C-20/58

JUDGMENT OF THE COURT

17 JULY 19591

Phoenix-Rheinrohr AG

v High Authority of the European Coal and Steel Community

Case 20/58

Application for annulment — Definition of a decision — Criteria applicable in the legal assessment of a measure by the High Authority — Effect of declarations by servants of the High Authority — Distinction between a decision and an internal office directive.

Application for the annulment of the decisions contained in the letter sent by the High Authority on 18 December 1957 to the Office Commun de Consommateurs

1 — Language of the Case: German.

JUDGMENT OF 17.7.1959 - CASE 20/58

de Ferraille (OCCF) (Joint Bureau of Ferrous Scrap Consumers), relating to the definition of the concept of 'own resources scrap' within the meaning of Decisions Nos 22/54, 14/55 and 2/57, and published in the Journal Officiel No 4 of 1 February 1958,

THE COURT

composed of: A. M. Donner, President, O. Riese, President of Chamber, L. Delvaux (Rapporteur), Ch. L. Hammes and N. Catalano, Judges,

The applicant claims that the Court should: The facts of the case may be summarized as '1. Annul the decisions contained in the follows: letter sent by the High Authority on 18 By its Decision No 22/54 of 26 March 1954, December 1957 to the OCCF, relating to the High Authority established an equaliza­ the definition of the concept of "own tion system to prevent Community prices resources scrap" within the meaning of for ferrous scrap from being aligned on the Decisions Nos 22/54, 14/55 and 2/57, and higher prices for scrap imported from third published in the Journal Officiel of 1 countries. February 1958, pages 45-58 et seq.; This equalization system was continued by 2. Order the High Authority to pay the Decisions Nos 14/55 and 2/57 but, from 1 costs.' April 1955, the proceeds of the contribution The defendant contends that the Court were used to finance, besides equalization, should: the granting of premiums for the increased '1. Take formal note that all the documents use of cast iron. The implementation of the and communications relating to this case system in practice was entrusted to the shall be sent to the High Authority, 2 place Office Commun des Consommateurs de de Metz, Luxembourg; Ferraille (OCCF) (Joint Bureau of Ferrous 2. Dismiss the application submitted by the Scrap Consumers) and the Caisse de Péré­ applicant on 17 March 1958 as unfounded; quation des Ferrailles Importées (CPFI) 3. Order the applicant to pay the costs.' (Imported Ferrous Scrap Equalization

PHOENIX-RHEINROHR v HIGH AUTHORITY

paying the contribution imposed on the con­ That decision which is individual in sumption of bought scrap. character concerns the applicant. If the By a letter of 30 October 1957, the OCCF principle according to which only such scrap then asked the High Authority to take a as is recovered by an undertaking distinctly decision on this question under the second defined by its company name can be con­ paragraph of Article 15 of Decision No sidered as own resources were applied to it, 2/57. In its reply of 18 December 1957, the applicant would have to pay in respect published in the Journal Officiel of 1 of the past and in the future further con­ February 1958, the High Authority took the tributions for the tonnages which it view that the question was misconceived recovered from its subsidiary companies in and asserted in support of this view that which it has a controlling interest. there already existed a well-established opi­ Consequently, the applicant asserts that the nion linking the concept of 'own resources' letter in dispute can be contested on all the to the legal concept of 'ownership'. grounds listed in the first paragraph of Arti­ This application is for the anulment of the cle 33 of the Treaty. aforesaid letter of 18 December 1957. 2. The substance of the case III — Submissions and arguments of First submission: infringement of and the parties manifest failure to observe the Treaty and The submissions and arguments of the the rules of law relating to its application

JUDGMENT OF 17. 7. 1959 — CASE 20/58

This delegation of powers is in consumes the ferrous scrap. Although compatible with the Treaty (to this effect, German law recognizes for tax purposes the see the Judgment of the Court in Case existence of organic, financial and economic 9/56). links between a parent company and one or (3) By authorizing exemptions for two par more subsidiary companies, that recognition ticular cases of an exceptional nature, is always limited to definite sectors and the Hoogovens and Breda (see the letter of the legal independence of the controlled com High Authority of 17 April 1958), the High panies is not affected thereby.

It con The defendant asserts that, if it gave way to siders as scrap not on the market only such the demands expressed by the applicant, scrap as is recovered by one and the same which unduly extend the concept of 'own legal person, and not also such scrap as is resources' beyond its proper meaning, it recovered by two or more legal persons con would result in discrimination on its part. trolled by another legal person. Indeed, in the place of 'own resources' the (6) The act of bringing in for equalization defendant would have to introduce in a scrap which has not been bought and of do fresh decision the concept of 'group scrap'. ing so with retroactive effect for Decisions Thus, in order to effect the equalization of Nos 22/54, 14/55 and 2/57 adopted the prices of assessable scrap and of im previously cannot be accepted; such inclu ported scrap, which has to be subsidized, the sion is contrary to the generally accepted defendant would have to carry out a fresh principle that administrative measures in apportionment of the contributions in volving new taxes cannot be retroactive. favour of groups and to the detriment of The defendant takes the view that the sub those plants which are not part of a group. mission based on infringement of the Treaty The different treatment applied, on the cannot be admitted in this case (see supra: other hand, to concentrations forming a

PHOENIX-RHEINROHR v HIGH AUTHORITY

As to the exemptions granted to Hoogovens those agencies had authority to decide the and Breda, they are based upon the criterion two special cases ('Hoogovens' and 'Breda'), of the existence of a single industrial unit, and the question of the legal validity of the locally integrated. This criterion is capable criterion by which those two exceptional of objective application in all cases of a cases were decided. similar nature. The criterion defined in the letter com­ Second submission: lack of competence

end exemption from the general equaliza­ The defendant takes the view that the sub­ tion contribution can be envisaged only for mission based on lack of competence cannot an undertaking's genuine 'own resources'. be admitted (see supra: 'Admissibility') and The exemption of scrap belonging to the un­ therefore replies to the arguments put dertaking liable to pay the contribution is forward by the applicant in support of that an apt solution for reaching the desired ob­ submission only in the alternative. jective, a comprehensible and fair solution, It asserts that the contested letter cannot be and in all probability the only correct solu­ considered as amending its previous Deci­ tion. sions Nos 22/54, 14/55 and 2/57 and that The applicant also criticizes the dis­ therefore there was no occasion for the cretionary powers which the High Authority Council of Ministers to intervene. On the re­ allegedly surrendered to the Brussels agen­ quest of the OCCF, the High Authority con­ cies. In order for this complaint to be valid, firmed and clarified the interpretation of the those agencies would in this case have had concept of 'own resources' which the OCCF to use a power not provided for by the had hitherto been following. An interpreta­ Treaty. Such was not the case, since the tion in accordance with the habitual mean­ letter complained of was written by the ing of the word and the material context is High Authority and not by the Brussels not an amendment.

agencies. Moreover, the measures of the The exemptions granted in the contested Brussels agencies, which are unconnected letter also do not constitute an amendment with the contested decision, must be ex­ of the previous decisions. Indeed, it is for cluded from the present action; this is true any higher administrative authority to in particular of the question whether or not determine the limits of a decision by apply-

ing objectively defined and universally valid 1. It is a generally acknowledged principle criteria. Unity of location is a criterion of law that an administrative authority can which fulfills these conditions. use its powers only to adopt clear, coherent, sensible and comprehensible decisions. By Third submission: infringement of an essen using its powers to adopt an obscure, con tial procedural requirement tradictory, absurd and unintelligible deci The applicant advances the argument that sion, the High Authority failed seriously to the High Authority did not state the reasons adhere to the legal objective of its powers; it for its letter, which is nonetheless in the was guilty of a misuse of powers. nature of a decision, that it did not seek the 2. The Treaty does not recognize any ar unanimous assent of the Council of bitrary objectives. If the High Authority Ministers and, finally, that it took a decision adopts any measures which result in ar without describing it as such. bitrary effects, it is using its powers to pur The defendant takes the view that the sub sue objectives extraneous to the Treaty. mission based on infringement of an essen

foundation. The third paragraph of the 4. In two exceptional cases the High letter complained of sets out the reasons on Authority authorized the granting by the which the letter is based, which are founded Brussels agencies of an exemption from the on the concept of ownership and on logical obligation to pay contributions. By bringing and literal interpretation. A more detailed into being this discriminatory situation of statement of reasons would have been re exceptions, it used its powers to pursue ob quired only if the letter had diverged from jectives other than those authorized by the the normal meaning of the words.

According to the Treaty, the High an adequate answer to the OCCF's ques Authority must take account of economic tion. Moreover, the applicant has not been realities. In fact, it has ignored the economic prejudiced in any way by this informal situation by failing to allow scope for procedure. The possibility of contesting this economic concentration other than under a informal opinion of the High Authority by single company name. It has thus committed way of legal action is recognized in the case- a misuse of powers by exercising its powers law of the Court (Cases 8/55 and 9/55). in breach of the aims of the Treaty. Publication in the Journal Officiel marked

PHOENIX-RHEINROHR v HIGH AUTHORITY

dertakings which do not take part in the can be alleged only as such infringements ferrous scrap market. It is thus using its and not under the heading of misuse of powers for a purpose other than that in view powers. of which they were conferred upon it. The defendant also points out that it is The defendant answers that it has not mis­ doubtful whether in the present case any used the powers conferred upon it by the misuse of powers which may have been com­ Treaty. Its conduct sprang from proper ad­ mitted also 'affects' the applicant. On this ministrative, economic and legal considera­ point it leaves the matter to the wisdom of tions. It had in view at all times the objec­ the Court. tives which are laid down for it and it did As to its answer to the various arguments not use its powers to pursue aims extraneous which the applicant puts forward in support to the Treaty. of misuse of powers, the defendant refers to Furthermore, the infringements of the the explanations which it gave in the first Treaty upon which the applicant seeks to three submissions.

rely under the heading of misuse of powers

Grounds of Judgment

Admissibility

The letter of the High Authority dated 18 December 1957 sets out a general principle in so far as it relates to the definition of the concept of 'own resources' with regard to scrap.

been formally requested to do, but merely to reaffirm principles which it considered, rightly or wrongly, to follow logically from the basic Decision No 2/57.

This finding is confirmed by the fact that an amendment to Decision No 2/57 would have required, under Article 53 (b) of the Treaty, the prior unanimous assent of the Council of Ministers, a condition which was not fulfilled in the present case. Moreover, there is no reason to suppose that the High Authority would knowingly have infringed this imperative provision.

These considerations are not invalidated by the fact that, in answer to a formal request from the Deutsche Schrottverbrachergemeinschaft, sent to the High Authority on 6 February 1958, the Market Division replied by a letter of 19 February 1958 that the letter of 18 December 1957 was indeed a 'decision'.

In fact, by its very wording, this answer from the Market Division expresses the opinion of an official of the High Authority and does not necessarily, in itself alone and in the present case, convey the intentions of the High Authority. It must be noted, however, that that answer could have prompted, or even decided, the applicant to bring proceedings against this alleged decision, with the legitimate concern of safeguarding its interests.

However, the various subjective factors set out above cannot in themselves be decisive for the purpose of determining the nature of the letter of 18 December 1957 in question, since the nature of an administrative measure depends above all on its subject-matter and its content.

The said letter appears as being a directive of an internal character sent by a superior to services coming under its authority and intended to direct the activity of those services.

However, since, as the applicant has pointed out, the defendant by its letter of 19 February 1958 prompted, or even decided, the applicant to bring proceedings against the alleged decision contained in the letter of 18 December 1957, an order must be made that the parties bear their own costs.

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to Articles 14, 15, 33 and 80 of the Treaty establishing the ECSC; Having regard to the Protocol on the Statute of the Court of Justice of the ECSC; Having regard to the Rules of Procedure of the Court of Justice of the ECSC,

THE COURT

hereby:

Dismisses the application as inadmissible;

Orders the parties to bear their own costs.