C-2/60

(Case 2/60),

UNTERNEHMENSVERBAND DES AACHENER STEINKOHLENBERGBAUES , e. V., 5, Goethestrasse, Aachen,

(Case 3/60), applicants,

represented by Professor Konrad Zweigert, 187 Mittelweg, Hamburg 13, with an address for service in Luxembourg at the Chambers of Philippe Bennecke, 2 rue du Fort-Elisabeth,

High Authority of the European Coal and Steel Community,

defendant,

Advocate-General: M. Lagrange

Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

—1 900 000 metric tons from the Federal I —Summary of the facts Republic of Germany, —250 000 metric tons from France, The facts giving rise to the present case may be summarized as follows: —800 000 metric tons from the Netherlands. Following a formal request submitted by the Government of the Kingdom of Belgium un­ Article 5 of the same decision provides that, der Article 37 of the Treaty, the High in so far as it is necessary to allocate the Authority, taking into account the dif­ amounts set out above, this shall be carried out in liaison with the Governments con­ ficulties of the Belgian coal industry, on 23 December 1959 adopted Decision No 46/59 cerned on an equitable basis approved by (published in the JO of 31.12.1959) which the High Authority. was subsequently amended slightly by Deci­ On 22 February 1960 the applicants in­ sion No 1/60 (published in the JO of itiated proceedings against this decision, as 28.1.1960). Article 3 of the decision, which amended by Decision No 1/60. In a docu­ seeks to rationalize the Belgian coal in­ ment lodged on 22 April 1960 the defendant dustry, fixes for the Belgian Government a made an application for a decision on a maximum amount of 2 950 000 metric tons preliminary objection under Article 91 of for deliveries of solid fuels from the other the Rules of Procedure.

II-Conclusions of the parties III — Submissions and argu­ The applicant in Case 2/60 claims that the ments of the parties Court should: The submissions and arguments of the par­ 1. Annul Articles 1, 3 and 5 of Decision No ties may be summarized as follows: 46/59 of the High Authority of 23 December 1959, published in the Journal 1. Admissibility Officiel, p. 1327/59 et seq., and Article 3, as amended by Decision No 1/60 of 18 A — The principal conclusions January 1960, published in the Journal In its application the applicant in Case 3/60 Officiel, p. 103/60; maintains that 'the right to bring the pre­ 2. Declare that the provisions at issue are sent action is derived from the provisions of vitiated by an error giving rise to liability Article 33 of the Treaty in conjunction with on the part of the Community; the third paragraph of Article 37'. In addi­ 3. Order the High Authority to pay the tion, both applicants rely on similar argu­ costs. ments and refer to the judgments of the The applicant in Case 3/60 claims that the Court in Joined Cases 7 and 9/54 and in Court should: Case 18/57 in maintaining that the measure 1. Annul Articles 1, 3 and 5 of Decision No at issue is an individual decision concerning 46/59 of 23 December 1959 of the High them and that therefore they may use Authority, as amended by Decision No against it the four methods of recourse set 1/60 of 18 January 1960; out in Article 33. The individual nature 2. Declare that the decision at issue is arises from the fact that the contested deci­ vitiated by an error giving rise to liability sion imposes obligations on the Belgian on the part of the Community; Government and grants it special powers

and therefore governs the activities of a tains that undertakings and their associa public body expressly designated. In addi tions have no right to institute proceedings tion this decision directly concerns the appli under Article 37. After emphasizing that cants since its application has direct effects Article 37 is 'a safeguard clause in favour of on their position. a Member State against the Community' The applicant in Case 2/60 (a mining com the defendant further argues that in the case pany producing special anthracite) states of an action against a decision concerning that it exports approximately 75% of its protective measures adopted by the High total production to Belgium.

superfluous. ment and improvement of its production of The applicants reply that in respect of the special anthracite for generators. The appli right to institute proceedings Article 37 in cant states that consequently any reduction no way refers to the Member State directly of its exports to Belgium would cause it con concerned by application of the article but siderable economic loss. provides in a strictly neutral manner 'when The applicant in Case 3/60 (an association proceedings are instituted in the Court of mining undertakings in the Aachen Their applications are therefore admissible basin) submits statistics showing that the as based on Article 37 without there being continuous increase in the quantities any need to determine the general or in delivered to Belgium by the coal under dividual nature of the contested decision. takings affiliated to it was the result The applicants have the right to use all of a deliberate commercial policy. If methods of recourse as Article 37 contains the affiliated undertakings could have no limitations on Article 33 and itself gives suspected that quota restrictions between the Court the power to assess the general Member States had not been abolished economic situation. once and for all by Article 4(a) of the The defendant objects that, where the Treaty, they would have adopted a Treaty is silent, the question of the persons different commercial policy in respect of entitled to institute proceedings under the the Belgian market. third paragraph of Article 37 should be The applicants allege that they have four resolved in principle according to the nature methods of recourse for the annulment of of the contested decision taking account the contested decision. In particular they above all of the substantive content and the deny the existence of a situation justifying final objective, within the framework of the the intervention of the High Authority un Treaty, of any decision adopted by the High der the terms of the first and second Authority under the provisions of the second paragraphs of Article 37 and they also deny paragraph of Article 37.

(a) Admissibility under the third (b) Admissibility of the proceedings un­ paragraph of Article 37 der the third paragraph of Article 37 The defendant argues that the proceedings in conjunction with Article 33 referred to in Article 37 are merely a par­ The defendant states that the applicants can ticular example of the general proceedings also be given no right of action under Arti­ cle 37 by means of the second paragraph of

JUDGMENT OF 13. 7. 1961-JOINED CASES 2 AND 3/60

While maintaining that a general decision (aa) The conclusion concerning the first taken under the second paragraph of Article article of the contested decision 37 may equally well be contested by under­ Should the Court believe it possible in prin­ takings relying on four methods of recourse, ciple for the proceedings to be brought un­ the applicants argue in the alternative that der Article 33, the defendant contests the in any case they are able to prove misuse of admissibility of the methods of recourse con­ powers affecting them. The applicant in tained in the applications. The finding by Case 3/60 requests the Court to order the the High Authority of the danger of fun­ defendant, pursuant to Article 24 of the damental and persistent troubles threaten­ Protocol on the Statute of the Court of ing the Belgian economy, contained in Arti­ Justice, to produce all documents concern­ cle 1 of Decision No 46/59, is of a general ing negotiations which took place with the scope. Therefore the applicants can only Belgian Government for the purposes of the challenge this article by alleging a misuse of adoption of the contested decision from powers 'affecting them'. This they have which it will be evident that the High done, but in a form which fails to comply Authority followed aims incompatible with with the necessary procedure as they failed the Treaty. to advance any pertinent argument in sup­ port of this allegation. (c) Admissibility under Article 33 The applicants deny that the decision in Further, in the alternative, should the Court question is of a general nature as it is not decide that the third paragraph of Article 37 only addressed to a particular party but merely gives a right of action to the Member from its contents is also the regulation of a State which brought the matter before the particular well-determined situation. High Authority under the first paragraph of The interests of the applicants are affected Article 37, the applicants claim that their by the finding of the High Authority of the proceedings are based on the second alleged existence of the situation referred to paragraph of Article 33, without this neces­ in the first paragraph of Article 37 in so far sitating a new interpretation of their ap­ as this finding is a necessary pre-condition plications since they are ab initio based both for the adoption of the rules contained in on Article 33 and the third paragraph of Ar­ Article 3. ticle 37. The defendant argues that an undertaking The defendant's view, which would exclude or an association of undertakings is not any possibility of judicial protection of the capable of demanding review by the Court of

the question whether the High Authority's therefore entails the inadmissibility of the finding that the economy of a Member State alternative demand. showed signs of risks of fundamental and persistent disturbances was properly made. 2. The substance of the case (bb) The conclusions concerning Articles 3 and 5 of the contested decision A — The principal conclusions The defendant maintains that neither Arti (a) Infringement of the Treaty cle 3 nor Article 5 relating to the manner of The applicants allege that the defendant in allocating the supply quotas constitute in fringed the first and second paragraphs of dividual measures as, even if it is possible to

countries. Therefore Articles 3 and 5 may that a certain subsequent reduction in the only be contested from the point of view of sale of Belgian coal, as is evident in all the misuse of powers. Even if it is accepted that other countries of the Community which they are individual decisions or recommen produce coal, would give rise to troubles of dations, the defendant considers that there this nature. must at least be some doubt whether the ap The applicants also deny the existence of the plicants are sufficiently affected by these measures to be entitled to institute other condition required by the first

certainty. Authority which was admissible by the Therefore all the conditions of admissibility terms of provisions other than the second set out in the second paragraph of Article 33 are fulfilled. paragraph of Article 37 of the Treaty. Moreover, the wording used in the second paragraph of Article 37 ('decide on the B — The conclusions relating to compensa measures to be taken . . . in accordance with tion the provisions of this Treaty') clearly shows With regard to the conclusions whereby the that the High Authority must take decisions applicants request the Court to hold that the pursuant to the second paragraph of Article contested decision involves a fault of such a 37 only in so far as other provisions of the nature as to render the Community liable, Treaty authorize it to do so. the defendant alleges that pursuant to the In reply to this argument, the defendant first paragraph of Article 34 the Court may emphasizes first that the authors of the only make such a finding if the decision at Treaty themselves recognized that there is a issue had been previously, or was close correlation between the activities of simultaneously, declared void.

JUDGMENT OF 13. 7. 1961-JOINED CASES 2 AND 3/60

economy. However, Belgian coal production to avoid situations of disturbances and thus has been reduced by 7 million metric tons to re-establish the normal functioning of the over three years. The defendant denies that Treaty'. The exceptional power of review at Belgium had full employment in 1959. tributed to the Court by the third paragraph Contrary to the interpretation given by the of Article 37 can only be justified when applicants to Article 37, the defendant states regarded as a counterweight to the excep that, if it were true that only measures tional powers granted to the High Authority which the High Authority is already em by the second paragraph of that article.

purpose. The Treaty would not permit the cle 37 and any criticism of the High High Authority to regulate by means of Ar Authority which must be challenged by the ticle 37 a situation which should be normal method of application for annul regulated by means of Article 58, since these ment (Article 33) or action for failure to act provisions concern situations involving dif (Article 35). On the other hand, the action ferent disturbances. Moreover, the fact that set out in Article 37 is the ultima ratio application of Article 58 requires the assent where the normal and correct application of of the Council, whereas Article 37 requires the Treaty results in a situation which may mere consultation, shows that the authors of provoke fundamental and persistent distur

Authority, acting on the basis of Article 37, firmed by another essential difference were restricted to those defined by the other between the two provisions, mamely the pos­ articles of the Treaty, it would be in­ sibility under Article 37 for the interested comprehensible why the authors of the party to cause the High Authority to act by Treaty took pains to specify that the High means of proceedings under the third Authority must act 'while at the same time paragraph of that Article, while in the case

NIEDERRHEINISCHE BERGWERKS AG v HIGH AUTHORITY

Community. It must therefore be concluded Above all Article 37 gives to a Member State that the 'omission referred to in Article 37 whose economy is subject to disturbances a merely concerns the failure to use ordinary right to raise the matter with the High powers under the Treaty and not failure to Authority and to institute proceedings in the make use of an extraordinary power'. Court. This goes beyond the provisions of The defendant raises the objection that this Article 35 as, if the conditions required by view would have the effect of rendering Ar Article 37 are fulfilled, the Member State ticle 37 meaningless since the applicants' concerned may, having once raised the mat argument in respect of Article 58 should ter with the High Authority and if necessary also apply mutatis mutandis to a whole by means of proceedings in the Court, oblige series of intervention powers of the High the High Authority to eliminate the distur Authority which are all more or less in bances by taking measures which it is not tended to govern 'abnormal' situations on normally obliged to take, although they are

compatible with neither Article 3(b) nor Ar are also accepting modification of power ticle 4(a) and (b) of the Treaty and they which is in contradiction with their view argue that in no way can it be accepted that that Article 37 gives to the High Authority the High Authority has the power by virtue no power which is not already provided by of that article to eliminate by means of a other provisions of the Treaty. simple administrative measure something The applicants finally argue that the con that even revision of the Treaty under Arti tested decision was not taken 'in accordance cle 95 would have to leave untouched. with the provisions of the Treaty but The prohibition of measures for which the further infringes the essential interests of Treaty has not assigned any powers to the the Community 'as the supranational High Authority is also evident from the economic conception of the Treaty ithat is comparison with Article 226 of the EEC the common market in coal and steel

defined in Article 4) may not by virtue of the power to eliminate such disturbances by any Treaty provision be sacrificed to the adopting appropriate measures. national economic interests of a Member While the fact of avoiding disturbances ap State'. pears in the second paragraph of Article 2 to In this connexion the defendant observes be merely a limit laid down in the pursuit of that the safeguarding of the essential in the main aim of the Common Market, name terests of the Community in the case of Arti ly the progressive establishment of condi cle 37 is not the aim of the action of the tions which will of themselves ensure the High Authority but merely its limit. most rational distribution of production, the aim of avoiding disturbances is essential for The further restriction set out in this provi the application of Article 37.

In support of this view the objective of re-establishing, by eliminating defendant refers to the German translation disturbances, the integral functioning of the of Article 37. Common Market in conformity with the aims and principles of the Treaty'. This is The defendant argues that the applicants' moreover compatible with the sense of Arti view whereby derogation from the principles cle 4 whereby the prohibitions which it con of the market set out in Article 4 of the tains apply only 'as provided in this Treaty'. Treaty is unacceptable is irrelevant, as even Furthermore, the essential interests of the minor revision of the Treaty under Article Community are safeguarded by the 95 must comply with Articles 2 to 4 which measures at issue since, in spite of the dis are therefore 'constitutionally unalterable'. turbed state of the Belgian coal industry, The defendant further maintains that tem they ensure for the Member States adequate porary derogation within the context of Ar quotas the levels of which have been ac ticle 37 from the principles of the market set cepted by all the Governments. out in Article 4 is in no way a revision of the text of the Treaty and it observes that (b) Lack of competence national law also accepts that fundamental In support of this submission the applicants rights recognized by the constitution as in refer to the arguments advanced in support tangible may for a certain period fail to be of the submission of infringement of the observed where particular exceptions re Treaty. In addition they state that, since the quire breach of the fundamental law within High Authority bases its measures on Arti certain permitted limits. cle 37 alone, without having complied with Article 37 is an implementing provision the restrictive provisions of the Treaty with enabling the objective laid down for the regard to powers, its lack of competence is Community in the second paragraph of Ar

provocation of fundamental and persistent pertinence of the submission based on lack disturbances in the economy of the Member of competence since it is not coextensive States, while achieving the Common Market,, with the submission of infringement of the to be avoided. To this end it is not confined Treaty. The defendant further maintains to regulating procedure but is also of impor­ that this submission is unfounded and tance in substantive matters in conferring observes that the contested provisions of Ar­ on the High Authority the obligation and ticles 3 and 5 of Decision No 46/59 are

NIEDERRHEINISCHE BERGWERKS AG v HIGH AUTHORITY

procedural requirement Nowhere do the applicants state that this The applicants contend that insufficient aim was not properly followed by the High reasons were given for the contested deci Authority. It would be absurd to regard the sion since it does not show sufficiently in alleged partial 'derogation' from the limits law that, in spite of the evident full employ of the powers of the High Authority as the ment and favourable economic situation, aim of the measures at issue. the Belgian economy is threatened with fun damental and persistent disturbances. B—The conclusions concerning compensa Further, the decision does not reveal how tion the total quota for the supply of coal from The applicants base their conclusions con the countries of the Community was fixed at 2.95 million metric tons and it does not set cerning conduct giving rise to the liability of the Community on the third sentence of the out how the German quota was fixed at 1.9 million metric tons.

paragraph of Article 34. The very delicate With regard to the fixing of the total quota problems to be resolved by the decision at is for delivery of coal from the Community to sue were in fact very carefully weighed by Belgium and the allocation of these quotas the High Authority in collaboration with between the various supplier countries, the the Council of Ministers. defendant denies that there is any need to supply the detailed calculations carried out in order to fix the quotas, particularly as they are based on statistics known to all and I V— Procedure were determined in full agreement with the governments of the Member States con

tion against them resulting from these deci 37 of the Treaty. sions, it is guilty of a serious lack of At the administrative meeting on 20 April' foresight or care which is tantamount to a 1961 the Court decided to open the oral 'failure to comply with the aims of the procedure without any preparatory inquiry.

They therefore considered it necessary to assign to the High Authority, subject to review by the Court, an exceptional power enabling it to guard against the conse­ quences which might result from the application of the Treaty provisions which do not specifically refer to the existence or the threat of fundamental and persistent disturbances.

It is evident from the wording of the first paragraph of Article 37 that the right to raise the matter with the High Authority is held exclusively by the State in which the disturbed situation has appeared or has threatened to appear.

In fact only the Member State concerned is capable of appreciating whether the economic situation requires application of Article 37.

The second paragraph of Article 37 gives the High Authority the power to recognize the existence of a disturbed situation and, if this is the case, to take ap­ propriate measures.

The third paragraph of Article 37 provides that both the decision taken by the High Authority under the second paragraph after the matter has been raised with it by the Member State concerned and the express or implied decision refusing to recognize the existence of a disturbed situation may be the subject of proceedings in the Court which has extremely wide powers of review.

The third paragraph of Article 37 does not specify who may bring these proceedings.

The essential aim of Article 37 is to allow for the reconciliation of the interests of a Member State affected by the existence of fundamental and persistent disturbances or the threat of this (in application of the basic provision set out in the second paragraph of Article 2) and the general interests of the Community.

The second requirement is emphasized by the clause in the second paragraph 'while at the same time safeguarding the essential interests of the Community'.

The exceptional power assigned to the High Authority by Article 37 is not without limits.

These limits may be deduced from the exceptional nature of the powers assigned to the High Authority and are moreover specified in the clause 'while at the same time safeguarding the essential interests of the Community'.

JUDGMENT OF 13. 7. 1961-JOINED CASKS 2 AND 3/60

Therefore the measures adopted by the High Authority must be necessary and ap­ propriate and must therefore, on the one hand, constitute a proper remedy to the disturbed situation caused by its action or failure to act and, on the other hand, safeguard the essential interests of the Community.

On the other hand, for the reasons set out above the ability to institute the proceedings referred to in the third paragraph of Article 37 must be granted not only to the Member State which raised the matter with the High Authority but also to the other Member States.

This interpretation is confirmed by the second paragraph of Article 37 which obliges the High Authority, before making a decision on the request submitted by the Member State concerned, merely to consult the Council without being bound by its opinion.

NIEDERRHEINISCHE BERGWERKS AG v HIGH AUTHORITY

In view of the importance of the interests which may be concerned, this situation is only explicable if it is accepted that any Member State which does not agree with the opinion of the High Authority has the right to bring the matter before the Court and to request it to decide whether the measures in question are well founded and appropriate.

This interpretation is perfectly compatible with the refusal to grant undertakings a right of action, in view of the fact that Member States which are by their very nature in a position to supply all the necessary information for a detailed examina­ tion by the Court and which, as they sit on the Council, are equally responsible for the safeguarding of the essential interests of the Community, are able to intervene in order to protect public interests in the same way as those of the applicant State.

This interpretation is confirmed by the debates which took place in the Netherlands Parliament at the time of the ratification of the Treaty (Parliamentary Year 1950/1951, No 2228, p. 86).

In these circumstances it must be examined whether the measures adopted by the decision are in fact necessary and appropriate to remedy a disturbed situation af­ fecting the economy of one Member State and whether in addition they safeguard the essential interests of the Community.

Consequently the judgment could no longer be based on the provisions of Article 33 but on those of Article 37.

In other words proceedings which could entail a judgment of annulment pursuant to Article 33 cannot have this effect if the decision at issue is taken pursuant to Ar­ ticle 37 since the special power assigned to the High Authority enables it to act beyond the normal scope of its powers.

Therefore the proceedings instituted by the applicants must be declared to be inad­ missible, even if they are regarded as being brought under Article 33 in conjunction with Article 37 or under Article 33 alone.

Costs

In view of the complexity of the questions raised and having regard to the first sub­ paragraph of Article 69(3) of the Rules of Procedure the Court sees fit to order the parties to bear their own costs.

Donner Hammes Catalano

Riese Delvaux Rueff Rossi

Delivered in open court in Luxembourg on 13 July 1961.

A. Van Houtte A. M. Donner

Registrar President

OPINION OF MR ADVOCATE-GENERAL LAGRANGE