C-10/68

JUDGMENT OF THE COURT 10 DECEMBER 19691

Società Eridania Zuccherifici Nazionali and Others

v Commission of the European Communities, supported by Co.Pro.B.—Cooperativa Produttori Bieticoli and Others

Joined Cases 10 and 18/68

Summary

1. Measures adopted by an institution — Application by an individual against a decision addressed to another person — Decision of individual concern to him — Criteria

SOCIETÀ Distilleria di Cavarzere, having its registered office at 39 Via S. Fermo, Padua,

1 — Language of the Case: Italian.

JUDGMENT OF 10. 12. 1969 — JOINED CASES 10 AND 18/68

SOCIETÀ Romana Zucchero, having its registered office at 29/4 Via XX Settembre, Genoa,

SOCIETÀ Zuccherificio del Volano, having its registered office at 29/4 Via XX Settembre, Genoa,

Associazione Nazionale fra gli Industriali dello Zucchero dell' Alcool e del Lievito, having its registered office at 57/4 Via B. Bosco, Genoa,

and

III. Government of the Italian Republic, represented by Adolfo Maresca, Minister Plenipotentiary, acting as Agent, assisted by Pietro

ERIDANIA v COMMISSION

Peronaci, Deputy State Advocate-General, with an address for service in Luxembourg at the Italian Embassy, interveners,

Application in Case 10/68 for the annulment:

1. of Decision No 1/22/66 of the Commission of 27 July 1967, on the grant of aid from the European Agricultural Guidance and Guarantee Fund amounting to 480 000 units of account for the enlargement and development of the capacity of the Minerbio (Bologna), sugar refinery, the property of the Cooperativa Produttori Bieticoli Co.Pro.B.;

Advocate-General: K. Roemer Registrar: A. Van Houtte

gives the following

JUDGMENT OF 10. 12. 1969 — JOINED CASES 10 AND 18/68

JUDGMENT Issues of fact and of law

The remaining 10% to 15% at the discretion second decision, concerning the sugar of the Government by reason of special refinery at Ostellato, was adopted in ap circumstances and to take into account plication of Regulation No 206/66 of the possible changes in the sugar industry Council of 7 December 1966 on the and sugar beet cultivation. contribution of the EAGGF towards the By Ministerial Decree of 26 February repair of the damage caused by the 1968, the Italian Government adopted catastrophic floods in certain regions of certain criteria for the division of the Italy during the autumn of 1966 (OJ 10% of the basic quantity, that is to say,

agriculture or in agricultural under during the 1966/1967 marketing year takings, and that resulting from the applica — installations for the marketing or pro tion of the mathematical formula, cessing of agricultural products, — 430 000 quintals to the sugar refine which have become necessary in the ries situated in the provinces develop regions of Italy affected by the cata ing the growing of sugar beet which strophic floods of October and November showed, in relation to the average of 1966'. the basic period, an increase in the In respect of the common organization of cultivated area exceeding 35%, the market in sugar, Regulations Nos — 123 000 quintals to the sugar refine

ERIDANIA v COMMISSION

normal course. tion of the disputed decisions. At the close of the written procedure On 1 August 1968 the applicants lodged the Court requested the applicants to at the Court Registry an application indicate how they had obtained in against the implied decision of rejection formation concerning the wording of the resulting from the silence of the Com disputed decisions and what efforts they mission concerning the said formal re had made to obtain the information quest (Case 18/68). quickly. By a letter of 8 October 1968, the Court On hearing the report ot the Judge-Rap asked the parties whether they considered porteur and the views of the Advocate- that they could waive lodging a reply General, the Court decided to open the and a rejoinder in Case 18/68. oral procedure. By telex message of 15 October 1968 The oral submissions of the parties and letter of 22 October 1968 the Com were presented at the hearings on 17 mission and applicants respectively and 18 September 1969. agreed to the Court's suggestion. The Advocate-General delivered his By order of 25 October 1968 the Court opinion at the hearing on 28 October joined Cases 10/68 and 18/68 for the 1969. purposes of procedure and judgment. By applications lodged at the Registry on II — Conclusions of the parties 30 October 1968 the two cooperatives Co.Pro.B. — Cooperativa Produttori Case 10/68 Bieticoli of Bologna (the addressee of

By order or 25 November 1968 the penses.' Court allowed the intervention requested (Intervention No I). The defendant has contended that the Court should: By an application lodged at the Registry on 19 December 1968 the Società per '— declare that the application is inad Azioni Zuccherificio Castiglionese (the missible and in any event dismiss it; addressee of Decision No 1/73/67 sought — order the applicants to pay the costs .

In their observations in reply to the Admissibility of the application statements of the first interveners, the applicants state that knowledge of the A — Case 10/68 measure envisaged by the third para­ 1. Time-limits graph of Article 173 is knowledge of the complete wording of the measure, or at As the adoption of the decisions of 27 least of all the essential parts and not July and 2 October 1967 (Minerbio and only of the mere title. Ostellato) was made public by two On the Court s requesting the applicants announcements published in the Official (letter from the Registrar of 10 July Journal on 4 August 1967 and 7 October 1969) to give details of the means by 1967 respectively, the applicants relying which they obtained copies of the con­ on the third paragraph of Article 173 tested decisions, the applicants produced that with regard to them the time-limits two letters from which it appears that for making an application did not begin following a request (February 1968) by to run until the date on which they one of the applicants the President of were to obtain copies of the said de­ the Istituto Nazionale di Economia Sac- cisions. carifera obtained the complete versions of In its statement of defence the defendant the decisions taken in favour of the sugar leaves this point to the wisdom of the refineries at Minerbio and Ostellato and Court. However, in its rejoinder it draws sent them to Società Eridania by letter of attention to the serious disadvantages 20 March 1968.

ERIDANIA v COMMISSION

ments. By this intrinsically individual ally concerned. Furthermore, there are nature they are more likely to cause real, larger categories of persons concerned individual and direct damages to third such as suppliers of goods and services parties. Such is the case from a twofold for the execution of the works financed point of view: by the Fund, producers of sugar beet — they lead to a disturbance in com and competing undertakings. These cate petition contrary to Articles 92 and 93 gories are settled in a general and ab of the EEC Treaty; stract manner and their members cannot — they lead to a decrease in the pro be identified individually at the time of duction quota of sugar granted to each the decision. of the applicants or, in any event, to In respect of all persons other than increased difficulty in disposing of those to whom they are addressed the production 'outside the quota', within decisions must therefore be regarded as the framework of the limitations on measures having general scope not cap the production of sugar established by able of being of individual concern to the Community regulations, and of them. Considering that the present case the distribution of quotas among is similar to those decided by the Court undertakings laid down in Italy by in Cases 25/62 and 1/64, the Commis the Ministerial Decree of 26 Feb sion is of the opinion that the judgment ruary 1968. given in Joined Cases 106 and 107/63 The direct scope of this damage is con cannot be relied upon.

among them. The principles of good marketing years. Whilst stating that it is administration should even have led the absolutely inconceivable that in respect Commission to consult the competitors of of administrative measures of the Com the favoured undertakings before the munity the authors of the Treaty only grant of aid was decided upon. intended to give to those subject to

authors of the Treaty wished to ex­ (5) that the fact that the applicants be­ clude the possibility of any form of long to an abstract category does not action open to all against the legis­ exclude the possibility of concrete lative measures of the Community, it and immediate damage to their in­ is unacceptable that third parties dividual rights and interests and should have the right to act only that by way of example one may against individual decisions which are quote the system established by clearly addressed to them; that it is Article 85 and by Regulation No 17 the effect of a decision which is more which allows a right of appeal against important than the person to whom it a decision authorizing a cartel for is addressed and that if a third party third-party undertakings suffering in­ can prove that his individual rights or jury to their rights and interests; interests suffer direct damage he (6) in reply to the arguments of the de­ proves by that very fact that the fendant that the regulations concern­ contested measure is of direct and ing the common organization of the individual concern to him; market in sugar would not cause a (5) that this interpretation of Article 173 reduction in the production of sugar supports the case-law of the Court, and that the proportional distribution inasmuch as it holds applications from of the increase provided for is not individuals against decisions addressed guaranteed to previously existing to Member States, which although undertakings: not being regulations nevertheless — that in the absence of the contested have a general scope, to be inadmiss­ decisions the Italian Government ible; such actions may be classified as would have been obliged to distribute uti cives actions and the person con­ a supplementary production quota of cerned suffers direct damage only at 17 000 metric tons, which is now the time of the concrete application granted to the three sugar refineries, of the general decision, so that the among the other undertakings; indirect protection of Articles 177 — that, far from having a discretion, the and 184 of the Treaty remains avail­ said government was not free in re­ able to him and that in the present spect of the distribution of production case the situation is completely dif­ quotas and that this is a consequence ferent, in view of the fact that the of the third decision which makes the decisions in question have had their grant of aid subject to the condition

that the government in question reason of circumstances in which should grant the undertaking con they are differentiated from all other cerned a corresponding basic quota, persons, and by virtue of these fac a clause which the other decisions tors distinguishes them individually contain by implication. just as in the case of the person In its rejoinder the defendant denies addressed' and that it follows from that the applicants are directly concerned this that it is not the general or in by the contested decisions, as the dis dividual nature of the measure in turbance of competition which is the itself but its effects with regard to consequence of an enlargement of the the applicant which are decisive; sugar refineries does not immediately (2) that it follows that the present case result from the said decisions.

cerned against decisions of general cisions in question are not of individual scope to be inadmissible: concern to the applicants and that they — that the actions brought by under may, at the most, claim a general in takings in so far as they belong to a terest in not having the production of certain economic category interested competitors increased, an interest which in the annulment of the measure is common to the whole, open and ab must also be classified as an action stractly defined category of sugar pro

eral scope to be treated as if they dividual nature, and in that of a were regulations; decision addressed to an individual, (4) that the distribution of production the interest in instituting proceed quotas depends upon the exclusive, ings accepted by the case-law on the and to a large extent discretionary, second paragraph of Article 33 of power of the Italian Government as the ECSC Treaty is insufficient (see the applicants themselves recognized the opinion in Joined Cases 16 and by disputing that distribution before 17/62 and Case 25/62); that it is the Italian Consiglio di Stato with

JUDGMENT OF 10.12. 1969 — JOINED CASES 10 AND 18/68

which apply only to the Member States. In respect of the joinder of the examina­ In respect of the alleged decrease in tion of admissibility to that of the sub­ production quotas of sugar allocated to stance of the case, the applicants ob­ the applicants, according to the first serve that an application for a prelimin­ interveners there is no direct link be­ ary decision on a procedural issue with­ tween the rules governing the system of in the meaning of Article 91 of the

ERIDANIA v COMMISSION

The of the second intervener, the applicants application concerns the refusal to com again assert that the argument of their ply with the formal request and not opponents is the result of confusion be directly the fact of not having annulled tween abstract effects (appropriate to a or revoked the disputed decisions. regulation or a measure having general Article 175 applies in particular to the scope) and the concrete effects of an case of an action for failure to annul or individual decision, which may cause to revoke a measure taken in favour of injury to several persons without that third parties which directly injures the amounting to an obstacle to the admiss individual rights or interests of the ap ibility of the application made. plicant, which is confirmed by the fact The Italian Government, the third in

B — Case 18/68 the opportune nature of the measure. The applicants state that their applica In its statement of defence the defendant tion seeks the annulment of the refusal submits that the application is inadmiss ible because following from the absence of a reply to the formal request addressed to the — of the principle ne bis in idem, in Commission under Article 175 of the view of the fact that the application EEC Treaty and is of a contingent, has the same purpose as that in Case precautionary and alternative nature. If 10/68, namely the annulment of the their application in Case 10/68 were three decisions, and that Application held to be inadmissible as being made 10/68 must be regarded as the more against decisions of which they are not important;

— with regard to the expression 'any The substance of the case natural or legal person', Article 175 appears more restrictive than Article A — Case 10/68 173, because it presupposes that the institution has failed to address a Complaints common to the three de measure to such person: that prevents cisions the extension of the application of the Introductory comment second paragraph of Article 175 to cases which do not even come within In their observations on the statement the framework of the concept of by the second intervener, the applicants 'direct and individual concern' ap summarize the essential points of their pearing in Article 173; application as follows: — the Commission has defined its posi (1) On the one hand, the aid granted by the three contested decisions cannot con tion on the substance of the formal request of 7 May 1968 in the state tribute to the improvement of agricul

pediency. peated verbatim by Article 17 of Regu In their observations in reply to the lation No 17/64. statements of the first interveners the applicants, whilst noting that the inter 1. Infringement of Articles 11(1)(c) and veners refrain from commenting on Case 12(3) of Regulation No 17/64 18/68, define their position on the ob In -their application the applicants al servations set out by the Commission. lege in the first place that the said In so doing, they argue in particular: articles, by referring to the marketing of (1) that reliance on the principle ne bis and the obtaining of the best return in idem in the present case disre from agricultural products, exclude any gards the alternative and subsidiary financing of the sugar beet processing scope of Application 18/68; industries from the field of application of the Fund.

ion. Finally, the applicants consider that, examination sought by way of an even though the financing of the pro extra-judicial request amounts only cessing industries may come within the to a discretion—failure to exercise activities of the Fund, which is true in that discretion, when the circum respect of the second decision under stances which allow it to be used Article 1 of Regulation No 206/66, such are present, is vitiated by misuse of financing must contribute to the im powers. provement of agricultural production.

That condition is not fulfilled in the projects relating to slaughterhouses, present case, because the equipment and dairies etc. productivity alone of industrial under­ As to the assertion that aid from the takings already having surplus capacity Fund must in any case contribute to the receive benefit; it has not been fulfilled improvement of agricultural production, either because of the fact that those the Commission argues that, when it benefiting from the first and second allows the financing of improvements in decisions are sugar beet cooperatives, marketing, and particularly the obtain­ the benefits received by them being too ing of the best return from agricultural marginal and their proper remuneration products, Regulation No 17/64 does not being secured by the minimum purchase in any way require proof of a specific price provided for by Regulation No beneficial effect on basic production. Al­ 1009/67. though the Commission was not there­ In its statement of defence the defendant fore required to make a particular ex­ states that the majority of the com­ amination of the favourable effects on plaints of the applicants cannot affect the growing of sugar-beet, it states that the second decision because they are it nevertheless did so and arrived at based upon provisions of Regulation No positive conclusions. In fact, it is of little 17/64 which are not re-enacted by moment that in 1963/1964 there was Regulation No 206/66. surplus production capacity, because that It disputes the contention that Articles does not necessarily mean that such 11 and 12 of Regulation No 17/64 ex­ capacity was well distributed over the clude the financing of processing in­ territory. Furthermore, production of dustries and states: sugar-beet had been considerably in­ — that Annex II of the Treaty regards creased, particularly in the areas in ques­ processed products such as sugar as tion, during the last few years. More­ agricultural products; over the minimum purchase price could — that Article 38 of the Treaty, which not ensure proper remuneration for the applies not only to agriculture but to farmers. On the other hand, the enlarge­ trade in agricultural products, includ­ ment of sugar refineries allows the price ing processed products, gives the of sugar-beet to develop above the mini­ Community legislature the power un­ mum.

fineries. In other respects, the Commis cause that policy is intended to limit the sion has not proved that production production of sugar, as appears clearly capacity is not well spread geographic from Regulations Nos 44/67 and 1009/ ally. According to the applicants that 67. It follows from this that there is a capacity is, in the areas of Minerbio clear infringement of Article 14(1)(b) of and Ostellato, much greater than the Regulation No 17/64 which provides production of sugar-beet. In Tuscany that the projects accepted must 'be aimed also there is not an insufficient number at an adaptation or guidance of agri of sugar refineries. culture necessitated by the economic con The interveners Co.Pro.A. and Co.Pro.B. sequences of the implementation of the argue in particular that it would be diffi common agricultural policy or at meeting cult to encourage an increase in con the requirements of that policy'. sumption which the assistance of the 1 hat infringement is all the clearer since Fund must favour if processing were he capacity of the Italian sugar refineries considered to be outside the scope of is in surplus and since, further, within the Fund. This applies in particular to the framework of the common agricul agricultural products such as sugar- tural policy, the necessity to reduce the beet, which can come within the trading production of sugar-beet has been as system only as basic products intended serted (twelfth recital of the preamble for necessary processing. This is con

By Further, they assert that the definition Regulations Nos 44/67 and 1009/67, the contained in Article 38 of the Treaty Council wished only to avoid an increase does not justify the disputed decisions. in production beyond a certain ceiling. In fact, although it is true that the In respect of Italy, the Council even authors of the Treaty extended the con allowed a considerable increase in na cept of 'agricultural product' to pro tional production by granting it a basic ducts of a first-stage processing and even quantity of 1 230 000 metric tons of to substitute products, they have never sugar, a quantity clearly greater than the theless supported the generally accepted average production during the reference concept of 'agricultural undertaking'. period (947 000 metric tons).

new undertakings. That part of the mar The applicants consider that the contest gin granted to the three sugar refineries ed decisions, by granting large sums to in question amounts to 17 425 metric increase the production capacity of three tons whilst the total margin is 123 000 sugar refineries, run counter to the com metric tons for the year 1968/69. mon agricultural policy in sugar be As to the alleged infringement of Article

15 of Regulation No 17/64, the Com areas in question the processing in mission replies, on the one hand, that dustry already has a surplus and such a complaint can be made only by maintains, on the one hand, that the another applicant during the procedure allegation of the applicants that the for the granting of aid from the Fund improvement of means of transport and, on the other hand, that the required would permit the producers to send priority was satisfied by all the measures products to a more distant destination implemented by the Italian Government does not take into account the ad in order to encourage the harmonious vantages for the farmer of a nearer development of the regions concerned. processing plant, that is to say the In their reply the applicants consider that possibility of dealing with the whole the Commission has not shown that in production of sugar-beet in good consistency between the limitation on the time, leading to a greater quantity increase in production and the interven and a better quality of sugar and, tions which favour the creation of new consequently, the earning of a higher production units does not exist, as income and, further, that the dis

by the Community and the Member In its rejoinder the defendant: State concerned, which may dis (1) states that action by the Guidance tribute according to its free discretion, Section of the Fund falls within the 'the margin' which is granted to it framework of Community structural by Regulations Nos 1009/67 and policy, which is based upon the ob 1027/67. jectives of Article 39 of the Treaty In respect of Article 14 of Regulation No the necessity for which has been re 17/64 the interveners Co.Pro.A and Co. cognized by the Parliament as well Pro.B maintain that the system of quotas as by the Council and the Com includes limitations on production which mission; are desirable but not enforced, to which (2) alleges that Regulation No 1009/67, the applicants reply that under the by providing in Article 34 for the present system the production which granting of adaptation subsidies by may be sold at the basic price is strictly the Italian Republic to its beet pro

JUDGMENT OF 10. 12. 1969 — JOINED CASES 10 AND 18/68

Articles 92 and 93 of the only to the floods of that year which Treaty, which deal only with State aids, had destroyed the cereal seedlings are therefore not applicable. Neverthe and cannot be regarded as an indica less, Regulation No 17/64 includes an tion of a normal increase in sugar- ad hoc provision in Article 17(2) ac beet cultivation; cording to which 'Intervention by the (2) that in the absence of sufficient pro Fund must not alter the conditions of duction of sugar-beet in the actual competition in such a way as to be in area, the sugar refinery of Castiglion compatible with the principles contained Fiorentino had to obtain supplies in the relevant provisions of the Treaty'. from distant areas, which fact, more That wording refers to the principles laid over, contradicts the statements con down in Articles 42 and 92 of the cerning the gravity of the problem of Treaty, both of which however provide the distance between fields and the for derogations from the rule contained processing undertaking; therein, particularly with regard to (3) that if the sugar crisis is, in fact, of a structural assistance in the agricultural qualitative nature and necessitates a sector. Regulation No 17/64 provides ex complete re-structuring of under pressly for Community assistance of such takings, this problem, which is essen a nature and lays down a number of tially industrial, is a problem which criteria to be observed.

The applicants policy must be in accord with Com dispute the contention that they should munity policy which it is not in the have based their submissions on Article present case. 3(f) and Article 155 of the Treaty rather

by implication to Articles 92 and 93 of cisions upon the system of quotas, it Treaty, it is clear, furthermore, that an cannot be denied, according to the infringement of the former provision in­ applicants, that in the future their re­ volves an infringement of these latter spective quotas will be affected by it. provisions. The allegations of the opposite parties In its rejoinder the defendant adheres to concerning the dominant position oc­ its position by emphasizing that Article cupied by the applicants on the Italian 17(2) of the Regulation No 17/64 grants market have led the latter to raise it a wide area of discretion, which is during the oral procedure the submission even grater since Articles 92 and 42 of of misuse of powers committed in re­ the Treaty already show a bias in favour spect of them. In fact, either the size of structural aids. It adds that in the of the respective undertakings has not present case the incidence of Com­ influenced the decisions in question and munity subsidies on trade between all the arguments referring to them are Member States is practically nil because irrelevant or their size played a role and of the system of production quotas in­ these decisions in fact took into account stituted by Regulation No 1009/67. the competitive position of the applicants The interveners Co.Pro.A. and Co.Pro.B. on the Italian market. claim, on the one hand, that there is no The applicants believe, moreover, that it link between Article 17(2) of Regula­ is necessary to consider their position tion No 17/64, which applies only to not on the Italian national market alone, interventions by the EAGGF, and but on the whole Common Market where Articles 92 and 93 of the Treaty and, on it is far from being dominant. the other hand, that Article 34 of Regu- According to the defendant the sub-

mission put forward has no basis. The — the case of Article 3 of Regulation No mere fact of granting structural sub 17 is different from that of aid, as sidies to three undertakings does not third parties are liable because of a allow the conclusion to be drawn that negative decision to suffer damage in its real purpose was to attack the com law and not merely in fact; the state petitive position of the applicants, all the ment of reasons for the regulation less so since, by fixing quotas based not distinguishes between undertakings upon companies but upon undertakings, which are addressees of the decision the Community regulations on sugar which 'must be accorded' the right to allowed the applicants, which are com be heard, and third parties who must panies made up of several undertakings, 'be given the opportunity' of submit to carry out measures of internal re ting their comments. construction.

4. Infringement of the general principle its position. of law which allows persons having a contrary interest the right to be Complaints peculiar to the decisions of heard before a decision is taken of 27 July 1967 and 2 October 1967 According to the applicants it is a matter In their application the applicants give of a general principle of law, common details, in respect of each of the decisions to the legal systems of all the Member mentioned above, of the complaints States and of which account has been which they have already put forward. taken in the relevant provisions, for In addition, they set out the following example in Article 3 of Regulation No arguments:

the Commission intends to abolish the request for aid for the sugar refinery at aid complained of; notice to those Minerbio was made before 1 October who have an interest contrary to the 1965, by virtue of Article 20, the Com grant of aid is not required; mission should have taken a decision — for the possible authorization of rates before 31 December 1966. The decision involving any element of support was not taken until 21 July 1967, so Article 80 has provided only for the that an infringement of Article 20 may consultation of the Member States be presumed. If this doubt was able to and not of individuals; be raised it should be considered that

the grant given must refer to the year which is claimed to be an industrial act 1966, that is to say, to a time when the ivity, does not make it possible to attri organization of the markets in sugar did bute an industrial character to that not yet exist. company. In its defence, the defendant replies that According to the applicants no political Regulation No 50/67 postponed the choice and no social requirement can time-limit given to the Commission justify a clear infringement of the Treaty until 31 July 1967. As to the year to and of Community regulations. which a contribution refers, it points out that the conditions for the grant of 3. Infringement of Article 1(2) of Regu aid must be considered as at the time lation No 206/66 by the decision of

applicants enlarge upon a complaint pre area of Ostellato did not suffer damage, viously put forward namely the lack of as is shown by the Presidential Decrees relevance of the recital that the addres of 9 and 15 November and 12 Decem sees of the contested decisions are 'co ber 1966 and the Ministerial Decree of operative sugar refineries'. This fact can 21 December 1966, which in giving de not absolve the Commission from ob tails of the communes of the province serving the rules and criteria in force. of Ferrara affected by the floods, makes In view of the critical situation of the no mention of the commune of Ostellato. Italian sugar industry, the desire to bene For these reasons Article 1(2) of Regula fit the cooperatives and to enable them tion No 206/66 has been infringed. to absorb the whole sugar-beet produc In addition, the applicants point out that tion of their present or future members a request for a contribution comparable must be only a secondary consideration. to that of the Ostellato undertaking was Furthermore, the benefits of a coopera made by one of the applicant companies tive are doubtful in this case and are in favour of a sugar refinery situated in available to the members only in their the commune of Porto Tolle which was capacity as industrial producers and not wrecked by the flood.

Consequently, it is not possible tion. to justify the large amount of aid in The interveners Co.Pro.A. and Co.Pro.B. tended not for the repair but for the insist upon the capital importance of the enlargement of the sugar refinery of fact that the addressees of the first two Ostellato. It amounts to a misuse of contested decisions are cooperatives. The powers on the part of the Commission. fact that one cooperative carries out the In its statement of defence the defendant processing of agricultural products, replies that Regulation No 206/66 does

not require that the plant itself and the in the damaged area who are interested place where it is situated should have in the supply of their products to the been involved. According to Article 3(1) Ostellato sugar refinery. The Commis the project must contribute 'to allowing sion replies to the arguments of the ap economic revival in the agricultural sec plicants that the increase in production tor'. The majority of the farms of mem of sugar-beet in the flooded areas of the bers of the recipient cooperative were province of Ferrara was not a fortuitous damaged and, further, many farmers in phenomenon but a permanent one, in the region affected changed to the grow view of the fact that the growing of ing of sugar-beet so that the enlarge sugar-beet was the only type of agri ment of the sugar refinery in question culture able to bear such a salinity rate allowed the new production to be ab as resulted from the floods, and that the sorbed. growing of hemp which had previously In their reply the applicants, repeating been predominant had almost totally that the sugar refinery like the territory disappeared. of Ostellato and even the greater part In their statements the interveners Co. of the province of Ferrara did not suffer Pro.A and Co.Pro.B. maintain that Regu from the floods state with documentary lation No 206/66 allows aid not only for support that the allegations of the Com the reconstruction of farms and agricul

The cooperatives August and September. Further, even if allege, with documents in support, that sugar-beet growing had been intensified a large number of the members supply following the floods, which was not the ing the sugar refinery live in the com case, such accidental increase would not munes which have suffered damage. suffice to justify the grant of aid for the In their reply the applicants dispute that extension of the sugar refinery of Ostel the flood affected the 'majority' of the lato, to be carried out some years later. members of the cooperatives, since only The applicants consider in addition that 14% of the total number of members in order to absorb the new production have their undertakings in the territory of sugar-beet it is not necessary to en of the communes declared to be flooded. large the sugar refinery concerned be As to the fact pointed out by the ap cause, on the one hand, existing sugar plicants that the Italian Government did refineries would have been able to ab

a national government. tive whose farms are situated in com The applicants point out that, if the munes flooded in 1966 and a table show company concerned did not appeal ing the number of sugar-beet producers against the decision of the national

authorities, it was because it accepted conform to the provisions of the regu the reason for this refusal according to lations applied. In respect of the decision which the said request was not 'related of 7 March 1968, the same reservation to directly agricultural interests'. And it must be regarded as implied. is because they are still of the same opin In order to show the illegality of the ion that the applicants are acting not implied rejection of their extra-judicial against the refusal of the Italian Govern request, the applicants rely upon the ment to the request from the Porto submissions and arguments set out with Tolle company but against the decision in the framework of their Application addressed to the Ostellato undertaking. 10/68 and refer to these as well as to During the oral procedure, the appli the documents produced in support of cants stressed particularly the wording them. of Article 1(2) of Regulation No 206/66 The defendant does not adopt any view '. . . for the restoration and the improve with regard to the argument of the ap ment . . .', and the fact that any decision plicants that the action provided for in must therefore conform to the first con Article 175 covers the annulment of an dition, which is clearly not the case in implied measure resulting from the respect of the Ostellato undertaking. silence of the institution.

Nos 17/64 and 206/66. Each authority of 2 October 1967, have become un has its own responsibilities and must assailable, having regard to the fact that answer for these actions before the ap the reasonable period accepted by case- propriate courts. law in which an administrative measure may be annulled or revoked has expired. B — Case 18/68 In respect or the criticisms made con cerning the three decisions in question The applicants consider that the inacti the Commission refers to the submissions vity of the Commission, including the in the defence which it set out in Case absence of any verification of the points 10/68. of fact and of law alleged by them, is The applicants in their observations on illegal; all the more so since the decisions the statement by the Italian Government of 27 July 1967 and 2 October 1967 allege that, particularly as regards the de expressly provide, in their statements of cision concerning the Ostellato under reasons for the possibility of a suspen

Grounds of judgment

1 By Application 10/68 lodged at the Court Registry on 10 May 1968, the applicants requested the annulment of Decisions of the Commission Nos

JUDGMENT OF 10. 12. 1969 — JOINED CASES 10 AND 18/68

1/22/66 of 27 July 1967, 1/17/INON of 2 October 1967 and 1/73/67 of 7 March 1968, granting aid from the European Agricultural Guidance and Guarantee Fund to certain sugar refineries established in Italy.

2 By Application 18/68 made under Article 175 of the Treaty and lodged at the Court Registry on 1 August 1968, the same applicants contested the implied decision of rejection which, according to them results from the silence maintained by the Commission in respect of an extra-judicial request by which they had sought the revocation of the abovementioned decisions.

3 By order of 25 October 1968 the Court joined the two cases for the purposes of judgment.

6 The applicants consider that this is so in their case by reason of the fact that, as the aids granted are likely to affect competitive relationships on the Italian sugar market, they suffer damage by the advantage thus given to the ad­ dressees of the contested decisions, with whom they are in competition; par­ ticularly because of the introduction of the quota system provided for in Regulation No 1009/67 EEC of the Council of 18 December 1967, on the common organization of the market in sugar (OJ No 308) and by Regulation

ERIDANIA v COMMISSION

No 1027/67/EEC of the Council of 21 December 1967 on the fixing of basic quotas for sugar (OJ No 313), the contested decisions affect the position of the applicants on the Italian sugar market in a direct and individual manner.

7 The mere fact that a measure may exercise an influence on the competitive relationships existing on the market in question cannot suffice to allow any trader in any competitive relationship whatever with the addressee of the measure to be regarded as directly and individually concerned by that measure.

Only the existence of specific circumstances may enable a person subject to Community law and claiming that the measure affects his position on the market to bring proceedings under Article 173.

The allegation of the applicants that the contested decisions have a direct effect upon their situation in the system of distribution of quotas provided for by Regulations Nos 1009/67 and 1027/67 tends to show the existence of such specific circumstances in respect of them.

Thus the production capacity of the undertakings and factories did not play any part in the distribution of this 10%, the only variable element of the system, as such distribution was based on criteria relating to completely dif­ ferent circumstances, such as the area where the factory was established, the character and number of units of production of the undertaking or the results of sugar marketing years between the reference period and the entry into force of the said Ministerial Decree.

11 It appears from these facts that such EAGGF aid as that granted by the contested decisions has no influence upon the distribution of quotas except to the extent to which the criteria adopted by the governments allow it.

Consequently this aid has no direct effect on the said distribution.

12 The applicants have further alleged that the contested decisions, and in par­ ticular that concerning the Castiglion Fiorentino sugar refinery, influenced the distribution of the basic quantity by the Italian Government, by reason of the fact that they made the payment of aid subject to an undertaking from the said Government to allocate to the recipients a basic quota corresponding to their increased capacity.

13 Nevertheless, the condition mentioned cannot be regarded as having deter­ mined the content of the criteria for distribution adopted by the Italian Government.

On the contrary, the Commission could not grant EAGGF aid without being previously assured of the conformity of these decisions with the distribution policy which the Italian Government intended to adopt in accordance with the regulations on the common organization of the market in sugar.

Without stating under which provision of Community law the Commission was required to annul or to revoke the said decisions, the applicants have confined themselves to alleging that those decisions were adopted in infringe­ ment of the Treaty and that this fact alone would thus suffice to make the Commission's failure to act subject to the provisions of Article 175.

17 The Treaty provides, however, particularly in Article 173, other methods of recourse by which an allegedly illegal Community measure may be disputed and if necessary annulled on the application of a duly qualified party.

To admit, as the applicants wish to do, that the parties concerned could ask the instituion from which the measure came to revoke it and, in the event of the Commission's failing to act, refer such failure to the Court as an illegal omission to deal with the matter would amount to providing them with a method of recourse parallel to that of Article 173, which would not be subject to the conditions laid down by the Treaty.

18 This application does not therefore satisfy the requirements of Article 175 of the Treaty and must thus be held to be inadmissible.

Costs

19 Under Article 69(2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs. As the applications of the applicants are inadmis­ sible, it is appropriate to order them to pay the costs, including those of the interventions;

2. Orders the applicants to pay the costs, including those of the inter­ ventions.

Lecourt Monaco Pescatore

Donner Trabucchi Strauß Mertens de Wilmars

Delivered in open court in Luxembourg on 10 December 1969.

A. Van Houtte R. Lecourt

Registrar President