C-18/60

1. Only in cases where the OCCF's 2. Article 65 (1) and (5) of the ECSC actions concern the functioning of the Treaty, prohibiting concerted prac­ equalization scheme, and thus are in tices tending to distort normal com­ the nature of an official duty, can they petition within the Common Market, be considered directly to give rise to enables the High Authority to the liability of the High Authority. intervene against the originators of a boycott which displays this feature.

In Case 18/60

LOUIS WORMS, residing at The Hague, assisted by J. L. Janssen van Raay, avocat-avoue, of Rotterdam, with an address for service in Luxembourg at the Chambers of Robert Krieps, 12 Avenue Marie-Therese,

applicant,

HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, repre­ sented by its Legal Adviser, B. van der Esch, acting as Agent, assisted by C. R. C. Wijckerheld Bisdom, advocate of the Hoge Raad der Nederlanden, with an address for service in Luxembourg at its offices, 2 Place de Metz,

defendant,

gives the following

JUDGMENT Issues of fact and of law

I — Conclusions of the parties The defendant contends that the Court should: The applicant claims that the Court should: 1. 'Declare that it does not have juris­ diction to hear the action which has 1. 'Declare that it has jurisdiction in this been brought or, alternatively, de­ matter and that it will entertain the clare it to be inadmissible or, altern­ application; atively, dismiss it as being unfounded; 2. Rule that the applicant has suffered 2. Order the applicant to pay the costs.' injury as a result of a wrongful act or omission on the part of the II— Summary of the facts Community in the application of the Treaty establishing the ECSC; The principal facts alleged by the 3. Appoint one or more experts to applicant in support of his claims may prepare a report on the damage by summarized as follows: suffered by the applicant; The applicant had been a buyer and seller of ferrous scrap in the Benelux 4. Award the applican tdamages against countries on behalf of the German the Community, the amount of which Company Hansa-Rohstoff-Verwertung the Court should settle at a reason­ GmbH., since 1 January 1956. In 1957, able sum after hearing the experts' he informed his principals that certain ' report; ferrous scrap dealings were covered by 5. Order the High Authority to pay the fraudulent certificates issued by an costs, including those incurred in official of the Dutch Ministry of Econ­ connexion with the application for omic Affairs. After exposing this fraud to legal aid.' the Ministry itself on 28 November

1957, the applicant found that his opinion (unfounded, as it subsequently contract with Hansa was terminated by appeared) that the High Authority a letter dated 29 November 1957. would have such objections. The applicant subsequently made In support ot his argument that the several attempts to find other agencies as boycott of which he had been the a scrap dealer, applying, but without victim would not have succeeded if the success, to one of the directors of the High Authority had intervened seriously Dutch iron and steel undertaking in the case of the ferrous scrap frauds, Hoogovens, who was at the same time the applicant relies chiefly on the fact President of the Caisse de péréquation that the request for authorization of (Equalization Fund) and of the Office certain agreements made on 26 April

circle of ferrous scrap dealers. The The application was made on 1 July agency replied on 13 January 1958 1961. that it would decide on his case after it had investigated his dispute with Hansa. III — Submissions and arguments A further letter from the applicant, of the parties dated 26 February 1958, repeating his request, received no reply and further The submissions and arguments of the offers to the OCCF dated 17 March, parties may be summarized as follows:

The applicant con Mr Worms could carry on business; cluded from this last failure that the (2) It failed to intervene to break the policy of the OCCF consisted solely of boycott of the Dutch ferrous scrap showing itself willing to deal with him dealers against Mr Worms; and then finding an excuse to avoid the transaction. (3) It failed to act in a determined Finally, a letter from Hoogovens of manner to end acts of fraud in 16 July 1958, signed by Mr Bentz van scrap-dealing and to proceed against den Berg, disclosed that the writer had, those responsible. until that moment, been under the According to the applicant, these tacts impression that 'Luxembourg' would constitute wrongful acts or omissions on have objections to the OCCF's dealing the part of the High Authority in two with the applicant, but in fact he now respects. understood from a telephone con

JUDGMENT OF 12. 7. 1962 — CASE 18/60

industry. The OCCF is not therefore an B — As to admissibility organ of the High Authority when it 1. On the admissibility of the first purchases ferrous scrap. This activity is submission: the boycott of Worms by outside the competence of the High the OCCF. Authority which is unable to delegate a power which it does not itself possess. The defendant disputes the admissibility In accordance with the principle set of this submission in the two respects out above, the representative of the envisaged by the applicant, that is to High Authority at the OCCF did not say, the alleged wrongful act or omission therefore have the power to interfere in attributed to the High Authority by the decisions of a commercial nature reason of the fact that the OCCF is an taken by that agency. The defendant organ of the High Authority and of the contends therefore that the alleged wrongful act or omission on the part of irregular acts committed by the OCCF the High Authority itself which has in the sphere of scrap purchases cannot

WORMS v HIGH AUTHORITY

already occurred even before he had come into contact with the OCCF. that it is not supported by a single The defendant states in fact that it properly established fact. The failure to intervene to break the emerges from the letters sent by Mr Worms to the OCCF on 10 January 1958 alleged boycott by the Dutch traders cannot be an act or an omission of the and to the High Authority on 4 March 1958 that the applicant considered that OCCF because that agency had no he had already been ruined by the actions opportunity of intervening in the matter. of Hansa-Rohstoff-Verwertung GmbH., Moreover, the application does not even before the alleged boycott by the cite any concrete fact in support of this OCCF could have made itself felt. allegation : it does not specify the period or nature of the boycott or the measures (b) Liability of the High Authority arising which the High Authority should have from its obligations as a public authority taken. Further, the applicant provides The defendant contends that the no proof that, at the time, the High arguments adduced under point (a) Authority was aware of the alleged above indicate that the facts disclosed boycott or that it had an opportunity of are also incapable of constituting a

theirgoods. The defendant contends that inadmissible from the outset or, at least, in this respect the submission is in as being unfounded. admissible. The applicant replies that his exposure of In response to the arguments under the ferrous scrap frauds to the Dutch points (a) and (b) above, the applicant authorities on 28 November 1957 led

matter strengthened the immunity of public statement in the Netherlands on the cartel of ferrous scrap suppliers, 30 March 1961 and published a report whereas a positive attitude on its part on 5 May 1961. The High Authority's would have encouraged the dealers inquiry was opened so late and was so favourable to Mr Worms to resume incomplete that there could no longer business relations with him. be any question of good faith. Mr Worms Furthermore, this cartel ot Dutch scrap- refers in this respect to the Report of the dealers requested from the High High Authority of 8 April 1961. Authority on 26 April 1954 the authoriza­ C — On the substance of the case tion provided for in Article 65 (2) of the Treaty, and this request was refused 1. Whether the first submission — the only on 2 June 1960. From this the boycott of Worms by the OCCF — is applicant deduces that if the High well founded Authority had exercised due diligence and if, as a consequence, the cartel had The applicant claims that the High ceased to exist at the time when the Authority failed to exercise its powers facts in dispute occurred, Mr Worms over the OCCF to ensure that he could

would have been able more easily to carry on business. establish normal business relations with His principal arguments have been buyers of ferrous scrap. summarized above (See Summary of the facts, II, and Admissibility, III, B, 1). 3. On the admissibility of the third In order to establish the existence of an

submission: the failure of the High illegal act by the OCCF in its refusal to Authority to act in the affair of the do business with Mr Worms, the appli­ ferrous scrap frauds cant 'requests the Court to order the production of all letters, memoranda, The defendant points out that all factual notes, telegrams or internal instructions definition of the act or omission of which of the OCCF, the CPFI or the regional the High Authority is accused in this offices, which relate to Worms, including matter is lacking. The opinion of the those emanating from Mr Bentz van den members of the 'Comite contre les Berg, in whatever capacity'. fraudes de ferrailles' (Committee for the The applicant submits that the CPFI suppression of ferrous scrap frauds) is should be included in the investigations

manner of doing business with the The fact that the OCCF did not use American continent, without going European intermediaries in its dealings through European intermediaries, has with the American continent cannot no legal justification. Moreover the constitute discrimination against Mr report of the American authorities quoted Worms, since the OCCF was conforming above justifies the suspicion that there to its normal practice; in March and were illegal reasons for preferring to May 1958 other European dealers offered deal with the American group, Luria lots of ferrous scrap plainly identical to Brothers. those offered by Worms and they also the defendant replies hrst with the met with a direct refusal. arguments summarized above (see 2. Whether the second submission — Admissibility, III, B, 1). the boycott of Worms by the Dutch With regard to tne applicant s request scrap-dealers — is well founded for the Court to order the production of certain documents, the defendant The applicant claims that the High observes that the documents referred to Authority did not intervene to break cover too wide a field and that, if the the boycott against him by the Dutch Court were to accede to this request, the scrap-dealers. documents to be produced must be His principal arguments are summarized specified more precisely. Furthermore, above (See II, Summary of the facts, the defendant states that Mr Worms and Admissibility, III, B, 2). requests that documents belonging to The defendant replies first with the private persons or institutions not parties arguments summarized above (See to the proceedings should be added to the Admissibility III, B, 2). file. Moreover, there would be valid It adds that in 1959 Mr Worms obtained

3. Whether the third submission — the On 24 October 1960 the applicant failure of the High Authority to act lodged an application for legal aid at the in the affair of the ferrous scrap Court Registry. frauds — is well founded The first Chamber of the Court granted this application by Order dated 24 The applicant claims that the High January 1961. Authority failed to act in a determined At the hearing on 19 January 1962 the manner to end acts of fraud in scrap- Court, after hearing the report of the dealing and to proceed against those Judge-Rapporteur and the opinion of responsible. the Advocate-General, requested the His principal arguments are summarized parties to furnish certain information above (see II, Summary of the facts, and to produce certain documents. and Admissibility, III, B, 3). The replies to tnose questions were The defendant replies first with the lodged on 8 February 1962 by the arguments summarized above (see defendant and on 30 March 1962 by the Admissibility, III, B, 3). applicant.

Grounds of judgment

The applicant invokes Article 40 of the Treaty establishing the ECSC to obtain reparation for the injury he has suffered as a result of a wrongful act or omission on the part of the Community in the application of the Treaty and bases his application on the following three submissions:

1. The High Authority failed to exercise its powers over the Office commun des consommateurs de feraillle (OCCF) to compel the latter to ensure that the applicant could carry on his trade as a scrap-dealer. The High Authority is liable for the damage arising from this omission by the OCCF because it concerned the functioning of the equalization scheme, a sphere in which that agency (OCCF) must be considered as an organ of the High Auth­ ority. Furthermore, the latter is responsible for the situation because it failed in its duty as a public authority to comply with its obligations.

This line of argument deals with the question whether the existence of a wrongful act or omission on the part of the Community (a condition pre­ cedent for an application based on Article 40 of the Treaty) is not precluded in this case on the ground that certain acts of the OCCF fall outside the framework of the Community's activities. This is a question concerning the merits of this submission and not its admissibility.

2. With regard to the second submission, the defendant refers to the fact that the application specifies neither the period nor the nature of the alleged boycott, nor the steps which the High Authority should have taken, and therefore the brief statement of the grounds on which the application is based, as required by Article 38 (1) (c) of the Rules of Procedure, is defective.

In his application the applicant has stated clearly the submission relating to the boycott. He has subsequently completed and amplified this submission during the proceedings. The defendant's objection cannot be sustained.

3. With regard to the third submission, the defendant emphasizes that there is no relationship of cause and effect between the steps taken by the High Authority in the suppression of the scrap frauds and the injury alleged by the applicant.

This argument of the defendant, which deals with the remoteness of causa­ tion between the alleged wrongful act or omission and the injury suffered, is a question of substance and not of admissibility.

JUDGMENT OF 12.7. 1962 — CASE 18/60

A contrario it appears from Article 15 (2) thereof that the right reserved to the High Authority to make decisions itself in certain cases does not exist with regard to the activities which are the subject of this application, and which are provided for in Article 11 (2) and (3).

When carrying on its strictly commercial activities, the OCCF, a Belgian company under private law, is governed by national law. It is only in cases where the OCCF's acts concern the functioning of the equalization scheme, and on that account have the character of a public duty, that they can be considered as directly giving rise to the liability of the High Authority.

There is no doubt in this case that the offers to sell ferrous scrap made by the applicant to the OCCF had an exclusively commercial character and, in law, were no different from those made by him to the undertakings using scrap.

Furthermore, it appears from the documents produced by the applicant that he made three offers to sell ferrous scrap to the OCCF by letters dated respectively 17 March, 31 March and 12 May 1958. The first two offers

WORMS v HIGH AUTHORITY

contained no indication of price and were imprecisely drafted, as the Court was able to establish by comparing the applicant's offers with other offers from third parties to the OCCF, so that the OCCF's refusal to accept the applicant's offers cannot be considered to be discriminatory.

However, it must be considered whether the Treaty establishing the ECSC gives the defendant the power to act against the boycott from which the applicant claims to have suffered. Article 65 (1) and (5) of the Treaty, which prohibits concerted practices tending to distort normal competition within the Common Market, enables the High Authority to intervene against the originators of a boycott which presents this feature. In this case, however, the applicant has failed to show that the boycott which he alleges he has suffered had the effect of preventing, restricting or distorting normal com­ petition within the Common Market, within the meaning of Article 65 of the ECSC Treaty.

JUDGMENT OF 12. 7. 1962 — CASE 18/60

The High Authority did not have the necessary powers to take steps against the boycott alleged and described by the applicant. Therefore the facts alleged do not fall within the competence of the High Authority.

(b) The applicant complains that the High Authority waited six years before, on 2 June 1960, it refused a request for authorization made on 26 April 1954, in pursuance of Article 65 (2) of the Treaty, by the cartel of scrap dealers recognized by the Dutch iron and steel works as direct suppliers. The injury suffered by the applicant lies in the fact that, if the High Authority had been more diligent, the said cartel would have ceased to exist at the time when the scrap frauds occurred and thus the applicant could more easily have established business relations with the purchasers of scrap.

This argument must be dismissed. Indeed, the possible negligence of the High Authority in examining the request for authorization of the above- mentioned cartel could have caused the applicant only indirect damage which in other respects is not sufficiently proved in law.

As the applicant has failed in all his submissions, he must bear the costs, including those in connexion with the application for legal aid.

On those grounds,

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to Articles 40, 53 and 65 of the Treaty establishing the European Coal and Steel Community; Having regard to the Protocol on the Statute of the Court of Justice of the European Coal and Steel Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities;

THE COURT

hereby:

1. Dismisses the application made by Louis Worms against the High Authority to obtain reparation for the injury he claims to have suffered as a result of the wrongful act or omission on the part of the Community in the application of the Treaty establishing the ECSC;