C-42/59

SNUPAT v HIGH AUTHORITY

10. (a) A legal decision conferring on the person concerned subjective rights the legal decision has had pre­ or similar benefits cannot be judicial effects on the benefi­ withdrawn retroactively. ciaries' competitors: Or if the illegal decision was (b) On the other hand, if a decision of adopted on the basis of false or this nature is illegal, it may be incomplete information provided withdrawn with retroactive effect: by the beneficiaries.

If, taking account of the circum­ An appraisal of the respective im­ stances of the case, the public in­ portance of the interests in question terest in safeguarding the princi and, consequently, a decision ple of legality overrides the in­ whether or not to withdraw the il­ terest of the beneficiaries in legal decision with retroactive ef­ maintaining a situation which fect devolve in the first instance on they took to be settled, which the. author of that decision.

In Joined Cases 42 and 49/59

SOCIÉTÉ NOUVELLE DES USINES DE PONTLIEUE —ACIÉRIES DU TEMPLE (SNUPAT), a limited liability company having its registered office at Billancourt (Seine), represented by its Administrative Director in office, Eugene de Sèze, assisted by Jean de Richemont, Advocate at the Cour d'Appel, Paris, with an address for ser­ vice in Luxembourg at the Chambers of Georges Margue, 6 rue Alphonse- Munchen,

applicant, v

interveners,

Application

for the annulment of the letter from the Market Division of the High Authority of 7 August 1959, by which that Division refused to agree to the principle of damages in favour of the applicant claimed on the ground of the alleged wrongful act or omission committed by the High Authority in granting 'deroga­ tions' to certain undertakings in connexion with the equalization of scrap (Case 42/59);

against the implied decision of rejection alleged to result from the silence of the High Authority concerning the requests made by the applicant for the withdrawal of all 'derogations' granted or tolerated by the High Authority in respect of the equalization of scrap, for the fixing of a new rate of levy and for the communication of the latter to the applicant with all the information enabling the latter to undertake a normal check on the calculation of those levies (Case 49/59).

THE COURT

composed of : A. M. Donner, President, Ch. L. Hammes and N. Catalano, Presi­ dents of Chambers, O. Riese (Rapporteur), L. Delvaux, J. Rueff and R. Rossi, Judges,

I — Facts Authority withdrew those reservations 'because of the exceptional nature of the cir The facts may be summarized as follows: cumstances in question'. By letter of 17 1. By successive decisions, the High April 1958, addressed to the OCCF and Authority established equalization published in the Journal Officiel of 17 April machinery for imported ferrous scrap, re- 1958, addressed to the OCCF and published quiring contributions to be paid by ECSC in the Journal Officiel of 13 May 1958, it iron and steel undertakings on the basis of set out the reasons for the grant of the ex their consumption of 'bought scrap', the emptions in question, that is to say the fact 'own arisings' of those undertakings not be that the interveners, with certain of their ing liable. The applicant undertaking, ferrous scrap suppliers, at Sesto San which is closely linked to the Régie Giovanni, Milan and IJmuiden, form 'a Nationale des Usines Renault, especially by single industrial unit'; it added that any connexions of a financial and economic other undertaking placed in a similar situa nature, considered that the scrap which was tion of 'local integration' could also claim delivered to it by the latter should be as the benefit of the exemption. similated to own arisings and, consequently, exempt from equalization. It adduced this 3. The applicant, which was accountable, argument without success before the High according to the CPFI, for a sum of Authority; the Court, by the judgment $228 430.75 by way of equalization which it gave in Joined Cases 32 and 33/58 charges, considered that the basis on which (Rec. 1958-1959, 'P. 275) confirmed the that amount had been calculated was irreg opinion of the High Authority that ferrous ular. In fact, that amount would have been scrap known as group scrap must be smaller if the exemptions had not been regarded as bought scrap. granted to the interveners; according to the applicant, those exemptions were illegal

as own resources. Those decisions were Authority: taken on 6 July and 14 September 1956 as regards Breda, and on 13 and 14 December (a) To revoke, with retroactive effect, all 1956 as regards Hoogovens; however, the express or implied decisions of 'deroga representative of the High Authority at the tion' in favour of other undertakings; OCCF expressed reservations on this (b) To fix the new rate of levy having matter. regard to the revocation of those decis By letter of 18 December 1957, addressed ions and 'to the modification of the to the OCCF and published in the Journal basis of calculation of the levy as the Officiel of 1 February 1958, the High result of the judgment of the Court' and

4. By letter of 7 August 1959, the Director Order the costs of the proceedings to be paid of the Market Division of the High by the High Authority.' Authority stated in reply to those letters: In its reply the applicant submits that the Court should: (a) That the exact scope of the judgments in question, as well as their repercussions 'Take formal note that the applicant leaves to the Court's discretion the merits of the on the equalization contributions 'will be considered by the departments of the submissions relied upon by the High High Authority', which would take 'the Authority and especially on the point necessary decisions' on the basis of the whether the letter of 7 August 1959 con­ information requested from the appli­ stitutes an individual decision; cant on 6 August 1959 as well as from a In the case of an affirmative finding, accede number of other undertakings; to the submissions contained in the applica­ (b) That the Market Division ... sees no tion; basis' for the claim for damages for a Take formal note that the applicant reaf­ wrongful act or omission. firms that it reserves the right to make an application under the Court's unlimited The application against an ultra vires jurisdiction for damages against the High measure' entered in the Court Register on 7 Authority for a wrongful act or omission, in September 1959 (Case 42/59) is directed compensation for the damage suffered by it against that rejection of the claim for com­ as a result of the abovementioned deroga­ pensation. tions; Further, the applicant disputes by an ap­ Take formal note that it intends to request plication for failure to act, of 28 October the joinder of this new application with that 1959, entered in the Court Register on 31 at present before the Court, entered in the October 1959 (Case 49/59), the implied Register under No 42/59; decision of rejection which it considers to Order the High Authority to pay the costs.' result from the silence of more than months The defendant in its statement of defence maintained by the defendant concerning the contends that the Court should: claims of the applicant expressed in letters of 29 and 30 July 1959 and mentioned 'Reject the application of SNUPAT as inad­ above at point 3 (a) and (b). missible or alternatively unfounded, and order the applicant to pay the costs of the II — Conclusions of the parties case.'

request not only to revoke with retroactive The defendant adheres to the conclusions effect to the date on which they were agreed which it put forward in respect of the main the implied or express decisions granting application. derogations which it may have taken or in which it may have acquiesced in favour of III — Submissions and argu­ other undertakings or even which it ments of the parties tolerated, but also, in view, on the one hand, of the revocation of those decisions and, on The submissions and arguments of the par­ the other hand, of the modification of the ties may be summarised as follows: levy as the result of the judgment of the Court, to fix the new rate of levy and to 1. Application 42/59 communicate the latter to the applicant, together with all information enabling it to Admissibility make its normal check on the calculation of The defendant contends that the application that levy; is inadmissible for two reasons: Order the costs to be borne by the High (a) The contested letter does not constitute a Authority.' decision of the High Authority: it is signed The defendant contends that the Court by the Director of the Market Division should: acting in his own name and not in the name '(a) Dismiss as inadmissible the application and on behalf of the High Authority; for failure to act in so far as it asks for further, its contents do not satisfy the condi­ the annulment of the refusal to fix the tions which must be fulfilled in order that a new rates of contribution and to com­ measure may have the nature of a decision, municate to SNUPAT all information as laid down by the case-law of the Court. enabling it to make a normal check on (b) It appears from the applicant's letter of that amount; 29 July 1959 and from the reply of the (b) Also, dismiss as unfounded the applica­ Market Division of 7 August 1959 that the tion for failure to act submitted by only matter in dispute is the existence of a SNUPAT, wrongful act or omission. An application for with all legal consequences, especially as monetary compensation for a wrongful act concerns the rules of costs'. or omission can be based only on Article 40 of the Treaty and not on Article 33 which 3. Cases 42 and 49/59, intervention deals with the annulment of decisions of the

itself the right very shortly to lodge a third intricate nature of the question. As to the anion before the Court' to be devoid of in­ misuse of powers, no proof of it has been terest and consequently inadmissible. adduced.

The defendant also opposes the joinder to As regards the damage claimed, neither its the present action of the action yet to be existence nor its amount has been es­ commenced. tablished; the absence of any proof of real damage can lead only to the dismissal of the Substance application as soon as its substance is ex­ amined. (a) The applicant considers that the dis­ The intervener Hoogovens claims that there puted 'decision' is irregular, since it does not was no wrongful act or omission since the contain a statement of reasons. In fact, it refusal of the High Authority to withdraw merely indicates that the High Authority the exemptions is not vitiated by illegality 'sees no basis for your claim for compensa­ or by misuse of powers. tion for a wrongful act or omission'; that The intervener Breda Siderurgica does not is hardly a sufficient enumeration of the es­ adopt a position on the substance of Ap­ sential findings of fact on which the legal plication 42/59. justification for the measure depends. The defendant recalls that a letter from an 2. Application 49/59 official who is not acting pursuant to a power delegated by the High Authority need Admissibility not be reasoned, since such a letter does not A — Submissions put forward by the defen­ constitute a decision (see above on admis­ dant sibility). (b) According to the applicant it follows The defendant puts forward the following from the judgment of the Court in Joined arguments:

Court in Cases 32 and 33/58 was given, in equalization contribution which is claimed order to apply the principles of that judg from it'. ment and to adopt the new rate consequent upon it. There is therefore no failure to act. B—Submissions put forward by the Furthermore, there can be no question of interveners finding a failure to act since the depart The intervener Hoogovens repeats certain of ments of the High Authority are entitled to a reasonable time in order to finish this the submissions of inadmissibility raised by the defendant, but it adds to them the fol work, which will be possible only when they lowing submissions and arguments: have obtained all the necessary information. At the appropriate time the High Authority

emption. Since there was no derogation, the Authority has replied to the claimant 'that action for failure to act, as presented, does the question is under consideration'. not lie. On point (b): The request for modification The applicant replies that the High of the rate of levy is the normal consequence Authority certainly used the term 'deroga of the application for withdrawal of the ex tions' in its letters of 18 December 1957 and emptions and is an integral part of it.

. . decisions of it to make public the reasons for its actions derogation, etc.', the applicant requested and to publish such data as could be useful a decision which would have been general to those concerned. The applicant asks only not only in relation to the wording of the for the application of these principles; there said request but also in respect of its ob can therefore be no question of 'super ject and effect because without mention vision'. ing an addressee 'it was to lay down a The defendant replies in its rejoinder that measure applicable for the past and for the said passages of the Meroni judgment the future to all persons finding have nothing to do 'with the applicant's themselves in the circumstances specified claim to be entitled to supervise in advance for its application' (see the judgment in the work of the departments of the High Joined Cases 36 to 38, 40 and 41/58, Authority in so far as such action has not SIMET and Others v High Authority); yet been put into effect by a decision in The applicant's request that the rate of respect of the applicant as to the amount of contribution be modified is closely linked

to the request mentioned above; further fered to prove; such an obligation cannot be more, such a modification would clearly found in the judgment of the Court in amount to a general decision of a Joined Cases 32 and 33/58, nor does it fol legislative character. low from Article 34 of the Treaty, since that judgment was not a judgment of annulment. In the light of these remarks, Hoogovens Furthermore, even if such a duty on the puts forward three submissions of inadmis High Authority were proved, the application

On point (a): The contested decision merely justified, it had no power to withdraw them confirms the point of view already adopted except by resorting to the procedure laid previously by the High Authority in its let down by Article 53 (b), that is to say by ters of 18 December 1957 and 17 April seeking the unanimous assent of the Council 1958. Either the applicant could have of Ministers. brought an action for annulment against the The intervener Breda Siderurgica also puts confirmed decision and did not do so within forward the submissions set out above under the limitation period, and therefore, since points (a) and (c) and it adduces similar the period within which an action for annul

On point (b): Although it may perhaps be the decision sought. The withdrawal of the accepted that the applicant has alleged a exemptions would have the effect of reduc misuse of powers as regards the granting of ing the amount of the contribution due from exemptions, it has not shown any reason of such a character as to establish a misuse of the applicant and therefore concerns it per sonally; further, in its letter of 29 July, it powers vitiating the refusal to withdraw asked that the new rate of levy should be them; that is precisely what it should have notified to it, which necessitated an in done since, even supposing that the exemp dividual decision. Consequently the implied tions are vitiated by misuse of powers, it decision of refusal has, in part at least, the does not necessarily follow that the same is true of the refusal to withdraw them. nature of an individual decision.

SNUPAT v HIGH AUTHORITY

tions, that is to say, on the one hand, Deci­ 3. Submissions based on the argument that sion No 13/58 of the High Authority of 24 the contested decision is an individual July 1958 (JO of 30. 7.1958) permitting the decision

resources'. The submission based on the ex being out of time the applicant should have disputed the decisions confirmed within the piry of the limitation period cannot period of one month from the publication in therefore be accepted. Further, by its letters the Journal Officiel on 1 February and 13 of 18 December 1957 and 17 April 1958, May 1958 of the letters of 18 December the High Authority interpreted Decision No 1957 and 17 April 1958.

reasoned. The applicant replies to these arguments with those already reproduced above (2 (a) On point (c): The duty to withdraw the ex and (b)). emptions follows from the judgment in Cases 32 and 33/58. As the result of that 4. Submission based on the retroactive judgment, the High Authority was required nature of the decision sought immediately to take retroactive measures. The intervener Hoogovens states that as Consequently, an application based on the first paragraph of Article 35 is admissible. early as 1956 the Brussels organizations ac The existence of misuse of powers is by no cepted that ferrous scrap from Breedband means excluded in case of limited jurisdic was Hoogovens' own arisings; the High tion, since limited jurisdiction has to do with Authority accepted that interpretation, the 'object' and the misuse with the 'pur which applies equally to the past, that is to pose' of the decision. say the situation created since 1 April 1954. Moreover, the application may also be based According to the case-law of the Court an on the second paragraph of Article 35; the administrative measure conferring in High Authority had the right, under its dividual rights can be revoked only within a Decision No 13/58, to revoke, where ap reasonable period of time, and it certainly propriate, any proceedings of the Imported cannot be revoked after several years of ap Ferrous Scrap Equalization Fund and of the plication. Since 1954, Hoogovens, in the Joint Bureau of Ferrous Scrap Consumers management of its business, has taken ac and to take such measures as that revoca count in perfectly good faith of the fact that

judgment of the Court and Decision No would be contrary to the fundamental prin­ 13/58 constitute new facts capable of alter­ ciples of good administration and legal cer­ ing the legal basis of the original exemption tainty. decisions. Further, the damage suffered by Hoogovens

JUDGMENT OF 22. 3. 1961-JOINED CASES 42 AND 49, 59

would be, proportionally, infinitely greater compromised since 'it can always dispute than the benefit which would accrue to the the amount of its contribution to the

Moreover, even and leaves to the discretion of the Court the when the interests of third parties are at is- question whether what is at issue is an ob sue, the theory of the confrontation of in jection of inadmissibility or a substantive terests prevents a withdrawal and above all submission. It adds that the applicant, in its a retroactive withdrawal. previous application (32/58), far from criticizing the 'Hoogovens solution', Substance demanded that it should be extended.

sion. However, by relying on the ir Authority, by granting the disputed exemp revocability of the measures in question, the tions, has altered the provisions establishing defendant has by implication accepted their the equalization machinery and especially illegality. The criterion of the reasonable Article 5 (2) [sic] of Decision No 2/57 which period of time cannot apply if third parties defines the concept of 'own resources' in ac are affected. cordance with the 'semantic value of the ex Furthermore, such a period did not begin to pression', as the letter of 18 December 1957 run until the date of the Court's judgment confirms. The decision confirming this (17 July 1959), since it was only on that modification was not taken in accordance date that the illegality of the exemptions with the correct procedure, that is to say, became apparent.

SNUPAT v HIGH AUTHORITY

Moreover, according to the judgment of the (26 January 1957), the exemption granted Court the letters of 18 December 1957 and to Hoogovens by the Brussels organizations 17 April 1958 which settled that interpreta­ in December 1956 was perfectly well tion constitute 'directives of an internal known. If the 'legislature' of the Com­ character' and not decisions. munity (Council of Ministers and High The applicant replies that an interpretation Authority), in order to maintain that ex­ which adds something to a provision or emption, considered the wording of Decision reduces the scope of it gives it an effect No 2/57 sufficient, it therefore considered which was not desired by its authors. that the exemptions were in conformity with The intervener Hoogovens replies first of all the principles laid down by the basic deci­ that the applicant can put forward only the sions.

JUDGMENT OF 22. 3. 1961-JOINED CASES 42 AND 49/59

32 and 33/58. The applicant replies to this latter argument The misuse of powers appears equally from that although the Court expresses itself in the fact that the exemptions were granted the subjunctive its meaning is not con with full knowledge of the discriminatory ditional; 'it asserts that an interpretation financial repercussions which they entailed which is "too wide" (and the adverb "too" for the undertakings subject to the equaliza clearly indicates the error committed by the tion charge. The contested decision which High Authority) cannot in any way justify refused to revoke the exemptions is also other exemptions since that grant is con vitiated by this defect. trary to the very principles of the system Lastly, the applicant complains of the im and of the Treaty'. precision of the defendant's decisions. The intervener Hoogovens, after recalling The defendant disputes the existence of dis once more that the applicant can put crimination, since the ferrous scrap used by forward only the submission of misuse of Hoogovens and Breda was not regarded as powers, considers that the applicant, by group scrap, but declared to be assimilable deducing from the illegality of the exemp to own arisings, the exemption of which has tions the illegality of the refusal to abrogate been accepted by the Court as being legal. them, has raised a type of objection of il Furthermore, by its letters of 18 December legality which cannot be admitted, since none of the conditions which allow the ob 1957 and 17 April 1958, the High Authority declared that such an exemption would be jection of illegality to be raised are present. granted to undertakings which could prove The applicant repeats that it regards the the same conditions: there was therefore no contested decision as an individual decision.

3. Third submission: Misuse of powers Moreover, under Article 47 of the Treaty, The applicant recalls that according to the the High Authority, as the Meroni judgment wording of the judgment in Joined Cases 32 (Case 9/56) recalled, should have made and 33/58 'Any action having the objective public the reasons for its action and in par or the effect of artificially distorting . . . ticular should have specified those which competition must be regarded as dis caused it to treat the ferrous scrap in ques criminatory and incompatible with the tion in the same way as own arisings.

SNUPAT v HIGH AUTHORITY

sidered that own resources were involved. scrap to own arisings constitutes a dis­ 'Local integration' is both an objective and criminatory advantage in relation to other a technical criterion; it is not based on a for­ undertakings. Hoogovens forms a group tuitous link. with Breedband.

That contract con dant, which complains that the applicant has confused cause and effect. tains a series of 'highly confidential' clauses. The intervener states that it would agree to The intervener Hoogovens repeats and ex any measures of inquiry which the Court pands the arguments of the defendant. The considered necessary if it took account of complaint of discrimination fails because, in the necessity for Hoogovens to maintain the absence of local integration with the secrecy regarding information which must Régie Renault, the applicant is in a situation not be divulged to its competitors.

the parties'. of equalization and since their effect on the The intervener Hoogovens maintains and price of steel does not even amount to 1%. expands above all the following two argu The intervener Breda Siderurgica repeats ments: these arguments in part. (a) The own arisings in question are its The intervener Hoogovens recalls that the property. There has therefore been applicant must prove the misuse of powers neither purchase nor transfer of allegedly vitiating the decision of refusal ownership. which it disputes, and not the misuse of (b) In any case, these own arisings must be powers allegedly vitiating the grant of the treated as Hoogovens' own resources disputed exemptions. Further, the effect of because, taking account of the an exemption on the situation of other un relationship which exists between dertakings in the Community cannot be Hoogovens and Breedband, those two taken into account to show a misuse of companies form in fact a single under powers. taking. The applicant recalls that the Court has On point (a): According to the intervener, clearly stated that the assimilation of group the relationship between Breedband and

productive capacity. Consequently, both of production'. A purchase and sale transac­ tion is inconceivable without the existence them have the exclusive right to enjoy and use that capacity, and during manufacture of a price. they have undivided power as to the control The applicant replies to these arguments and right of disposal of the things produced that: jointly. In accordance with this company 1. If two companies form a third company structure the sale of products is entrusted to between them the products manufactured a common sales organization, of which the are the property of that third company and two members are shareholders. The produc­ are not subject to the undivided joint tion of the two companies is carried on on ownership of the members. Otherwise, it their common account and at joint risk, all would have been easy for the Régie Renault losses, whether they occur in the Hoogovens and the applicant to draw up such a con­ factories or in those of Breedband, being tract, and the own arisings of the Régie borne by the two members in accordance Renault would then have been the un­ with the rules governing the division of the divided property of the two companies. joint annual result. According to the same 2. If such a company exists as between rules all profits are entered by the two Hoogovens and Breedband, it is concealed members in common and then divided and it therefore does not come within the between them. Before dividing the profits jurisdiction of the High Authority, which each of the members makes provision for its granted the exemption only to the two un­ production costs. dertakings Hoogovens and Breedband. The According to Netherlands civil law, the acceptance of such concealed companies members of such a company are joint would render impossible the supervision owners of the goods produced in common. which the High Authority must exercise un­ When Breedband makes scrap available to der Article 65 et seq. of the Treaty. It is also Hoogovens there is a 'transfer from one contrary to the case-law of the Court on the joint owner to the other of part of what was concept of 'output'. in undivided joint ownership which may 3. The intervener is wrong in claiming that now be divided'. It is a matter of the ter­ the price which is charged to its account is mination of undivided ownership and not of paid into joint ownership. As soon as a com­ a purchase and sale. Since the division pany comes into existence, monies which it between joint owners is purely declaratory receives in exchange for goods do not fall in character, in accordance with Articles into joint ownership but become the 1129 and 1689 of the Netherlands Civil property of that company. Code, Hoogovens is deemed always to have The financial and administrative links been the owner of the ferrous scrap which is which unite the intervener to Breedband are put at its disposal by Breedband. absolutely identical to those which exist

Breedband and Hoogovens are two different funds from the Marshall Plan, it was pos undertakings and have distinct company sible to gather the necessary means; these names. In accordance with the principles were partly devoted to the extension of laid down by the High Authority and ac Hoogovens, and the balance of Fi. 135 mil cepted as valid by the Court, own arisings lion was put into the construction of the which the Breedband company transfers to Breedband rolling mills, it being understood the intervener cannot therefore be regarded that this was a matter of 'the extension .

The appli a separate company was created, the NV cant wrongly relies on the concealed nature Breedband, to which the State subscribed of this company because, according to 97% and Hoogovens 3% of the capital. The Netherlands law, undivided co-ownership of establishment of that distinct company was things produced in common may be relied therefore imposed by circumstances; it does not in the least distort normal conditions of upon against third parties and that pos sibility is not subject to special measures competition; lastly, 'the creation of the concerning publication. In that respect, the Breedband company and its relationship intervener refers to the preamble to the with Hoogovens are of a quite different Netherlands draft law which was the basis order [from the] relationships which prevail in the formation of industrial or financial of the law of 8 May 1952, allowing the for mation of the Hoogovens-Breedband group; groups'. that document has been placed on the file. The applicant replies that it was an equally On point (b): According to the intervener, fortuitous reason, of a fiscal nature, which the arguments which the Court accepted in caused the separation between SNUPAT its judgment in Joined Cases 32 and 33/58 and the Régie Renault.

JUDGMENT OF 22. 3. 1961—JOINED CASES 42 AND 49/59

tuitous links which are ordinarily The Court has used the name by which the characteristic of groups, but result from the undertaking is distinguished as the sole fact that Hoogovens and Breedband form a criterion for the concept of own resources, single undertaking. and it is only within an undertaking thus That integration leads to an improvement in defined that there is reason to take account output such as does not exist within groups of improvement in productivity. By refusing of undertakings; it eliminates all transport to accept exemptions in case of fortuitous costs and allows immediate delivery or links, including geographical links, the provision by Hoogovens to Breedband of a Court has excluded the possibility of taking whole series of raw materials (such as gas, account of the use of a single site. water, steam, oxygen) and of services; one of Hoogovens and Breedband are two different these improvements in output follows from undertakings.

The in and it is sufficient that their workshops are tervener interprets that judgment as mean some hundreds of kilometres apart for their ing that a single site is a prerequisite for ferrous scrap to be taxed. regarding the use of arisings as an improve The intervener Hoogovens replies that the ment in productivity. criterion of the company name is not to be The equalization contribution paid by the found in the basic decisions, nor has it been intervener on the bought ferrous scrap adopted by the Court.

The Court has accepted expression', and that such a result would clearly be unjust; 'That complete local integration between furthermore, such a double charge would its plant and that of Breedband has the constitute a discrimination prohibited by the consequence that its use of arisings from Treaty. Breedband's workshops constitutes an The applicant replies that the only dif improvement in productivity within a

single undertaking and that this ferrous Authority has not conformed to the princi scrap has therefore properly been as ples accepted by the Court'. similated to own resources.' The defendant considers that the facts men The defendant agrees entirely with the tioned by the intervener 'constitute further arguments of the intervener. It adds that arguments showing the correctness of the rather than confine the matter to the High Authority's interpretation'. Like the criterion of the identity of the company intervener, it is of the opinion that the lat name alone, it was necessary 'to give ter's situation is technically very different precedence to reality over the simplicity of from that of the applicant. formal legal criteria in order to adhere not only to the letter of legislative decisions but 5. As regards more especially the retroac also to their spirit'. tive effect of the withdrawal sought The intervener Hoogovens submits that the B — Breda Siderurgica Court should rule 'that the High Authority The intervener Breda Siderurgica states would have infringed fundamental rules of that the ferrous scrap which it uses comes law by retroactively withdrawing the ex from other factories in the same industrial emptions granted'. It refers on this point to group established within the same precinct the submissions which it made against the at Sesto San Giovanni, Milan, this last be admissibility of the application. ing a single establishment surrounded by a The intervener Breda Siderurgica, putting wall, served by a main entrance and two forward the same arguments as Hoogovens, side entrances common to all departments asks the Court 'to rule that the High and by a single railway link. Authority would have infringed fundamen In this industrial complex all the general tal principles of law if it had retroactively departments are common: revoked the exemptions granted to certain purchase, transformation and distribution undertakings, among them Breda of electric energy; Siderurgica'. purchase and distribution of raw materials The applicant replies that without retroac by pipelene ; tive effect the decisions of the Court would distribution network of industrial and have no effect, since the equalization drinking water; scheme has been abolished. drainage network;

registered office at Velsen ferrous scrap recovered within the factories (Netherlands), by two orders of the at Sesto San Giovanni must be regarded as Court of 20 January 1960; the 'own resources' of the intervening com (b) Breda Siderurgica, SpA, having its pany. registered office at Milan (Italy), by The applicant replies that the facts men order of the Court of 6 May 1960. tioned by the intervener are 'completely for By an order of 29 January 1960, the Court

JUDGMENT OF 22. 3. 1961—JOINED CASES 42 AND 49/59

Following, the termination of the written and those of the intervener Hoogovens, at procedure and on hearing the views of the IJmuiden; these inspections took place Advocate-General the Court decided to in­ respectively on 23 September and 7 October spect the factories of the intervener Breda 1960.

Siderurgica at Sesto San Giovanni, Milan,

Grounds of judgment Case 42/59

I — The admissibility of the applicant's main conclusions

The defendant submits that the application is inadmissible on the ground that the letter of 7 August 1959 from the Market Division does not constitute a decision of the High Authority and, alternatively, that there cannot be an application in respect of an ultra vires measure in this connexion.

Such a ruling may not be obtained by means of an action for annulment under Arti­ cle 33 of the ECSC Treaty, which concerns the annulment of decisions of the High Authority and on which the application is based, but can be founded only upon Ar­ ticle 40 or possibly upon Article 34.

It is not possible to base a contrary argument on the third sentence of Article 40 of the Statute of the Court of Justice of the ECSC; in fact, although that provision

SNUPAT" v HIGH AUTHORITY

refers to cases in which a person who considers that he has suffered damage owing to a wrongful act or omission of the Community has made a prior request to the relevant institution of the Community, it is nevertheless intended only to fix a limitation period, without altering the character of the application provided for in the matter.

For these two reasons the application is inadmissible.

II — The admissibility of the applicant's supplementary conclu­ sions

Admissibility

I — Submissions put forward by the defendant

1. As regards the request to revoke the exemptions the defendant relies on the dis­ cretion of the Court on the question whether the High Authority has failed to act, despite the fact that within the period of two months laid down in the third paragraph of Article 35 the Market Division replied to the applicant that the ques­ tions raised were being studied.

JUDGMENT OF 22. 3. 1961—JOINED CASES 42 AND 49/59

Nevertheless, such a reply does not exclude the admissibility of an application for failure to act, since it does not amount to a decision within the meaning of the Treaty.

Despite that letter there is an implied decision of refusal, in accordance with Article 35 of the ECSC Treaty, so that from this point of view the application for failure to act is admissible.

The reasoning confuses the admissibility of the application with its validity.

According to the third paragraph of Article 35 of the ECSC Treaty proceedings may be instituted for failure to act if at the end of two months the High Authority has not taken any decision.

It follows from the foregoing that the objections of inadmissibility raised by the defendant must be rejected.

SNUPAT v HIGH AUTHORITY

II — Submissions put forward by the interveners

The interveners raise objections of inadmissibility which were not put forward by the defendant.

Thus the withdrawal by the High Authority of the reservations previously for­ mulated by its representative concerning the disputed exemptions had the force of a decision; the exemptions granted to the interveners therefore constitute decisions.

As regards the argument that the refusal to revoke the exemptions granted to Breda and Hoogovens is a purely confirmatory measure, it is true that a measure which merely confirms a previous measure cannot afford those concerned the opportunity of reopening the question of the legality of the measure which is confirmed.

JUDGMENT OF 22. 3. 1961—JOINED CASES 42 AND 49/59

However, that general rule does not apply if there is a new fact of such a character as to alter the essential circumstances and conditions which governed the adoption of the first measure.

By commencing an action based on Article 35 of the Treaty the applicant asked the High Authority to implement the Court's judgment in Joined Cases 32 and 33/58, maintaining that, considered in the light of the grounds of that judgment, the ex­ emptions granted to undertakings in a situation of local integration were no longer justified and must be withdrawn.

Nevertheless, the question whether the judgment mentioned is such as to invalidate the implied refusal at issue must be examined in relation to the substance of the case; in these circumstances the argument based on the alleged confirmatory nature of the contested decision cannot be accepted as an objection of inadmissibility.

They further maintain that even if the decision were individual the applicant could rely only on misuse of powers to the extent to which the application is based on the second paragraph of Article 35.

(a) The nature of the contested decision must be assessed in the light of the wording of the prior request addressed by the applicant to the High Authority.

SNUPAT v HIGH AUTHORITY

By that request, the applicant sought in particular the adoption of a series of in­ dividual decisions to withdraw exemptions.

In the opinion of the Court that was certainly the essential element of the request, since at the time when it was formulated no case similar to that of the two in­ terveners had come to light, so that it referred in substance to the withdrawal of the exemptions granted to Hoogovens and Breda Siderurgica.

Thus the refusal to accede to the applicant's request has the nature of an individual decision.

It should however be considered whether, as the intervener Hoogovens maintains, that rule is inapplicable in the present case since an application for failure to act based on the second paragraph of Article 35, according to the very wording of that provision, can only be an application concerning misuse of powers.

That objection disregards the fact that the application is in effect based on the first paragraph of the said article.

JUDGMENT OF 22. 3. 1961—JOINED CASES 42 AND 49/59

In fact the applicant has clearly expressed the opinion that the High Authority is re- quired to make a finding acquiescing in the prior request which the applicant ad­ dressed to it.

It follows from the preceding considerations that the objections of inadmissibility which have been raised are unfounded.

4. Finally, the defendant and the interveners raise an objection of inadmissibility based on the fact that the retroactive withdrawal sought exceeds the powers of the High Authority, since an administrative act conferring subjective rights can be revoked only within a reasonable period of time, and such period has been greatly exceeded in the present case. The principle of the balance of the interests in ques­ tion is also said to stand in the way of the withdrawal sought.

It is appropriate therefore to consider first whether the disputed exemptions are il­ legal.

A—Are the disputed exemptions illegal?

1. The ferrous scrap in question, used by Hoogovens and Breda Siderurgica and coming from their sister undertakings, was exempted from equalization in 1956 and 1957 because of the local integration of the workshops in question, although it might possibly fall within the concept of group scrap.

SNUPAT v HIGH AUTHORITY

In its judgment given on 17 July 1959 in Joined Cases 32 and 33/58 (SNUPAT v High Authority) the Court decided that an exemption in respect of group scrap was unjustified.

In these circumstances the abovementioned judgment showed the exemptions in a new light; this should have led, after a fresh examination of their legal basis, to a decision concerning their legality.

In these circumstances, the silence of the High Authority on the request that the disputed exemptions be withdrawn, far from amounting to a mere confirmation of its previous attitude, implies a new decision, to the effect that the principles laid down by the judgment of the Court in Joined Cases 32 and 33/58 did not require the High Authority to alter its position.

JUDGMENT OF 22. 3. 1961—JOINED CASES 42 AND 49/59

The refusal to revoke the disputed exemptions thus constitutes a new decision of the High Authority, a decision which the applicant was able to dispute and which it dis­ puted within the prescribed period by the present application.

2. It is appropriate to pass next to a consideration of the problem of the legality of the disputed exemptions on the basis of the principles laid down by the Court in its previous judgment (Joined Cases 32 and 33/58).

In granting the exemptions on the ground of the local integration of the workshops, the High Authority justified its decision on the basis of a link which was essentially geographical, and therefore fortuitous, which the Court held to be unacceptable in its previous judgment.

Further, in the aforementioned judgment, the Court laid down the principle that the exemption of group scrap, since it causes discrimination prohibited by Article 4 of the Treaty, is contrary to the Treaty.

Furthermore, as regards the Breda industrial complex, only the Breda Siderurgica company produces steel whilst the other companies only process the steel.

In these circumstances the Breda Siderurgica company and the other companies in the same group cannot constitute a single undertaking within the meaning of Arti­ cle 80 of the Treaty, which refers solely to undertakings 'engaged in production in the coal or the steel industry'.

Local integration, even of a very high order, and the economic interdependence of the production of each of the undertakings forming the group cannot obscure the fact that the workshops where the ferrous scrap is recovered belong to legal persons distinct from the interveners.

If the interested parties choose expressly to group themselves together according to a given legal form in anticipation of certain advantages, they have no grounds for demanding that this legal form should not be taken into account whenever its ap­ plication is capable of operating to their disadvantage.

It would further be unjust to apply to ferrous scrap moving between two distinct companies rules differing according to whether those companies occupy neighbour­ ing or more or less widely separated premises.

Such a system would result in increasing the extra burden consequent upon the necessity of paying for transport charges and therefore might artificially increase the differences in costs of production, which would run counter to the Treaty as well as to the basic principles of the equalization scheme.

For these reasons the rules laid down in the judgment in Joined Cases 32 and 33/58, according to which so-called group scrap must be assessed for equalization, apply equally to the interveners.

3. Hoogovens claims that the disputed exemptions must be maintained to avoid a double charge on the same undertakings for the same quantity of ferrous scrap, of which the Court disapproved in its previous judgment.

The Court does not accept that reasoning.

In its judgment in Joined Cases 32 and 33/58, the Court ruled against double im­ position of the levy only in so far as this would affect one and the same undertaking and not in a case in which the levy would be apportioned between several separate undertakings.

Consequently the decisive test is not whether the material is technically identical, but whether the purchaser and the undertaking in which the material is recovered are the same.

In fact, in very numerous cases there is a technical relationship between ferrous scrap recovered during the manufacture of finished products, on the one hand, and ferrous scrap used in the production of steel intended for such manufacture, on the other.

There is reason to note first of all that by the expression 'own resources' Decision No 2/57 refers to ferrous scrap which has from the beginning been the property of an undertaking within the meaning of the Treaty.

That interpretation, far from contradicting the intention of the author of the deci­ sion, was adopted by the latter in its letter of 18 December 1957 (JO of 1, 2. 1958, p. 45/58), since there it is specified that the concept of 'own resources' must be in­ terpreted 'in accordance with the semantic value of the expression'.

The concept of 'undertaking' as conceived by Article 80 of the Treaty corresponds to the concept of a natural or legal person, as is set out above under A 2.

Consequently, when a decision of the High Authority simply refers to the 'under­ takings referred to in Article 80 of the Treaty' there is reason to assume that it means by this the natural or legal persons in whose name the activities referred to in that article are carried on.

In the present case it is furthermore established that such an interpretation corres­ ponds to the intention of the author of Decision No 2/57 since, in its letter of 18 December 1957, the High Authority specified 'that an undertaking ... is defined in all circumstances by its name'.

In addition, the reference to an undertaking's 'own' ferrous scrap implies the con­ cept of 'owner', which has a strictly legal nature.

According to the civil law of the Netherlands, the members of a 'maatschap' are joint owners of the goods produced in common.

These allegations are based essentially on the contract made between Hoogovens and Breedband, the wording of which the intervener did not see fit to place on the file.

The intervener emphasized the 'extremely confidential' nature of this contract and stated that it had serious doubts about disclosing its contents to the applicant and to the intervener Breda Siderurgica, which are its competitors.

It stated nevertheless that it was willing to make the contract available to any person bound by professional secrecy, in the presence, if need be, of the Judge- Rapporteur, or to the High Authority for the purpose of such investigation as the Court might consider necessary.

It would infringe a basic principle of law to base a judicial decision on facts and documents of which the parties themselves, or one of them, have not been able to take cognizance and in relation to which they have not therefore been able to for­ mulate an opinion.

At the time of the inspection by the Court at IJmuiden, the representative of the in­ tervener, when questioned on the subject, stated that the contract contained no ex­ press reference to the system of ownership, but that in the opinion of the intervener the proof of joint ownership emerged from several of its clauses.

Consequently it has not been established that the ferrous scrap which Hoogovens receives from Breedband constitutes 'own resources', in accordance with the seman­ tic value of that expression.

(c) The same finding must be reached on the subject of the intervener Breda Siderurgica, which has not even alleged the absence of a change of ownership of the ferrous scrap in question.

5. Consequently the exemptions granted to the interveners amount to true deroga­ tions.

Decision No 2/57 provides neither for general derogations nor for special deroga­ tions from the concept of own resources.

Nevertheless, in the context of financial arrangements involving the equalization of charges, the power to grant derogations must not be presumed, especially since any derogation in favour of one contributor necessarily increases the burden on the others.

The disputed derogations were therefore granted as the result of a mistaken in­ terpretation of Decision No 2/57.

The facts alleged have not been disputed by the applicant.

Nevertheless, in the opinion of the Court, it emerges from the general structure and objectives of Decision No 2/57 that the concept of 'bought scrap' includes the deliveries in question.

As the Court has already found in its judgment in Joined Cases 32 and 33/58, it emerges from the objectives and fundamental principles of the equalization machinery that the exemption of own resources constitutes an exception to the rule that all consumers of ferrous scrap are required in that capacity to pay equalization contributions.

Consequently it is not the concept of 'own resources' but rather that of 'bought scrap' which, in case of doubt, must be interpreted widely.

There is therefore reason for regarding as 'bought ferrous scrap' all scrap in which there has been a transfer of property for an agreed price, whether this transfer is ef­ fected under a contract of sale in the real meaning of the term, or by virtue of a comparable contract and whether or not there exists between buyer and seller a sharing of profits and losses.

Such is the case as regards the ferrous scrap in question.

On the one hand, the interest of the beneficiaries and especially the fact that they might assume in good faith that they did not have to pay contributions on the ferrous scrap in question, and might arrange their affairs in reliance on the con­ tinuance of this position.

On the other hand, the interest of the Community in ensuring the proper work­ ing of the equalization scheme, which depends on the joint liability of all under­ takings consuming ferrous scrap; this interest makes it necessary to ensure that other contributors do not permanently suffer the financial consequences of an ex­ emption illegally granted to their competitors.

It should also be noted that the statement of account is still provisional in character and that it is possible to spread the payment of arrears over a period of time.

Furthermore, according to the law of all the Member States, retroactive withdrawal is generally accepted in cases in which the administrative measure in question has been adopted on the basis of false or incomplete information provided by those con­ cerned.

The Court cannot exclude the application of this principle in the present case.

In fact it appears from a statement made by the representative of the intervener Hoogovens at the time of the visit of inspection by the Court at I Jmuiden, as well as from the 1959 Annual Report of Breedband NV, that the latter also provided Hoogovens with ferrous scrap arising during the rolling of steel slabs which did not come from Hoogovens.

II— The action for failure to act brought against the implied refusal to fix the new rate of charge and to communicate it to the applicant with all the necessary in­ formation

Any withdrawal of disputed exemptions would involve an obligation on the part of the defendant to fix the new basic rate of equalization, to substitute for the deci­ sions imposing a contribution on the applicant new and properly reasoned decisions based on a correct calculation and to communicate those decisions to the applicant.

However, the departments of the High Authority must have, where necessary, a reasonable period of time in which to carry out these operations, so that it cannot be accepted that the defendant was required to adopt the decisions sought at the latest by the date on which it is considered to have taken the contested implied decision.

Nevertheless, the annulment of the refusal to withdraw the exemptions extends necessarily to the refusal to rectify the contribution.

Consequently, that part of the contested decision must also be annulled.

In these circumstances there is no need to consider whether the contested decision is

As regards Application 49/59, it is appropriate that the defendant and the in­ terveners should bear their own costs, that the defendant should be ordered to bear the costs of the applicant, apart from the costs due to the interventions, and that the interveners should be ordered to bear the costs caused to the applicant by their respective interventions.

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, 33, 34, 35, 40, 53 and 80 of the ECSC Treaty; Having regard to the Protocol on the Statute of the Court of Justice of the ECSC; Having regard to Decision No 2/57 of the High Authority; Having regard to the Rules of Procedure of the Court of Justice of the European Communities,

THE COURT

hereby:

In Case 42/59:

1. Dismisses the application as unfounded;

(b) Orders the defendant to bear the costs of the applicant, apart from the costs caused by the intervention;

(c) Orders the interveners to pay the costs caused to the applicant by their respective interventions.

Donner Hammes Catalano

Riese Delvaux Rueff Rossi

Delivered in open court in Luxembourg on 22 March 1961.

H. J. Eversen A. M. Donner

A — Admissibility 92

B — The substance 96

1. The criterion of local integration 97

(a) Interpretation of the basic regulatory decisions 98

(b) Legality of the basic regulatory decisions 98

2. Examination of the situation of Breda and Hoogovers 100