C-25/59

3. Obligations of Member States — Failure to fulfil an obligation — Power of the High Authority — Recording of such failure (ECSC Treaty, Article 88)

4. Obligations of Member States — Failure to fulfil an obligation — Strict interpretation of Article 88

5. Obligations of Member States — Failure to fulfil an obligation — Concept (ECSC Treaty, Article 88)

1. Cf. paragraph 1, summary of the judg­ 4. Cf. paragraph 4, summary of the judg­ ment in Case 20/59. ment in Case 20/59.

2. Cf. paragraph 2, summary of the judg­ 5. Cf. paragraph 5, summary of the judg­ ment in Case 20/59. ment in Case 20/59.

3. Cf. paragraph 3, summary of the judg­ ment in Case 20/59.

1. Coöperatieve Vervoersonderneming Interlimburg Ca , Venlo, repre­ sented by its Managing Board, composed of F.G. van der Ven (President), G.W. Helmes (Vice-President) and F. Faessen (Member),

2. Reinhold Coumans , proprietor of the R. Coumans Transport Undertaking, Geleen,

3. Vennootschap onder Firma M. Overdorp en Zoon , Velsen-IJmuiden O., represented by its managing partners, Machiel Overdorp and Leendert Overdorp,

4. Rotterdamsche Droogdokmaatschappij NV, Rotterdam, represented by its director, Kornelis van der Pols,

5. Vereniging van Metaal-Industrieën , The Hague, having legal personality, represented in accordance with its articles of association by Dr J.C. Hooykaas, General President, and M.M. Heinsius, Secretary, and assisted by G. de Grooth, Buitengewoon Hoogleraar at the State University of Leyden, with an address for service in Luxembourg at the Chambers of J. Loesch,

interveners,

NETHERLANDS v HIGH AUTHORITY

Advocate-General: K. Roemer Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

By letter dated 12 August 1958 the High either a duplicate or certified copy of Authority requested the governments of the waybill or contract of carriage;

JUDGMENT OF 15.7.1960 —CASE 25/59

or a document signed by the consignor lands Minister for Transport and Inland and the carrier and containing the es­ Waterways expressed his readiness to take sential information relating to the trans­ the necessary steps to cause the transport port rates and conditions. rates and conditions to be communicated to the High Authority after the conclusion of These documents must contain the follow­ contracts of carriage. In so doing he thought ing minimum information: he was following the third course suggested by the High Authority. place and date of execution of the docu­ ment, Elsewhere in the letter, the Minister em­ name and address of the consignor, phasized that, in connexion with road trans­ name and address of the carrier, port, the Netherlands Government did not place of loading and place of delivery of the consider itself to be subject to obligations goods; other than those the purpose of which was name and address of the consignee, to 'enable the High Authority to determine description of the goods, whether or not there is discrimination with­ gross weight of the goods or quantity ex­ in the meaning of the first and second par­ pressed in other terms, agraphs of Article 70' and refused to accept transport rate and other charges, that Article 60 of the Treaty could give rise distance travelled in kilometres, and to specific obligations in connexion with where appropriate: frontier crossing points.' transport.

NETHERLANDS v HIGH AUTHORITY

It was based upon Articles 2,3,4,5, the scales, rates and all other tariff rules of 15, 60, 70, 81, 86 and 88 of the Treaty. every kind applied to the carriage by road of coal and steel within the Community for In the statement of reasons for the decision, hire or reward'. the High Authority considered the attitude adopted by the Netherlands Government This decision was based on the following and the French Government with regard to considerations in particular: the recommendations in paragraph (c).

. ., none of these measures (a) that there should be control over any is capable of satisfying the conditions and discriminatory scales, rates and other tariff requirements defined above.' rules applied to transport within the Com mon Market; This led the High Authority to find that all the Member States, including the Nether (b) that producers should be able to draw lands State, had failed to fulfil 'an obligation up their price lists with full knowledge of imposed on them under the ECSC Treaty'. the delivery prices of their own products, According to the same statement of rea even in cases where the contract of carriage sons, this obligation consisted of the adop is concluded with the consignee. tion of one of the first two courses of action recommended to Netherlands Government (c) that producers should be able to draw in the letter of 12 August 1958, subject, up their price lists with full knowledge of however, to adjustments in respect of the the delivery prices of the products of prod flexibility of tariffs and the temporary ex ucers in competition with them. clusion from these regulations of certain categories of vehicle and certain short-dis (d) that producers should be able to align tance transport. their delivery prices on those of other pro ducers.' The time-limit for carrying out the Deci sion was laid down as 30 June 1960. 'Whereas these conditions can be fulfilled only if the producers and consumers of the On 2 April 1959, pursuant to the second Common Market can acquire knowledge of paragraph of Article 88 of the Treaty esta the scales, rates and all other tariff rules of blishing the European Coal and Steel Com every kind applied to the carriage by road of munity, the present application for annul-

No 18/59 of the High Authority of the Eu­ ropean Coal and Steel Community of 18 If the High Authority's view were correct February 1959 on the publication or notifi­ and if Article 88 endowed it with legislative cation to the High Authority of the scales, powers which it could exercise as it pleased, rates and all other tariff rules of every kind it would be difficult to understand why, in applied to the carriage by road of coal and other sectors more directly involved with steel within the Community for hire or re­ the functioning of the common market in ward, which was communicated to the coal and steel, the authors of the Treaty Government of the Kingdom of the Neth­ considered it necessary to lay down the erlands in the High Authority's letter of 25 Community's aims in binding rules and, February 1959 and was published in the subject to certain procedural safeguards, to Journal Officiel on 7 March 1959; and the confer formal powers on the High Author­ applicant claims that the High Authority ity. should be ordered to pay the costs. While Article 60 empowers the High Au­ The interveners claim that, in accordance thority to cause prices to be published, Ar­ with the application of the Netherlands ticle 88 cannot be wrongly applied for the Government, the Court should annul Deci­ purposes of indirectly conferring similar sion No 18/59 of the High Authority of 18 powers in relation to freight charges which February 1959 and order the defendant to the authors of the Treaty did not consider it pay the costs of their intervention. necessary to include in Article 70.

the interveners. In their view, only the obli Reference was wrongly made to Article 10 gations provided for under the Treaty are of the Convention on the Transitional Pro imposed on the States and the authors visions since it is impossible to conclude wrote them into the Treaty because they re therefrom that, after the High Authority garded this as essential or desirable for the has unsuccessfully conducted negotiations proper functioning of the Common Market. over a number of years, it should remain in active and that it has no right to utilize the In purporting, in the contested Decision, to procedure in Article 88 of the Treaty. impose a general obligation on the States in Furthermore, it is clear from Article 10 it regard to transport, but only in respect of self that the High Authority can, if need be, road transport, the High Authority assumes act on its own initiative. discretionary powers which it does not pos sess and, furthermore, is clearly guilty of There is no relevance in the comparison discriminating between road transport and with Article 60. That article directly em other forms of transport. powers the High Authority to make regula tions on the subject of the prices and con It follows from the foregoing that the con ditions of sale for coal and steel.

cumstances where, in particular, the bal munity itself imposes on carriers no obliga ance between the powers transferred to the tion either to lay down fixed tariffs or to pu Community and the powers reserved to the blish them. According to the declaration Member States is upset. made to the States General by the Nether lands Government when the Treaty was be The defendant replies that the main issue in ing ratified, this omission is deliberate. In these proceedings is that of the obligations view of this, the obligation cannot be im which the Treaty imposes on the Member posed for the purpose of carrying out the

JUDGMENT OF 15.7.1960 —CASE 25/59

C. The applicant protests against the inter­ Authority's proposals. It was in fact the ference by the High Authority with the High Authority which changed its view of trading policy of undertakings which do not the situation when it yielded to the wishes come within its jurisdiction. Transport un­ expressed by German industry and the dertakings do not fall within the definition French Government. There was, accor­ given by Article 80 to undertakings within dingly, no failure on the part of the Nether­ the meaning of the Treaty. lands Government.

Treaty. They point out that, in its letter of safeguards designed to prevent an infringe 12 August 1958, the High Authority, in ac ment of the Treaty being recorded in a de cordance with the procedure laid down in cision without further warning. In failing to Article .88, gave the Netherlands Govern give Governments the opportunity to com ment the opportunity to submit its com ment in advance on the measures imposed ments in offering it, in common with the upon them by their decision and which, ac other Governments, the choice of three cording to the Authority, were binding methods whereby it could fulfil its obliga upon those Governments under the Treaty, tions in connexion with road transport. the High Authority infringed an essential procedural requirement, in this case Article When the Netherlands Government chose 88 of the Treaty. the third method, there was no reaction on the part of the High Authority, nor was The defendant points out that the Nether there any to the Netherlands Government's lands Government did not in fact accept the letter of 29 November 1958 or when the third alternative offered in the letter of 12 Royal Decree of 24 December 1958 began August 1958 but hedged its choice about putting it into effect, but it took a decision with reservations and conditions which restricting the choice in future to two al were unacceptable; this applies especially to ternatives only. the requirement that the High Authority

submit fresh comments. The comments provided for in the first par The interveners emphasize that the Nether agraph of Article 88 are of value only be lands Government did not reject the High cause they enable the State concerned, as

Finally, the Netherlands Government no­ Article 60 is concerned with producers and where states that it has changed its mind its object is to enable them to take advan­ about the proposals of the High Authority tage of the possibility of aligning their quo­ contained in Decision No 18/59, which con­ tations on those of their competitors (Judg­ stituted the two first possibilities submitted ments of 21 December 1954: French Gov­ for its its comments in the letter of 12 Au­ ernment v High Authority and Italian Gov­ gust 1958. ernment v High Authority). It directly con­ cerns undertakings within the meaning of (b) Secondly, the interveners, arguing on the Treaty. In order to put the article into ef­ the basis of the infringement of an essential fect, the High Authority can directly im­ procedural requirement, contend that an in­ pose a particular method of calculating dividual decision addressed to the six prices. Member States is in fact a general decision but a decision taken pursuant to the first On the other hand, it is impossible to regard paragraph of Article 88 can only be an indi­ Article 70 as a provision which enables the vidual decision. price of transport to be laid down as a hard and fast rule inasmuch as it represents part The defendant replies that, since none of the of the price within the meaning of Article six Governments had expressed their wil­ 60, a provision which stands on its own. lingness to accept any of the solutions pro­ posed in the letter of 12 August 1958, all the There is no comparison whatever between Member States were in an identical position the price of transport and the price of a giv­ and the contents of the decision adopted by en quantity of coal or steel. In the European the High Authority in relation to them had Coal and Steel Community, transport mat­ obviously to be the same. ters are not 'integrated' in the same way as coal and steel matters. Each of the six 3. Infringement of the Treaty Member States has its own policy on trans­ port matters. A. Lack of legal basis for Decision No 18/59 Again while it is relatively easy to work out the real price of coal or steel, the same can­ (a) The applicant emphasizes that no provi­ not be said of transport. In view of the fact sion of the Treaty compels transport under­ that there are different methods of trans­ takings, the Governments of the Member port, that each road transport undertaking is States or the High Authority itself to accustomed to the conditions which are achieve the aims set out in detail in certain peculiar to it (vehicles, stages, etc.), that provisions of there contested decision. some undertakings producing coal and steel have their own means of transport, by road In particular, Article 70, which envisages a or otherwise ('eigen vervoer'), that all road 'programme', contains no 'express rule' transport undertakings may at any moment concerning the States or transport under­ have to face unforeseen difficulties and takings. Although it condemns 'interna­ that, finally, offers from outside the Com­ tional' and national discrimination, this munity can be made on the Common Mar­ does not constitute authority for the con­ ket, it is obvious that it becomes very diffi-

cult to work out the exact price for such agraph of Article 70 repeats in detail what transport and that it is impossible to lay has already been laid down in Articles 3 (b) down a general tariff in advance. and 4 (b). But those articles do not consist merely of 'programmes' but are directly ap All these factors were taken into account by plicable (Judgments in Joined Cases 7 and the authors of the Treaty when they drafted 9/54, Groupement des Industries Siderur- Article 70 in its present form and made the giques Luxembourgeoises v High Authority of Governments of the Member States respon the European Coal and Steel Community). sible for agreeing on a Community trans

tion. livery prices would comprise a factor which was unknown as far as third parties were The defendant contends that there is no concerned. The principle of publishing cor substance in the argument of the applicant rect prices requires publication of prices in when it states in effect that the High Au the strict sense of the word as well as the thority was wrong not to take account of the rates and conditions of transport. The first number of road haulage undertakings and paragraph of Article 70 of the Treaty, which of their peculiar circumstances and, in con constitutes the application of Article 4 (b) in sequence, not to establish a 'system whose the case of transport, prescribes an objective effectiveness is 100% in all circumstances'; which can be obtained only if those con the Netherlands Government thus ignores cerned are in a position to know the tariffs not only the practical situation but also the being applied. fact that the High Authority must endea vour to achieve what is, on a reasonable The attainment of the Common Market as view, practicable 'in so far as it is not, or not provided for under the Treaty requires yet, possible to achieve perfection'. therefore that the scale, rates and other ta riff rules applied to the carriage of coal and Finally, the defendant states that the fact steel should be laid down (it matters little that regulations were made only for the by whom) in the form of tariffs of general road transport sector cannot be described as application which are not kept confidential. discriminatory, since Decision No 18/59 is merely a stage in the implementation of Ar If Article 70 was, as the applicant main

NETHERLANDS v HIGH AUTHORITY

The High Au thority itself claims that the provisions con On this point the interveners advance an ar tained in Article 5 of the contested decision gument which is peculiar to them. It is not are necessary in order to ensure compliance possible to regard, the first and second par with the requirements imposed on States in agraphs of Article 70 as being of general ap Article 2 of the decision; the effect of this is plication, since it does not cover all modes that, since that part of the decision which of transport; in fact the prohibition which the defendant itself regards as vital is null can be read into it refers only to 'national and void, the whole decision must also be discrimination', as was stated by Mr Advo null and void. cate-General Roemer in his opinion of 11 February 1960 in Joined Cases 27 to 29/58 The defendant makes the immediate objec

This is why, in ing articles of the decision would still be ab his commentary, Reuter states that the au solutely valid; strictly speaking, Article 5 of thors of the Treaty were referring to rail the decision could even be described as su transport when they drafted Article 70. pererogatory. The interveners maintain that the third par It is, in fact, obvious that the obligations de agraph of Article 70 should be applied on scribed in Article 5 are the logical and ne the basis of this interpretation.

could quite easily verify whether its provi sions were being observed if the scales, rates and tariffs were communicated in confi The letter sent on 10 December 1958 by the dence after they had been applied. French Government to the High Authority contains some pertinent remarks on this The defendant replies that the dispatch of subject and they should have been taken thousands of contracts ex post facto would into account.

The defendant expresses surprise that such not lay down any general obligation to fix an argument should have been raised in rates. view of the fact that the authors of the Trea ty, among whom were the Netherlands In support of its contention, the applicant Government, have never mentioned it. quotes a passage from the above-cited judg ment in Case 1/54, in which the Court held No support for the restrictive interpretation that the publication to which reference is of the interveners can be found in the word made in the second paragraph of Article 60 ing of Article 70 which refers to '.

ticle 70. D. Infringement of the third paragraph of Article 70 of the Treaty The defendant points out that the option contained in the third paragraph of Article (a) The applicant and the interveners con 70, namely the option of publication or tend that Decision No 18/59 infringes the communication, is embodied in the con third paragraph of Article 70 in two re tested decision, in particular in Article 2 (a) spects. thereof. This conclusively rules out any conflict with the third paragraph of Article

. .) as it was interpreted in the judgment de Under the contested decision a communi livered by the Court in Case 1/54, cited cation to the High Authority really consti above. This wording in no way prevents the tutes a special form of publication since the charges from having to be made public be High Authority makes available for those fore being applied in practice and the words concerned the scales, rates and tariff rules 'charges applied' can be regarded as mean brought to its knowledge: thus the freedom ing the same words 'charges to be applied'. of choice has gone. Finally, the interpretation offered by the The article infringed refers to 'scales, rates other parties is incompatible with the Trea and all other tariff rules of every kind appli ty, taken as a whole.

NETHERLANDS v HIGH AUTHORITY

Such a Common Market'. This is aggravated by policy entails serious discrimination against the fact that the High Authority used these road transport. powers to oblige carriers to lay down fixed tariffs and not to conclude contracts the The defendant contends that, although un clauses of which can and usually do differ der the fifth paragraph of Article 70 trans from each other. Such a requirement is con port policy shall continue to be governed by trary to the third paragraph of Article 70. the laws or regulations of the individual Member States, this is 'subject to the provi The defendant replies that the first para sions of this Article [namely Article 70] and graph of Article 70 recognizes the need to to the other provisions of this Treaty'. apply such rates and conditions as the High Authority requires. In the case of transport, The defendant points out that the argument the Treaty clearly provides for tariffs the which the interveners base on the fifth par contents of which ('scales, rates and all agraph of Article 70 of the Treaty is not con other tariff rules') must, in the words of the clusive. The most that can be read into this third paragraph of Article 70, be published provision is that, if after action by the High or brought to the knowledge of the High Authority pursuant to Article 88 road trans Authority. port were placed in a comparatively unfa vourable position, it would be open to the It draws attention to the adjective 'fixed' States to adopt, in relation to other types of which keeps recurring in connexion with transport, appropriate measures to make tariffs in the interveners' arguments and good this disadvantage. which the latter seem to use in the hope of giving the impression of a certain inflexi F. Infringement of the second paragraph of bility if not of immutability.

concerned'. Thus, the provision in Article As far as the interveners are concerned, 47 covering professional secrecy does not there is a further infringement of the fifth apply to information the publication of paragraph of Article 70 in that the High Au which is necessary in order to achieve the thority applied the strict arrangements in aims of the Treaty.

The applicant emphasizes that extensive other sections of industry and even certain publication of precise transport charges transport systems, like the railways, apply inevitably affects the competitiveness of common tariffs; transport undertakings. The obligation to publish tariffs makes it impossible to pro­ in the water-borne transport sector, the duce realistic and therefore sensible charges Netherlands Government has itself found it which take account of the conditions on the necessary to introduce arrangements for the market and of the numerous factors which publication of freight charges; help to determine the cost price of each journey. the other countries of the Community, with the exception, latterly, of Italy, already re­ The system proposed by the High Author­ cognize and to some extent apply the High ity tends more and more towards a levelling Authority's system which the Netherlands down of charges to the detriment of the un­ Government describes as disastrous; dertakings' profitability. the fixing of tariffs proposed by the Author­ Such a situation will inevitably result in in­ ity still allows for a margin of discretion tervention by the Governments and, in (Articles 3 and 4 of the decision); consequence, the fixing of compulsory ta­ riffs. The result will be to freeze movement only coal and steel transport is involved; and road transport will suffer in conse­ quence. All methods of transport alike a carrier who works out his own detailed would feel the effect of competition and the and comprehensive tariff has plenty of consequential repercussions of the fixing of room for manoeuvre and can, in addition, tariffs by the State. operate within a 'margin' of 10%;

which is encouraged rather than weakened riers by road not subject to regulations to by the publication of prices; transport goods at the rates which they have published; there is no such obligation, and there has been no evidence that the putting this can cause some unpleasant surprises; into effect of Decision No 18/59 radically changed the successful results obtained by the alignment referred to in Article 60 (2) is the policy of the Netherlands Government feasible to such a small extent that it can in the transport field; publication of rates is help very little to stimulate competition; always of value in the struggle against dis­ even if direct or indirect publication of crimination; nor must it be forgotten that transport rates were necessary to enable the there is no ideal system of free competition. right to alignment to be freely exercised, at all times and places, given the limited effect H. Infringement of Articles 3 and 5 of the of this right, it still does not follow that such Treaty publication is indispensable for the proper functioning of the Common Market. The interveners describe various peculiari­ ties and characteristics of road transport All this goes to show that the measures re­ and develop the following points: quired by the High Authority are incom­ plete and unreasonable in so far as carriers the large number of carriers by road (60 000 by road are concerned; they open, indeed from Italy and 9 000 from the Netherlands) pave the way for, abuses, discrimination makes it illusory to communicate rates and all sorts of secret agreements between which these carriers can change at any mo­ producers and carriers by road. It is impos­ ment particularly since they are free to re­ sible to exercise effective control. The con­ fuse to carry out deliveries at the rates and tested decision does not, therefore, help to on the conditions announced; achieve the objectives pursued by the Trea­ ty. In taking it, the High Authority acted in order to determine the 'optimum outlet', contrary to the requirements of Title One of in other words to define his selling area, a the Treaty, particularly Article 3 (b), (c) and producer must know his own costs as well (0 and the first paragraph and the third as those of his competitors and knowledge indent of paragraph (2) of Article 5. of the cost means knowledge of the trans­ port scales and rates according to destina­ The defendant replies that the system intro­ tion, but it must be clearly understood that, duced by Decision No 18/59 accords with in view of the number of competitors, those the Treaty and refers in general terms to the costs can only be known as a general figure, arguments developed above. Against the and in consequence, the perimeter of a sell­ arguments developed by the interveners, it ing area can be fixed only on the basis of ex draws attention to the following considera­ transport costs; tions:

rise knowledge is preferable to such general Finally, the defendant emphasizes that the knowledge; the power of alignment is of carriers themselves advance the argument particular interest in cases where special that dishonesty will undermine the system rates are employed; envisaged by the High Authority. In a com­ munity governed by the rule of law it must since there are about ten thousand carriers be a basic assumption that requirements of by road there could be no effective control the law are fulfilled. The High Authority re­ if information concerning all contracts of fuses to believe that if the measures are carriage were the subject of separate com­ adopted the Netherlands Government will munication; on the other hand, if tariffs are be unable to ensure that they are complied published, effective supervision can be ex­ with. ercised by those immediately concerned; IV — Procedure why should carriers not be willing to carry out transport commitments on the basis of The application was lodged in due form and a tariff which they fixed themselves and in time. which they must have made allowance for a reasonable margin of profit? The procedure followed the normal course.

Grounds of judgment

I — Before proceeding with the matter consideration must be given to (1) the legal basis of the decision and (2) the procedure which led to its being taken.

The legal basis of the decision appears from its title which states that it is 'on the publication or notification to the High Authority of scales, rates and all other tariff rules of every kind applied to the carriage of coal and steel within the Community for hire or reward' thus reproducing the wording of the third paragraph of Article 70 of the Treaty establishing the European Coal and Steel Community for which the intention is to lay down implementing rules.

This is the case with regard to the third paragraph of Article 70 of the Treaty which, although it establishes a concrete rule with regard to transport valid both for the Member States and for the High Authority, requires implementing mea­ sures for it to be applied to the subjects of the European Coal and Steel Commu­ nity.

With regard to such implementing measures it is necessary to inquire whether the Treaty gives the High Authority power to make regulations either (1) expressly or (2) by implication.

1. The third paragraph of Article 70 provides that The scales, rates and all other tariff rules of every kind applied to the carriage of coal and steel within each Mem­ ber State and between Member States shall be published or brought to the know­ ledge of the High Authority'.

It must be observed that these provisions are silent with regard to the conditions of their application and the implementation measures which they assume and cer­ tainly they do not give the High Authority any power to take decisions in this re­ spect.

Moreover, a comparison between the third paragraph of Article 70 and the pro­ visions of Article 60 (2) (a) shows that in a similar matter the Treaty has made the obligations to publish provided for in Article 60 subject to the power of the High Authority to provide for its application by providing that this publication must take place 'to the extent and in the manner prescribed by the High Authority after consulting the Consultative Committee'.

The fact that for the publication of the price-lists and conditions of sale applied within the Common Market the Treaty has expressly given the High Authority a legislative power, providing even for review by the Consultative Committee, shows the importance which it attributes in this matter to its regulation by the High Authority.

According to the High Authority if the latter are not published the publication of the prices would lose their purpose and be of no use to those concerned.

In order for those concerned to be able to align their prices and maintain heal­ thy competition they cannot remain ignorant of the important factor consti­ tuted by the transport rates in the formation of their quotations on the Com­ mon Market.

According to this argument, the corollary of the obligation to publish prices is the publication of transport tariffs and this obligation follows by implication from the concepts of 'price lists' and 'conditions of sale' referred to in Article 60.

It is wrong both in law and in fact to say that the expressions 'price lists' and 'conditions of sale' cover both those in respect of goods and those in respect of transport.

The seller can be required to publish only his own prices and not the rates ap­ plied by a transport undertaking.

In so far as the seller is required to pay the carrier's charges they represent an element of the seller's cost price.

Although it is true that in the 'Information' which it sent out after certain of the abovementioned decisions on the publication of prices the High Authority refers to transport costs, it does so however only to align the steel prices on the delivery price of another undertaking and even in this case it takes into account the price actually paid which does not require any previous publica­ tion but is subject only to checking afterwards.

(b) From another point of view it is not possible to infer a structural and functional correlation between the obligation to publish the prices of products and the ob­ ligation to publish transport costs from the basic principle of the Treaty which although guaranteeing economic freedom in the sphere of competition is ne­ vertheless aimed at restraining abuse by prohibiting any discrimination, the checking of which is for the High Authority.

Although it is true that by virtue of the general principle, applied to transport by Article 70, checking discrimination and taking action against it is for the High Authority, it not however possible to infer from this principle a power for the High Authority to take decisions concerned with prior control by laying down the publication of scales or rates, since such a power is exceptional and subject to renunciation by the Member States which in the present case the Treaty does not provide for either expressly or by implication.

The High Authority thus has no power to implement the provisions of the third paragraph of Article 70 by means of decisions.

B. Although the third paragraph of Article 70 does not give the High Authority a power of decision to implement its provisions either expressly or by implication it is necessary to inquire whether Article 88 of the Treaty, to which it has recourse, could legally do so.

The reasons required by the first paragraph of Article 88 must justify the re­ cording of the failure and the time-limit referred to therein defines the period in which a pre-existing obligation must be fulfilled and not one created by the decision taken under this article.

If it were possible to equate the 'decision' referred to in Article 88 with a de­ cision within the meaning of Article 14 by which the High Authority carries out the tasks assigned to it, it would be difficult to explain why a rule laid down under Article 88 would be subject to an action in which the Court has unli­ mited jurisdiction allowing any submission to be made based not only on le­ gality but on any reasons justifying failure to act, whereas decisions taken in the form provided for by Article 14 are subject to the rules and time-limits for bringing actions under Article 33.

(b) Article 88 opens means of implementation and is the ultima ratio enabling the Community interests enshrined in the Treaty to prevail over the inertia and resistance of Member States.

It is a procedure far exceeding the rules heretofore recognized in classical in­ ternational law to ensure that obligations of States are fulfilled.

NETHERLANDS v HIGH AUTHORITY

However, Article 88 must be strictly interpreted.

The contested decision could not regard the obligations formulated in the let­ ter of 12 August 1958 as disregarded since they are not the same as those con­ tained in the decision itself.

Thus the High Authority wrongly relied on Article 88 to lay down provisions for the implementation of the third paragraph of Article 70, thereby not only misconstruing Article 88 but also misusing the procedure provided for there as a means of implementation to accomplish a task of drawing up regulations which it did not have.

C. Although the wording of Article 70 and the wording and general structure of Article 88 give the High Authority no direct power to make regulations implemen­ ting the provisions of the third paragraph of Article 70, it is necessary to inquire whether the contested decision may, as the High Authority maintains, be re­ garded not as an independent regulation, but as a 'reasoned decision' recording a failure.

JUDGMENT OF 15.7.1960 —CASE 25/59

On this basis it was the letter of 12 August 1958 which required the Member States in general and the applicant in particular to submit their observations with regard to the obligation which the contested decision recorded as not being fulfilled.

Consideration of the letter sent on 12 August 1958 by the High Authority to the Netherlands Government shows that the High Authority is laying down require­ ments with regard to regulations which have to be adopted by the Governments in respect of road transport. These requirements were intended to be binding with regard to the objective which they lay down, namely the obligation arising, accord­ ing to the High Authority, from the third paragraph of Article 70 to publish the scales, rates and all other tariff rules of every kind applied to road transport.

NETHERLANDS v HIGH AUTHORITY

The Court cannot, however, regard this exchange of letters as constituting the final comments prior to the serious measure of recording a failure to fulfil agreed obligations on the part of a State, especially since the position adopted by the Netherlands Government was in furtherance of the objectives laid down in Article 70 referred to by the High Authority.

It not is sufficient that an imperative proposition contains a reference to the first paragraph of Article 88 for it to be said that any contrary opinion expressed by a Government which takes a view different from that of the High Author­ ity on the proper means to attain the objectives which the latter is pursuing must be immediately regarded as constituting the comments referred to in the first paragraph of Article 88 and as exhausting that Government's arguments on the determination of the obligations which it has in fact or is alleged to have under the Treaty.

This applies particularly in the present case where fundamentally the High Authority could refer only to the objective assigned to the State and had to leave the choice of means to the discretion of the Netherlands Government.

It would indeed be inconceivable that the different attitude, which was, ne­ vertheless, a very comprehensive one and was followed by the initiation of legislative action by the Netherlands Government in the form of the Royal Decree of 24 December 1958 relating to the 'possibilities' submitted by the High Authority could have been in the nature of comments on a precise fai­ lure, or one at least sufficiently specified in law. It is even less conceivable in­ asmuch as argument before the Court has disclosed that the parties share the same view.

In doing this the High Authority only recorded the failure to employ the means which it suggested whereas legally it should have recorded whether in the circumstances there was a failure to attain the proposed objective.

Thus it infringed both Article 88 and Article 70 of the Treaty.

III — In these circumstances and without its being necessary to consider the other arguments presented by the applicant and the interveners it is right to annul Decision No 18/59 of the High Authority.

IV — Under Article 69 (2) of the Rules of Procedures the High Authority must bear the costs.

On those grounds,

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 4, 14, 60, 70 and 88 of the Treaty establishing the European Coal and Steel Community; 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 Communities,

Delivered in open court in Luxembourg on 15 July 1960.

A. Van Houtte A. M. Donner

Registrar President

OPINION OF MR ADVOCATE-GENERAL ROEMER DELIVERED ON 20 JUNE 1960 1

Summary

A. Introduction 748

1 — Translated from the German.