C-54/65

JUDGMENT OF THE COURT 16 JUNE 19661

Compagnie des Forges de Châtillon, Commentry et Neuves-Maisons v High Authority of the ECSC2

Case 54/65

Summary

Measures adopted by an institution — Decision — Constituent elements (ECSC Treaty, Article 14)

Cf. para. 1 (a), summary, Joined Cases 23, 24 and 52/63 Rec. 1963, p. 443.

Application

— for the annulment of the individual decision of 21 July 1965, by which the defendant contests the applicant's right, within the framework of the equalization schemes for imported ferrous scrap, to deduct from the basis of assessment of the equalization contribution 13 831 metric tons of Armco pure iron scrap; and

— for damages for an alleged wrongful act or omission on the part of the defendant;

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

JUDGMENT OF 16. 6. 1966 — CASE 54/65

THE COURT

I — Facts adopted by your undertaking and will in­ form you in the near future of their decision The facts may be summarized as follows: on this subject'. 1. The applicant exploits a patent for the By letter of 8 October 1962 addressed to the production of pure iron known as Armco, applicant the High Authority made known a metal characterized by a high degree of its intention of including the material in chemical purity. During the period in which question in the basis of assessment of the the equalization scheme for imported fer­ contribution. rous scrap was in force, the applicant sold By letter of 8 April 1963 a statement of certain by-products of this manufacturing account drawn up in this manner was process. Considering that these by-products addressed to the applicant. As this statement constituted ferrous scrap as referred to in did not constitute a decision, Application the basic decisions which successively 52/63 by which the applicant sought to have governed this scheme, it deducted the ton­ it annulled was dismissed as inadmissible by nage concerned from the basis of assess­ a judgment of the Court of 5 December 1963 ment of its equalization contributions. (Rec. 1963, p.445 et seq.). 2. By letter dated 12 June 1958 addressed to 4. On 21 July 1965 the High Authority the applicant the Caisse de Péréquation des adopted the contested decision which was Ferrailles Importees (the Imported Ferrous notified to the applicant on 31 August 1965. Scrap Equalization Fund), hereinafter On 4 October 1965 the applicant introduced referred to as 'the CPFI', accepted these the present application. deductions except for certain materials described by the applicant as 'arisings from II — Conclusions of the parties billets'. However, following protests from the In its application, the applicant claimed that applicant, the CPFI also accepted the de­ the Court should: duction of these arisings by letter of 12 'annul... the decision of the High Authority August 1958 addressed to that party. of 21 July 1965, notified to the applicant on 3. By letter of 17 August 1961, the defen­ 31 August 1965; dant informed the applicant that: in the alternative, order the High Authority 'as the problem of Armco pure iron is under to pay the sum of 465 635.04 francs to the further consideration, the competent de­ applicant by way of damages for a wrongful partments of the High Authority provi­ act or omission on its part; sionally accept the method of declaration order the High Authority to pay the costs.'

In its statement of defence, the the defendent had lodged two price lists with the High contended that the Court should: Authority entitled respectively 'Price list '1. Declare that the application for annul for semi-finished products in Armco pure ment is unfounded; iron for re-rolling' and 'Price list for semi 2. Declare that the claim for damages is finished products in Armco pure iron for unfounded; re-casting'; the products in dispute were 3. Therefore, dismiss the application and sold exclusively according to the second order the applicant to pay the costs of price list. The difference between the the action.' respective prices for the two products The parties maintained these conclusions remainted at about 5%.

1. The application for annulment was not bound to produce a price list for the products in question, as such an obligation A — First submission: Infringement of only existed as regards ferrous scrap. Article 53 (b) of the ECSC Treaty and The applicant refers to the exchange of the general decisions of the High correspondence which took place in 1959 Authority governing the equalization between its sister company and the Market scheme for imported ferrous scrap Division of the High Authority, in the course of which that company had ex (a) Does the material in question con plained, without any statement's being stitute ferrous scrap? made to the contrary, that one of its price lists 'wrongly entitled ''semi-finished pro The applicant maintains that, according to ducts for re-casting",.

. . as regards the distinction to be made take into consideration 'the purity or the between the concept of the "raw material" selling price of the product in question'. It and that of the "manufactured product". In maintains in particular that the high price industry it is quite normal for one product of the material in question is justified on the which is finished at a particular stage to grounds set out under (b) below. become the raw material for the following During the period in question, the applicant stage .

JUDGMENT OF 16. 6. 1966 — CASE 54/65

term. . .it must be remembered. . .that ferrous for re-casting, when the applicant is at scrap is above all a recovered product. present stating that such a description Therefore, it is not clear how it was possible confers the character of ferrous scrap on the to include therein the materials in question, material in question. which were manufactured to order, always (c) To the extent that the applicant bases fulfilled specific conditions of analysis and its argument on the 5 % difference in price sometimes had particular dimensions (to between these two products, it must be take just one example, billets manufactured observed that: with an additional charge to cover the pro — this difference is further reduced if the cess of cutting them into blooms in the increased price for the cutting of pro dimensions requested by the customer). ducts for re-casting is taken into account; Moreover, the applicant has itself main — this difference is insignificant if it is tained that the so-called "Armco arisings" remembered that, in normal circum are specially produced and are provided for stances, new scrap is sold at a price in the manufacturing programme, that is, representing only 30 to 40% of the price the process is not one of the recovery of of iron and steel products. scrap or waste, but rather of the manufac ture of a product.

This — another purchaser points out 'that the decision established, for all categories of purpose of the designation "arisings ferrous scrap, price differentials which were from billets for re-casting" is to benefit applicable in relation to the basic category. As no differential was laid down for the from the reduced tariff"—that is, the railway tariff—'applicable to steel products in question, if the applicant had works'. correctly described them, it should have sold them at the price of ordinary ferrous As regards Decision No 28/53, the applicant scrap; in fact, the applicant rightly did not replies that it is clear that a set of rules do this. applying to ordinary scrap could not be The purpose of both the abovementioned applied to scrap with the particular charac measure and, ultimately, of the equalization ter of the material in dispute.

FORGES DE CHÂTILLON v HIGH AUTHORITY

stant until at least April 1957. 'It will never cost of the primary refining process theless be unable to claim that the price of which must be carried out before the Armco billets for re-rolling was dependent qualities of this scrap can be compared on the price of pre-refined scrap, since these to those of the products in dispute; billets were in no way used as a substitute — that in practice during the period in for the scrap. It is therefore, impossible to which the equalization scheme was in hesitate between the doubtful parallel with force this difference remained almost the price of ordinary scrap which it is at constant, which shows that the price of tempting to establish by its graph and the these products was dependent on that clear parallel with the price of products of ordinary scrap.

steels. It follows from certain letters from the The graphs which the applicant has placed Armco company placed in the file that the in the file show that from January 1955 to scales applied in this instance cover all the December 1957 the difference in the respec semi-finished products in question and tive prices of the two categories of scrap in correspond to the percentage increases then question remained at approximately 255 applied by all French works to iron and francs; with three exceptions the variations steel products. in this difference did not exceed 4% of this

The substitute product can not be identified with the true product. The C — Third submission: Infringement of graphs submitted by the applicant in no Article 4 (b) of the ECSC Treaty way show that there is a parallel between the prices in question; they often show the The applicant maintains that if they avoided prices to have developed quite differently. paying the equalization contributions the

purchasers of the products in question ticular on its Decision No 13/58. It main would receive an undue advantage in rela tains, moreover, that as the applicant has tion to the purchasers of ordinary ferrous itself sold the material in question as semi- scrap. finished iron and steel products it could not The defendant replies that the argument put count on the assurances given by the CPFI. forward by the applicant alone led to 2. The claim for damages discrimination, since it 'resulted, first, in rendering the purchasers of a semi-finished Should the Court uphold the contested iron and steel product liable to bear the decision, the applicant considers that the ad hoc price as increased by the ferrous fact that the CPFI granted it an illegal scrap equalization contribution and, sec authorization constitutes a wrongful act or ondly, in obtaining for the applicant the omission on the part of the High Authority. incompatible advantages of this price and Had it not been for this wrongful act or of the deduction of the sales in question omission, the applicant would have been from the basic rate of assessment of contri aware that the products in question could bution'. not be deducted from the basic rate of assessment for contribution and would have

suffered by the applicant. ments to be illegal, the applicant had every The applicant's belief that its purchasers reason to trust both the regularity and the would have accepted the price in question stability of the situation created by them; results from the fact that, as it shows by in fact: means of calculations, this price 'did not — the first of these 'agreements' had also mean any additional sacrifice, since the been communicated to the defendant; difference between the consumer price of — the second was made after 1 August 1958, the two categories of scrap remains con at which date the defendant took over stant, that is, the saving of the refining the management of the equalization costs'. schemes in accordance with its Decision In answer to the argument that it would have No 13/58 of 24 July 1958; the CPFI thus been unable to impose on its clients any acted as the direct agent of the defend price other than that fixed in its price lists, ant; furthermore, this decision only the applicant maintains that it is not authorized the withdrawal of earlier obliged to submit a price list concerning acts of the agencies in Brussels; finally, it arisings of ferrous scrap and that those was conceived in terms too general 'to which were submitted could be withdrawn constitute a legal basis for the revocation or amended at any time. of an administrative measure'; 'Should the Court require further explana — by a circular of 19 February 1960, the tion, the applicant offers to produce defendant required purchasers of the evidence of any additional factor which the material in question to pay equalization Court might consider necessary to complete contributions; its inquiry into the present application.' — the subsequent events (cf. above, I,) also The defendant replies that there can be no confirm the applicant's point of view. question of a wrongful act or omission in In short, these agreements were not view of the fact that the applicant itself sold revoked within a reasonable period. the material in question as semi-finished The defendant basis its argument in par

FORGES DE CHATILLON v HIGH AUTHORITY

As regards the loss and the relationship of to reconcile the idea of a price list which cause and effect, the defendant maintains, remains more or less constant over a first, that 'if it were to be found that a period of months, if not years, with the wrongful act or omission had occurred existence of the considerable monthly (quod non)', the only period which could fluctuations of the equalization contri­ be taken into consideration is that between bution at that period'; 12 August 1958 when the letter was sent and — finally, the purchasers of the material in 30 November 1958 when the equalization question believed that they too were not scheme came to an end. Even that is ex­ liable to pay the equalization contribu­ cluded in the light of the general warning tion. given by Decision No 13/58. Secondly, the applicant would never have IV — Procedure been able to make its purchasers bear the equalization levy. In fact: The procedure followed the normal course. — it was bound by the price lists properly Upon hearing the report of the Judge-Rap- submitted; porteur and the opinion of the Advocate- — one may accept the applicant 's argument General, the Court decided that there was that, in the large iron and steel under­ no necessity to make any preparatory in­ takings, the sales departments respons­ quiry. ible for fixing selling prices were for a However, it requested the defendant to long time unaware of the possible con­ place on the file certain letters exchanged sequences of their actions on questions between the Armco company and its pur­ of equalization; in this case, however, chasers.

In this submission the applicant contends that this claim is unfounded.

JUDGMENT OF 16. 6. 1966 — CASE 54/65

First, the basic decisions do not define the 'ferrous scrap' to which they refer, except for 'scrap from alloy steels' which is of no relevance in this case.

Secondly, Decision No 28/53, which fixes maximum prices for ferrous scrap, enumerates twenty-five different categories of 'ferrous scrap' and defines them precisely.

It is not disputed that the material in question does not fall within any of these categories.

Furthermore, the purpose of the basic decisions is the same as that of Decision No 28/53, in that they seek to avoid the danger of a substantial increase in the price of ferrous scrap within the Common Market.

On the contrary, the list appearing in Annex I to the ECSC Treaty refers, under heading 4300 which does not include ferrous scrap, to 'Crude and semi-finished products of iron, ordinary steel or special steel, including products for re-use and re-rolling', which shows that in the minds of the authors of the Treaty material used for re-casting may constitute a semi-finished product.

Furthermore, until 8 November 1957 the applicant itself sold the materials in question on the basis of price lists notified to the High Authority which described them as 'semi-finished products in Armco pure iron for recasting'.

FORGES DE CHATILLON v HIGH AUTHORITY

It is true that the applicant now claims this description to be incorrect. However, as it is the corollary of the relatively high price of the material in question and as it was accepted by the applicant's customers, it appears to have been in accordance with commercial usage.

Certain customers of the applicant or of its sister company, which sells similar products, objected to their respective suppliers subsequently describing this mate­ rial as 'arisings from billets', when according to the customers it was simply 'billets' and therefore a true semi-finished product within the meaning of heading 4 300 of Annex I to the Treaty.

It must finally be noted that until 8 November 1957 the applicant published and sent to the High Authority price lists for the material in question, according to the provisions of the Treaty relating to semi-finished products.

JUDGMENT OF 16. 6. 1966 — CASE 54/65

Faced with such an unlikely argument it is necessary to accept the more convincing explanation furnished by the defendant, to the effect that the price of the products in question 'was determined by the price of ordinary billets, but remained at a slightly lower figure since less care was required in the rolling process as they were intended for re-casting'.

Finally the price of this material was always perceptibly higher than the price of ordinary imported ferrous scrap. If this fact is not itself sufficient to exclude the material in dispute from the application of these decisions, it is nevertheless evidence in favour of the argument put forward by the defendant.

In fact, it did not meet the purpose of the equalization scheme for the contribution in question to be imposed upon the purchasers of a product which was appreciably more expensive than that whose price was to be reduced by the equalization scheme.

It follows from all these considerations that this submission is unfounded.

Second submission: Infringement of Article 15 of the ECSC Treaty

In particular, since, as has just been shown, the material in question does not constitute ferrous scrap within the meaning of the basic decisions, the defendant was not empowered to subject it to the payment of the equalization levy on the basis thereof.

FORGES DE CHATILLON v HIGH AUTHORITY

Thus, in reality, the applicant's complaint refers to the basic decisions themselves.

On this point, it meets the objections set out in relation to the preceding consider­ ations.

This submission must therefore be rejected.

Fourth submission: Infringement of the general principles of law applying to the revocation of administrative measures

First, it has in fact neither been established nor even alleged that the statements in question result from a formal discussion on the part of the CPFI.

Moreover, as regards in particular the letter of 12 June 1958 headed 'Investigation by the SA Fiduciaire Suisse into your tonnages subject to contribution', one reads:

'We refer to the report drawn up by the SA Fiduciaire Suisse concerning the investigation into your tonnages subject to contribution. In this respect, may we make the following observations:

1. . .

2. Part of your Armco arisings sold to third parties was deducted and part was not

JUDGMENT OF 16. 6. 1966 — CASE 54/65

This power is even greater when the 'revocation' concerns not a formal decision, but a simple statement.

In this instance, the applicant was only able to rely for a relatively short period on the maintenance of the position adopted by the CPFI.

Under the terms of Article 1 (b) of the abovementioned Decision No 13/58, which came into force after the first and before the second of the letters in question, the defendant reserved the right to 'rescind as far as is necessary any resolutions' of the agencies in Brussels and 'to take any measures entailed in rescinding them'.

The effect of this provision was to make all the measures adopted by these bodies appear rather precarious.

Secondly, bearing in mind the magnitude of the task of reconsidering all these measures, the beneficiaries of any favourable statements could not expect a final decision on these statements to be taken in a short time.

On 25 November 1959, a letter addressed by the Market Division of the High Authority to the applicant's sister company, which had the same general manager, referred to a 'disagreement between you and your purchasers' about the description of material similar to the material in question.

II — The claim for damages

In the event of the application for annulment being dismissed, the applicant, in an alternative plea, requests the Court to order the payment of such damages as will make good the damage which it has suffered by a wrongful act or omission on the part of the defendant.

It considers this wrongful act to consist in the fact that the CPFI 'authorized the applicant to deduct from the basis of assessment of its equalization contributions the tonnages in dispute, without previously establishing the legality of this pro­ cedure'.

Secondly it maintains that but for this error it would have sold the material in question at a higher price, comprising the ruling price as increased by the equaliza­ tion contribution to which this material would have been subject had the basic decisions been applicable to it, since if the information received by the applicant had been correct that party would have been aware both of the advantage to its customers as the result of the non-assessment of this material, and of the dis­ advantage to itself if it was not deductible.

It is first necessary to consider whether the applicant was injured by the actions of the CPFI which are criticized in this case.

As the attitude adopted by the applicant after the CPFI made its statements did

III — Costs

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

The applicant has failed in its application.

It must therefore be ordered to pay the costs.

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 4, 14, 15, 33, 40 and 53 pf the Treaty establishing the European Coal and Steel Community; Having regard to the Protocol on the Statue 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 (2); Having regard to Decisions Nos 28/53 (Official Journal of 15 March 1953, p. 97), 21/54 (Official Journal of 30 March 1954, p. 286) and 13/58 (Official Journal of 30 July 1958, p. 269) of the High Authority;

Donner Trabucchi Lecourt Monaco

Delivered in open court in Luxembourg on 16 June 1966.

A. Van Houtte Ch. L. Hammes

Registrar President

OPINION OF MR ADVOCATE-GENERAL GAND DELIVERED ON 18 MAY 19661

Mr President, ducted the tonnage of this material from the Members of the Court, basis of assessment of its equalization con­ tributions. The application upon which you have to This interpretation of the decisions has not decide today is the outcome of a debate always been accepted by the competent which has continued over a long period, bodies. After refusing on 12 June 1958 to concerning facts which are even older. accept a deduction in respect of the mate­ It has given rise to a very comprehensive rials described by the company as arisings written procedure involving in particular from billets, the Imported Ferrous Scrap the production of numerous documents to Equalization Fund (the CPFI) accepted the which I shall refer later. Moreover, at your applicant's point of view on the following own request, valuable details of a technical 12 August. nature were submitted at the hearing. As for the departments of the High Author­ The Compagnie des Forges de Châtillon, ity which had resumed responsibility for Commentry et Neuves-Maisons manufac­ the equalization scheme, in 1961 they in­ tures products in pure iron known as formed the company that the question of Armco, which is characterized by a partic­ Armco pure iron was under 'further con­ ularly high analytical purity. With its sister sideration' and then in 1962 stated that they company (Les Aciéries et Tréfileries de intended to incorporate this material into Neuves-Maisons, Châtillon) it appears to the basis of assessment of the equalization be the only company in France to carry on contributions. You will recall that by a this activity. During the functioning of the judgment of 5 December 1963 you dismissed equalization scheme, it considered the scrap the application brought by the company arising from this manufacture to be ferrous against the statement of account addressed scrap as referred to by the basic decisions of to it as inadmissible, on the ground that it the High Authority and consequently de­ did not constitute a decision.