C-67/63

H­ IGH AUTHORITY uthority of the European C­ OAL and Steel C­ OMMUNITY (re­

presented by its Legal Advisers, Heinrich Matthies and Gerard Olivier,

acting as Agents), with an address for service in Luxembourg at its registered office, 2 place de Metz, defendant,

Application for annulment of Decision No 8/63 of the High Authority of 30 April 1963 concerning membership on the part of the Oberrheinische

Kohlenunion, Bettag, Puton & Co., Mannheim, of the Société Rhénane d'Exploitation et de Manutention, Strasbourg,

THE COURT

was inaugurated, the Oberrheinische Ruhr, the Saar and Lorraine. Kohlenunion Bettag, Puton & Co. 2. By agreements and resolutions of

SOREMA v HIGH AUTHORITY

16 April 1956 the OKU was converted chasers, Decision No 19/57 granted

into an organization concerned with the them a transitional period to enable

joint buying from the above-mentioned them to develop their own sales activi­

companies of fuels intended for ties in the South German market 'so as mining sale in South Germany and was en­ to create in this way the conditions

d'Exploitation et de Manutention (here­ many'.

inafter referred to as SOREMA). 4. By Decision No 4/58 of 2 April 1958 3. By Decision No 19/57 of 26 July (Official Journal, p. 169/58) the High 1957 (Official Journal, p. 352/57) the Authority took account of the fact that High Authority authorized the above- the organization of sales activities, which

mentioned agreements 'save for any the traders belonging to SOREMA

refusal, limitations or have had conditions'

arising should opportunity to an

out of other provisions of the said develop in South Germany, had been Decision. delayed by reason of the measures which T he Decision was to remain in force only had to be taken in implementation of

conditions, laid down in the OKU's nothing to justify the undertakings which articles of association of 16 April 1956 it represented from staying within the for the admission of new members. OKU, as their so doing was incom­

These conditions are set out in para­ patible with the principles on which the

graph 19 of the articles which limit conversion of the OKU and its authori­

right of accession to the OKU to whole­ zation by Decision No 19/57 had been sale coal merchants who fulfil the made and was authorized as an excep­

conditions for admission as direct pur­ tional case for a transitional period of

chasers of fuel for sale in South Germany one vear.

regulated in any way until Decision rules and as a transitional measure, No 23/59 of 25 March 1959 (Official wholesale coal merchants established

Journal, p. 420/59) whereby the High in France would be allowed to draw Authority, taking account in particular their supplies direct, provided that

of the fact that evidence had not been during the coal industry's year 1960-61 furnished concerning the withdrawal of they had sold in the Common Market at certain associated companies including least 2500 metric tons of hard coal, the French merchants within SOREMA hard-coal coke and hard-coal briquettes extended by two months up to 31 May of the selling agency to which they were 1959 the period of operation of the admitted, the normal requirement being authorization for the joint buying of a sale of 6000 metric tons. fuel by the OKU which by Decision 10. By Decision No 3/62 of 28 March No 19/57 had been limited to 31 March 1962 (Official Journal, p. 873/62), the 1959. High Authority extended the authority This Decision did not specially mention, for joint buying by the OKU until in its operative part, the merchants 31 December 1967 and stipulated that

represented by SOREMA who were for a transitional period, to which a

members of the OKU. time-limit would be set by a later deci­ 7. By Decision No 31/59 of 27 May sion, this authorization extended also to 1959 (Official Journal, p. 697/59) the SOREMA's membership. High Authority again extended the T his Decision was based in particular on

period of operation of Decision No 19/57, the consideration that it was not yet

evidence they fulfil the conditions that visional basis in the interests of an

for direct supply from the selling agen­ improvement in coal distribution and in cies. As against this, it approved a supplies to the market.

transitional arrangement whereby 11. Finally, by Decision No 8/63 of

SOREMA itself was authorized thence­ 30 April 1963, notified to SOREMA on forth to remain within the OKU, this 4 May 1963 and published in the Official time until 31 March 1960. Journal of 11 May 1963 (p. 1441/63), 8. By Decision No 12 /60 of 18 May the High Authority decided that the (Official Journal, p. 813/60) the High authorization of SOREMA's member­

Authority extended to 31 March 1962 ship of the OKU should cease to be the time-limit (31 March 1960) set for effective on 30 June 1963. SOREMA's membership of the OKU This Decision, the subject of the present

by Decision No 31/59. application, refers only to Decisions y. By Decision No 3 /61 of 8 February Nos 19/57 and 3/63; it contains in 1961 (Official Journal, p. 413/61), the particular the following recitals: High Authority varied the trading rules Whereas by its Decision No 3/62 of

for direct access to the coal selling Decision. agencies of the Ruhr by virtue of a T he applicant replies that the conditions

transitional arrangement which entered for bringing an action are dependent into force on 1 April 1961 and that one upon its capacity as accepted by the

year was insufficient to enable them to High Authority and not its actual

deploy their commercial activities to capacity.

meet these conditions; To admit any other view would lead to Whereas the High Authority now finds conferring on the High Authority power that a fresh period of one year provided to arrogate to itself the right to judge

a sufficient margin and that from 1 July the scope of the Treaty's application. 1963 the conditions for collective mem­ When the High Authority, in imple­

— to annul the contested Decison; ing the descriptions set out in Article 80 — to order the High Authority to bear to bring an application for annulment.

the costs. This view in no way leads to the High The High Authority asks the Court: Authority's being left as judge of the — to dismiss the application as inad­ scope of the Treaty's application; it missible on the ground that the appli­ must, on the one hand, draw the conse­

cant cannot be considered to be quences of the dismissal of an applica­

either an undertaking or an associa­ tion on grounds of inadmissibility and, tion of undertakings within the on the other, if the occasion arises, make

meaning of the Treaty, and in any good losses arising out of wrongful

event as unfounded; conduct.

JUDGMENT OF 19.3.64 — CASE 67/63

Article 65. the meaning of Article 80 and the pro­

Moreover, under its articles of associa­ hibition contained in Article 65 cannot

tion, SOREMA has a duty to ensure apply to it as a mere agent. 'directly or indirectly the control or Its articles of association no doubt

management of each every interest and enable it to engage in distribution; but

assisting in the fulfilment of its object', Article 80 refers to the actual situation

an application is actually engaged; the which for their part fall within the

High Authority leaves it to the Court to provisions of Article 65. make this determination. Moreover, the purpose of Article 65 is to com­ prohibit all agreements restricting B — Substance petition which are associated with mem­

bership, even financial, of a legal person. The applicant puts forward five grounds To SOREMA's membership prohibit of complaint which it describes in a of the OKU is equivalent to prohibiting general way without giving detailed wholesale merchants grouped in SOR­

particulars, as infringement of an essen­ EMA who do not satisfy the conditions tial procedural overt in­ requirement, of the articles of association of the OKU fringement of the provisions of the from taking part in joint buying agree­

Treaty and of the rules of law relating ments, made by the merchants doing to its application and misuse of powers. business in South Germany, and put into The defendant observes that none of the effect by the OKU. grounds of action is directed to the

actual, object of the contested Decision, Second ground of complaint: Illegal revoca­ which, in its view, is to fix a date for the tion end of the transitional arrangements

regularly engaged in distribution in the membership of the OKU is in associates'

coal sector, is not an undertaking within accordance with the Treaty.

SOREMA v HIGH AUTHORITY

In fact the High Authority is not em­ This element is plainly lacking in the powered to grant a period of time for present case for the High Authority

cancelling agreements and practices seeks to invoke a posteriori conditions

which do not accord with the Treaty; which it did not impose on the applicant. their revocation must take immediate The defendant answers SOREMA's effect. claims basically with the following argu­

cover the same subject and are not either of the hard economic facts or of

concerned with the same problems. the Treaty itself, which provides in the Decision No 19/57 validates the indi­ second paragraph of Article 2 that: 'The vidual membership of the OKU by Community shall progressively bring wholesale coal merchants established in about conditions which will of them­

hand Decision distribu­ France; on the other selves ensure the most rational

No 8/63 revokes SOREMA's collective tion of production at the highest possible

membership of the OKU. level of productivity'. The applicant's

The difference in subject matter is reasoning, seeking to prove that Decision con­

revokes the authorization previously substance and the wording assigned to granted, the length of the transitional them by the High Authority.

period not having been fixed. Moreover, the applicant's entire argu­

(d) T­ he contested Decision should ment proceeds from an incorrect pre­

therefore indicate the change of cir­ mise: the issue has always been one of a cumstances which causes the collective transitional arrangement of limited dur­

membership of the French wholesale ation.

coal merchants within the OKU The French merchants affiliated to

appeared to be one of authorization that time of all the determining factors. given on a purely transitional basis. For that very reason therefore it is to

(b) Decision No 19/57 and the con­ the implementing Decision forecast by tested Decision (No 8/63) must be con­ Decision No 3/62, that is, to the con­

sidered together as they are directly tested Decision, that one must look for linked. the clues justifying the date chosen for When in 1959 the French merchants' ending the transitional period. direct and individual membership of (d) Finally the High Authority con­

the OKU was replaced by membership siders the applicant in error in its view

of SOREMA itself, this was intended to that the contested Decision contains an

bring out still more clearly the transi­ improper revocation of an authorization tional nature of an arrangement, the previously granted.

buying in the four basins of Aachen, the of the market.

Ruhr, the Saar and Lorraine. But inas­ T he contested Decision could not there-

much as it was the trading rules for the fore afford grounds for revoking this

Ruhr coal sales which may have created authorization by that the claiming difficulties for the French traders affili­ French wholesale coal merchants had ated to SOREMA for several years in not been in a position to extend their

buying directly coal intended for sale in business activities within the time

South Germany, the contested Decision allowed to meet the new conditions

1963 as the end of the transitional period and does not assert that a condition for to run again under Deci­ is which started authorization unfulfilled.

sion No 3/62. It appears from the text itself of Decision If the High Authority did not set an end No 19/57 that the authorization given

to the transitional period in Decision relates to joint buying from the mining No 3/62 itself, this was because it did companies of the basins of Aachen, the

SOREMA v HIGH AUTHORITY

Ruhr, the Saar and Lorraine or their sions of Article 65 (1) is out of time and sales organizations of fuels for intended inadmissible as regards the contested

resale in South Germany. Decision. Decision No 19/57 was justified by a It is also ill-founded in that this Decision concern, repeatedly shown in the series No 8/63 cannot be considered except in of decisions extending the transitional conjunction with Decision No 19/57; period, to give the merchants affiliated to moreover, the latter states that agree­

maintaining that the Decision is based through SOREMA, acompany not

on a new factor which does not appear itself engaged in distribution at all, in the previous Decisions. neither restricts nor distorts normal

competition. The competitive position at Fourth complaint: Failure to state reasons the time of the contested Decision related

establishing the existence of a restriction of to a period before SOREMA's member­

competition ship of the OKU. When SOREMA was established in 1946 the French whole­

The applicant maintains that the High sale coal merchants were adapting Authority, having stated in Decision themselves to a pre-existing situation

De­ between French period granted by the previous tionship the and the

cisions, especially No 19/57; it was not German merchants taking part in these therefore called upon either to make the agreements and their implementation statement in question or give reasons for that must be looked at. it. As regards the provisions of Article 65 (1) T he complaint disputing that member­ it matters little whether the participa­

ship of the OKU falls within the tion the French in the provi­ of merchants

JUDGMENT OF 19.3.64 — CASE 67/63

decisions taken by the OKU takes the resale in South Germany. SOREMA's form of individual membership or of claim to take part in these agreements is

membership through an organization incompatible with Article 65 because whose purpose is to represent their the traders it represents are not engaged

takings belonging to SOREMA in the ing the Advocate-General, decided there

joint buying agreements entered into by was no case for a preparatory enquiry. the members of the OKU restricts At the request of the Court the defendant between all the wholesale has however certain docu­ competition produced

merchants concerned and falls under the ments for the record.

prohibition set out in Article 65 (1) of The parties were heard on 15 January

the Treaty. 1964. Finally, these agreements are restricted The Advocate-General gave his opinion to the joint buying of fuels intended for at the hearing on 28 January 1964.

Grounds of judgment

applicant has no capacity to bring proceedings and that its application for annulment is therefore inadmissible under the second paragraph of Article 33 of the Treaty.

SOREMA v HIGH AUTHORITY

The High Authority is however unjustified in raising this plea of inadmissi­ bility.

In fact, by taking a decision concerning the applicant, it has by implication

recognized the applicant either as an undertaking or as an association of

undertakings.

of any association or part serving the of

object, namely 'all business relating to the handling, storage, transport of

and trading in solid fuels and other bulk goods in the areas supplied by the Upper Rhine and adjoining areas …'

Moreover, the coal undertakings belonging to SOREMA are legal persons whose objects as companies include regular engagement in coal distribution and who must, in accordance with Article 80, be considered as undertakings for the purposes of Article 65. Therefore, so far as the applicant represents and groups its members for the purposes set out above, it must be classed as an association of undertakings for the purposes of Article 48 of the Treaty.

As such it is qualified to take proceedings under Article 33 of the Treaty against the contested decision.

In this respect the application is admissible.

JUDGMENT OF 19.3.64 — CASE 67/63

It is accepted that the applicant is an association of undertakings and its constituent undertakings themselves fall within the provisions of Article 65.

The purpose of Article 65 is generally to prohibit all agreements, decisions, or practices tending to prevent, restrict or distort normal competition. It therefore applies also to associations to the extent that their own activity or

that of their member undertakings tends to produce the effects referred to

therein. This is confirmed by Article 48, which allows associations to engage

in any activity not contrary to the provisions of the Treaty. To admit any

It is necessary to examine whether such an authorization was granted to the

applicant.

Decision No 19/57 of 26 July 1957, authorizing joint buying of fuels by wholesale coal merchants operating in South Germany and laying down conditions for membership of the OKU which was entrusted with this joint

buying, stated that the French traders grouped in SOREMA did not

satisfy these conditions. Their exclusion in principle was accompanied by the laying down of a transitional period intended to allow them to establish themselves in South Germany and get permission to draw their supplies directly from the selling agencies.

Decision No 19/57 cannot be considered, with regard to the French mer­

to a transitional arrangement whereby the Société Rhénane d'Exploitation

et de Manutention (SOREMA) S.A.R.L., Strasbourg, representing the interests of the French merchants who are also partly supplied by the area Upper is to join "Oberrheinische Kohlen­ of the Rhine, authorized the

until the end of the coal industry's year 1959/60'. The second union"

para­

graph of Article 2 of the said Decision No 31/59 provides that 'the authoriza­

tion covers the membership of the Société Rhénane d'Exploitation et de Manutention (SOREMA) S.A.R.L., Strasbourg, but only until 31 March 1960'. It thus amounts to a change in the composition of the OKU in the

Moreover Decision No 31/59, unlike Decision No 19/59, no longer sets a time-limit on the French merchants for withdrawal from the OKU but

authorizes SOREMA's own membership of that body for a limited period.

Decision No 12/60 of 18 May 1960 amended Decision No 31/59 by removing the time-limit of 31 March 1960 from the authorization of SOREMA's

membership of the OKU.

Decision No 12/60 is based on the following grounds:

'whereas by Decision No 31/59 of 27 May 1959 the High Authority author­

JUDGMENT OF 19.3.64 — CASE 67/63

may therefore be extended until 31 March 1962, this being the date of expiry of the authorization granted for the Oberrheinische Kohlenunion and it is

therefore permissible to proceed to an examination of the market situation

and to a uniform adaptation of commercial arrangements, and for this

examination SOREMA must submit evidence, on the basis of the experience

meanwhile, showing whether, and, if so, to what extent, its member­ gained

This Decision states, on the one hand, that the grounds preventing the

merchants in SOREMA from direct membership of the OKU, grouped

namely that 'it is impossible for them for a variety of reasons to draw coal supplies from the Ruhr', disappeared during 1961 owing to the institution of transitional arrangements for direct access to the coal selling agencies of the

Ruhr and, on the other hand, that 'it is still not possible at the present time

to form a clear conception of the final shape of these trading rules and their French 'for these High trade'

effects on and that reasons the Authority considers that for the time being SOREMA's continued membership of the Oberrheinische Kohlenunion is justified in the interests of an improvement in coal distribution and market supplies'.

As it had not at that time put an end to that membership it could take no

SOREMA v HIGH AUTHORITY

other course but to authorize it under Article 65. In the present case there­ fore there was an authorization granted subject to specified conditions and for a limited period within the meaning of the third subparagraph of

Article 65 (2) of the Treaty.

The contested Decision states in its preamble that 'as from 1 July 1963 the conditions for group membership of the Oberrheinische Kohlenunion on the French wholesale coal merchants will no longer exist'

the part of and

Treaty.

Under the third subparagraph of Article 65 (2): 'the High Authority shall renew an authorization once or several times if it finds that the requirements

of subparagraphs (a) to (c) are still met at the time of the renewal'. The High Authority, therefore, when it considers itself unable to renew its authoriza­

tion must state its reasons and in particular indicate in what respects the

conditions set out in Article 65 (2) (a) to (c) are no longer fulfilled. The

contested Decision contains no such statement of reasons and the mere

requirements, or that the actual result of the agreement or of the application

thereof are contrary to the requirements for its authorization'.

The contested Decision does not establish any change in circumstances which would result in the agreement's no longer meeting the requirements for its

JUDGMENT OF 19.3.64 — CASE 67/63

authorization nor does it indicate what effects would be contrary to the

requirements for its authorization.

The applicant has however failed in its request for suspension of the opera­

tion of the contested Decision.

It must be ordered to pay the costs of this action.

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;

SOREMA v HIGH AUTHORITY

Puton & Co., Mannheim, on the part of the Société Rhénane d'Exploitation et de Manutention, Strasbourg;

2. Orders the High Authority of the European Coal and Steel

Community to pay the costs in the main action and orders the costs of the application for the adoption of the interim

measure to be borne by the applicant.

Donner Hammes Trabucchi

The applicant in the present proceedings member of that company. It now com­

is a French limited liability company, plains that the High Authority, by consisting in the main of wholesale coal Decision No 8/63 of 30 April 1963 merchants. Its objects are 'toutes les (published in the Official Journal of 11 operations se rapportant à la manuten­ May 1963), has withdrawn its authoriz­

tion, l'entreposage, le transport, le ation for the applicant to be a member of commerce des combustibles solides et the OKU. autres matières pondéreuses dans les The course of events which led up to this régions desservies par le Rhin-Amont et Decision has been gone into at length in les regions limitrophes et notamment the proceedings. I must however return l'exploitation des chantiers du port de briefly to it for a better understanding of Kehl' (all business relating to the hand­ my conclusions on the legal position. ling, storage, transport of and trading in When the Common Market was in­ solid fuels and other bulk goods in the augurated the OKU was an organiza­

areas supplied by the Upper Rhine and tion for the joint selling of coal in South

adjoining areas and especially the opera­ Germany from the areas of Aachen, the tions of the yards at the port of Kehl) Ruhr, the Saar and Lorraine. The (Article 2 of its articles of association). agreement on which it was founded was

1 — Translated from the German.