C-9/65

JUDGMENT OF THE COURT 2 MARCH 1967

Acciaierie San Michele SpA (in liquidation)

v High Authority of the ECSC

Joined Cases 9 and 58/65

Summary

1. Liability of the ECSC — Financial arrangements — Equalization — Normal

In Joined Cases 9 and 58/65

Acciaierie San Michele SpA (­ in liquidation ), represented by its liquida­

tor, Gianni Delzano, assisted by Arturo Cottrau of the Turin Bar, with an address for service in Luxembourg at the Chambers of Georges Margue,

applicant,

v

High Authority of the European Coal and Steel Community , repre­

(a) the individual decisions of 13 November 1964 fixing the tonnage of assessable ferrous scrap and the applicant's debt to the scheme for the equalization of imported ferrous scrap;

1 — Language of the Case: Italian.

JUDGMENT OF 2. 3. 1967 — JOINED CASES 9 AND 58/65

(b) of other individual decisions of 5 October 1965, amending the said

tonnage and the said debt;

raising objections of illegality with reference to the General Decisions Nos —

gives the following

JUDGMENT

Issues of fact and of law

I —

Summary of the facts Corte Costituzionale Italiana on the legal­ ity of the ECSC Treaty within the Italian By an individual decision of 13 Novem­ legal system, a question raised by the ber 1964, the High Authority fixed the Tribunale di Torino in another action

provisional amount of the equalization between the same parties. debts owed by the San Michele under­ By an order of 22 June 1965, the Court taking at 144 055 664 lire. dismissed this application. Appli­ This decision was contested by By a letter of 28 January 1966, the High cation 9/65. Authority notified the applicant that in The San Michele undertaking was de­ implementation of 'the general decision clared insolvent by decree of 'the Tri­ of 15 December 1965 (Decision No bunale di Salluzzo dated 22 June 1965. 19/65) it had fixed the final rates of the A new individual decision of 5 October equalization contributions and that con­

of the Rules of Procedure. report by Mr Chaudat relating to a check By an order of 2 June 1966, the Court carried out by Mr Chaudat and Mr defendant's be­ reserved its decision on the objection Astorri, the inspectors, for the final judgment. tween 2 and 9 October 1962. On 30 June 1966 the applicant lodged a statement calling on the High Author­ docu­ ity to produce the original of a II — Conclusions of the ment the photocopy of which was parties

allegedly incomplete.

By an order of 13 July 1966, the Court The applicant claimed, in its Applica­

took official note of the Registrar's find­ tion 9/65, that the Court should:

ing that 'the photocopy produced in the '1. Declare that the individual decisions proceedings corresponded to the original of 13 November 1964 (notified to the produced by the defendant. The written procedure followed the nor­ applicant on 24 December 1964) are infringe­ vitiated on the grounds of mal course. re­ ment of an essential procedural In a schedule to the reply, the applicant

lodged three accounting documents: the quirement, infringement of the Treaty and misuse of powers and therefore journal (1957 to 1958), the balance sheet book (31 December 1956 to 31 annul them; December 1960) and the register sum­ 2. Declare that General Decision No marizing the movement of stocks (1957 7/63 is vitiated on the grounds of

The applicant replied in the affirmative. the applicant (documents in the hands

The defendant of the High Authority) together with replied that only the

book had been the reports drawn up by the inspec­ balance sheet submitted tors of the ECSC, Mr Lepape, Mr to the investigators. At the hearing on

23 November 1966 the Judge-Rappor­ Chaudat and Mr Astorri, and those

in drawn up by the Société Fiduciaire teur asked two questions connexion

the Suisse should be produced to the with contested decision, regarding it Court and notified to the applicant; the reference by to the accounting documents and the defendant's reply to 4. Allow the production of the annexed the Registrar's letter. documents; At the same hearing, the Advocate-Gen­ 5. Admit proof by the evidence of wit­

spection Directorate of the High The defendant contended in its corres­

Authority, Mr Rochat, Mr Montavon ponding statement of defence that the

and Mr Egger of the Fiduciaire Suisse Court should: and Mr Lionello Renaldi, Mr 'dismiss as unfounded the application of Giacomo Aragno and Mr Armando 16 January 1965 made by San Michele Castelli of the Acciaierie San Michele SpA against the two individual decisions

undertaking together with Mr Gianni of 13 November 1964 and order the

Delzanno, the director in charge of applicant to pay the costs of the action'. the legal affairs of the steelworks; The applicant claimed in its Application 58/65 that the Court should: Matters for proof by the evidence of 'declare the present application admis­

witnesses ible; 1. Is it true that the Acciaierie San order all the documents relating to the Michele began its activities in the iron present case to be transmitted to the and steel industry on 1 February 1957 Court and notified to the applicant, in and that only from that date it was accordance with Article 23 of the Proto­

electric furnace operated 40 of theECSC Treaty, declare that the capacity hours (one High Authority is guilty of a wrongful eight a day shift) on

working days? act or omission in that it wrongfully failed to prevent a considerable number Matters, for proof by means of the opin­

of acts of fraud (involving roughly ion of a technical expert 350 000 metric tons at the time of the

5. The expert appointed by the Court 11th General Report) from being com­

should state what were the average mitted against the iron and steel under­

prices prevailing in the Community takings throughout the duration of the

Luria Brothers Cor­ to communicate punctually to the under­ and Company takings the amount—although still pro­ poration, which was found to have visional—of the rate for 'the equaliza­ 'participated in an anti-trust agree­

tion of bought ferrous scrap, whilst oblig­ ment with the Office Commun des ing them throughout the period from 1 Consommateurs de Ferraille (the Joint April 1954 to 31 March 1959 to publish Bureau of Ferrous Scrap Consumers, their own price lists, without their being hereinafter to by its French referred

able to take any account of the equaliza­ initials as 'the OCCF') and the Caisse tion rate with only to which they were de Péréquation des Ferrailles Impor­

be charged, and then provisionally, seven, tees (the Imported Ferrous Scrap eight and even nine years later; Equalization Fund, hereinafter refer­ also refer consideration of the second red to by its French initials as 'the

question to a committee of experts to be CPFI') of Brussels, for importing fer­ officially appointed by the Court and en­ rous scrap from the United States? trust them with calculating, after con­ order the defendant to produce the fol­

sidering the applicant's price lists and lowing documents:

on the following questions: taining the 'profit and loss accounts'

— What is the tonnage of ferrous scrap of the OCCF and the check by the

todate on which equalization was Société Fiduciaire de Belgique, and

wrongly paid? the certificate of the two permanent

What legal steps were taken against, commissioners for the years 1954, and what administrative sanctions 1955, 1956, 1957 and 1958; were imposed on, the servants of the — copies of the minutes or the annual

Italian Regional Office (Campsider) general meetings of the OCCF and

injury Community by received by the High caused to the Authority until the illegal actions of the former's the end of 1958 (see the reply to official, Mr Van der Grifth? On what Written Question No 37, Official date were proceedings commenced Journal 1963, b, 95, p. 1760 c, first and what is the outcome? paragraph of Question 2);

JUDGMENT OF 2. 3. 1967 — JOINED CASES 9 AND 58/65

— a copy of the mandate which the steelworks and the rolling mill. High Authority gave on 24 January Thus the contested decision is unjusti­

1959 to the President CPFI, of the fied in attributing to San Michele a con­

Brussels, (through the regional office), sumption of 4 333 metric tons of ferrous with an order requesting production scrap.

on or before 20 February 1959 of The defendant replied that from May the missing documents relating to 1956 electricity was not only supplied

The defendant contended in its corres­ rolling'.

defence that the The decision thus properly took into ponding statement of 'consumed'

Court should: account the ferrous scrap

'after joining the present case with Case during the disputed period, whether the said scrap was purchased by the I.S.A.P. 9/65, pending between the parties, dis­ or otherwise. miss the application lodged on 26 On either of these two views, since no November 1965 by the liquidator of the Acciaierie San Michele unfounded contribution was paid by the I.A.S.P., as the obligation arises from the proper ap­ and order the applicant to pay the costs plication of General Decisions Nos of the action'. 14/55 (Article 3) and 2/57 (Articles 3 In their statements relating to Joined and 10). Cases 9 and 58/65, the parties main­ tained their previous conclusions. The legality of making an estimated

assessment in this case III — Submissions and argu­

ments of the parties On the basis of the Treaty, Article 2 of Decision No 13/58 and the case-law The date of the commencement of San of the Court the applicant endeavours to Michele's activities show that the capacity of its furnace, The applicant states that San Michele the power of its transformer, the fact commenced production of steel on 1 that it was carrying out certain altera­

ferrous scrap', that is to say, for the ine factors in the calculation which

production of castings from ingots taken would enable the estimated assessment

over from the I.S.A.P. in order to carry to be set aside.

out certain orders previously accepted The applicant amended the High

by that undertaking. Authority's calculations taking these

Further, the electricity supplied was facts, its previous declarations and its used in connexion with the machinery, accounts into consideration.

mention the 'essential elements in the ment fact' findings of on which they were

The applicant produced the following based.

accounting documents in a schedule to It alleged that the High Authority mis­

the reply: the journal, the balance sheet used its powers, since it employed them

book and the register summarizing the to obtain payment of unjustified con­

movement of stocks. tributions which were incorrectly calcu­

poses of the proceedings'. tricity from 1 May 1956 to 30 Novem­ It recognized however that the third ber 1958. document 'might in principle achieve its The misuse of powers alleged does not

desired purpose if the applicant had correspond to the interpretation placed

annexed to that document those on the on this concept by Community law. basis of which it was compiled'. With regard to the alleged infringement

It alleged that this register — 'which until of the Treaty, the defendant observed

then had never been submitted to the that it used the only system of checking agents of the High Authority' — proved and induction possible by employing the however that the undertaking's declara­ criterion of the elec­ consumption of

tions were incorrect. tricity and the facts established in the

duct from the relevant production. by the inspectors of the High Authority

JUDGMENT OF 2. 3. 1967 — JOINED CASES 9 AND 58/65

and the Société Fiduciaire Suisse only The validity of the general decisions the data obtained by the latter were (objection of illegality against General taken into account. Decisions Nos 7/61 and 7/63) These data were transmitted verbally, The applicant complains that General invalidating the statement of reasons for Decisions Nos, 7/61 and 7/63 are vitia­

the decisions. ted by the infringement of an essential Furthermore, it is alleged that the High procedural has admitted, requirement, since they were Authority within the con­

adopted without the previous unanimous text of the decision of 13 November assent of the Council of Ministers. 1964, that the electricity invoices were The defendant replies that this argu­

submitted to the inspectors, in particu­

Embassy of 9 April 1965, it is to be complained of by the applicant and re­

doubted whether the consumption of called that the Court had approved the

attributed to the applicant system employed. electricity 'for' the electric furnace was used ex­ The judgment in Case 18/62 or 16 December 1963 (Rec. 1963, 529 clusively by smelting purchased scrap. p. et

exemp­ seq.) governs the question of The defendant replied that the confusion tions. of complaints put forward shows that The applicant General De­ contested they are inconclusive. cision No 7/63. on the ground of misuse It pointed to the difficulties encountered of powers. It alleged that the High by its agents in the face of the diver­ Authority authorized approximations and gent explanations given by San Michele thus distorted competition, and that, in connexion with its consumption of furthermore, it infringed Articles 47 electricity. and 78 of the Treaty by its failure to These divergences were resolved by the publish data and the lack of supervision communication of 9 April 1965 from the from which the High Authority's act­

Italian Ambassador to Luxembourg, re­ ions suffered.

lating to this consumption and demolish­ The applicant claimed finally that the

had it­ ages . acceptable to the Community as a the administration arrogated to

whole, on the obligation of professional self 'the power to decide, a posteriori auditors'

secrecy, on checks and on the and even so only approximately, one of subjection of all undertakings to an the essential factors in the cost of pro­ duction' identical system. increasing 'by over 50% the

cost of transforming the ferrous scrap The claim for compensation into ingots'. The defendant replied that the condi­

According to the applicant, there has been a wrongful act or omission causing tions laid down by Article 40 of the

an injury which can only be calculated Treaty do not obtain, since the appli­

The San Michele company has made an application against two individual decisions of 13 November 1964, whereby the High Authority, on the basis of an estimated assessment, fixed the tonnage of assessable ferrous scrap and from that the corresponding debt to the imported ferrous scrap equalization

scheme.

The said company has also made an application against two other individual decisions of decisions of 5 October 1965 based on new facts relating to the

electricity and fixing an increase in the tonnage and the con­ consumption of

tributions. The said applications seek the annulment of the said individual decisions, pleading the illegality of General Decisions Nos 7/61 and 7/63 and claiming compensation for a wrongful act or omission on the part of the High Authority.

Since these applications do not give rise to any dispute as to admissibility,

ment declarations in support of which valid proof cannot be supplied.

It is clear from these provisions that the assessment and amendment on the

High Authority's initiative are alternative and exceptional methods, which are

only in certain circumstances. In fact the High Authority is only applicable

empowered to substitute its own figures for those of the undertakings if the

latter do not fulfil their obligation to supply it with information capable of

requested, but that they only 'submitted in (without part'

were were more

precise details) and that since the High Authority 'did not have the above-

disposal' mentioned accounting documents at its it was obliged to make an

estimated assessment.

The San Michele undertaking disputes these reasons and states that it pro­ duced to the agents of the Fiduciaire Suisse and to the High Authority's in­ spectors the register of invoices for bought ferrous scrap and the register of goods being processed, in addition to various accounting documents relating in particular to the receipts of ferrous scrap.

of 19 November 1962, drawn up by Mr Maurice Chaudat, the High Authority's inspector, that various

accounting documents were submitted to him.

The said report in fact states:

'There were presented to us for the period under review:

— the suppliers'

invoices for 1957 and 1958, numbered and arranged in

— register of goods being processed for 1958 (that for 1957 was missing);

— originals of the statements to the "Cassa Conguaglio per le tariffe elet­

letters.' triche"

accompanied by receipts for registered

It therefore appears that the statement in the decision of 13 November 1964 that the High Authority did not have at its disposal the accounting docu­

ments which it requested is therefore not correct, or at any rate only partly correct, since two of them are referred to in Mr Chaudat's report (the balance sheet book and the register of goods being processed for 1958) and were

various matters calling for cross-checking or discussion.

The High Authority cannot merely reject any accounting document for the sole reason that it reveals figures lower than those obtained by means of the estimated assessment on the basis of the consumption of electricity.

Furthermore, the Chaudat report, itself emphasizes various points arising out ofthe accounting documents, the excessive obsolescence of equipment and 'considerable'

scrap which were not even mentioned in the state­ recoveries of

ment of reasons for the decision.

The contested decisions must therefore be annulled as being based on in­ correct reasons and for infringement of Article 2 of General Decision No 13/58 of 24 July 1958.

sion on the part of the High Authority, but without indicating the amount of damage which it has suffered.

The applicant has by no means proved that because it was for a time uncer­

tain as to the final amount of its equalization contributions, the disadvantage from which the San Michele undertaking exceeds the dis­ suffered normal

advantages unavoidably inherent in the equalization scheme, as it has been established and has functioned with a view to the general interest.

This head of the claim must therefore be rejected.

The application on a procedural issue in connexion with the High Authority's letter of 28 January 1966.

Costs

Under Article 69 (2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs. The defendant has failed in respect of the prin­ cipal head of the applications. It must therefore be ordered to pay the costs.

The costs of two of the three procedural issues raised by the applicant have been reserved. The defendant must bear the costs of the proceedings forming the subject of the order of 2 June 1966 since the High Authority's letter of 28 January 1966 is supplementary to the annulled decisions.

The applicant must bear the costs of the proceedings closed by the order of 13 July 1966, since the Court has taken note of the Registrar's finding that the original document conformed to the photocopy which the applicant

alleged was incomplete.

The costs relating to these proceedings are estimated at 1/20 of the total

Having regard to the Rules of Procedure of the Court of Justice of the European Communities, especially Article 69;

THE COURT

hereby:

1. Annuls the individual decisions of 13 November 1964 and 5 October

1965, fixing and amending the tonnage of assessable ferrous scrap and the debt of Acciaierie San Michele SpA under the imported ferrous scrap equalization scheme;

2. Orders the High Authority to pay 19/20 of the costs of the action

Summary

Introduction (statement of facts, conclusions of the parties, procedure) 15

Legal consideration 18

I — Admissibility 18

II — Substance 18

1. Arguments relating directly to the contested