C-3/64

JUDGMENT OF 8. 7. 1965—JOINED CASES 3 AND 4/64

In Joined Cases

(1) 3/64

(a) CHAMBRE SYNDICALE DE LA SIDÉRURGIE FRANÇAISE, having its registered office at 5 bis, rue de Madrid, Paris 8, represented by its Chairman, Jacques Ferry;

(b) FORGES DE CHATILLON, COMMENTRY & NEUVES-MAISONS, S.A., having its registered office at 19, rue de la Rochefoucauld, Paris 9, represented by its General Manager, Claude Laplace;

(c) HAUTS FOURNEAUX DE LA CHIERS, S.A., having its registered office at Longwy-Bas (Meurthe-et-Moselle), represented by the Chairman of its Board of Directors, Arsène de Launoit;

(j) UNION SIDÉRURGIQUE LORRAINE (SIDELOR ), S.A., having its registered office at 4, rue des Clercs, Metz (Moselle), represented by the Chairman of its Board of Directors, Roger Martin;

(k) UNION SIDÉRURGIQUE DU NORD DE LA FRANCE (USINOR), S.A., having its registered office at 14, rue d'Athènes, Paris 9, represented by its Director and General Manager, Maurice Borgeaud;

SIDÉRURGIE FRANÇAISE v HIGH AUTHORITY

(l) DE WENDEL & CIE, S.A., having its registered office at 1, rue Paul- Baudry, Paris 8, represented by its Chairman, Emmanuel de Mitry;

and (2) 4/64

(a) CHAMBRE SYNDICALE DES PRODUCTEURS D'ACIERS FINS & SPÉCIAUX, having its registered office at 12, rue de Madrid, Paris 8, represented by its Chairman and General Manager, Robert Morizot;

v

HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, represented by its Legal Adviser, Guy Sautter, acting as Agent, assisted by Frédéric Chartier, Advocate of the Cour d'Appel, Paris, with an address for service in Luxembourg at its offices, 2, place de Metz, defendant,

Application:

(a) (Application 3/64): for the annulment of Article 1 (2) and Articles 2 (Articles 7, 8 and 9) of Decision No 19/63, and of Article 1 (2) and (3), Article 2 (1) and (2) and Article 3 of Decision No 20/63;

JUDGMENT OF 8. 7. 1965 — JOINED CASES 3 AND 4/64

(b) (Application 4/64): for the annulment of Article 1 (2) and Article 2 (Articles 7, 8 and 9) of Decision No 19/63 and of Article 1 (2) and (3), Article 2 and Article 3 of Decision No 21/63;

I — Summary of the facts Furthermore, 'The High Authority may … decide The facts which form the basis of the that: dispute may be summarized as fol­ (b) undertakings shall be held respons­ lows: ible for infringements of this obliga­ Chapter V of Title Three of the ECSC tion by their direct agents or by Treaty refers, on prices, to distribution commission agents acting on their by undertakings engaged in production behalf’ (Article 63 (2) (b)). within the meaning of Article 80 of Finally, the Treaty and to the activity of certain distributors. 'In the event of an infringement of this obligation by a purchaser, the High Article 60 prohibits pricing practices Authority may restrict or … tem­ contrary to Articles 2, 3 and 4 of the porarily prohibit dealings with that pur­ Treaty. In order to prevent producers chaser by Community undertakings.' from discriminating at the commercial level, Article 63 (2) provides that: (Second subparagraph of Article 63 (2)). ‘… the High Authority may decide that: Under Article 63 (3) (a) undertakings must frame their con­ 'The High Authority is empowered to make to the Member States concerned ditions of sale in such a way that their customers and commission any appropriate recommendations to en­ sure mat the rules laid down for the agents acting on their 'behalf shall be under an obligation to comply application of Article 60 (1) are duly with the rules made by the High observed by all distributive undertakings Authority' in application of the pre­ and agencies in the coal and steel sec­ tors'. vious Articles (first subparagraph of Article 63 (2)). These Articles thus provide that the

The first implementing decisions, taken 1. No 19/63 of 11 December 1963 in 1953 and 1954 by the High Author­ (Official Journal, 1963, p. 2969) ity, are the following: amending the text of Decisions Nos 1. Decision No 30/53 of 2 May 1953 30/53 and 1/54 (practices prohibi­ ted by Article 60 (1)); amended by Decision No. 1/54 of 2. No 20/63 of 11 December 1963 7 January 1954; (Official Journal, 1963, p. 2972) 2. Decision No 31/53 of 2 May 1953 amending the text of Decisions Nos supplemented by Decision No 32/53 31/53 supplemented or amended by of 20 May 1953 and amended by Decisions Nos 32/53, 2/54, 32/56 Decision No 2/54 of 7 January 1954 (publication of price lists for ordin­ and by Decision No 32/56 of 21 ary steel); November 1956; 3. No 21/63 of 11 December 1963 3. Decision No 37/54 of 29 July 1954 amending the text of Decision No supplemented by Decision No 33/58 37/54 supplemented by Decision of 1 December 1958. No 33/58 (publication of price lists The first group of decisions defines the for special steels). practices prohibited by Article 60 (1) These three decisions were taken by of the Treaty, the second group fixes the High Authority to fill the gaps in the forms in which the price lists and the Decisions of 1953-1954, which in conditions of sale in the ordinary steel essence arose out of the lack of any distinction between distributors inter se industry are to be published (Article 60 (2) (a) of the Treaty) and the third and the distinction between producers fixes the same rules for the special­ and selling agencies. steels industry. Decision No 19/63 distinguished be­ tween selling agencies (risks and profits The following rules arose from these for the producer, but no freedom of decisions: action, taking on a function of the producer) to which should be added the (a) All distributors were subjected to the same rules, without distinguish­ obligations of undertakings (revised Article 7), acting as middlemen on be­ ing between agents acting on their own behalf and middlemen acting half of producers (risks and profits for the producer, but with freedom of act­ for producer undertakings. Selling agencies were treated on a par with ion) (new Article 8), and purchasers distributor undertakings, but were for resale (independent dealers) with not defined. freedom of action and risks and profits for themselves (new Article 9 retaining (b) Distributor undertakings merely for purchase for resale alone the rules subject to the obligation not to dis­ of the former Article 7). criminate among their customers re­ Although on the one hand the position mained free to apply whatever con­ of independent dealers (purchasers for ditions they wished provided these resale) remains unchanged (new Article were also applied to all comparable 9 of Decision No 30/53), the under­ transactions. It was therefore pos­ takings, on the other hand, must require sible for the published price lists the middlemen acting on behalf of the to differ from those of the producer producers to apply their price lists and undertakings whose products the conditions of sale (new Article 8). distributor undertakings sold. According to the defendant, the pur-

pose of that provision is to prevent any hand with selling agencies common to possible discrimination by means of several producer undertakings and on middlemen. In order to make this pro the other hand selling agencies created vision effective, the undertakings are by or associated with a particular pro obliged to put themselves in a position ducer. For the first (Article 65 (2) of to furnish—and in fact to furnish to the Treaty) there is no problem of the High Authority at its request—in

when the holding does not represent 53 (Article 2 of Decision No 19/63) 100% of the capital, or the organiza provides that the producer undertakings tion does not sell all the products of a must only sell their products through producer and does not restrict its busi their selling agencies at the prices and ness exclusively to those products. conditions in their own lists. Generally, The High Authority claims that it has the three new decisions provide that tried to evolve criteria to clarify the the obligations also extend to trans connexions rendering a selling agency a actions effected by their selling agen distributor which must of necessity be cies. subject to the obligations of Article 60 According to the defendant, this new if the latter is to continue to fulfil its obligation is intended to make it im allotted function under the Treaty. possible for producers to discriminate. According to the defendant, Article 60 But since, according to the defendant, must be applied when three factors are it was possible to discriminate because present: the sales organizations in practice as — dependent management: this pre sumed a function normally pertaining supposes a situation in which the to the producer, it was proper to limit selling agency's policy with regard the extension of the obligations only to conditions of sales, to price and to those selling agencies which were to the market can be determined by

long-term task for the selling agency; fined as exactly as their diversity of —a distributive activity essentially form allowed and as the necessity to based on the products of the under cover all situations from which a breach taking in question: failing this, the in the system of Article 60 might arise situation of the selling agency would demanded. approach that of a trading under In fact we are concerned on the one taking.

'Declare inadmissible the applications (a) In Application 3/64: made by the Chambre Syndicale de la 'Having regard to the provisions of the Sidérurgie française and other iron and Treaty establishing the European Coal steel undertakings, and Steel Community, especially Articles And the Chambre Syndicale des Pro­ 2, 3, 4, 5, 33, 60, 63, 64, 80, 95 and ducteurs d'Aciers Fins et Spéciaux and 96, the applicants, offering moreover to other iron and steel undertakings, produce all appropriate evidence in sup­ for the annulment of Article 1 (2) and port of their request, Article 2 (Articles 7, 8 and 9) of De­ That the Court should cision No 19/63, of Article 1 (2) and find for the admissibility of their appli­ (3), Article 2 (1) and (2) and of Article cation for the annulment of Article 1 3 of Decision No 20/63; (2) and Article 2 (Articles 7, 8 and 9) in any event reject them as unfounded, of Decision No 19/63 and of Article 1 with all the consequences in law, especi­ (2) and (3), Article 2 (1) and (2) and ally with regard to the rules on costs and fees.' Article 3 of Decision No 20/63; And consequently pronounce the said annulments, after making any necessary III — Submissions and argu­ enquiries, in particular with regard to ments of the parties the legal standpoints adopted by the High Authority in this matter; The submissions and arguments of the Order the High Authority of the Euro­ parties may be summarized as follows: pean Coal and Steel Community to pay The applicants request the annulment of the entire costs of the proceedings;' Articles 1 (2) and 2 of Decision No (b) In Application 4/64: 19/63, of Articles 1 (2) and (3), 2 (1) and (2) and 3 of Decision No 20/63 'Having regard to the provisions of the and of Articles 1 (2) and (3), 2 and 3 Treaty establishing the European Coal of Decision No 21/63. The submissions and Steel Community, especially and arguments therefore relate to all Articles 2, 3, 4, 5, 33, 60, 63, 64, 80, the Articles in the contested decisions 95 and 96, the applicants offering more­ which in the first place refer to the over to produce all appropriate evidence various obligations imposed on pur­ in support of their request, chasers for resale and on middlemen, That the Court should and which, in the second place, refer find for the admissibility of their appli­ to the obligations of producers in rela­ cation for the annulment of Article tion to selling agencies and contain a 1(2) and Article 2 (Articles 7, 8 and 9) definition of these selling agencies. of Decision 19/63 and of Article 1 (2) In support of their application, the ap­ and (3), Article 2 (1) and (2) and plicants put forward the plea of misuse Article 3 of Decision No 20/63; of power in two respects: first of all And consequently pronounce the said the High Authority took a decision when annulment, after making any necessary it was only empowered to make a enquiries, in particular with regard to recommendation (misuse of procedure) the legal standpoints adopted by the and in the second place the contested High Authority in this matter; decisions involve a discrimination among Order the High Authority of the Euro- the producers of the Community.

In support of these two pleas, the appli­ (a) According to the first hypothesis, cants further allege serious lack of care, the applicants allege the High Author­ amounting to a disregard of the purpose ity's lack of competence, and not a mis­ of the law, on the part of the de­ use of powers. In fact, a power can fendant. only be misused if it exists and confers something more than a mere fettered A — Admissibility discretion. (b) According to the second hypothesis, According to the defendant, the con­ if the limits of a power which exists ditions for the admissibility of the appli­ are exceeded, this constitutes an ultra cations are not present for the following vires act and not misuse of powers. reasons: (c) If the applicants are arguing for a 1. The submission that the High misuse of procedure, they must clarify Authority acted by means of a de­ their argument. cision and not by means of a recom­ The applicants' reply is to allege that mendation is inadmissible in sup­ the High Authority has committed a port of an application against mis­ misuse of powers, constituted in par­ use of powers in so far as it really ticular by a misuse of procedure. In constitutes a plea of lack of com­ fact, they state, in order to close the petence or of acting ultra vires; gap which it claims to have discovered, 2. Misuse of powers is not convincingly the High Authority could only proceed evidenced in so far as the plea of by way of a recommendation to Govern­ discrimination among producers of ments provided for in Article 63 (3) of the Community is concerned; the Treaty. 3. The argument based on the serious The defendant replies that the plea of lack of care amounting to a dis­ misuse of procedure cannot be regarded regard for the purpose of the law as conclusively proved since it is based is first of no intrinsic value to the on mere allegations. extent that it is based on what it As to (2) The submission of discrimina­ has to prove and secondly it is un­ tion as between Community producers convincing to the extent that it is based on alleged uncertainties. The defendant observes that this sub­ Finally, the defendant alleges that the mission refers to the infringement of applicants' reasoning is entirely directed Articles 3 (b), 4 and 5 of the Treaty. towards the obligations of the producers (a) With regard to Article 3 (b), refer­ in relation to the selling agencies; it ring to the equal access of all con­ observes that with regard to the request sumers to the sources of production the for the annulment of the other provis­ defendant alleges that the submissions ions misuse of powers is not even al­ do not indicate how the contested de­ leged. cisions compromised this access for the applicants. Moreover, according to the As to (1) The submission with regard defendant, the infringement of Article to acting by means of a decision and 3 (b) at the most could only constitute not by means of a recommendation a discrimination against the consumers The defendant alleges that the appli­ and not against the producers whom it cants' arguments mean: is not the purpose of this provision to — either that the High Authority had protect.

plicants claim that the contested de (Direkthändler) has the status of a pur cisions infringe that provision, they have chaser for resale, even when steel is failed to give any information with re sent directly from the forge to the gard to this, either on the particular consumer, and is not subject to super provisions which they consider were in vision by the High Authority and that fringed or on how that infringement the large German iron and steel groups took place. Furthermore, the defendant have commercial companies with the claims that there is no connexion be status of 'Direkthändler' and, conse tween the infringement of Article 5 and quently, of a middleman not subject to the complaint of discrimination. supervision. The French steel works are

powers. In fact it says that Article 4 that a misuse of power has been com contains prohibitions which leave no mitted against them are relevant. margin of discretion to the High According to the defendant, the appli Authority. cants as individual undertakings do not The applicants reply point by point to allege a direct attack on their individual the arguments of the defendant. interests, as the case-law of the Court (a) With regard to Article 3 (b), the requires. It is true that they allege an distinction which the defendant makes injury deriving from the different sys between the position of consumers and tem created, on the one hand, for the that of producers is arbitrary because agents and commission agents and, on competition between producers emerges the other hand, for the independent pur precisely at the stage when the con chasers for resale, but they by no means sumer places an order. The fact that it establish the direct nature of the injury is impossible for the consumers to have to their individual interests, since the equal access to all the sources of pro said difference in the systems arises duction principally affects producer from the Treaty itself, and in no way undertakings, whose customers may be from the contested decisions and that, alienated by the differences in the sale on their own admission, if there is an price to the consumer. injury, it is to the consumers and not (b) With regard to Article 5 the ques

their members in the same way. They cants state that in Germany an agent do not establish that the decisions were

taken with the purpose of damaging them or not, but such an ‘uncertainty’ the French iron and steel industry or cannot form the basis for the complaint indeed of affecting it. of serious lack of care. In sum, according to the defendant, the (c) With regard to the uncertainty over applications are inadmissible because the the application of Article 47 of the claims do not have sufficient statements Treaty, which allows the High Authority of reasons, misuse of powers has not to address itself directly to selling been convincingly alleged and the plea agencies, the defendant contends that a that this alleged misuse of powers glance at the text of the contested de ‘affected’ the applicants is no more cisions shows that they are not based convincing. on Article 47 of the Treaty, to which a formal reference would have been re As to (3) With regard to the allegation quired, and the allegation of uncertainty of serious lack of care amounting to a

1. First aspect of misuse of powers: the arising from Article 47 of the High Authority took a decision when Treaty. it was only empowered to make a (a) The defendant observes in the first recommendation (misuse of pro place that the serious lack of care can cedure) not constitute an argument in favour of the two submissions of having acted by The applicants claim that under Article means of a decision and of committing 63 (2) of the Treaty the powers of the a discrimination between producers in High Authority by way of Obligations the Community.

unequivocal. It states furthermore that recommendation in accordance with any general law leads the persons con Article 63 (3) and not by means of a cerned to wonder whether it applies to decision under Article 63 (2).

The defendant replies that Article 63 undertakings fall upon distributors, (2) of the Treaty makes no mention something which could not have hap either of stages or of the number of pened under the previous system. transactions. In order to bring this about, the High The producers referred to by Article Authority was led artificially to contest 80 are directly subject to Article 60. the de facto independence of the sales Article 63 (2) relates to the extension organizations, despite their legal struc of the obligations of public law im ture and by a description based on posed on producers; a second obliga criteria of fact disputed by the appli tion of public law is imposed on the cants. AM of these serious defects would latter: that of imposing an obligation have been avoided if the High Authority in civil law. had employed the normal procedure, On whom must that obligation be im that is, the recommendations provided

Moreover they appear to attack the Article 63 (3) provides additional means High Authority's purpose, which accord of action, with regard both to distribu ing to them is an extension of super tor undertakings which cannot be bound vision, and the method used, that is to by means of Article 63 (2) and to other say, treating the selling agencies as kinds of measures applicable to any dis distribution departments of the pro tributor whether or not affected by ducers.

Article 8 (3) of the The applicants reply that the defen revised Decision No 30/53, as appears dant's allegation, with regard to the from the contested decisions, indeed obligation imposed by Article 63 (2) on provides that 'the producers shall furnish producers to require an obligation in the High Authority with all particulars civil law from all distributors whom of the commercial operations of the they can directly contact, cannot justify middlemen who are either their em the contested decisions. ployees or direct agents or their In fact 'these decisions, by bringing in authorized agents. But this is not an

JUDGMENT OF 8. 7. 1965 — JOINED CASES 3 AND 4/64

ments. They are thus concerned with transactions are carried forward in the the implementation of Article 63 (2) case of the ‘selling agency' to the (b). second and third transactions respec The contested decisions were thus in tively. disputably taken under Articles 60 and Thus Article 2 of Decision No 19/63 63 (2). They explain 'the limit within (Art. 8), obliges 'undertakings and their which the rules laid down in imple selling agencies' to bind their agents mentation (of Article 60)’ must be to apply the rules and conditions of

They complain with Article 63 (2). that it does not give a clear and proper (b) Article 1 (2) of Decision No definition of the distributors affected 19/63 whose annulment is requested by that decision whose effects have re provides that in certain specified cases percussions throughout the successive selling agencies shall be treated as dis distribution stages, thus leaving the tribution departments of the producers undertakings concerned in a state of The aim of this assimilation is to bring uncertainty. the legal position into line with facts, The applicants observe that it emerges and to put all producers on the same clearly from the last reason in paragraph footing with regard to the application 1 of the preamble to Decision No 19/63 of Article 60. The assimilation was that the High Authority had tried to effected under this Article. On this establish a jurisdiction over the under point the contested decision refers to takings which it does not possess.

This Authority has created a new legal cate is the objective of Article 2 of Decision gory, the selling agencies, and estab- No 19/63 (Art. 8 (3)). The High

Authority could assume such powers purchasers for resale independent of the by various methods, in particular by a producers and acting on their own revision of the Treaty, but not by the behalf. In treating certain selling authoritarian method of a decision. agencies in the same way as a distribu The applicants conclude from this that tion department of the producer under the defendant has failed to observe one takings, the High Authority has re of the fundamental purposes of the established proper observance of Article Treaty, which is to ensure legal 60 by abolishing, as it is obliged to do, equality (Art. 3 (b), Art. 4, Art. 5); in a discrimination between two categories fact, the obligations of the persons con of producers, the one continuing to cerned differ to an unjustifiable extent, carry out all functions of producers depending on their being, or not being, under one and the same name and the in the position of a purchaser properly other separating the producers' functions so-called. of distribution from production properly The defendant replies by employing so-called. the arguments already set out during (c) The different system to which the consideration of the admissibility of dealers as opposed to commission agents this plea (see above A—Admissibility are subjected is also to be explained by As to (2). the particular situation in which the The applicants reply that the discrimina trade is placed by the Treaty of Paris. tion which they allege is founded on the The dual nature of the system of which disparity established by the contested the applicants complain was not created decision with regard to the obligations by the contested decisions.

Article 60 of the Treaty. The second case-law, that the High Authority acted consists in reasoning as if the parti with 'a serious lack of care, amounting cular situation of the trade was the pro to a disregard for the purpose of the duct not of the Treaty, but of the con law' and this arises: tested decisions. (a) from the fact that the High Author (a) With regard to supervision the dis ity acted by means of a decision parity between the situation of the

of distribution. In the first instance, from an obscurity as to whether there is distribution by the undertakings the High Authority intends to apply themselves, in the second there are directly to the selling agencies the

The contested measures established a legislative principle, laying down con­ ditions for its implementation and setting out the legal consequences result­ ing from them; they are therefore general decisions.

Furthermore, this general nature is not disputed in the action.

Consequently, for their applications to be admissible, the applicants must convincingly point to facts and circumstances indicating the probability that in this instance the High Authority, through want of foresight or serious lack of care amounting to disregard for the purpose of the law, has pursued other objectives than those for which the powers provided by the Treaty were conferred upon it.

SIDÉRURGIE FRANCAISE v HIGH AUTHORITY

The applicants have not fulfilled that requirement.

The first complaint made against the High Authority, that is, of having acted by means of a decision and not by means of a recommendation, is reduced to a submission of lack of competence based on an analysis of Article 63 of the Treaty.

Thus the last plea also fails to establish misuse of powers.

It follows from this that Applications 3 and 4/64 must be dismissed as inadmissible.

JUDGMENT OF 8. 7. 1965 — JOINED CASES 3 AND 4/64

II — Costs

Under Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs.

In this case, since the applicants have failed in their action, they must bear the costs.

Delvaux Trabucchi Strauß Monaco

Delivered in open court in Luxembourg on 8 July 1965.

A. Van Houtte Ch. L. Hammes Registrar President