C-23/59
ECLI:EU:C:1959:33
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JUDGMENT OF THE COURT 17 DECEMBER 1959<appnote>1</appnote>
Acciaieria Ferriera di Roma (FERAM) SpA v High Authority of the European Coal and Steel Community
Case 23/59
Wrongful act or omission—Certificates drawn up by a national authority recognized as supporting documents—Wrongful act committed by a national official in drawing up such certificates—Absence of checking by the Community.
(a) If, at the time when certificates of wrongful act or omission in the perfor origin, recognized by the High mance of its functions within the mean Authority as supporting documents, are ing of Article 40 of the ECSC Treaty drawn up, a wrongful act is committed when the task is entrusted to a higher by a national official who acts neither in authority, such as a Ministry, which accordance with orders given by the appears to be the most appropriate and High Authority nor on behalf of or in the most likely to afford the best the name of that institution but in the guarantee against any abuse and when performance of purely national duties, the national regulations provide for an the wrongful act cannot be imputed to extremely detailed procedure before the the High Authority and does not con said certificates are drawn up. stitute a personal wrong for which the (c) Nor, in these circumstances, does the latter is liable. fact that the High Authority refrains (b) If, instead of making itself responsible from checking the authenticity of the for drawing up the certificates, the High certificates constitute a wrongful act or Authority leaves this task to the omission so long as there was no indica national authority, there is no defective tion to suggest the existence of an abuse. organization and, consequently, no (ECSC Treaty, Article 40.)
In Case 23/59
ACCIAIERIA FERRIERA DI ROMA SPA (FERAM), a limited company under Italian law, having its registered office in Rome, represented by the Chairman of its Board of Directors, Aldo Alliata, assisted by Arturo Cottrau, Advocate of the Turin Bar and of the Corte di Cassazione, Rome, with an address for service in Luxembourg at the Chambers of Georges Margue, 6 rue Alphonse-München,
applicant,
v
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, represented by its Legal Adviser, Professor Giulio Pasetti, acting as Agent, assisted by Professor Trabucchi of the University of Padua, Advocate of the Corte di Cassazione, Rome, with an address for service in Luxembourg at 2 place de Metz, defendant, 1 — Language of the Case Italian.
JUDGMENT OF 17. 12. 1959 — CASE 23/59
Application for reparation for injury caused by an alleged wrongful act or omission on the part of the High Authority;
THE COURT
composed of: A. M. Donner, President, R. Rossi, President of Chamber, O. Riese (Rapporteur), Ch. L. Hammes and N. Catalano, Judges,
Advocate-General: M. Lagrange Registrar: A. Van Houtte
gives the following
JUDGMENT
Issues of fact and of law
I — Facts the Community and did not qualify for equalization. The facts which underlie the present dispute These irregularities, which resulted in may be summarized as follows: criminal proceedings being brought in the In a series of general decisions instituting Netherlands against the official responsible, financial arrangements for the equalization were the subject of Questions Nos 56 and 59 of imported ferrous scrap the High from Messrs van der Goes van Naters and Authority provided for such scrap to be Nederhorst, members of the Common treated as shipyard scrap, with the result Assembly, and of the respective replies by that purchasers of shipyard scrap were en the High Authority. (See JO of 20. 1. 1958, titled to equalization payments (see in par p. 22 et seq. and JO of 20. 4. 1958, p. 22 et ticular Article 1 of Decision No 14/55 of 26 seq.). March 1955, Journal Officiel, p. 685 et seq., According to the last reply the total amount and Article 10 (c) of Decision No 2/57 of 26 which wrongly benefited from equalization January 1957, Journal Officiel, p. 61 et amounts to 22 204 metric tons (compared seq.). with a total of approximately 3 270 000 and Up to 1957 some tonnages of ferrous scrap 4 260 000 metric tons which benefited from
were sold through the Office Commun des equalization in 1956 and 57 respectively) in Consommateurs de Ferrailles (OCCF) respect of which US $646 200 were paid. (Joint Bureau of Ferrous Scrap Con sumers), for which certificates issued by the Head of the Iron and Steel Department of II — Conclusions of the parties the Netherlands Ministry of Economic Af fairs were used as supporting documents. In its application, the applicant claims that the Court should: These certificates fraudulently certified that this ferrous scrap was 'shipyard' scrap, '1. Declare the application to be admissible; whereas in fact the material originated in 2. Declare that the High Authority of the
FERAM v HIGH AUTHORITY
European Coal and Steel Community is 1. Submissions and arguments of the appli liable for having failed to avoid the situa cant
tion whereby, during the period from The applicant bases its application on Arti 1954 to 1957, considerable quantities of cle 40 of the ECSC Treaty since, in its view, ferrous scrap were sold through the the facts in the case satisfy the conditions OCCF, supported by fraudulent cer for its application: tificates issued by the Head of the Iron (a) There has been a wrongful act or omis and Steel Department of the Netherlands sion on the part of the High Authority Ministry of Economic Affairs, to the in the performance of its functions; effect that these quantities originated (b) The applicant has as a result suffered from ship-breakers' yards; injury;
3. Instruct an expert, to be appointed by (c) The High Authority must therefore the Court, to determine: make reparation for it. (a) The exact number of metric tons of As to (a). There has been a wrongful act or ferrous scrap which were the subject omission on the part of the High Authority, of these fraudulent practices which which inadequately supervised the actions inflicted loss on the iron and steel of the Brussels agencies, and there is a undertakings of the Community sub casual link between this act or omission and ject to the compulsory equalization the injury suffered by the applicant since system and which made possible the this would not have occurred if the High issue of certificates relating to cer
Authority had taken proper care. tain quantities of ferrous scrap In its decisions establishing the financial received from internal sources which arrangements, the High Authority had were drawn up in such a way as to given a formal undertaking to the coal and cause the said quantities of ferrous steel undertakings of the Community to scrap wrongly to benefit from the provide a faultless service. In the eighth equalization payment applicable to recital of the preamble to Decision No imported scrap; 14/55, it declared that it 'is responsible for (b) The percentage increase in the the regular functioning of the financial equalization rates to be attributed to arrangements and hence must always be in the said fraudulent practice; a position to intervene effectively'.
The (c) The exact amount of the sum to be High Authority thereby undertook to ensure credited to the applicant on the that fraudulent practices such as those provisional equalization accounts for which were carried out over a number of the years 1954 to 1957; years and which gave rise to the present case 4. Order the High Authority to pay the should not take place with its knowledge. costs.' It is common experience that such crimes The defendant, in its statement of defence, have always been committed and that, contended that the Court should: in consequence, they were perfectly 'dismiss all the heads of claim contained foreseeable. Accordingly, the fact that the in the application of Acciaieria Ferriera High Authority has not been able to prevent di Roma (FERAM), SpA, made on 14 them constitutes 'a case of objective liability' April 1959, and order the applicant com since the conduct of the High Authority was pany to pay the costs.' objectively unlawful. In any case, even if this conclusion is not accepted, it must be In then reply and rejoinder the parties borne in mind that the degree of diligence maintained their previous conclusions. expected of the High Authority is greater III — Submissions and arguments than that which can be required of the of the parties average administrative body. The submissions and arguments of the par The defendant wrongly claims that the ties may be summarized as follows: applicant has not discharged the burden of
JUDGMENT OF 17. 12. 1959 - CASE 23/59
proof. A wrongful act or omission 'does not produced by correct calculation of the ton need . . . to be directly proved'; it is proved nages entitled to equalization. whenever there is an objective infringement The damage is all the greater in that in of the rules, including the principles of those very years, 1956 and 1957, the rate sound administration, which the High levied by the Brussels agencies reached the Authority is bound to observe. It is for the maximum (US $12 to 13 per metric ton). defendant to prove that it is not liable there The High Authority has itself admitted that fore ('la prova della non imputabilità') the sums wrongly granted by the Equaliza 'because the infringement is due to circum tion Fund amounted to US $646 200.
But it stances beyond its control or because it exer appears that this sum is appreciably less cised the degree of care required of it'. than that subsequently calculated. Furthermore the wrongful act was officially As to (c). It is clear 'that the applicant has admitted by the High Authority itself in its an interest in having the conduct of the ad reply to Question No 59 from Messrs van ministration declared unlawful and the ex der Goes van Naters and Nederhorst. It is istence of a right to reparation for the stated therein that: damage recognized by the Court.
. . and, the tonnages affected by the acts of fraud moreover, the existence of the legal obliga 'were sold through the medium of the tion on the part of the High Authority to OCCF'; recalculate the equalization payment, the 'the High Authority came to the conclu monthly rates of the levy and of the sums sion that the system used by the Fund for charged to the applicant'. The defendant checking the origin of the ferrous scrap has not hitherto taken these steps. While it
is true that the defendant claims that qualifying for equalization payments must be rectified, especially the liaison calculation of the equalization payment is a between the Fund and the regional offices provisional one and that an action is in the countries of the Community'; pending for recovery of the sums wrongly in a letter to the President of the Board of paid, this has no relevance to this case. the Fund 'the High Authority asked for 2. Submissions and arguments of the defen information on the steps proposed to dant remedy the deficiencies in the functioning The defendant contends that the essential of the system presently in force'; bases of an application for reparation the agencies in Brussels 'authorized their (wrongful act or omission, damages, causal President to seek counsel's opinion on the link) are wanting in this case. legal measures to be taken with regard to As to (a). The High Authority does not con compensation'. test that it is liable for the wrongful acts or During the oral proceedings the applicant omissions of the Brussels agencies in the referred, in the same vein, to the wording of performance of their functions.
But the a letter which the Vice-President of the applicant has not proved that such wrongful High Authority addressed on 24 February act or omission has occurred. 1958 to the President of the Equalization The liability referred to in Article 40 of the Fund. This letter appears in the file Treaty is not 'objective' in the sense of being (schedule to the reply of the High Authority based on the theory of 'created risk'; it is to the questions raised by the Court). clearly related to a 'wrongful act or omis As to (b). The fraudulent activity of the of
sion'. Nor is there any greater possibility of ficial of the Netherlands State caused relying on contractual liability based on any 'specific and direct' damage to all undertak alleged guarantee that the administration ings in the Community which are consumers will function properly. Although in its of ferrous scrap. In fact, the total of the con general decisions the High Authority has tributions which these undertakings had to announced its obligation to ensure the pay in respect of equalization for the years proper functioning of the equalization in question was greater than the amount arrangements, this constitutes political
FERAM v HIGH AUTHORITY
liability and not an undertaking entered contended for by the applicant. Nor do these into for the benefit of particular parties. statements disclose a link of cause and effect In particular, as regards the burden of between the conduct of the Netherlands of proof, the applicant must prove not only in ficial and the alleged wrongful act or omis jury but a wrongful act or omission and the sion on the part of the High Authority. In casual link between these two factors. In contemplating an improvement of the ex particular it must show that the criminal isting system, the High Authority was mere offence of the Netherlands official was able ly referring to the fact that, at that time, the to have, and did have, the alleged conse regional offices submitted their files to the quences, by virtue of negligence on the part Fund for inspection purposes only after a of the High Authority or the Brussels agen certain time and that the High Authority
cies. Even if objective liability arises on the wished to expedite the process. The High basis of a guarantee of proper functioning, Authority's statement cannot involve it is for the applicant to establish that the in acknowledgement 'of possible inadequacies jury of which it complains was caused by the which could be looked for only after the in unsatisfactory functioning of the ad spection of the books of the Fund which ministration. But the attempts made by the were at that time in the hands of the applicant to do so have failed, and it is Netherlands courts in connexion with the endeavouring without success to shift the criminal proceedings for fraud'.
In any case, burden of proof. it must be borne in mind that all organiza Even judged by the most severe criteria as to tions are at all times capable of being im the requisite standard of care which it is proved. bound to observe, the High Authority can As to (b). It has not been established that not be expected to check the authenticity of there is any injury. The calculations so far certificates issued by a senior national of made of the contributions are only ficial, as this would constitute unwarranted provisional ones. Moreover, proceedings for interference in the administration of a recovery have been instituted against under
Member State. The wrongful act or omis takings which have benefited from the sion committed by a national official for criminal offence involved; recovery is, whom the High Authority has no respon therefore, still a possibility and the appli sibility cannot be imputed to the latter; on cant wrongly alleges inactivity on the part the contrary, the personal liability of such of the High Authority. an official removes the legal basis of liability Finally, the defendant does not consider the on the part of the Community. inquiry demanded by the applicant to be Furthermore, there was no negligence, since necessary; there is, in any case, no need to the system applied is such that only wholly appoint an expert since the tonnage which unforeseeable events could fail to be checked illegally benefited from equalization is by the administration. The irregularities in perfectly well known. question were unforeseeable, since they were committed by the competent official of a IV — Procedure government ministry and the certificates issued fraudulently 'gave every outward The procedure followed the normal course. appearance of authenticity as far as their Upon hearing the report of the Judge- form is concerned'. Rapporteur and the opinion of the It is quite impossible to find in the reply Advocate-General, the Court decided to which the High Authority gave to the ques open the oral procedure without any tions put by Messrs van der Goes van Naters preparatory inquiry but nevertheless invited and Nederhorst or in the letter of 24 February the parties to provide fuller statements on a 1958 from the Vice-President of the High certain number of points and to submit cer Authority any admission of a 'wrongful act tain documents to the Court, a request with or omission' or of any 'liability' in the sense which the parties complied.
JUDGMENT OF 17. 12. 1959 — CASE 23/59
Grounds of judgment
I—Existence of in jury
Equalization payments have been made on the basis of certificates fraudulently cer tifying that a considerable quantity of ferrous scrap was 'from ship-breakers' yards' whereas, in fact, it originated in the Community and did not therefore qualify for equalization. These payments are liable to result in an increase in the contributions to be paid by all ferrous scrap producers including, therefore, the applicant.
It is still uncertain whether or not this increase in the equalization rates causes ferrous scrap consumers and, particularly, the applicant, actual, significant and definite injury, since the High Authority has instituted proceedings for recovery of the sums improperly paid and, moreover, it is still possible for such proceedings to be taken against those responsible.
There is, however, no need to settle this question because, for the reasons set out below, even the existence of injury places no obligation on the defendant to make good that injuiry.
II — Obligation to make good the injury
1. Liability of the High Authority on the basis of a guarantee given by it
The applicant infers the liability of the defendant from the fact that the latter, in its decisions establishing the equalization scheme, formally undertook to ensure a fault less service; this commitment extended also to iron and steel undertakings of the Community. This emerges from the eighth recital of the preamble to Decision No 14/55 in which the High Authority declared that it 'is responsible for the regular functioning of the financial arrangements and hence must always be in a position to intervene effectively'.
The establishment of the financial arrangements and the principle enunciated in the recital to the abovementioned general decision, of the liability assumed by the High Authority for the regular functioning of this scheme, belong to the political and administrative sphere and cannot thus constitute an obligation to the undertak ings under its authority or a guarantee giving rise to objective, contractual or legal liability on the part of the High Authority, even when no wrongful act or omission can be imputed to it.
This submission must therefore be dismissed.
FERAM v HIGH AUTHORITY
2. Liability for a wrongful act or omission
The application is moreover principally based on Article 40 of the ECSC Treaty which allows the injured party to bring an action to obtain pecuniary reparation from the Community to make good any injury caused in carrying out the said Treaty by a wrongful act or omission on the part of the Community in the perfor mance of its functions.
(a) The official of the Netherlands Ministry for Economic Affairs, who fraudulently issued the certificates in question, was not subject to the control of the High Authority and did not receive orders from it, but acted in his capacity as a national official.
If, in accordance with the system applied by the High Authority, certificates issued by the Netherlands Ministry were recognized as supporting documents without further checking, it cannot be inferred from this that the official whom the Ministry had charged with issuing the said certificates acted on behalf of or in the name of the Community. The wrongful act committed by this official cannot therefore be imputed to the defendant. No other personal wrong committed by a servant of the defendant in the performance of his duties has been established.
(b) It is also necessary however to consider whether there was a wrongful act or omission on the part of the defendant within the meaning of Article 40 of the ECSC Treaty, because of its failure to provide a better organized system for issuing the certificates of origin for ferrous scrap qualifying for equalization payments, and in particular because of its failure to provide for the investigation of the authenticity of the said certificates.
At first sight, the fact that it was possible for the abuses complained of to continue for several years appears to indicate that the organization was defective and insuf ficient. However, that conclusion is not justified in this case. In fact, in leaving to the competent national authority the task of issuing the necessary certificates, the defendant pursued the course which appeared the most appropriate and the most likely to afford the best guarantee against any abuse. Since the certificates formed at the same time the legal basis, according to Netherlands law, for the re-export of the ferrous scrap, it was natural to entrust their issue to the national authorities who, moreover, were the best qualified to carry out the necessary checks.
The issue of the certificates had not been left to a subordinate authority but to a Ministry. The Netherlands regulations provided for an extremely detailed procedure prior to the issue of the certificates for checking the origin of the ferrous
JUDGMENT OF 17. 12. 1959 — CASE 23/59
scrap in question; it was in fact impossible to foresee that acts of fraud could occur if this system were applied.
In these circumstances, the defendant cannot be blamed for having adopted this system and the fact of its having so cannot in any case be described as a wrongful act or omission.
This also holds good with regard to lack of supervision. In fact, it would have been excessive to check certificates coming from a Ministry and purporting to be official documents, at any rate so long as there was no indication of abuse which could raise doubts as to their authenticity.
The argument of the applicant that the reply given by the High Authority in the European Parliament to the questions put by Mr van der Goes van Naters and Mr Nederhorst and the letter of 24 February 1958 addressed to the President of the Equalization Fund by the Vice-President of the High Authority, Mr Spierenburg, constituted an admission of a wrongful act or omission should be rejected. Although in fact these statements did enquire how an improvement of the system could avoid such defects in future — and it was only after the acts of fraud that those defects came to light — they do not constitute an express admission that a wrongful act or omission on the part of the High Authority had occurred. They cannot moreover transform a course of action by the defendant into a wrongful act or omission — a description which such a course of action does not in fact deserve.
For all these reasons, the defendant is not under a duty to make reparation and the action must, therefore, be dismissed as being unfounded.
Costs
Under the terms of Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs. In this case the applicant has failed in its pleas and must therefore bear the 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 Article 40 of the ECSC Treaty; Having regard to the Protocol on the Statute of the Court of Justice of the Euro pean Coal and Steel Community;
FERAM v HIGH AUTHORITY
Having regard to the Rules of Procedure of the Court of Justice of the European Communities, especially Article 69 (2),
THE COURT
hereby:
1. Dismisses the application as being unfounded;
2. Orders the applicant to pay the costs.
Donner Rossi Riese
Hammes Catalano
Delivered in open court in Luxembourg on 17 December 1959.
A. Van Houtte A. M. Donner
Registrar President
OPINION OF MR ADVOCATE-GENERAL LAGRANGE <apnote>1</apnote>
Mr President, 'Without prejudice to the first paragraph Members of the Court, of Article 34 [which concerns the special case of harm resulting from a decision of The conclusions of this application are con the High Authority which has been cerned with the question of the liability of declared void], the Court shall have the Community under Article 40 of the jurisdiction to order pecuniary reparation Treaty for an injury suffered by the appli from the Community, on application by cant society and attributable to 'a wrongful the injured party, to make good any in act or omission ... in the performance if its jury caused in carrying out this Treaty by functions' on the part of the High a wrongful act or omission on the part of Authority. the Community in the performance of its functions.' I Under the next following paragraph of the Article the Court also has jurisdiction in the With the exception of certain disputes con matter of the liability of a servant of the cerning the Staff Regulations of Officials or Community to third parties in the event of Servants, this is the first time that an injury caused by a personal wrong by a ser application based on Article 40 has been vant in the performance of his duties. brought before the Court. This wording seems rather to imply a Let me recall its terms: reference to the system of French law as b- 1 —Translated from the French.