C-9/71

In Joined Cases 9 and 11/71

(1) Compagnie d'Approvisionnement, de transport et de crédit SA

(2) Grands Moulins de Paris SA,

companies with their registered offices in Paris, represented by their Chairmen/­ Managing Directors in office, assisted by André Vidart and Michel Nicolay, Ad­ vocates at the Conseil d'État and the Cour de cassation of France, with an address for service in Luxembourg at the Chambers of Ernest Arendt, 34 B IV rue Philippe- II,

applicants,

v

Advocate-General: H. Mayras Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Facts and procedure the end of the 1969/1970 marketing year, be reduced, in the sector concerned, by The facts and procedure may be sum­ 11.11%'. Furthermore Article 3(1) lays marized as follows : down that 'in so far as it is necessary to compensate for the effects' in particular 1. On 11 August 1969, under Article 103 of the aforementioned measures 'France of the Treaty, the Council adopted Regula­ shall grant subsidies for imports from tion (EEC) No 1586/69 on certain measures Member States and third countries'. of conjunctural policy to be taken in the Finally Article 8 vests in the Commission agricultural sector as a result of the the necessary powers to lay down detailed devaluation of the French franc (JO No rules for the application of those provisions L 202, p. 1). and those rules must include 'in particular, The first paragraph of Article 1(1) of the the fixing of the amounts ... of the import regulation provides, in particular that 'the subsidies'. intervention or purchase prices to be paid On this basis, the Commission adopted, on by France, in accordance with the regula­ 22 August 1969, Regulation (EEC) No tions on the common organization of the 1670/69 on certain measures to be taken agricultural markets, in respect of interven­ with regard to the cereals and rice sectors tion on the internal market shall, until as a result of the devaluation of the

JUDGMENT OF 13.6.1972 — JOINED CASES 9 AND 11/71

When the Compagnie d'Approvisionne 4. The present applications, both of which ment, de Transport et de Crédit (hereinafter have been submitted jointly by the Com called 'the Compagnie d'Approvisionne pagnie d'Approvisionnement and Grands ment') brought an action for annulment Moulins were lodged at the Court Registry of that provision, the Court dismissed the on 16 and 18 March 1971. application as inadmissible, holding that On 26 April 1971, the defendant lodged the contested measure was in the nature of applications, pursuant to Article 91 of a regulation and was not of individual the Rules of Procedure, for an inter concern to the applicant (Judgment of locutory decision on a procedural issue 16 April 1970 in Case 65/69, [1970] ECR regarding the admissibility of the applica 229). tions and for a declaration that they were

. . (b) 8.44% as procedure and judgment. regards the intervention price for common The written procedure in the main action wheat and durum wheat'. followed the normal course and after Accordingly, Section A of the Annex to hearing the report of the Judge-Rappor Regulation (EEC) No 1505/70 of the teur and the views of the Advocate-General, Commission of 28 July 1970 (JO L 166, the Court decided to open the oral p. 33) fixed the subsidy on imports into procedure without any preparatory inquiry. France of common wheat and mesiin at The parties presented oral argument at the FF 44.43 per metric ton. hearing on 22 March 1972. The Advocate-General delivered his

The two months after receipt of the ap letter of 15 November particularly con plicant's letter on 19 November 1970 cerns the application in Case 11/71, and and the decision of 26 February 1971

entering into the calculation of the to order that', read 'namely Article price of imported wheat owing to the 10.01 A which appears in the Annex revaluation of the French franc, that to Regulation (EEC) No 16,70/69 of 22 August 1969'; is, in short, FF 1.88 per quintal during the 1970/1971 marketing year multi­ plied by the number of quintals entered — for 'FF 1.88 per quintal during the on each certificate: 1970/1971 marketing year' read 'FF 1.93 per quintal during the (3) secondly, and in any case, recognize 1969/1970 marketing year'; immediately, by means of the present application, the aforementioned right — under (3), instead of 'FF. 1.88' read 'FF 1.93'. to compensation on the terms set out above, as a result of the wrongful act of the Commission ; assess, on the basis In both cases the defendant contends that the Court should: of FF 1.88 per quintal and of the number of quintals entered on each certificate, the amount of damage 'dismiss the applications as inadmissible resulting from such act and order the and in any case as unfounded; and order Commission to pay the resultant sum the applicants to pay the costs'. to the applicant companies;

(4) recognize, in addition, their right to III — Submissions and arguments compensation for the damage caused of the parties them as a result of the Commission's wrongful act and arising from the The submissions and arguments of the fact that they did not receive the same parties may be summarized as follows: treatment as millers in Germany and the Netherlands, with all the con­ 1. Admissibility sequences implied in law; The defendant contends that the applica­ in the alternative, recognize their right tions are inadmissible both as a whole and thereto on account of the breach of with regard to each head of claim.

With regard to the claims for compensa cannot be the subject of an application for tion, the defendant argues that the very annulment. fact that the damage is expressed as the The applicants reply that the applications precise difference between the amounts concerned are based on Articles 173 and payable under the contested regulations 175 of the Treaty. When a person subject and those which would be payable under to the jurisdiction requests the Com rules acceptable to the applicants shows mission for a reply which is of direct and that those claims are disguised applications individual concern to him, he is entitled for annulment of the said regulations to make use, according to the circum designed to circumvent the inadmissibility stances, of the procedures laid down by one barring such applications and the inad or other of the abovementioned provisions. missibility of the applications for annul Moreover, the defendant's argument is ment which are the subject-matter of the contradicted by the actual wording of

cants' requirements. The effect of the third bears the consequences of the facts in paragraph of Article 175 of the Treaty is question. that individuals cannot complain to the These facts are that when the defendant Court of failure by an institution to take fixed the import subsidies for the products measures in the form of a regulation. concerned first at FF 58.49 per metric ton As for the letter of 26 February 1970, this (Regulation No 1670/69, in respect of the does not constitute a decision which can 1969/1970 marketing year) and then at be the subject of an application under FF 44.43 per metric ton (Regulation No

As a result, months which followed those letters cannot the price which importers have at present give rise to an action for failure to act and to pay for imported wheat is higher than the express reply of 26 February 1971 the price which they had to pay before

devaluation notwithstanding the subsidies Regulation No 1586/69 provided for a in question, the amount of which is clearly subsidy for imports from third countries, inadequate. its author acknowledged by implication In particular, in calculating the subsidy of that the subsidy, as opposed to the subsidy FF 44.43 per metric ton (that is, in practice, granted for imports from other Member FF 4.44 per quintal), the defendant first States, cannot be calculated on the basis took the average guaranteed price for of the intervention price which is wholly wheat in France, which was FF 46.78 per unconnected with trade with third coun quintal; then it multiplied this figure by tries. Consequently, although Article 1 (1) 9.5 % in view of the French Government's of Regulation No 1586/69 does not ex decision to reduce by 3 % with effect from pressly refer to the threshold price this is 1 August 1970 the amount by which the to be attributed either to a clerical error franc had been devalued (12.5%). Taking or to the fact that the threshold price Dark Northern Spring wheat (Application was included in the term 'purchase price' 11/71 and Manitoba wheat (Application or, again, to the fact that the threshold 9/71) as examples of imports from third price is linked to the intervention price, countries, the applicants produce figures as Regulation No 120/67 provides that to show that, as a result of devaluation, the latter is lower than the target price to the purchase prices paid in Paris increased which the former corresponds. and that the applicants thereupon suffered To permit the subsidy to be fixed on the a loss of basis solely of the intervention price leads, moreover, to an increase in prices — FF 1.93 per quintal for the 1969/1970 to the producer and the consumer, as marketing year (Application 11/71); shown by the calculations mentioned — FF 1.88 per quintal for the 1970/1971 above; such an effect is, of course, in marketing year (Application 9/71). conflict with the objectives set out in the preamble to Regulation No 1586/69. It is clear from the regulations in question, Furthermore, fixing the subsidy in this particularly Regulation No 1586/69, that manner by increasing the price of wheat their object was to prevent any particular imported from third countries to French

The de the defendant. fendant did not, therefore, correctly apply Nevertheless, the validity of the arguments the principles laid down by the said regula advanced by the applicants is confirmed tions or the principle of equality contained by the actual provisions adopted by the in the Treaty. Although it is true that defendant as a result of the 'alterations in Article 1 of Regulation No 1586/69 refers the parity' of the German and Netherlands only to the intervention or purchase currencies (Regulation No 1014/71 of prices, those words must be looked at in 17 May 1971, JO No L 110, p. 10).

Article 1 of trade and a threshold price for imports Regulation No 974/71 of the Council of from third countries. Accordingly, although 12 May 1971 (OJ, English Special Edition

1971 (I), p. 257), a provision on the basis Regulation No 1586/69 is a measure of of which Regulation No 1014/71 was conjunctural policy. Aware of the fact adopted, is practically identical to Article 3 that a sudden rise in prices to the consumer of Regulation No 1586/69 and is of direct and the producer had to be avoided, the relevance to the present cases. There is Council created a temporary and limited very great similarity between the two exception to the rule on the automatic situations and the defendant cannot argue and immediate increase in the amounts the contrary from the fact that in Germany under the system of common prices when and the Netherlands there was only a converted into French francs.

These prices are applicants wholly misunderstand both the not included in the term 'purchase prices' wording of Regulation No 1586/69 and which is a technical term indicating, in the scope of all the measures adopted by certain organizations of the market, a the regulation and the objectives embodied guaranteed price for producers similar to therein. the intervention prices provided for by Following the devaluation of the French other organizations of the market. The franc, the Community was in a position threshold price is a notional import price either to adjust the common prices or the for wheat from third countries into the unit of account to the new situation or to Community and not a price 'to be paid by accept that, in France, the common price France in respect of intervention on the system would in future be applied accord domestic market' (Article 1 (1) of the said ing to the new parity. The first alternative regulation). had to be avoided mainly because its By reducing the intervention and purchase effect would have been to lower the level prices to be paid by France, this provision of guaranteed prices in the other Member changed the level of these prices in relation

But, as con be adopted in order to exempt France from firmed by Regulation (EEC) No 1134/68 the system of common prices applicable of the Council of 30 July 1968 on condi to trade with third countries, French tions for alterations to the value of the imports from those countries had to be unit of account used for the common maintained under the same price condi agricultural policy (OJ, English Special tions, in units of account, as those ap Edition 1968 (II), p. 396), it is obvious that plicable to imports made by the other those traders cannot claim that those con Member States from third countries. ditions should be maintained as of right. French imports from third countries, which

were subject to the same levies in units of marks or come to a standstill. It was account as imports made by the other therefore essential to authorize Germany Member States were, accordingly, priced by Regulation No 974/71 (like the Nether at the same level as imports made by the lands and, subsequently, all the Benelux other. Member States and, so that they countries) to levy compensatory amounts could come down from this Community on imports from Member States and to level to the French level, had to receive the grant them on exports to those States. same subsidy as that granted for French The above-mentioned divergence could imports originating in the Community. also have had the result that trade with If the defendant had calculated the con third countries was transacted at a price tested subsidy on the basis of the threshold which, in national currency, was below the price it would have departed from the intervention prices. With regard to trade requirement laid down in Article 3 of with third countries, however, it was Regulation No 1586/69.

entirely different. Widening the margins of differ both as to the reasons upon which fluctuations of currency does not, in fact, they are based and as to their operative have any effect as such on the system of parts. prices fixed in units of account by the Finally, the applicants are mistaken in Community and on these prices as ex claiming that they should receive the same pressed in national. currency. The result, treatment as that extended to German however, is that the relationship between exporters and millers as a result of the the value of the currencies of two Member 'alteration in the parity' of the Deutsch States according to the daily rate of mark and the guilder.

JUDGMENT OF 13.6.1972 — JOINED CASES 9 AND 11/71

legislature. The disadvantages suffered by In reply the defendant contends that, even the applicants are the outcome of a if the contested act amounted to an decision taken independently by a Member illegality, the illegality is not the result of State. negligence but of a misinterpretation of On the question of the protective rôle of the regulations, which is all the more the provisions alleged to have been in excusable because the interpretation which fringed and of liability and responsibility, the defendant placed on Regulation No the applicants state that the regulations 1505/70 was confirmed by the judgments concerned were also intended to safeguard of the Court delivered on 16 April 1970 the interests of importers of foreign wheat, in Cases 63, 64 and 65/69 ([1970] ECR 205, including the applicants. 221 and 229). It is clear from the development described Inasmuch as the applicants state that any above that the manner in which the illegality constitutes a wrongful act it defendant calculated the contested sub must be pointed out that no justification sidies amounted to culpable negligence. can be found for this argument either in According to the case-law of the Court, any principle common to the Member it is not only cases in which the wrongful States or in the case-law of the Court. act or omission is serious in which liability On the contrary, the Court has accepted is incurred by the administration.

Finally, not amend the contested regulations the defendant was forced to execute although, in both cases, the effect of a Regulation No 1586/69 very quickly. 'currency manipulation' upon the func As for the principle of liability without tioning of the organization of the com any wrongful act or omission, its existence mon market in cereals had to be countered. is contested by some of the learned writers СIE D'APPROVISIONNEMENT ν COMMISSION

Moreover, in question. Without denying that this damage affecting a whole branch of may be true in the case of some current industry is not of a 'special' nature. contracts, it seems more likely that the As for the damage and the relation of applicants decided of their own free will cause and effect, the applicants state that to continue importing foreign wheat the Compagnie d'Approvisonnement, despite the increased purchase price through which the imports were made, has and the grant of subsidies of an amount a moral interest in joining in the action which they considered inadequate. brought by Grands Moulins which, in the last resort, is suffering the damage — In assessing the loss sustained at

1971 marketing year. This loss was the selling prices which they charged. result of the increase in the purchase price which could not be passed on to the — Finally, it is clear from the very state consumers. The applicants were unable to ments of the applicants that the Com abandon the said imports because they pagnie d'Approvisionnement cannot consisted in wheat of high milling value claim the existence of damage of its intended to increase the quality of flours own as its role was merely that of an and were vital to the national economy. agent, which did not suffer the alleged The relationship of cause and effect which loss, for Grands Moulins. exists between the loss and the contested provisions is clear. In conclusion, there seems to be a con As the Court has accepted that an applica tradiction in the applicants' statement: if tion for damages need not state from the the products which they import are essen first the total damages claimed, the tial to the national economy, it is difficult applicants are justified in requesting that to understand why they were not in a the amount should be determined by an position to make their customers bear the expert's report. increase in the price of the said products. The defendant contends that the applicants are, in fact, seeking the restitutio in integrum B — Requests for annulment provided for in Article 176 of the Treaty when an act has been declared void. The applicants contend that it is clear from The evidence put forward by the applicants their statement with regard to the applica seems to refer only to the correctness of tions for damages that the refusal by the the amount by which the subsidies fixed defendant to recognize their right thereto by the Commission differ from those to must also be annulled.

JUDGMENT OF 13.6.1972 — JOINED CASES 9 AND 11/71

to recognize that the provisions could not annul the contested provisions and replace be set up against the applicants. them with other provisions which met the The defendant replies that the absence of applicants' requirements, but the applicants any justification for the requests for annul­ cannot claim any such entitlement. As ment is already clear from the fact that the regards, more particularly, the 'implied submission based on the illegality of the decisions of refusal', it follows from the contested subsidies is ill-founded. foregoing that the applicants are endeav­ Furthermore, even assuming that the ouring to have the defendant censured for Court accepted that this illegality existed, failing to adopt a new regulation. But the 'decisions' of refusal would neverthe­ Article 175 of the Treaty does not give less be proper. In order to recognize the individuals the right to claim that there entitlement of the applicants to compensa­ has been a failure to exercise legislative tion, the defendant would first have had to power.

Grounds of judgment

1 The present applications, lodged on 16 and 18 March 1971 respectively, seek to obtain recognition that the applicants are entitled to compensation for the damage they were caused by a wrongful act of the Commission in that, under its Regula­ tions Nos 1670/69 and 1505/70, the latter fixed at an inadequate level the subsidies to be granted by the French Republic on imports of common wheat and mesiin from third countries as a result of the devaluation of the French franc in 1969.

work of the system of legal remedies and it is subject to the conditions laid down for its exercise in the light of its specific purpose.

5 The action differs from an application for annulment in that it seeks compensation for damage caused by an institution in the exercise of its functions and not aboli­ tion of a specific measure.

6 Applications for compensation seek solely the recognition of a right to compensa­ tion and, therefore, to a payment intended to affect the applicants alone.

7 These applications are therefore admissible.

2. The applications 'for annulment'

8 According to the applicants, these applications are based on Articles 173 and 175 of the EEC Treaty.

13 Since legislative measures involving measures of economic policy are concerned,

JUDGMENT OF 13.6.1972 — JOINED CASES 9 AND 11/71

the Community does not incur such liability for damage suffered by individuals as a consequence of those measures by virtue of the provisions in the second paragraph of Article 215 of the Treaty unless a sufficiently flagrant violation of a superior rule of law for the protection of the individual has occurred.

14 For that reason, the Court, in the present case, must first consider whether such a violation has occurred.

is A — The applicants contend, first, that, contrary to Regulations Nos 1586/69 and 1432/70 of the Council, on the basis of which the contested regulations of the Commission were adopted, the above amounts were calculated so as to compensate only for the fall in the intervention prices to be paid by the French Republic and not for the whole of the increase in the price of wheat imported from third coun­ tries owing to the devaluation of the French franc, when account is also taken of the threshold price and the levy.

16 Under Article 3 of Regulation No 1586/69, 'France shall grant subsidies for im­ ports from Member States and third countries', 'in so far as it is necessary to compensate for the effects of the measures referred to in Articles 1 and 2' of the same regulation.

22 Nothing in Regulations Nos 1586/69 or 1432/70 justifies the assumption that the Council intended to compensate for all the effects of the devaluation of the French franc on the purchase price, expressed in that currency, of cereals from third coun­ tries imported into .France.

23 The applicants mistakenly endeavour to contest this interpretation on the ground that Article 1(1) of Regulation No 1586/69 refers to 'the intervention or purchase prices'.

24 The term 'purchase price' is explained by the fact that certain provisions relating to a common organization of the markets, such as Articles 4(1) and 7 of Regulation No 159/66 of the Council of 25 October 1966 on fruit and vegetables (JO No 192, pp. 3288 and 3289), use it to indicate a price having a function analogous to that of the 'intervention price' referred to, for example, in Articles 2, 4 and 7 of Reg­ ulation No 120/67 of the Council on the common organization of the market in cereals, to the effect that in each case these are prices at which the Member States are obliged or authorized to buy the products offered them through bodies or persons appointed for that purpose.

25 In these circumstances, the Commission correctly applied Regulations Nos 1586/69 and 1432/70 and the first submission cannot be upheld.

26 B — The applicants then accuse the Commission of having infringed Article 40 of the Treaty by creating discrimination between French importers and millers on the one hand and, on the other, their opposite numbers in the other Member States, because the latter did not have to bear any increase in the prices of imports from third countries as the result of the devaluation of the French franc.

32 Although the powers conferred on the Community institutions by the Treaty, in particular by Article 103(2) thereof, pursuant to which the Council adopted Reg­ ulations Nos 1586/69 and 1432/70, include the power to alleviate, in the common interest, certain effects of a devaluation or of a revaluation, it does not follow that the Council must compensate for all these effects in so far as they are adverse to the importers or exporters of the Member State concerned.

33 In fact, by empowering the Council to 'decide upon the measures appropriate to the situation', without obliging it to do so, Article 103 conferred on that institution a wide power of discretion to be exercised in accordance with the 'common interest' and not with the individual interests of a specific group of traders.

34 The applicants have not proved or offered evidence that in this case the common interest required that there should be full compensation for the increase in the price of cereals from third countries imported into France as a result of the devaluation of the French franc.

35 It follows from all the foregoing considerations that the complaint that Article 40 has been infringed must be dismissed.

36 C — Finally, the applicants claim to be the victims of further discrimination on the ground that Regulation No 1014/71 of the Commission of 17 May 1971 adopted as a result of the temporary widening of the margins of fluctuation for the currencies of the Federal Republic of Germany and of the Kingdom of the Netherlands, fixed the compensatory amounts which those States were authorized to grant on exports to third countries at a level which took into account all the effects of the said widening on export prices.

41 The economic situations resulting from, on the one hand, the devaluation of the French franc and, on the other, the temporary widening of the margins of fluc­ tuation for the German and Netherlands currencies are sufficiently different to rule out the alleged discrimination.

42 Furthermore, since the main objective of the common agricultural policy is, ac­ cording to Article 39(1)(b) of the Treaty, 'to ensure a fair standard of living for the agricultural Community, in particular by increasing the individual earnings of persons engaged in agriculture' there may be greater justification for supporting the exportation of agricultural products to third countries rather than the importa­ tion of those products.

43 The complaint of discrimination must therefore be dismissed.

44 D — It follows from all the foregoing considerations that the contested provisions of Regulations Nos 1670/69 and 1505/70 are not vitiated by illegality and it would, therefore, serve no purpose to examine the other conditions giving rise to liability for a wrongful act.

2. The submission based on liability in the absence of illegality

45 The applicants claim that the Community incurs liability even in the absence of illegality because the applicants have suffered 'unusual and special damage' owing to the fact that they were treated less favourably than, first, importers from Mem­ ber States other than France and, secondly, than German and Netherlands ex­ porters.

45 The applicants have failed in their submissions.

so They must, therefore, be ordered to bear 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 the Treaty establishing the European Economic Community, especially Articles 39, 40, 103, 107, 173, 175, 178 and 215; Having regard to Regulation No 1586/69 of the Council of 11 August 1969 and Regulation No 1432/70 of the Council of 20 July 1970; Having regard to Regulations Nos 1670/69 of 22 August 1969, 1505/70 of 28 July 1970 and 1014/71 of 17 May 1971 of the Commission; Having regard to the Protocol on the Statute of the Court of Justice of the Euro­ pean Economic Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, especially Article 69;

THE COURT

hereby :

Delivered in open court in Luxembourg on 13 June 1972.

A. Van Houtte R. Lecourt

Registrar President

OPINION OF MR ADVOCATE-GENERAL DUTHEILLET DE LAMOTHE DELIVERED ON 14 JULY 1971<apnote>1</apnote>

1 — Translated from the French .