C-49/65

JUDGMENT OF THE COURT 28 APRIL 19661

Ferriere e Acciaierie Napoletane SpA v High Authority of the European Coal and Steel Community2

Case 49/65

In Case 49/65

FERRIERE E ACCIAIERIE NAPOLETANE SPA, a limited liability company, having its registered office at Naples, represented by Giovanni Scotto, Chairman of its Board of Directors, assisted by Pietro Gasparri, Professor at the University of Perugia and Carlo Selvaggi, both with a right of audience before the Magistrature Superiori, with an address for service in Luxembourg at the Chambers of Ernest Arendt, 6 rue Willy-Goergen,

applicant,

Advocate-General: J. Gand

Registrar: A. Van Houtte

gives the following

1 — Language of the Case: Italian. 2 — CMLR.

JUDGMENT OF 28. 4. 1966 — CASE 49/65

JUDGMENT

I—Summary of the facts The question at issue between the parties bears essentially on whether this tonnage The facts which form the basis of the dispute consists entirely of 'alloy scrap', exempt may be summarized as follows: from the equalization scheme. Exactly (1) As a result of the inspections and checks 10 965 metric tons of ferrous scrap are con­ cerned, allocated thus: carried out, in 1958 and 1962, by the — 8 344 metric tons consumed between Société Fiduciaire Suisse on Ferriere e Acciaierie Napoletane (hereinafter referred April 1955 and November 1958, — 2 621 metric tons consumed between to as FAN), the quantity of assessable ferrous scrap consumed by the latter was, April 1954 and March 1955. in the first instance, assessed at 41343 metric tons. This assessment was the subject II — Conclusions of the parties of a letter addressed to the applicant by the High Authority on 8 April 1963. Both that The applicant claims that the Court should: letter and Decision No 7/63 of the High '1. Pursuant to Article 33 of the Treaty, Authority were contested by the FAN annul the individual decision of 19 May before the Court of Justice. The relevant 1965; application 57/63 was dismissed on 9 June 2. Pursuant to Article 34 of the Treaty, if 1964 as inadmissible. necessary refer the matter back to the (2) In the course of proceedings, the parties High Authority for it to take the neces­ came together and discussed the possibility sary steps within its competence to of carrying out new checks. The applicant comply with the judgment, including the produced documents concerning the points refund of any sums wrongly paid and at issue and an expert's report was obtained. the payment of fair compensation for As a result of these checks and discussions, the loss suffered as the Court deems fit; the High Authority took the decision of 3. Order the High Authority to pay the 19 May 1965 which is contested by the costs; present application. 4. As a measure of inquiry, admit the (3) According to that decision, the quantity annexed documents and order the High of assessable scrap consumed by FAN Authority to produce the complete file between April 1954 and November 1958 is of documents on the assessment of the 34 300 metric tons. purchases of ferrous scrap concerning On the basis of its foregoing declarations the Acciaierie Napoletane company, and the checks carried out by the High reserving the right if necessary to request Authority, the applicant admits that in the additional measures of inquiry.' course of the said period it consumed 21769 The defendant contends that the Court metric tons, that is to say: should: — 17 003 metric tons declared for the 'Dismiss all the heads of the application and period April 1955 to January 1957, — 4 766 metric tons admitted to have been order the applicant to pay the costs of the proceedings.' consumed in the period from April 1954 to March 1955. III — Submissions and arguments of (4) The difference between the tonnage the parties declared by the FAN and that found and checked by the High Authority is thus The submissions and arguments of the 12 531 metric tons. parties may be summarized as follows:

Admissibility period before 1958, the basic provisions are those of Article 12(1) and Article 16(1) The defendant raises no objection with to (4) of Decision No 2/57, which concern regard to the admissibility of the applica the fixing of the amount of contributions tion. owed by each undertaking. These pro visions moreover do not specify the proce Substance dure or the power whereby the High 1. Infringement of essential procedural re Authority shall calculate the amount, but quirements and of the rules of the are limited to providing that each under Treaty, especially Articles 3(b), 4(b), 5 taking under its control shall inform the and 53; infringement of the rules of law High Authority of the movements of relating to the application of the Treaty ferrous scrap and that the High Authority arising from the general principles of the shall notify the undertakings concerned of the result of this calculation. national law of the Member States con cerning the burden of proof; infringe In these circumstances, it is evident that in ment of the rules relating to the applica interpreting these provisions account must tion of the equalization scheme and be taken of the general principle whereby, especially Decision No 2/57; misuse of in the absence of provisions to the con trary, the grant of a specified power implies

Certainly, the in were shown the quantities of 'alloy High Authority must always proceed on the scrap' received. basis of exact information; but, unless the This was the time when the High Authority, undertaking is in a position to prove suffi if it considered it necessary, should have ciently in law that the High Authority's required the undertaking concerned to calculation is based on wrong information, prove that the disputed ferrous scrap was or that it actually purchased the declared alloy scrap. The applicant, whilst not dis scrap, the results arrived at by the High puting the High Authority's right to correct Authority must be considered as definitive. or check undertakings' declarations, does All these principles, already recognized by not admit its right to require the produc the Court, especially in the Judgment in tion, after several years (in this instance Case 18/62, have as their logical corollary between 11 and. 7 years), of evidence for that it is the undertakings' duty, under the which it could have asked when the dis rules in force since the scheme was set up, puted facts were declared, the more so to assemble valid documents and to retain since in absence of such a request under them as long as may be necessary in order takings considered that their declarations to dispute the amount of the contributions complied with the requirements prescribed claimed and to prove the exact quantities

JUDGMENT OF 28. 4. 1966 — CASE 49/65

This principle is showed higher consumptions of ferrous subject to exceptions in the sphere of public scrap. This explains, for example, the law, but these exceptions must arise from adoption of the criterion based on the an express provision and not be created by consumption of electricity which had sub the administration simply by means of an sequently to give way to that based on the executive measure. number of actual working days. It thus follows that, if undertakings which The High Authority's attitude led it to have not made their declarations are put reject the designation of 'alloy scrap' for under an obligation to prove the inaccuracy the tonnages in dispute. Its behaviour of the checks carried out by the High reveals its basic preoccupation with main Authority, then by the same token it is for taining the balance between the credits and the High Authority to prove any inaccuracy debits of the equalization scheme, by the in the undertakings' declarations. methods most suited to avoid, so far as At a more practical level, it must moreover possible, the amendments necessary to the be explained that the exemption of alloy general budget of the equalization funds scrap from the equalization contribution which the correction of certain calculations was contemplated from the outset of the

But these docu figures with regard to the tonnage of scrap ments cannot also be required with regard received, as these tonnages could not be to the past, because of the physical im used swiftly, and the accuracy of the figures possibility of producing them at several could have been determined at any time by years' remove, and of the lack of any legal a check on the stocks. provision for such an obligation. The High

Authority's conduct would thus burden the It consequently makes the following ob undertakings unlawfully with the conse servations. quences of its own failure to take action. The defendant objects in its rejoinder that With regard to heads (a) and (c) the discussion on the burden of proof is misplaced here. On the one hand, it was In the first place, the very fact that the High only where the applicant indicated the Authority admitted, on the basis of certain content in other metals of the ferrous scrap invoices and of an expert's report that the in dispute that it was possible to consider applicant used at a given time quantities of whether its statements required proof or if alloy scrap bars these two considerations they must be presumed correct. On the from being sufficient reasons for the con other hand, if it is admitted, as it was tested measure. Secondly, in this instance admitted in the Judgment in Case 18/62, the purchase of alloy scrap for use as that the High Authority may carry out ordinary scrap may be fully explained, by checks by inductive methods, it must ipso reason of: facto be concluded that the burden of proof — the dearth of ordinary scrap on the does not rest on it. market in Naples at the time; With regard to the argument that the — the parity of prices of alloy scrap and of obligation to justify the nature of the alloy ordinary scrap on this market.

Why then should it have thrown away that advantage 2. Infringement of the provisions, prin in the previous years? ciples and rules cited in the foregoing submission; infringement of essential With regard to head (b) procedural requirements; failure to give a sufficient statement of reasons; misuse In the first place, it must be noted that the ■ of powers parity of the prices of these two types of ferrous scrap on the market in Naples is The applicant recalls that the contested due to the structure of that market, es decision refusing to accept the disputed pecially during the period under review. tonnages as being alloy scrap is based on The lack of foundries producing alloy steel, the following considerations: the availability of that ferrous scrap created (a) The FAN's type of production does not by undertakings using semi-finished prod require the use of alloying constituents; ucts of alloy steel purchased elsewhere, and (b) The prices of the disputed ferrous the very high costs which would have been scrap were the same as those of ordinary involved in transporting these materials scrap; northwards, are the principal causes of that (c) The disputed ferrous scrap was not parity. used as alloy scrap; In the second place, it should be remember (d) There is no mention of the alloy con ed that the FAN had already proved by an tent in the invoices relating to the official certificate given by the Naples purchase of the disputed quantities. Chamber of Commerce that on that market

there were no separate calls for ordinary possible, the undertakings must not be scrap and for alloy scrap, and the parity of made to suffer the consequences. the prices is confirmed by a certificate given The applicant then gives the following by the same Chamber, the veracity of which information: cannot be called in question as long as it — Assessment of the ferrous scrap in dis has not been judicially denied. Taking pute would artificially increase the pro account of all those factors and of these duction costs of the FAN, which had certificates, it is incomprehensible that the expected to offset the higher production High Authority could have concluded in cost which it entailed, by the exemption its decision that by reason, inter alia, of the available for this ferrous scrap.

have led it to the same conclusion with stricted to giving concrete form to a ter regard to the disputed quantities. minology already extremely widespread. If The applicant ends by noting that the fore the High Authority doubted the accuracy going considerations refer to the whole of of these certificates, it ought to have check the disputed alloy scrap, that is, 10 965 ed it by inquiries made of those providing metric tons of ferrous scrap. the certificates. This check was not effected The defendant opposes the applicant's at the time of the inspections of 1958 and attempt to divide the reasoning of the con

ACCIAIERIE NAPOLETANE v HIGH AUTHORITY

scrap. For this it is necessary that the would rather prove that, since the two content in other metals should attain types of ferrous scrap were the same from specified percentages. These percentages an economic point of view, it had never been were shown by Resolution No 17 of the felt necessary to analyse their content so Fund of 24 April 1958. But the applicant that the lack of any indication, even a itself does not dispute that the under posteriori, of the content in alloying ele takings were already acquainted with these ments of the disputed ferrous scrap arose percentages, since the said resolution merely essentially from this circumstance. adopted criteria and sanctioned a practice Finally, from the technical point of view, already extremely widespread. the claim that the applicant purchased the For these reasons therefore, it is clearly a alloy scrap in order to avoid the equaliza necessary condition of the High Authority's tion scheme presupposes that, for the accepting the ferrous scrap as being alloy reasons set forth above, it would have had scrap that the alloy content should be to arrange an analysis of that ferrous scrap

mental effects on the quality of the steel. formation with regard to two deliveries of For these reasons, if the applicant has ferrous scrap which the High Authority produced no analysis, it is because the accepted as being alloy scrap, in 1956 and ferrous scrap in dispute was ordinary scrap, in 1958; but it has produced no like or else contained a minimum percentage, information with regard to the quantities of technically and economically insignificant, ferrous scrap in dispute. of other metals. In these circumstances, exempting the The defendant finally points out that in any ferrous scrap in dispute from the equaliza

JUDGMENT OF 28. 4. 1966 — CASE 49/65

The applicant did not satisfy any of these nor the alleged damage, nor a connexion of criteria with regard to the ferrous scrap in cause and effect between these two factors dispute. has been proved. With regard to the FAN's request for an inquiry and for the production of all the IV — Procedure documents relating to the assessment of the disputed ferrous scrap, the defendant con­ The written procedure followed the normal siders that, since the subject in dispute has course. On the report of the Judge-Rappor­ been amply debated by the parties, with an teur, the Court, having heard the Advocate- expert's report as well, these measures General, invited the parties to lodge by 15 would merely cause delay. February 1966, a copy of Resolution No 17 of the Council of the Fund, adopted on 3. The claim for damages under Article 34 24 May 1958. of the Treaty The parties complied with that request on 14 and 15 February 1966. The defendant observes that this claim is The parties presented their oral explana­ drawn up in extremely general terms, and tions at the hearing on 22 February 1966. is not supported by any line of argument. The Advocate-General delivered his opinion Neither the fault of the High Authority, at the hearing on 22 March 1966.

Grounds of judgment

Admissibility

The admissibility of the application is not disputed by the defendant and there are no grounds for the Court to raise the matter of its own motion.

The application is therefore admissible.

It is clear from Questionnaire 2/50 of the ECSC, used since December 1954 by the undertakings, that since the establishment of the equalization scheme they had been in a position to know these percentages.

The applicant supplied the High Authority with a certain amount of information which, in its opinion was such as to prove that the ferrous scrap in dispute was alloy scrap.

That information was considered insufficient by the contested decision, on the ground that it did not fulfil the three conditions set out in Resolution No 17 of the Council of the Imported Ferrous Scrap Equalization Fund, which entered into force on 1 May 1958.

Under that resolution only ferrous scrap purchased by undertakings producing alloy steels, containing a specified percentage of alloying elements with the price of the alloying elements separately shown in the purchase invoices and with an entry for their average content is deemed to be alloy scrap.

The applicant maintains that the criteria deduced from the nature of the steels produced and from the level of the prices of the alloy scrap cannot be upheld in this instance.

In this connexion it claims that large quantities of alloy scrap were at the time being offered on the market in Naples, at prices identical with those of ordinary scrap.

In these circumstances, it must be considered whether in this case the High Author­ ity was justified in requiring absolute compliance with that criterion, as it is set forth in the abovementioned Resolution No 17.

As opposed to the French text, the Italian text of the said resolution does not mention the obligation on the undertakings to indicate the average content in alloying metals on the invoices relating to purchases of alloy scrap.

It is agreed that only the Italian text was notified to the Italian undertakings, which include the applicant. The resolution provides moreover that declarations made before its entry into force will be the subject of investigation case by case.

The actual provisions of the abovementioned resolution only render it binding on the undertakings concerned from 1 May 1958.

It is not therefore possible to insist on observance of the resolution with regard to ferrous scrap purchased and used before that date.

The applicant's declarations regarding the purchase of the ferrous scrap in dispute go back to a period before 1 May 1958. The High Authority ought therefore to have checked whether these declarations were well founded on the basis of a

Costs

Under the first paragraph of Article 69 (2) of the Rules of Procedure the unsuccess­ ful party shall be ordered to pay the costs if they have been asked for in the successful party's pleading. The defendant must therefore be ordered to pay the costs of the present 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; Having regard to Articles 15, 33, 34, 47 and 53 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, especially Article 69 (3);

THE COURT

hereby:

Registrar President