C-2/70

JUDGMENT OF THE COURT 3 MARCH 19711

Acciaierie е Fernere Riva S.p.a. v Commission of the European Communities

Case 2/70

Summary

I. Common financial arrangements — Equalization of ferrous scrap — Function­ ing — Equality of treatment of contributors — Obligations of the Commission (ECSC Treaty, Article 53)

2. Common financial arrangements — Equalization of ferrous scrap — Contribu­ tions — Limitation period — Incontestability until closure of the final account (EEC Treaty, Article 53)

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by its Legal 1 — Language of the Case : Italian.

JUDGMENT OF 3. 3. 1971 — CASE 2/70

Adviser, Antonio Abate, acting as Agent, with an address for service in Luxembourg at the offices of Émile Reuter, 4 boulevard Royal, defendant,

Application for the annulment of two individual decisions of 4 December 1969 addressed to the applicant and fixing, first, the applicant's tonnage of ferrous scrap assessable under the equalization scheme for imported ferrous scrap and scrap treated as such and, secondly, the amount owed by the applicant on the basis of the said tonnage of ferrous scrap, namely, the sum of Lit. 275 005 963,

THE COURT

composed of: R. Lecourt, President, A. M. Donner (Rapporteur) and A. Trabucchi, Presidents of Chambers, R. Monaco, J. Mertens de Wilmars, P. Pescatore and H. Kutscher, Judges,

RIVA v COMMISSION

metric tons. sumed by this firm, the assessable ton — When audits were carried out by the nage for the period from 10 March 1957 High Authority to check the accuracy to 31 December 1957 had been fixed at of these figures, Riva was unable to 22 548 metric tons and that the amount supply adequate accounting docu of the contribution owing on 31 ments; it merely produced a summary December 1965 therefore came to Lit. of purchases of ferrous scrap. 256 071 350. — To remedy these defects, the High In a letter of 9 February 1966 addressed Authority requested the undertaking to the High Authority, Riva replied in in a letter of 27 November 1961 to particular that the decisions of 18 send the invoices relating to the con December 1963 had become final; any sumption of electric power; from the other sums owing in excess of those invoices sent it emerged that during fixed by those decisions were outside the period from January to November the limitation period; Riva was there 1958 the firm had consumed fore astonished to learn that the High 20 243 622 kWh in the production of Authority, in its letter of 23 December steel. 1965, had assessed an additional 22 548 — On the basis of this figure the deci metric tons for the period from 10 sions of 18 December 1963 were March 1957 to 31 January 1958. adopted. Furthermore, Riva had to express — Subsequently, 'the Committee of ex reservations as to the accuracy of the perts convened for the purpose of figures contained in the letter of 23 completing and perfecting the system December 1965. of estimating the consumption of In a letter of 17 May 1966 addressed ferrous scrap in electric furnaces pro to the High Authority the applicant duced new factors taking account, stated that, as had been said in the inter alia, of the influence of arisings letter of 9 February 1966, 'The period from steelworks on the production of from 30 March to 1 November 1957 ingot steel and consequently on the which is now remote must be considered tonnage of ferrous scrap constituting as falling outside the limitation period'. the basis of assessment to contribu By a decision of 4 December 1969, of tions; .

JUDGMENT OF 3. 3. 1971 — CASE 2/70

strative officers of the Italian Govern­ — 'revoked and replaced by the present ment in April 1965, that, contrary decision' the decision of 18 Decem­ to its declarations, the undertaking ber 1963 fixing the amount of produced steel even before 1 January contributions at Lit. 33 190 021; 1958 and consumed during that — stressed that the decision was en­

period a total of 18 237 800 kWh in forceable. the production of steel'. The present application, directed against — In these circumstances, the Com­ these two individual decisions, was mission is obliged to redetermine the lodged at the Court Registry on 14 applicant's consumption of ferrous January 1970. scrap. By virtue respectively of Article 2 of Decision No 13/58 (O.J. No 10 of 30.7.1958) and Article II — Conclusions of the par­ ties 15 of Decision No 16/58 (the same number of the Official Journal), this The applicant has claimed that the assessment is to be made by means Court should: of an estimate drawn up by the institution on its own authority for 'by reason of the limitation period the period not covered by declara­ and on all the grounds set out in the tions (March to December 1957) application, declare illegal and annul and by means of a correction made the contested decisions of 4 December on the institution's own authority 1969 of the Commission of the Euro­

RIVA v COMMISSION

It therefore falls After hearing the report of the Judge- outside the limitation period. Rapporteur and the views of the Ad This principle is not unknown to the vocate-General, the Court decided to Community legal system, as is shown open the oral procedure without a pre by: paratory inquiry. — Article 40 of the Protocol on the The oral observations or the parties were Statute of the Court of Justice of the presented at the hearing on 12 January ECSC; 1971. — Article 1 of Decision No 5/65 of The Advocate-General delivered his the High Authority of 17 March 1965 opinion on 2 February 1971. (OJ, English Special Edition 1965- 1966, p. 38) according to which claims of the High Authority in IV—Submissions and argu respect of levies under Articles 49 ments of the parties and 50 of the ECSC Treaty shall be barred after a period of three years. The submissions and arguments of the The same principle inspires Article 2 parties may be summarized as follows: of General Decision No 14/64 of the High Authority of 8 July 1964 (OJ,

Con the current calendar year and for not sequently, the examination of the faas less than the five preceding calendar the existence of which is implied by years'. these decisions must be considered final In the absence of an express provision also in relation to the defendant. To on the period of limitation for contri claim the contrary amounts to acknow butions to the equalization scheme, re ledging that the Commission has the course must be had to this analogy. For power to make further claims on under- this purpose, it is undeniable that the

said contributions bear 'the closest re consumption so as to obtain the quan semblance to' the levies referred to by tity liable to contribution. For this Articles 49 and 50 of the ECSC Treaty reason, the new decisions reduced to and consequently it must be admitted 24 373 metric tons the figure of 25 721 that they are subject to the three-year metric tons liable to contribution fixed period of limitation provided for by by the previous decisions in respect of Decision No 5/65. the period from January to November 1958; the result of this is a reduction C — The substance of the case amounting to Lit. 4 873 744 in the con The figures which the defendant ob tributions due for this period.

output). an illegal or inopportune measure which It was, on the contrary, a period of testing the plant and of experimentation; has proved to be contrary to the public heavy energy consumption yielded al interest. As regards more particularly the exercise of the power in question most no production, since the activity with respect to notices of assessment, it of the undertaking was limited to testing cannot be made subject to a condition and training staff, in the main from the agricultural sector, with systematic and as to time; in fact, the public interest— which requires the equal treatment of continual rerunning of the machinery those subject to the law as regards con and no positive results as regards in dustrial production. tributions and the strict accuracy of the content of the measures adopted in the field at issue—'is present always and at

tion period This inadmissibility derives from the fact that the applicant has no interest since The laws of Member States only have it can gain nothing from the annulment in common the fact that they recognize of that part of the contested decisions. the principle of the limitation of actions; The decisions of 18 December 1963 in on the other hand they differ as to the fact failed to take account of a factor periods of time which must elapse for favourable to the applicant, namely, its this purpose and as to the grounds upon own resources of ferrous scrap which which they may be suspended or dis must be deducted from the aggregate continued.

The legal system of the ECSC contains found that the furnaces had been in no express provision on the general prin production during the year in ques ciple of the limitation of actions. Con tion; sequently an essential and indispensable — these facts were studied in detail by condition for putting into operation as officers of the High Authority; it was a general principle the established rule only after these facts had been con of the limitation of actions with the firmed by the information supplied legal system of the ECSC is lacking. by the Italian administrative author Nor can one apply by analogy the period ities in April 1965, relating to the of limitation provided for general levies. electric power consumed by the fur These in fact are the Community's own naces, that it was possible to assess sources of revenue so that it may appear the scrap consumed during the period advisable to sacrifice the rights of the in question and to inform the under creditor in favour of legal certainty. On taking thereof (letter of 23 December the other hand, the revenue from the 1965); equalization levy is intended for the — it is not difficult to infer from the

accurate'. vance of the provisions on equalization'. Furthermore, the undertaking was aware This task depends in the main on the of the provisional nature of the facts promptness with which undertakings serving as the basis for the decisions of discharge their obligations, and, in par December 1963, as is shown by the ticular, that of declaring the prices and following passage from a letter of 10 quantities of scrap imported or pur July 1962 addressed to Riva by the chased within the Community.

In fact: D — The substance of the case — it always failed to supply the High Authority and later the Commission The applicant does not deny that Riva with data relating to the movements was in production and accordingly pro of bought scrap during the period duced steel during the period from 10 from 10 March to 31 December March to 31 December 1957. 1957; In taking as the running-in period the — it was only in September 1964, on first three months' production of each the occasion of the expert inquiry furnace, the defendant based its deci carried out by Mr Studer, the engin sion on criteria generally applied in eer, that serious indications were estimates which it made on its own

authority and аlsо on the data relating visions, the principles which the Court to the applicant's plant which were is called upon to define in this connexion ascertained by means of an exhaustive are an integral part of Community law; expert inquiry. The assertion that the but this does not mean the rules con trial period covered the whole of the tained in the respective laws of Member production shown for 1957 is in clear States. In fact, in creating the Com contradiction with technical principles munity legal system, Member States and the economics of production. The began with the premise that this system contested decisions have accepted for the should reflect the legal principles period of normal production a coeffi common to the said States. cient of 850 kWh per metric ton of The principle of prescription in relation liquid steel produced. This coefficient to property rights is accepted by all the represents absolute maximum value on Member States.

3. In its reply the applicant makes the years prescribed for the latter also to following points in particular: apply in the present case. In fact, in It first of all declares that it takes note both cases of the explanations given by the defen — the obligation to contribute derives dant in regard to the corrections made from an economic fact relating to in favour of the undertaking. In these production; circumstances, the undertaking has in — the provisions in force prescribe that fact no interest in adhering to its declarations shall be made by under application in so far as the new decisions takings and provide for corrections have replaced the previous decisions. made by the institution on its own The dispute therefore concerns the authority; debts relating to the period from March — the contributions are calculated and to November 1957, which were indicated levied by reference to periods; for the first time in the two decisions — it is necessary to avoid subjecting of 4 December 1969. undertakings to the serious incon In this request, the applicant maintains venience of demands dating back a the objection relating to the period of long way and consequently unrelated

RIVA v COMMISSION

This provision recognizes by date of that closure. implication that the Community cannot rely, as against undertakings, on rights As regards equalization, the rigid which are based on documents dating application of the ordinary rules on the limitation of actions would have dis back more than five years from the current year. In fact, although the Com agreeable consequences since it would munity has authorized undertakings to favour certain undertakings to the detri destroy their documents after a certain ment of their competitors; pursuing this time has passed, this is because it does course of reasoning, the defendant puts not consider that it is entitled to claim forward certain factors relating to the debts dating back further. It is unjust winding up of the scheme in question. to acknowledge that the administration Even if, hypothetically, the period of has the power to assert such claims limitation had begun to run, it was dis when undertakings, not through any continued several times by acts of the fault on their part, no longer possess High Authority revealing its intention to determine the actual date of com the facts which may prove that the alleged debt does not exist. mencement of the iron and steel pro When applied to this case, all these duction of the undertaking, more parti considerations lead to the following cularly by the letters of 10 July 1962 results: the defendant's claims are based and of 10 September 1964. on facts which occurred during the Recourse to the Community provisions period from March to November 1957 governing the period of limitation in whereas the defendant raised them for respect of the general levy does not the first time in its letter of 23 Decem enable the applicant to succeed in its ber 1965, in other words eight years point of view. In fact, the first para

14/64. The defendant is acting unjustly in raising documentary evidence against taking, the application by analogy of the applicant which the latter can no the said provisions therefore leads one longer refute with the aid of its own to accept the limitation period of six documentation. years. In addition, Article 3 of Decision No 5/65 provides for the dicontinu 4. The defendant, in its rejoinder, makes ance of the period of limitation 'by the the following assertions: dispatch .

JUDGMENT OF 3. 3. 1971 — CASE 2/70

the undertaking of the High Authority's merely refers to the arguments advanced intention to carry out verification'; the in the statement of defence. period of limitation of six years was 5. At the oral hearing the applicant thus discontinued by the letters of the stressed above all the submission relat­ High Authority of 10 July 1962 and 10 ing to the period of limitation. It September 1964. claimed that it is a fundamental legal As regards Decision No 14/64, it must principle which, as such, is an integral be observed that: part of Community law despite its — it ‘does not authorize iron and steel alleged incompatibility with a system undertakings to destroy their such as that of the equalization of scrap. accounting documents (if its aim The applicant has contested, on the was such it would conflict with one hand, the case-law of the Court Italian law which provides that in that the latter has recognized the undertakings must keep the said principle of prescription only in cases documents for ten years): the only where the Community legislature has inference that can be made from determined limitation periods and, on Decision No 14/64 is that under­ the other, the arguments advanced by takings which no longer possess the the defendant relating to the concept documents in question after five of prescription. In particular, the dies years have elapsed are not liable to a quo is the day when the creditor can the penalties laid down in Article 47 actually exercise his right, which in of the Treaty; the present case is 31 October 1957. — it does not concern levies or equaliza­ Furthermore, any interruption of the period of limitation can only take place tion, but only the regulation of prices'. by means of a formal notice, which the two letters invoked by the defendant did not constitute. B — The substance of the case 6. The defendant has reiterated the In its application, the applicant hardly main points of its written observations 'touched on' this submission; the reply and stated in particular that the Court was 'completely silent on the matter'. has not (recognized prescription as a In these circumstances, the defendant general principle of Community law.

(b) complains that the figures adopted in its case by the Commission do not correspond to reality and proposes to show in detail that the presumptions on which the contested decisions were based are unfounded.

The submission relating to the principle of res judicata

4 By the contested decision, No 1166, the Commission revoked the decision of the High Authority of 18 December 1963 fixing the amount of scrap serving as the basis for equalization contributions at 25 271 metric tons and replaced it by a fresh assessment of 45 740 metric tons.

5 It emerges from the recitals in the preamble to the contested decision that it is based essentially on two considerations; first, fresh criteria of technical evaluation enabled the quantities of scrap assessable to contributions which were adopted for the period referred to in the decision of 18 December 1963 (1 November 1957 to 30 November 1958) to be corrected to the advantage of the undertaking; secondly, it was established that, contrary to the data on which that previous decision had been based, the undertaking did not com­ mence steel production on 1 January 1958 but as early as 10 March 1957.

6 The applicant, invoking what it calls the ‘principle of res judicata’ contests, first of all, the Commission's power to revoke its previous decisions and to modify their content. Since the applicant did not take advantage of its right of appeal against the decision of 18 December 1963, the latter became final, not only in relation to the undertaking concerned, but also in relation to the Community authorities.

The submission relating to the limitation period

10 The applicant alleges secondly that the power to impose on it the obligation to contribute to the equalization scheme has lapsed by prescription. In this connexion, it relies on the fact that eight years passed between the end of the period in dispute, from 10 March to 31 December 1957, and the first official notice that it would have to pay contributions in respect of that period, namely the letter of 23 December 1965.

11 Whilst recognizing that the written rules which govern the relationship between the Community and undertakings as regards equalization do not contain any specific provision on the limitation of actions, it considers never­ theless that in this respect the limitation of actions derives from the general principles of law which govern all relationships under the Community legal system. In this connexion, both the national provisions on limitation of actions and those exacted by general Decision No 5/65 of the High Authority of 17 March 1965 on the barring by time of claims in respect of levies pro­ vided for in Articles 49 and 50 of the ECSC Treaty (Official Journal, English Special Edition 1965-1966, p. 38) are applicable by analogy.

RIVA v COMMISSION

12 The applicant also relies on Article 2 of the general Decision No 14/64 of the High Authority of 8 July 1964 on business books and accounting docu­ ments which undertakings must produce for inspection by officials or agents of the High Authority carrying out checks or verifications as regards prices. Since this provision requires undertakings to be able to produce their docu­ ments for the current calendar year and for the five preceding calendar years the applicant claims that it follows that the powers of checking and verification can be exercised only during this same period.

16 It alleges that this was a period of testing of the plant and experimentation, for which a heavy consumption of electric power, the basis factor in the determination by the institution on its own authority of the basis of con­ tribution, yielded almost no production. In its statement of defence, the defendant has explained the calculations on which the contested decision is based and has declared that it adopted in respect of the first three months at issue criteria suited to the special characteristics of a running-in period.

JUDGMENT OF 3. 3. 1971 — CASE 2/70

17 Neither in its reply nor during the oral procedure did the applicant contest the explanation put forward by the defendant. It also failed to develop its complaints as it had proposed to do in its originating application. In these circumstances, since the applicant has failed to establish that its application is well-founded, it must accordingly be dismissed.

Costs

18 Under Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs. The applicant has failed in its submissions.

On those grounds,

Monaco Mertens de Wilmars Pescatore Kutscher

Delivered in open court in Luxembourg on 3 March 1971.

A. Van Houtte R. Lecourt

Registrar President