C-23/58

JUDGMENT OF THE COURT

17 JULY 1959<appnote>1</appnote>

Mannesmann AG, Hoesch-Werke AG, Klöckner-Werke AG, Rheinische Stahlwerke AG and Aktiengesellschaft für Berg- und Hüttenbetriebe

v High Authority of the European Coal and Steel Community

Case 23/58

Application for annulment — Definition of a decision — Criteria applicable in the legal assessment of a measure by the High Authority — Effect of declarations issued by servants of the High Authority — Distinction between a decision and an internal office directive (Cf. summary, Judgment in Case 20/58 of 6 July 1959)

all assisted by Werner von Simson, Advocate of the Düsseldorf Bar, with an address for service in Luxembourg at the Chambers of the said Werner von Simson, initially at Capellen 20, and then at Bertrange,

applicants,

v

HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, represented by its Legal Adviser, Frans van Houten, acting as Agent, assisted by Wolfgang 1 — Language of the Case: German.

JUDGMENT OF 17. 7. 1959 — CASE 23/58

Schneider, Advocate of the Frankfurt Bar, with an address for service in Luxem­ bourg at its offices, 2 place de Metz,

JUDGMENT

Issues of fact and of law

1 — Conclusions of the parties 2. Dismiss the application lodged by the applicants on 17 March 1958 as un­ The applicants claim that the Court should: founded;

'1. Annul the letter sent by the High 3. Order the applicants to pay the costs.' Authority on 18 December 1957 to the OCCF and published in the Journal Of­ II — Statement of the facts ficiel of 1 February 1958, page 45 et seq. if and in so far as that letter con­ The facts of the case may be summarized as stitutes a decision within the meaning of follows: Articles 14 and 15 of the Treaty; By its Decision No 22/54 of 26 March 1954, 2. Order the defendant to pay the costs' the High Authority established an equaliza­ The defendant contends that the Court tion system to prevent Community prices should: for ferrous scrap from being aligned on the '1. Take formal note that all the documents higher prices for scrap imported from third and communications relating to this countries.

case shall be sent to the High Authority, This equalization system was continued by 2 place de Metz, Luxembourg; Decisions Nos 14/55 and 2/57 but, from 1

MANNESMANN v HIGH AUTHORITY

Authority. Under Decision No 2/57, the contribution of 1. Admissibility each undertaking is obtained by applying, for each accounting period, a basic rate to The defendant acknowledges that according its consumption of bought scrap, and, if to the case-law of the Court (Cases 8/55 and necessary, a supplementary rate to its excess 9/55) a letter from the High Authority can consumption of bought scrap. An undertak be contested as well as a formal decision. ing's total consumption of scrap is defined as But it asserts that the criterion in question being the sum of the tonnages of the total applies equally to all the undertakings in the amount of own resources and the amounts Community and that consequently the letter of bought scrap received, plus any decrease in dispute is of a general nature.

and 15 of the Treaty. sidiary undertakings having a different com If the contested letter is a decision, it is in pany name, but in which they possessed a dividual in character, since it is addressed to controlling interest. In other words, in the the President of the OCCF, and it concerns view of those undertakings, 'group scrap' is the applicants, whose equalization contribu 'own resources scrap' and therefore is not tions it considerably increases.

2/57. In its reply on 18 December 1957, published in the Journal Officiel of 1 The applicants state that under the second February 1958, the High Authority took the paragraph of Article 15 of Decision No 2/57 view that the question was misconceived the High Authority may take a decision only and asserted in support of this view that in the absence of a unanimous resolution by

the Board of the OCCF on the measures not only contained in Article 2 but also in referred to in Articles 3 to 11 (1) of the said Article 3, which determines the calculation decision. In the present case, the point at of the contribution. issue is the definition of the concept of an Second submission: procedural defects undertaking. And it is Article 2 of the deci­ sion which defines that concept as meaning The applicants advance the argument that 'an undertaking referred to in Article 80 of the letter complained of had to be approved the Treaty'. Furthermore, that definition by a unanimous resolution by the Council of does not constitute 'a measure'. Ministers. The letter amends Decision No The applicants add that, according to Arti­ 2/57 by substituting for the criterion of 'an cle 53 (1) (b), with regard to the making of undertaking referred to in Article 80 of the financial arrangements, the High Authority Treaty' that of 'an undertaking bearing the is competent to act only after obtaining the same company name' or of 'a legal person'. unanimous assent of the Council of Minis­ Furthermore, the letter does not state the ters. The defendant takes the view that the reasons on which it is based, contrary to the submission based on lack of competence provisions of the first paragraph of Article cannot be admitted (see supra: 'Admis­ 15 of the Treaty. sibility') and therefore replies to the argu­ The defendant takes the view that the sub­ ments put forward by the applicants in mission based on infringement of an essen­ support of the submission only in the tial procedural requirement cannot be alternative. admitted (see supra: 'Admissibility') and It asserts that the contested letter cannot be replies to the arguments in support of this considered as amending its previous Deci­ submission only in the alternative. sions Nos 22/54, 14/55 and 2/57 and that The defendant asserts that the complaint of therefore there was no occasion for the inadequacy of the reasons stated is without Council of Ministers to intervene. On the re­ foundation. The third paragraph of the quest of the OCCF, the High Authority con­ letter complained of sets out the reasons on firmed and clarified the interpretation of the which the letter is based, which are founded concept of 'own resources' which the OCCF on the concept of ownership and on logical had hitherto been following. An interpreta­ and literal interpretation. A more detailed tion in accordance with the habitual mean­ statement of reasons would have been re­ ing of the word and the material context is quired only if the letter had diverged from not an amendment. the normal meaning of words. According to The exemptions granted in the contested the principles of law, the reasons given are letter also do not constitute an amendment sufficient.

4. The letter infringes the previous Deci 9. Finally, the applicants assert that until sions Nos 22/54, 14/55 and 2/57, and in now the High Authority has accepted the particular Article 3 (1) of Decision No 2/57, unity of the applicants' undertakings. By which provides for a contribution only in four decisions in 1956 and 1957, authoriz respect of bought scrap, and Article 4 (1) ing concentrations by the first applicant, and (2), which allows undertakings within Mannesmann AG, the High Authority the meaning of Article 80 of the Treaty to acknowledged that Mannesmann together deduct their own resources from their con with its subsidiaries constitutes an iron and sumption of scrap. steel undertaking within the meaning of Ar

6. According to Article 80 of the Treaty, mission based on infringement of the Treaty the applicants together with their sub cannot be admitted in this case (see supra: sidiaries constitute one single undertaking. 'Admissibility'). Therefore it replies to the The letter complained of infringes that arti applicants' arguments in support of that cle, by adopting the criteria of the company submission only in the alternative. name or a legal person. According to the defendant, the applicants 7. The applicants constitute an economic are confusing economic unity and legal un unit with their subsidiaries, and to a large ity. Only the latter is decisive for the extent also a legal unit. Therefore they are application of the decisions concerning in a position comparable to that of under ferrous scrap equalization.

8. The applicants are also victims of dis ing, it can mean only the legal person who crimination in relation to the undertakings consumes the ferrous scrap. Although to which the OCCF granted an exemption, a German law recognizes for tax purposes the measure approved by the letter complained existence of organic, financial and economic of 'by virtue of the exceptional nature of the links between a parent company and one or situations in question'. In fact, the connex more subsidiary companies, that recognition ions between the subsidiaries belonging to is always limited to definite sectors and the the undertakings of the applicants are much legal independence of the controlled com

panies is not affected thereby. The courts assessable. On the other hand, the extensive have also expressly refused to extend the interpretation defended by the applicants theory of organic union (Organtheorie) to could not be applied unless it had been that of a subsidiary (Filialtheorie). precisely defined in the decision itself. Therefore it is a priori impossible to take the The contradictions alleged by the applicants view that the recognition for tax purposes in do not exist in the letter complained of. The German law of an organic subordination reason why the High Authority stated that can justify the application of particular it was not necessary to amend the existing rules of law within the framework of the procedure while at the same time inviting ECSC Treaty. the Fund to recover the overdue contribu The defendant asserts that, if it gave way to tions was that the tonnages had been wrong the demands expressed by the applicants, ly entered in the accounts as own resources. which unduly extend the concept of 'own Since, as the result of a mistake in interpreta resources' beyond its proper meaning, it tion, the applicants submitted a materially would result in discrimination on its part. incorrect declaration, they must rectify it. Indeed, in the place of 'own resources' the The Fund has no way of knowing whether defendant would have to introduce in a undertakings have deducted too much scrap fresh decision the concept of 'group scrap'. as 'own resources'; that fact normally comes Thus, in order to effect the equalization of to light only when the Swiss fiduciary com prices of assessable scrap and of imported pany carries out its check. scrap, which has to be subsidized, the defen As to the complaint that the High Authority dant would have to carry out a fresh appor did not comply with Article 5 of the Treaty, tionment of the contributions in favour of which obliges it to carry out its task with a groups and to the detriment of those plants limited measure of intervention, the defen which are not part of a group. dant points out that it is empowered to in The different treatment applied, on the one tervene in internal affairs, for example with hand, to concentrations forming a single regard to production and investment. legal person and, on the other, to undertak Therefore, a forciori, it cannot be charged ings linked as regards organization, with having unlawfully imposed the con economy and finances, rests on a legal foun tribution upon deliveries of scrap carried

It is true that, in all cases of a similar nature. in that particular context, a decision by the The criterion defined in the letter com High Authority was based upon the idea plained of is not an administrative measure that Mannesmann AG could be considered having retroactive effect, but only the state as an undertaking producing steel. But that ment of what the administration had always observation was made only in decisions held as its rule. It is true that the expression relating to concentrations and it is not possi 'own resources' (Eigenentfall) does not ble to draw from it conclusions applicable to appear in Decisions Nos 22/54 and 14/55, this action. In respect of this action, only but in interpreting and applying Decision Decisions Nos 22/54, 14/55 and 2/57 are No 2/57 it would be impossible to take 'own material: they clearly state that only such resources' to mean anything other than did undertakings as consume ferrous scrap can the previous decisions, which referred to be concerned.

MANNESMANN v HIGH AUTHORITY

Grounds of judgment

Admissibility

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

The letter was published in the Journal Officiel of 1 February 1958 and thus brought to the attention of all the undertakings in the Community.

It was described as a 'decision' by the Market Division, in a letter dated 19

JUDGMENT OF 17. 7. 1959 — CASE 23/58

In fact, by its very wording, this answer from the Market Division expresses the opi­ nion 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 applicants to bring proceedings against this alleged decision, with the legitimate concern of safeguarding their 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

MANNESMANN v HIGH AUTHORITY

superior to services coming under its authority and intended to direct the activity of those services.

Therefore, if that letter could give rise to immediate duties, it could do so only on the part of the addressee organization and not of undertakings consuming ferrous scrap. Furthermore, this situation is corroborated by the fact that that letter of 18 December 1957 was published in the Journal Officiel only on 1 February 1958.

THE COURT

hereby:

Dismisses the application as inadmissible;

Orders the parties to bear their own costs.

Donner Riese

Delvaux Hammes Catalano

(See Case 20/58, page 84)