C-46/59

JUDGMENT OF THE COURT <ap note>1</ap note> 14 DECEMBER 1962

Meroni & Co., Erba, and Meroni & Co., Milan,

v High Authority of the European Goal and Steel Community

Joined Cases 46 and 47/59

Summary

1. Procedure — Application — Content — Obligations of the applicant (Protocol on the Statute of the Court of Justice of the ECSC, Article 22; Rules of Procedure of the Court of Justice of the European Communities, Article 38(1)).

2. MERONI & CO., a limited company governed by Italian law, having its registered office at Milan and its business premises at Settimo Torinese

(Turin), represented by its sole director Dr Aldo Meroni,

both assisted by Arturo Cottrau of the Turin Bar, advocate at the Corte di Cassazione in Rome, and both with an address for service in Luxembourg at the Chambers of Georges Margue, 6 rue Alphonse-Munchen,

applicants,

v

1 — Language of the Case: Italian.

Advocate-General: M. Lagrange Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Facts two categories of ferrous scrap was dearer than that of ferrous generally The facts may be summarized as fol ws: scrap within the Community.

By a series of general decisions, the 1. The above­ -mentioned arrangements

purchased ferrous scrap imported from regional offices in each of the Member third emanating from States. ship- countries or breakers'

yards, as the cost price of these From 1 August 1958 the High Authority

MERONI v HIGH AUTHORITY

itself once again took over the powers — that as, however, the inquiries had of decision which it had delegated to not been completed at that date, it those agencies. seemed possible, if not probable, that 2. Up to 1957 approximately 22 000 this figure did not include all the

metric tons of ferrous scrap of Com­ irregularities which had occurred

munity origin were equalized, in respect (the Poher Report mentions as much of which there were presented, by way of as 252 000 metric tons):

an action by the Société FERAM made by the High Authority to

against the High Authority pursuant to recover from the guilty parties the

Article 40 of the ECSC Treaty, which sums paid in error, as certain of these was dismissed by the Court on 17 attempts had not vet been successful. December 1959 (Rec. 1958/1959, pp. II —

Conclusions of the parties 506 et seq.), as it did not consider that In its application the applicant Meroni, Erba, the above-mentioned facts indicated a claimed that the Court should : wrongful act or omission on the part 1. 'Declare that the present action is of the Community. admis ble; After the discovery of the Van der 2. Declare that the defendant is liable Grift case, it emerged that following for having failed to avoid the situa­ acts of fraud and other irregularities tion whereby, through the medium committed independently of this case, of the OCCF during the period other quantities of ferrous scrap had from 1954 to 1957, considerable also been wrongly equalized. The High quantities of ferrous scrap were sold, Authority instituted an inquiry into the matter, in April 1961 presented, as and supported by fraudulent certificates issued by the head of the Iron and an Annex to its ninth General Report, Steel Department of the Dutch a Report on the action taken by it in the Ministry for Economic Affairs, to matter (hereinafter referred to as 'the the effect that those quantities Report of the High Authority'). The originated from ship-breakers'

yards Domestic Market Committee of the (in which affair Hansa-Rohstoff of European Parliamentary Assembly also Düsseldorf appears to have been carried out a general examination of the

13 018 270 metric tons of imported 4. If necessary, appoint an expert, to ferrous scrap or scrap treated as be selected by the Court, to ascertain such had been wrongly equalized; (a) The exact amount of the tonnage

JUDGMENT OF 14.12.1962 — JOINED CASES 46 AND 47/59

of ferrous scrap involved in the action solely on the acts of fraud fraudulent practices engaged in to relating to the Van der Grift case or on the detriment of the iron and steel all the acts of fraud committed in undertakings of the Community respect of equalization, 'possibly amend­

subject to the compulsory equaliza­ ing the tenor of their conclusions to that tion system, practices which made it effect, subject to the ... admissibility possible to issue certificates in respect amendments'.

of such

of certain quantities of ferrous scrap The lawyer for the applicants replied

(c) The exact amount of the sum dismiss all the heads of claim contained

which should be credited to the in the application of Meroni & Co., a applicant in the provisional­ equaliza­ limited partnership of Erba (Como) 1959'

tion accounts for the years 1954 to made on 28 September (and 1957; also: 'of Meroni & Co., company a

5. Order the High Authority to pay limited by shares, of Settimo Torinese the costs and expenses of the pro­ (Turin), made on 12 October 195 '); (the applicant companies) to pay ceedings.'

order

In its application the applicant Meroni, the costs.

whereby, through the medium of the in the written procedure Dutch regional office of the Caisse de péréquation during the period from The submissions and arguments set out 1954 to 1957, considerable quantities of by the parties in the written procedure ferrous scrap were sold, supported by may be summarized as fol ws: fraudulent certificates issued by the head of the Iron and Steel Department 1. Submissions and arguments of the appli­ of the Dutch Ministry for Economic cants

Affairs, to the effect that those quantities originated from ship-breakers' yards, Where the applicants cite actual facts, and for all other acts of fraud subsequently these relate only to the Van der Grift discovered (Hansa-Rohstoff of Düssel­ case.

dorf They maintain that the acts of fraud in etc).'

At the hearing on 31 January 1962, the question have caused them direct loss, Judge-Rapporteur asked the lawyer as, for the financial years in question,

assisting the applicants and also the they have had to contribute under the applicant Compagnie des hauts four­ equalization scheme a greater sum than

neaux de Chasse (Case 33/59) these — if the payments made in error had not

act or omission on the part of the defend­ produce photocopies of the invoices ant or of the agencies in Brussels or the of the ship-breaking undertakings

regional offices, which amounts to the together with banking documents same thing from the legal point of view. establishing the payment of those

1. By its Decisions establishing the invoices; financial arrangements for the equaliza­ —

to require the Dutch Ministry for

tion of ferrous scrap, the High Authority Economic Affairs to produce photo­

had explicitly guaranteed to the under­ copies of the original certificates of

that the High Authority should exhibit circumstances at the time did not

a higher degree of care than an ordinary give any grounds for suspicion. On the administration. contrary, the agencies concerned must

The acts of fraud would not have have noticed undertaking as that an

occurred if the responsible departments small as Cracau Metalen in the course of

had exercised care: a single year offered the Community — to issue in advance strict provisions more than 22 000 metric tons of ferrous

scrap from ship-breakers'

JUDGMENT OF 14.12.1962 — JOINED CASES 46 AND 47/59

sold through the medium of the OC F'; have prevented the acts of fraud. The —

that the High Authority came to the allegation by the defendant that the

conclusion that the system used by claims had to be dealt with swiftly, as it the Fund for checking the origin of the was important to the claimants to

ferrous scrap qualifying for equaliza­ obtain the equalization payments

tion quickly, flagrantly contradicts the state­ payments must berctified, especially the liaison between the Fund and the ment by its Vice-President that the

counsel's opinion on the legal which it is obliged to protect, from measures to be taken with regard to suffering injury. compensation'. 2. Submissions and arguments of the In a letter to Mr Bentz Van den Berg, defendant Presiden­ t of the CPFI, the Vice-President The defendant cites in particular the of the High Authority expressly stated findings in the aforementioned judgment that the acts of fraud had been able to in the FERAM case to show that the continue long because regional for so allegations of the applicants are without offices had for too long a time retained foundation. the files which they are required to It emphasized in particular that: submit to the Fund and because certain regional offices had failed to carry out (a) The applicants nave failed to prove

the instructions of the Fund on the any actual injury. The High Authority inspection of certificates of origin. The has taken measures to recover the

letter to equalization sums paid in error, so that ends with a request notify the High it will still be possible subsequently to Authority of the measures which

were contemplated 'to rectify the situa­ correct the amounts of the levy. It is tion which had caused the Fund to unnecessary to consult an expert, since

function so badly'. Far from challenging the exact ferrous scrap for amount of

justification these which equalization payments have been the of complaints

all possible care. Moreover, even if the foreseeable, even judged by the most

regional offices had submitted the docu­ severe criteria as to the requisite standard

ments more quickly, this would not of care.

MERONI v HIGH AUTHORITY

It is impossible to see why the swifter respect of all the acts of fraud so far submission of files by the regional discovered, and referred in particular

offices would have been capable of to the Report of the High Authority preventing the acts of fraud, since the and the Poher Report. falsified certificates gave every outward However they did not analyse case by appearance of authenticity as far as their case the irregularities enumerated in form is concerned. these reports and did not reveal why, The draw false irregu­ applicants conclusions according to them, each of these from certain statements by the High larities demonstrated the negligence of

functioning of the equalization scheme 4. By an Order of 21 March 1962, the is entirely of a political nature; there is Court decided to reopen the oral pro­

'objective' no liability on its part. cedure in the three cases, and in (c) The fact that the responsible depart­ particular required the applicants to ments of the Community recognized the answer the following question:

certificates issued by the Dutch Ministry 'What are the precise facts, other than supporting documents does not con­ as those relating to the fraudulent certifi­

stitute a delegation of its powers, but cates issued by the head of the Iron and

merely the recognition of documents Steel Department for of the Ministry which a national agency issued in the Economic Affairs of the Netherlands, exercise of its constitutional powers. the which, according to applicants,

IV give rise to the wrongful act or omission — Subsequent procedure on the part of the High Authority and on which the applicants intend to base 1. By an Order of 26 February 1960, applications?'

In the interests of the good administration of justice, the present cases,

already joined for by the February 1960, oral procedure the Order of 26

should be decided as connected cases by the same judgment.

I — On the scope of the conclusions of the applicants

The scope of the conclusions made to the Court in these cases must first be set led:

In its application the applicant Meroni, Erba, claims in particular that the Court should:

'Declare that the defendant is liable for having failed to avoid the situation

whereby, through the medium of the Dutch regional office of the Caisse de péréquation during the period from 1954 to 1957, considerable quantities of ferrous scrap were sold, supported by fraudulent certificates issued by the head of the Iron and Steel Department of the Dutch Ministry for Economic

Affairs, from ship-breakers'

to the effect that those quantities originated

and for all other acts of fraud subsequently discovered (Hansa- yards, Rohstoff of Düsseldorf etc).'

In these circumstances, the question arises whether these conclusions have

Court of Justice of the European Communities, the application shall state the subject matter of the dispute and shall contain the submissions ('con­

clusions') of the applicant.

The applicant must thus set out the precise facts relied on in support of his claim and must present his conclusions in an unequivocal manner.

In the absence of such exactness, the Court risks either giving judgment ultra petita or failing to give judgment on one of the heads of the conclusions.

Furthermore, in the absence of such exactness, the right of the defendant to be obliged to reply only to facts explicitly defined and to refute only clear

and precise allegations would be disregarded.

If the Court accepted arguments by the applicants made with such a lack of

precision, it would deprive the defendant to a considerable extent of its

opportunities, provided for in the Rules of Procedure, to submit its defence

with full knowledge of the facts.

With regard to the conclusions, it does not emerge clearly enough from them that they encompass not only the Van der Grift affair but also all the acts of fraud and irregularity which have been committed.

The arguments set forth in the applications are restricted in fact to the Van der Grift affair alone.

tions must be interpreted as to the Van der Grift affair. referring only

Subsequent procedure, far from weakening that interpretation, is such as to

confirm it.

In fact, at the hearing, although counsel for the applicants asserted that the conclusions of the applicants always related to all acts of fraud, he did not however formally amend or clarify those conclusions.

Such an assertion cannot take the place of an amendment of the conclusions,

which, even if admissible, is subject to the strictest requirements as regards its precision and content.

yet been possible finally to fix the amounts to be paid in respect of the equaliza­

tion levy on ferrous scrap.

These arguments do not however make it possible to give to the references to the acts of fraud, other than those committed in the Van der Grift affair —

references contained in the conclusions and in the course of the oral

procedure —

the wide interpretation the benefit of which the applicants

Van der Grift affair, including the facts relating to that affair which emerged

after the lodging of the applications, but before the opening of the oral procedure.

II — On the substance of the case

1. Liability of the High Authority on the basis of a guarantee given by it

The applicants infer the liability of the defendant from the fact that the latter, in its decisions establishing the equalization scheme, formally under­

took to ensure a faultless service; this commitment extended also to iron and steel undertakings of the Community. This emerges from the eighth

2. Liability for a wrongful act or omission

The applications are moreover principally based on Article 40 of the ECSC

Treaty which allows the injured party to bring an action to obtain pecuniary reparation from the Community to make good any injury caused in carrying out the said Treaty by a wrongful act or omission on the part of the Community in the performances of its functions.

(a) The official of the Dutch Ministry for Economic Affairs, who

fraudulently issued the certificates in question, was not subject to the control of the High Authority and did not receive orders from it, but acted in his

capacity as a national official.

act or omission on the part of the defendant within the meaning of Article 40 of the ECSC Treaty, because of its failure to provide a better organized system for issuing the certificates of origin for ferrous scrap qualifying for equalization payments, and in particular because of its failure to provide for the investigation of the authenticity of the said certificates.

At first sight, the fact that it was possible for the abuses complained of to

continue for several years appears to indicate that the organization was

defective and insufficient. However that conclusion is not justified in this case. In fact, in leaving to the competent national authority the task of issuing the necessary certificates, the defendant pursued the course which appeared

the most appropriate and the most likely to afford the best guarantee against any abuse. Since the certificates formed at the same time the legal basis,

according to Dutch law, for the re-export of the ferrous scrap, it was natural to entrust their issue to the national authorities who, moreover, were the best

ing to be official documents, at any rate so long as there was no indication of abuse which could raise doubts as to their authenticity.

The argument of the applicants that the reply given by the High Authority in the European Parliament to the questions put by Mr Van der Goes van Naters and Mr Nederhorst and the letter of 24 February 1958 addressed to

MERONI v HIGH AUTHORITY

the President of the Equalization Fund by the Vice-President of the High Authority, Mr Spierenburg, constituted an admission of a wrongful act

or omission should be rejected. Although in fact these statements did inquire how an improvement of the system could avoid such defects in future —

and

In its judgment in the FERAM case (Rec. 1958/1959, pp. 506 et seq.), the Court had refused a request for reparation for injury to the applicant

FERAM; this request was based on the same ground as the present applica­

tion, namely the existence of a wrongful act or omission on the part of the High Authority comprising its failure to provide a sufficient check on the

operation of the equalization scheme.

The facts referred to by the applicants in the present dispute, inasmuch as

they relate to the Van der Grift affair, do not contain any new factor which might lead the Court to abandon its position as defined in the FERAM case.

This lack of awareness, for which the applicants cannot be blamed, induced them to institute proceedings for compensation within the time which they considered appropriate.

That factor constitutes an exceptional circumstance, within the meaning of Article 69 (3) of the Rules of the Court, for offsetting the costs as will be defined below in the operative part of the judgment.

JUDGMENT OF 14.12.1962 — JOINED CASES 46 AND 47/59

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 Article 40 of the Treaty establishing the European Coal and Steel Community;

3. Orders that the costs be shared, each party bearing its own costs.

Donner Delvaux Rossi Riese Hammes

Delivered in open court in Luxembourg on 14 December 1962.

For the President

A. Van Houtte L. Delvaux Registrar President of Chamber

OPINION OF MR ADVOCATE-GENERAL LAGRANGE DELIVERED ON 1 MARCH 1962 AND 18 OCTOBER 1962 (see Case 33/59, page 391)