C-3/58

5/58, Harz-Lahn-Erzbergbau AG, Mathildenhütte, Bad Harzburg, represented by its Board of Directors,

intervener: Land of Lower Saxony , represented by the Minister for Economic Affairs and Transport,

6/58, Mannesmann AG (formerly Gewerkschaft Mannesmann ), Düsseldorf, represented by its Board of Directors,

intervener: Land of Lower Saxony , represented by the Minister for Economic Affairs and Transport,

7/58, Erzbergbau Siegerland AG, Betzdorf, represented by its Board of Direc­ tors,

interveners: 1. Land of Rhine-Palatinate , represented by the Minister-Presi­ dent, 2. Land of North Rhine-Westphalia , represented by the Minis­ ter for Economic Affairs and Transport,

intervener: Land of North RHINE-WESTPHALIA , represented by the Minister for Economic Affairs and Transport,

11/58, Hüttenwerke Siegerland AG, Siegen, represented by its Board of Direc­ tors,

intervener: Land of North RHINE-WESTPHALIA , represented by the Minister for Economic Affairs and Transport,

12/58, FRIEDRICHSCHÜTTE AG, Herdorf/Sieg represented by its Board of Directors,

intervener: Land of RHINE-PALANTINATE , represented by the Minister-President,

13/58, Eiserfelderhütte GmbH , Siegen, represented by its manager,

intervener: Land of North Rhine-Westphalia , represented by the Minister for Economic Affairs and Transport,

JUDGMENT OF 10.5.1960 - JOINED CASES 3 TO 18, 25 AND 26/58

17/58, EINSENWERK-GESELLSCHAFT MAXIMILIANSHÜTTE AG, Sulzbach-Rosen­ berg-Hütte, represented by its Board of Directors,

intervener: Land OF BAVARIA , represented by the Minister-President,

18/58, HÜTTENWERKE ILSEDE-PEINE AG, Peine, represented by its Board of Direc­ tors,

intervener: Land of Lower Saxony , represented by the Minister for Economic Affairs and Transport,

the applicant in Case 9/58 by Mr Lietzmann and by Wilhelm Wengler, Professor at the Free University of Berlin;

the applicants in Cases 11 and 12/58 by Mr Lietzmann and by Wolfgang Küster, Advocate at Düsseldorf;

the applicant in Case 17/58 by Heinz Kühne, Advocate at Munich, and by M. B. Aubin, Professor at the University of Saarbrücken;

the applicant in Case 18/58 by Ludwig Raiser, Professor at the University of Tü­ bingen;

the interveners being assisted as follows:

Land of Baden-Württemberg, Land of North Rhine-Westphalia and Land of Low­ er Saxony by Joseph H. Kaiser, Professor at the faculty of law at Freiburg;

High Authority of the European Coal and Steel Community , represented by its Legal Adviser, Walter Much, acting as Agent, assisted by Hans Peter Ipsen, Professor at the. University of Hamburg and Wolfgang Schneider, Advocate at Frankfurt, with an address for service in Luxembourg at its seat, 2 place de Metz,

defendant,

Application for the annulment of certain provisions of the decisions of the High Authority of 9 February 1958 concerning special rates and conditions applicable to the carriage by rail:

1. of mineral fuels destined for the iron and steel industry (T/10.203), 2. of ores (T/10.202) JO of 3. 3. 1958, p. 105/58 and p. 122/58),

THE COURT

composed of: A. M. Donner, President (Rapporteur), L. Delvaux and R. Rossi, Presidents of Chambers, O. Riese and Ch. L. Hammes, Judges

In Cases 25 and 26/58, annul Decision No quire the abolition or modification of spe­ II 10.203. cial rates and conditions in favour of the applicants within fairly extended periods. The applicants in Cases 3 to 16/58, and 25 and 26/58 set out the provisions of the con­ The High Authority bases its decisions in tested decisions which in particular affect particular on two main reasons: them adversely. (a) The special rates and conditions consti­ All the applicants also claim that the Court tute a discriminatory measure in favour should order the defendant to bear the costs of the undertakings compared with un­ of the proceedings. dertakings placed in comparable situa­ tions from the point of view of trans­ The interveners support the conclusions of port; their respective principal parties and claim that the Court should order the defendant (b) The maintenance of the rates and con­ to bear the costs. ditons is not necessary for achieving the objectives set out in Articles 2 and 3 of The defendant contends that the Court the Treaty. should: The High Authority also ordered that some 1. Dismiss the applications as unfounded , of these rates and conditions, described and by the Federal Government as competitive 2. Order the applicants and interveners to rates and conditions, be abolished, on the bear the costs. ground that it did not consider them justi­ fied by competition from another means of II — The facts transport.

BARBARA ERZBERGBAU v HIGH AUTHORITY

They thus for the transitional period ended on 10 Feb legally came into existence. ruary 1958. Yet the High Authority ordered the abolition or alteration of rates and con Taking the matter from a different angle, it ditons after that date. It thus took the con clearly appears from the two letters sent to tested decisions despite the fact that at that the Federal Government on 12 February time it no longer had the power to do so. 1958 that those letters did not constitute de cisions but formal notice of the decisions to Nor does the fourth paragraph of Article 70 the addressee. That notice is an important of the Treaty give the High Authority the factor as regards the applicability of the de power to take the contested decisions.

The Obviously, prior agreement cannot be given question whether the High Authority could to rates and conditions already in existence. have directly applied the provisions of the Since the High Authority did not order that fourth paragraph of Article 70 to existing the rates and conditions be abolished or rates and conditions after the expiry of the altered during the transitional period, it has transitional period does not arise. lost the power which was expressly reserved to it for the duration of that period. There In any event, the opinion of the applicants, fore it can no longer act in respect of pre according to which the special rates and conditons in force fall once more within the existing rates and conditions.

JUDGMENT OF 10.5.1960 —JOINED CASES 3 TO 18. 25 AND 26/58

indicated above. The same is true of the thority must take into account the general submission, put forward at the same time, principle of the protection of acquired situa that the Treaty has been infringed and tions according to which the administration, manifestly disregarded. in the exercise of its powers, may only affect the assets of an individual in so far as the In some cases, the defendant alleges in the granting of assistance or of an indemnity alternative that the power conferred on it by ensures that the latter does not suffer any the seventh paragraph of Article 10 of the loss. Convention did not cease to exist when the Convention expired. According to the High The defendant replies: Authority, the special rates and conditions were subject to an examination by it and the

vention). existing special rates and conditions must be clarified definitively. However, the High 2. As for the principle of the protection of Authority is mistaken in thinking that this acquired situations, which has been put for clarification can only result from a declara ward in argument, the right approach is to take into consideration the fact that the es tion emanating from itself. The uncertainty can also come to an end automatically by tablishment of the European common mar the withdrawal of the relevant provisions, ket in coal and steel, according to the se such that no prohibition could any longer cond paragraph of Article 2, is only possible be imposed. by progessively bringing about market con ditions which ensure the most rational dis tribution of production together with the In support of its point of view, the defendant

C — Infringement of the Treaty (b) In case the Court should reject the argu­ (a) The applicants allege, first, that the ment put forward under (a), the applicants

BARBARA ERZBERGBAU v HIGH AUTHORITY

rely on the fact that the authorization for view of all the other factors which count in which Article 70 of the Treaty, read togeth­ the individual situation of an undertaking. er with Article 10 of the Convention, makes First and foremost it has failed to take into provision, was not required. account the effect of geographical and tech­ nical factors on each undertaking. The Treaty, which is only directed at partial integration, does not encroach upon the The defendant replies that where, as prov­ rights and duties of the Member States, on ided by the fourth paragraph of Article 70, their side, to promote the prosperity of the the application of special internal rates and general economy at national level. This is conditions to the advantage of one or more clear both from Article 2 (1) of the Treaty undertakings in the Community may be and from Article 67, which only gives the permissible, this involves rules making an High Authority the power, in certain given exception, intended by the Treaty, to the circumstances, to rectify certain repercus­ prohibition on discrimination set out in Ar­ sions of national economic policies on the ticle 4 (b) and in the first paragraph of Common Market. Article 70.

JUDGMENT OF 10.5.1960 —JOINED CASES 3 TO 18, 25 AND 26/58

It is not equal plicable and that the only effect of the said ity of treatment from the point of view of provision is to establish a programme. It is transport that matters, but equality of treat argued that it is a priori impossible to be ment as regards consumers within the lieve that the first paragraph of Article 70, Common Market placed in comparable which consists of one short sentence, con conditions. tains a prohibition which is perfectly de fined and applicable in practice to a group of The defendant replies that this attempt to questions for which the provisions con justify the rates and conditions at issue tained in the United States' Interstate Com must fail on grounds both of form and of merce Act cover several pages.

disadvantage arising from his geographical The most rational distribution of produc-

tion exists when reasonable economic con the discretion which it exercised is not sub siderations justify the initial introduction ject to review by the Court. and the maintenance of production in given conditions. The evidential value of the 'general opin ion' put forward by the applicants appears The defendant replies that the applicants fail doubtful to the High Authority for simple to understand the purpose stated in the sec reasons of principle. According to the ond paragraph of Article 2. According to fourth paragraph of Article 70 it is the duty the Treaty the most rational distribution of of the High Authority to harmonize the production must be guaranteed by taking principles of the Treaty. The requirement of into consideration the conditions, such as being 'in accordance with the principles of they are, of the Common Market. this Treaty' is an imprecise legal concept.

of Article 3. and conditions, namely the rates and condi tions mentioned in the second paragraph That refusal means that either immediately , and those mentioned in the fourth para or in the long-term it will be virtually im graph. Under the first of these provisions, possible for the applicants to remain com the rates and conditions which it covers petitive, by reason of the heavier charges must be considered as discriminatory. It arising from the application of the general rates and conditions. has been unanimously accepted that a dif ferent set of rates and conditions on the same line would in any case be considered as Since several undertakings in the same re discriminatory, but other rates and condi gions would all be affected in a similar way, tions have been subjected to an entirely dif grave and persistent disturbances could ferent body of rules. This difference in arise (last phrase of the second paragraph of Article 2). treatment can only mean that the Treaty is not be taken as having decided a priori the The defendant is of the opinion that in question whether a set of 'special internal rates and conditions' is or is not discrimin adopting the contested decisions it took sufficiently into consideration all the objec

date. The defendant replies that protective rates On this point it should also be pointed out in favour of coal and steel undertakings are that the defendant expressly declares that by nature discriminatory. They are contrary

to a series of objectives and principles of the 4,67 and 70 of the Treaty and Articles 1,10 Treaty (second paragraph of Article 2; Arti­ and 23 of the Convention. cle 4 (b), and also (c); first paragraph of Ar­ ticle 70). They also include certain prohibi­ The High Authority takes the view that since tions—notably the prohibition on discrimi­ the applicants have not alleged any new nation—of an absolute character. facts and in reality do no more than repeat their complaints that the Treaty has been But this absolute prohibition on discrimi­ infringed, there is no need for it to produce nation in the field of transport is only appli­ an answer on this point. It concludes that cable, pursuant to Article 4, 'as provided in the complaint is unfounded. this Treaty'. One of the provisions of the Treaty to which reference must be made for E — Infringement of essential procedural present purposes is the fourth paragraph of requirements Article 70. It empowers the High Authority to authorize special internal rates and con­ The applicants are of the opinion that the ditions in the interest of certain coal-or High Authority, in failing to mention in the steel-producing undertakings provided that contested decisions the reasons which led it the said rates and conditions are 'in accor­ to make the comparison mentioned in the dance with the principles of this Treaty'. first paragraph of Article 70 only from the point of view of transport, has infringed ess­ The principle that discrimination is abso­ ential procedural requirements (insufficient lutely prohibited is thus tempered by the re­ statement of reasons). quirement that it must be adapted to the other objectives and principles of the Treaty They put forward the same complaint in re­ in every individual case. spect of the fact the High Authority, in its decisions, did not include a definition of the In such a confrontation the provisions en­ particular reasons which, in its opinion, suring general protection (the prohibition would justify the maintenance of the on discrimination) and the provisions en­ special rates and conditions. suring individual protection (the exception­ al grant of protective measures) will always The High Authority is of the opinion that the be in mutual opposition to each other. This first complaint is unfounded. Moreover, it opposition must be resolved in a fair and ra­ takes the view that it was neither necessary tional way. The defendant thinks that it has nor possible to give an abstract definition of resolved it, in the exercise of the discretion the 'special reasons' in order to justify indi­ which it possesses for this purpose, by deci­ vidually the decisions concerning the appli­ ding that the prohibition on discrimination cants.

tions to this part of the decision: The applicants stress the curious nature of (a) The High Authority has not stated the the difference between Nos 1 and 2 of reasons which led it to cut down the Chapter III, B, of the decision. amount of the reduction in rates to 8% of the aforementioned general rate. The decision states that the reduction in rates granted for the transport of brown coal (b) The decision is also erroneous in sub­ briquettes is in accordance with the Treaty stance. The High Authority was wrong because the transport thereof is necessary in evaluating the two factors which for political reasons. jointly make up the amount of the re­ duction in rate of 21 % at 13% and 8% re­ Yet as regards the supply of coal and coke, spectively: (a) 13%—protective mea­ the decision cuts down the accepted reduc­ sures and (b) 8%—compensation for tion in rates to 8% of the general rate. losses arising from the establishment of the interzonal frontier. Thus, in the applicants' opinion, it is per­ (c) The High Authority, having accepted fectly clear that as regards coal the High the proposition that a special rate was Authority has not accepted the reduction in justified by reason of the location near rate that it completely accepted in the case the interzonal frontier, should, in appli­ of brown coal, for the sole reason that the cation of the fifth paragraph of Article applicants were granted a reduction in the 70, have left the decision as to the desir­ rate before the beginning of the political dif­ ability and necessity of any reduction in ficulties which, as the High Authority ac­ rates to the national authorities, and in cepts, give rise to a right to compensation, particular to the Federal Railways. the High Authority has refused to accept the possibility of compensation for 'political The defendant refers to the text of the deci­ damages' as a factor in the amount of the re­ sion itself in order to show that it took all duction in rate. the circumstances affecting the matter into account, and that the reasons which it gave Case 18/58 (Ilsede-Peine) on this point are not so cursory as the appli­ cants would have it. A — Infringement of essential procedural requirements It admits that the quantifying of each of the two partial percentages mentioned above The applicant alleges, first, that the High can give rise to differences of opinion, For Authority has infringed essential procedu­ its part, the High Authority took the view ral requirements in Chapter II and Chapter that the most reliable and the most suitable III, C, 2 and 3, of its Decision of 9 February method was to be found in the history of the 1958 on the carriage of mineral fuels. introduction and development of the rate in question. It was precisely because it realized After setting out, in the first paragraph of that future experience might show its as­ Chapter III, C, 2, the facts relating to Article sessment to have been inaccurate that it 71 (b) of the scale of dues for navigation on made provision for the possibility of post­ the Mittellandkanal, the High Authority, in poning the last 4% increase to be made in assessing this situation from the legal point

If the applicant finds the criterion 'from the This complaint is extraneous to the present point of view of transport' which is found case. An examination of the special internal rates and conditions of a Member State therein inaccurate in law, it cannot com­ plain that the reasons put forward by the pursuant to the fourth paragraph of Article High Authority are insufficient. The most it 70 is not subject to the condition that iden­ tical examinations must be undertaken in can do is allege that the Treaty has been in­ fringed. The allegation of infringement of other Member States. Nor is the complaint procedural requirements is based on a con­ based on fact. Starting in 1953, the Com­ fusion between the formal statement of rea­ mittee of Experts on transport matters has sons and the question whether the reason­ studied all the rates charged on the canals of ing is well-founded. the Community. The purpose of the study has been the elimination of any discrimi­ B — On the question of ultra vires nation pursuant to the second paragraph of Article 70. It should be noted that the applicant does not raise the question whether, on 9 Febru­ On point (c): ary 1958, the High Authority still had the power to take the contested decisions. It clearly appears from the official text of the However, it alleges that: scale of charges for the Mittellandkanal and the canals of West Germany, as regards Ar­ (a) Article 71 (b) of the scale of dues for ticle 71 (b) of the scale, that the said provi­ navigation on the Mittellandkanal con­ sion only has a limited field of application, cerns toll charges appertaining to public both in respect of the despatch and the re­ law levied in connexion with the use of ceipt of goods. the canal, and the High Authority does not have the right to encroach upon the C — Infringement of the Treaty fiscal sovereignty of the Member States. In case the Court should accept the propo­ (b) Even if it were admitted that these pay­ sition that the rate at issue falls within Ar­ ments were within Article 70 of the ticle 70, the applicant alleges that the refusal Treaty, the High Authority ought to to grant an authorization constitutes an in­ have examined all the fiscal systems of fringement of the fourth paragraph of the the Member States in so far as they bear said article. upon transport by inland waterway. It stresses in particular: (c) The applicant adds that in any event Article 70 does not apply to the existing (a) The rate at issue is intended to counter­ rate, because it is applied to all the un­ act competition from another means of dertakings situated in a given region, transport. This rate was introduced in such that it cannot be of a discriminato­ 1950 with a view to re-establishing ry nature. competitive parity in respect of rates for

carriage by rail, which had been re scope of the fourth paragraph of Article 70'. duced in 1949 by special rate 6 B 33. The necessity for a protective measure can hardly exist when undertakings, as is the (b) In view of the fact that the High Au case with the applicant, have no need of thority applied the fourth paragraph of tangible aid in the form of a reduction in Article 70 to certain undertakings in the rates, taking into account their economic region of the Upper Palatinate located and financial situation. The reduction of near the interzonal frontier, it no longer 7/10 in Article 71 (b) can at the most im has the right to refuse to apply the said prove the financial situation of the appli provision to other undertakings situat

rates. However, one special rate cannot be 4/58,12/58,14/58 and 18/58 withdrew their explained at law with reference to another conclusions concerning the provisions of for reasons of competition. the contested decisions relating to special rates 7 U 6,7 B 35,7 U 4, 7 B 3, and 6 B 33. On point (b): The Court, by decisions of 17 March, 17 It is not denied that in principle it is possible April, 21 April, 23 April, 5 May and 11 May for the applicant to receive aid in accor 1959 accepted requests to intervene from dance with the fourth paragraph of Article the following legal persons:

At the hearing on 2 December 1959 the Court—acceding to the applicant's re It asserts that it has suffered serious loss by quest—called upon the High authority to reason of its location near the interzonal produce a certified true copy of the minutes frontier. This fact has diminished its profit of the meeting of the High Authority of 9 ability and increased its vulnerability when February 1958 and of the annexes relating any crisis arises. It may therefore, although to the contested decisions. not requiring aid, expect to receive compen sation from the State in the form of mea The High Authority complied with this sures of economic policy designed to request on 3 December 1958. strengthen its competitive position. The applicant in Case 18/58 asked for per On this point, the defendant replies that by mission to amend its conclusions so that requiring, in addition to the condition—ac they be read as covering also Article 65 of cepted by the applicant—of eligibility to re the scale of dues for navigation on the Mit ceive aid, a specific need for aid, it does not tellandkanal, by reason of the fact that since thereby 'illegally' restrict in any way 'the the date of the lodging of the application,

It also appears from information produced by the parties that the fact that those decisions were adopted only on the last possible date of 9 February is to be ex­ plained by a last-minute approach by the Federal Government asking the High Authority to reconsider its position, which was already well known, and by the desire on the part of the High Authority not to fail in its duties in respect of that government, which led it to postpone the formal adoption of those decisions so as to be able to deliberate upon them afresh.

In order to enter into force, those decisions had to be notified to the Federal Gov­ ernment and, in accordance with the rules of good administration, notified as quickly as possible—which was done. Nevertheless, that does not in any way alter the fact that in this case the decisions were adopted during the transitional period.

Thus there is no doubt that the contested decisions were taken within due time.

BARBARA ERZBERGBAU v HIGH AUTHORITY

2. In Case 18/58 the applicant has also argued that the High Authority had no power to take a decision concerning Article 71 (b) of the scale of dues for navi­ gation on the Mittellandkanal because that scale lays down toll charges governed by public law and, therefore, covers a matter attributable to the fiscal sovereignty of the Member States.

This argument must be rejected in view of the fact that what is involved is pay­ ment for the use of public means of transport and that the payment constitutes one of the components of the cost of transport by waterway. Thus the High Au­ thority did not exceed its powers when it took the view that the reduction of that payment constituted the establishment of a special rate for transport within the meaning of the fourth paragraph of Article 60.

Since the abolition of the rates at issue was decided upon after expiry of the transi­ tional period or on the eve of the expiry thereof, the High Authority is said to have deprived the applicants of the possibility of claiming those aids.

The applicants' complaint cannot be accepted because at the time when the abo­ lition of the rates at issue was decided upon the applicants were not deprived of the right or of the means of claiming the grant of the abovementioned aids.

JUDGMENT OF 10.5.1960 —JOINED CASES 3 TO 18. 25 AND 26/58

In fact the last paragraph of Article 23 of the Convention provides that aid may be granted by decision of the High Authority with the assent of the Council during the two years following the end of the transitional period.

If no loss has been incurred during those two years, this situation is partly due to the fact that the Federal Government has not carried out the contested decisions.

Therefore the complaint can hardly be levelled against the High Authority that this failure to carry out the decisions prevented the undertakings from claiming the aid provided for by Article 23 of the Convention within due time.

(b) Secondly, the applicants challenge the interpretation put by the High Author­ ity upon the first paragraph of Article 70, which provides that comparable rates and conditions are to be offered to comparably placed consumers. They al­ lege—contrary to the point of view of the High Authority, which only considered the criterion of comparability 'from the point of view of transport'—that compari­ son between undertakings must take into account all the circumstances in which they are placed, in particular the place of production, the profitability of the de­ posits worked and the fact of being located in a less favoured region.

BARBARA ERZBERGBAU v HIGH AUTHORITY

However, this argument must be rejected.

First of all, the abovementioned provision appears in the chapter headed 'trans­ port'. It is. therefore necessary to interpret the phrase 'comparably placed' as re­ ferring, at least in principle, to the comparability of situations from the point of view of transport.

Moreover, the opinion that any comparison between several undertakings must take into account all the circumstances in which they are placed would lead to the result that an undertaking is only comparable with itself, and thus the concept 'comparably placed' and, therefore, that of 'discrimination' would become devoid of all meaning.

It appears from Article 4 of the Treaty that in Article 70 the intention of the au­ thors of the Treaty was to eliminate distortions in the Common Market by the har­ monization of transport rates and conditions and thus to ensure that the Common Market would function according to the principles established by the Treaty.

(c) The intervener, the Land of Hesse, has also defended the argument that Ar-

JUDGMENT OF 10.5.1960 —JOINED CASES 3 TO 18, 25 AND 26/58

ticle 70, in speaking of comparable conditions, does not mean comparability from the point of view of transport, but the creation of comparable situations in the Common Market, such that differences in situation between the undertakings are to be compensated by the rates set.

This interpretation must be rejected simply because the Treaty only provides for a very partial integration of transport.

This argument presupposes a much more complete integration of the transport markets of the different Member States and a more active intervention on the part of the High Authority than is provided for by the fourth and fifth paragraphs of Article 70.

For those same reasons, any attempt to treat the application of Article 70 as anal­ ogous to the practice of the United States Interstate Commerce Act is clearly in­ adequate. The Interstate Commerce Act is directed, first, at a total and much more wide-ranging control of transport rates and, secondly, at a true federal transport policy. The High Authority has no such power. Its task is limited simply to pro­ tecting the common market in coal and steel from encroachments and distortions by the States or the transport industry.

Accordingly, it is appropriate to reject the applicant's proposition according to

BARBARA ERZBERGBAU v HIGH AUTHORITY

which the said rates are covered by the fourth paragraph of Article 70 only when it has been proved that they cause immediate and direct loss to third parties.

4. The fourth paragraph of Article 70 provides that the application of special in­ ternal rates and conditions in the interest of one or more coal-or steel-producing undertakings shall require the prior agreement of the High Authority.

Contrary to various opinions put forward during the course of the procedure, it is to be noted that the wording of the abovementioned provision covers not only rates specially adopted in the interest of certain undertakings (a subjective crite­ rion), but also all special rates which, whatever the reason for their introduction, are advantageous to one or more undertakings (an objective criterion). Thus the fact that a special rate has been adopted for reasons which are entirely foreign to the interests of the undertaking deriving an advantage cannot in any way exclude or restrict the application of the fourth paragraph.

Where the special rates and conditions are in accordance with the principles of the Treaty the High Authority cannot withhold its agreement.

JUDGMENT OF 10.5.1960 —JOINED CASES 3 TO 18,25 AND 26/58

care not to provoke fundamental and persistent disturbances in the economies of Member States'.

This provision, while expressing two reservations, clearly states the essential ob­ jective of the Common Market, according to which the general policy of the High Authority must be to promote—and this also applies in the application of Article 70—the progressive establishment of conditions which will of themselves ensure the most rational distribution of production.

The authors of the Treaty realized that this policy could have the result that certain undertakings might be forced to cease or change their activity. This appears in par­ ticular from the Convention on the Transitional Provisions, of which the seventh paragraph of Article 10 has been applied in the present case.

The Convention makes provision both for establishing the common market by putting an end to situations which are incompatible with the principles of that market and are of such a nature as to jeopardize the achievement of the objectives defined notably in Articles 2 and 3, and for remedying the disadvantageous con­ sequences which the establishment of the Common Market could have in certain cases.

It expressly provides, in Article 23 in particular, for measures of readaptation, which can even take the form of the setting up of new undertakings not subject to the Treaty, and for assistance both to undertakings and to workers.

6. On the contrary, when economic conditions in the transport sector do not re­ quire or justify special rates (which is the case notably when competition from an­ other means of transport must be counteracted), it is only in exceptional cases that a special rate can be considered to be in accordance with the principles of the Trea­ ty.

The High Authority has recognized the existence of such an exceptional case as regards certain undertakings situated near the interzonal frontier.

In that case, the disadvantages are created by factors which are not of an economic nature and in particular by political contingencies which have separated these un­ dertakings from their natural market, with the result that they require support either to be able to adjust themselves to the new conditions or to be able to over­ come this accidental disadvantage.

However, the High Authority was right, in view of the exceptional nature of that assistance, to have examined closely, prior to giving its approval to those special rates, the question whether in that case the undertakings concerned did or did not need support and to have based its decisions on the results of that examination.

Therefore it is necessary to reject the offer made by the applicants to produce evi­ dence establishing that the damage suffered in particular by the Maximilianshütte and Luitpoldhütte undertakings since the establishment of the interzonal frontier greatly outweighs the advantage received from the reductions in rates granted un­ til the present and therefore exceeds by an even greater margin the advantage of the reduction granted to those undertakings by the contested decision.

According to that argument, since it has been recognized that such conditions exist in the region situated near to the interzonal frontier, the applicant is entitled to claim the grant of a protective rate, even independently of the question whether it does or does not need a subsidy.

Since, in principle, the fundamental rules of the Treaty prohibit all subsidies and all protective rates, a special rate for transport could be granted to an undertaking situated near the aforesaid frontier only where the survival of the said undertaking depended on it.

The applicant has not alleged that it is in such a position.

The submission concerning infringement of essential procedural requirements

1. The applicants allege that insufficient reasons are given for the decisions be­ cause they do not state the reasons for which, in applying the principle of com­ parability within the meaning of Article 70, the criterion of comparability 'from the point of view of transport' was alone taken into account, and also because those decisions do not set out in detail the reasons which, in the opinion of the High Authority, would have justified the retention of the special rates.

The Court accepts the defendant's argument according to which the High Au­ thority was entitled to confine itself to setting out its interpretation of the first par­ agraph of Article 70 in a positive manner and that it was not in any way required to reject or to criticize other possible interpretations.

3. The applicant in Case 18/58 also complains that the High Authority did not state the reasons for which it considered that Article 71 (b) of the scale of dues for navigation on the Mittellandkanal is discriminatory.

In reality this complaint merely expresses the fact, already examined, that special transport rates are not discriminatory by definition.

As has already been said, this complaint, in so far as it is put forward in support of the submission that the Treaty has been infringed, must be rejected.

Essentially, the said complaint does not concern the infringement of essential pro­ cedural requirements and therefore it cannot be accepted under this head.

The submission as to misuse of powers

Finally, the applicants argue that the High Authority has used the powers vested in it under the fourth paragraph of Article 70 and Article 10 of the Convention on the Transitional Provisions to ends for which the Treaty does not provide or for which it no longer makes provision, and on this account they assert that there has been a misuse of powers.

On those grounds,

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the oral observations of the parties; Upon hearing the opinion of the Advocate-General; Having regard to Articles 2, 3,4, 15, 33, 37, 60,67, 70 and 88 of the Treaty est­ ablishing the European Coal and Steel Community, and to Articles 1,10 and 23 of the Convention on the Transitional Provisions annexed to that Treaty; Having regard to the Protocol on the Statute of the Court of Justice of the Euro­ pean Coal and Steel Community; Having, regard to the Rules of Procedure of the Court of Justice of the European Coal and Steel Community, and to the rules of that Court on costs,

THE COURT

hereby:

1. Dismisses the applications as unfounded;

2. Orders the applicants and the interveners to bear the costs.