C-63/72

Commission of the European Communities , Brussels, represented by P. Gilsdorf, Legal Adviser, assisted by Professor H. P. Ipsen of the University of Hamburg, with an address for service in Luxembourg at the office of Emile Reuter, Legal Adviser to the Commission, 4 boulevard Royal, defendants,

Claim for damages and interest based upon Article 215, second paragraph, of the EEC Treaty,

THE COURT

composed of: R. Lecourt, President, A. M. Donner and M. Sørensen, Presi­ dents of Chambers, R. Monaco, J. Mertens de Wilmars (Rapporteur),

WERHAHN v COUNCIL

P. Pescatore, H. Kutscher, C. Ó Dálaigh, A. J. Mackenzie Stuart, Judges, Advocate-General: K. Roemer Registrar: A. Van Houtte

The applicants process durum wheat This distortion of competition is said to into cereal meal which they deliver have lost the applicants 20 % of the mainly to manufacturers of macaroni, German market in cereal meal, made up spaghetti and similar products. Whilst of manufacturers of macaroni, spaghetti common wheat production, intended for and similar products, the benefit breadmaking shows a considerable accruing in the main to French surplus within the Community, that of undertakings. durum wheat not only shows a In the first place, the applicants base considerable deficit, but is moreover their claim to compensation on a concentrated in certain regions, that is to wrongful act on the part of the say — as regards France — in Beauce Community institutions, in the main by and in the south, and in southern Italy. reason of their having fixed the The actions are concerned with a claim intervention price in respect of French jointly against the Council and the and Italian durum wheat at too low a Commission — in the terms of the level or the threshold price for durum application — and against the wheat imported from third countries at Community — in the terms of the reply too high a level. — for payment of sums amounting in all As a subsidiary point, in their reply, they to DM 9 487 281 by way of principal, further plead the principle of entitlement together with interest at 7 % from 1 to compensation arising from an illegal February 1972 by way of compensation intervention by the administration — for the damage which the applicants even if not culpable — affecting private claim to have suffered during the cereal property and amounting to expropria­ marketing year 1971/72. This damage is tion or dispossession. said to have been caused by the deficient, non-rational and illegal (b) Organization of the market in management of the common organiza­ cereals tion of the market in cereals, especially as regards durum wheat, which is said to The organization of the market in have resulted in German cereal meal cereals, comprising both common wheat producers being obliged to purchase and durum wheat, is based upon the their basic material — durum wheat following principles:

Regulation No 120/67 of the Council of case the cereal meal producers of the 13 June 1967 (OJ No 117, 19. 6.1967, p. two Member States — ought not to have 2269/67) provides that a target price, a to pay more than the intervention price basic intervention price, derived the difference being made up by means intervention prices and a threshold price of the aid. shall be fixed annually. The applicants claim that this theory In respect of durum wheat, the fixing of corresponds to the true state of affairs, a guaranteed minimum price, in excess at any rate as regards a large proportion of the target price and intended to of the purchases.

. . harvest under natural conditions of price durum wheat marketed at the time of a formation on the market and allow the normal harvest are less than the free movement of cereals within the quantities consumed within the Community in accordance with the Community' (Article 4 of Regulation No requirements of the market. 1528/71). The new single derived The threshold price, calculated for intervention price was equal to the Rotterdam, is fixed for the Community lowest derived intervention price existing in such a way that on the Duisburg under Article 4 of Regulation No

cereal'. The payment of this aid, — Target price: 127-50 u.a./metric ton. amounting to the difference between the (Article 1 of Regulation No 1054/71 guaranteed minimum price and the of the Council of 25 May 1971, OJ L aforementioned intervention price is the 115, 27. 5.1971 p. 8). responsibility of the public authorities. In theory, purchasers of French and — Basic intervention price: 119-85 Italian durum wheat — in the present u.a./metric ton (Article 1 of

— Guaranteed minimum price: 147-90 '1. Order the defendants jointly to pay u.a./metric ton (Article 1 of the applicant by way of Regulation No 1054/71 of the compensation for the damage Council of 25 May 1971). sustained by it the sum of DM — Amount granted by way of aid to 667 894-48, plus interest at the rate durum wheat production: 35-46 of 7 % as from 1 February 1972. u.a./metric ton (i.e. the difference 2. Order the defendants to pay the between the guaranteed minimum costs.' price and the single derived intervention price: 147-90 u.a. — In Case 64/72 112-44 u.a.). '1. Order the defendants jointly to pay (c) Procedure to the applicant by way of compensation for the damage The applications, dated 8 September sustained by it the sum of DM 1972, were filed with the Registry of the Court on 13 September 1972, 3 256 931-40, plus interest at the rate of 7 % as from 1 February 1972. By Order dated 31 October 1972, the Court decided to join the present cases 2. Order the defendants to pay the for the purposes of procedure and costs.' judgment. By letter dated 8 January 1973 the In Case 65/72 applicants' representative informed the Court that the original applicants in '1. Order the defendants jointly to pay cases 64/72, 66/72 and 68/72, that is to to the applicant by way of say 'Kurt Kampffmeyer Mühlen, compensation for the damage Hamburg', 'Duisburger Mühlenwerke sustained by it the sum of DM AG, Duisburg' and 'Süddeutsche 1 081 236-76, plus interest at the rate Mühlenwerke AG, Frankfurt', had been of 7 % as from 1 February 1972. amalgamated under the common name 2. Order the defendants to pay the of 'Kurt Kampffmeyer Mühlenvereini­ costs.' gung KG. Upon hearing the report of the In Case 66/72 Judge-Rapporteur and the opinion of the Advocate-General, the Court did not '1. Order the defendants jointly to pay consider it necessary to undertake a to the applicant by way of compen­ preliminary inquiry. sation for the damage sustained by The oral observations of the parties were it the sum of DM 592 648-72, plus submitted at the hearing on 19 and 20 interest at the rate of 7 % as from June 1973. 1 February 1972.

2. Order the defendants to pay the view of economics analysed the costs.' production, processing and consumption of durum wheat in the European In Case 67/72 Economic Community, as well as the systems for collection and distribution '1. Order the defendants jointly to pay and the methods covering the grant of to the applicant by way of aids, the applicants put forward the compensation for the damage sustained by it the sum of DM following grounds of complaint: 959 635-40, plus interest at the rate While the price system for the market in of 7 % as from 1 February 1972. cereals introduced by Regulation No 19 (OJ No 30 of 20 April 1962, p. 933/62), 2. Order the defendants to pay the costs.' reproduced by Regulation No 120/67 of the Council, has as its object common In Case 68/72 wheat and barley i.e. cereals produced throughout the Community and in '1. Order the defendants jointly to pay respect of which there exists a to the applicant by way of Community market, there exists, on the compensation for the damage other hand, no free market for durum sustained by it the sum of DM wheat in the Community. This cereal is 1 409 662-21 plus interest at the rate only produced in limited areas and is of 7 % as from 1 February 1972. bought by cereal meal producers established in or near those areas. 2. Order the defendants to pay the costs.' Moreover, fixing the target price and the basic intervention price for Duisburg In Case 69/72 makes no sense. Whilst admittedly that region has three durum wheat mills, '1. Order the defendants jointly to pay Duisburg is not the biggest importing to the applicant by way of centre, for it is altogether irrational and compensation for the damage contrary to the objectives of stabilization sustained by it the sum of DM as expressed in Article 39 of the Treaty, 1 509 272-04, plus interest at the rate to divert from French and Italian areas of 7 % as from 1 February 1972. of production the durum wheat which is 2. Order the defendants to pay the harvested there, when there are in fact costs.' cereal meal producers in those regions. The target prices and the basic The defendants contend that the Court intervention prices fixed in respect of the should: 1971/72 marketing year by Regulation 'Dismiss the applications and order the No 1054/71 accordingly do not fulfil the applicants to pay the costs.' purpose for which they are designed. The omission from Regulation No 796/72 of the basic intervention price III — Submissions and argu­ confirms this conclusion.

intentionally designed as regional prices 15-38 u.a. or DM 56-29 per metric ton of restricting the circulation of durum cereal meal) and 11-53 u.a. per metric wheat to a relatively limited region. In ton of durum wheat (that is 16-30 u.a. or 1971/72 they drastically inhibited the DM 59-66 per metric ton of cereal meal). formation of a market for durum wheat Besides, whilst imports of durum wheat harvested within the Community meal from France and Italy, amounted extending into the Federal Republic and to no more than 20 % of German

durum wheat. In the Member States which do not The applicants complain that the defendant institutions failed to seek a produce durum wheat and which do not solution to this situation. have access to the Community market in durum wheat, the part played by the The Council ought, in the applicants' threshold price is limited to protecting view, either to have brought the the market in common wheat against threshold price down to the level of the importations of durum wheat. But, in single derived intervention price, treating France and Italy this is done by means of the latter as the target price or modifying the intervention prices which are lower Article 5 of Regulation No 120/67, or to than the threshold price. It would have reduced the aid to producers of therefore have sufficed to have fixed a durum wheat provided for by threshold price in the other Member Regulation No 135/67 (OJ No 122 of 22

ton for the former. French and Italian No 19/62 (OJ No 30 of 20 April 1962, cereal meal producers were in a position p. 933) — have granted a preferential to offer durum wheat meal at prices margin of 1-1 u.a. per metric ton to lower by DM 38 to 50 than those of French and Italian home production as German and Benelux producers. compared with imports from third countries. On the assumption that the ratio of durum wheat imports from third Issues of law countries into France and Italy to home production, is as 20 to 80 or as 10 to 90 In the applicants' view the defendants, as the case may be then German and by legislative acts and by regulations as Benelux producers are still subject to a well as by a failure to supervise the handicap respectively of 10-25 u.a. per market in durum wheat, infringed metric ton of durum wheat (representing several important Community principles.

The objective of stabilizing agricultural As regards the price system established markets, provided for by Article 39 (1) by Regulation No 120/67, the Council (c) of the Treaty, the prohibition of points out that a target price is always discrimination set out in Article 40 (3), unreal in character, since it amounts to second paragraph and, as regards the an ideal price. The threshold price, the fixing of the threshold price for the level of which depends upon a 1971/1972 marketing year, the principle correlation between the markets in of proportionality envisaged by Article durum wheat and in common wheat is 40 (3) first paragraph are all alleged to not excessive since the resale price of the have been infringed. French and Italian collecting agencies is In the circumstances the Council higher than the intervention price.

Since in the present case The absence of real grounds for the part played by the threshold price complaint against the system of was limited to protecting the production Regulation No 120/67 is further shown of common wheat against imports of durum wheat and since the same in the Council's opinion, by the delay in making the complaint, showing the objective was achieved, in countries absence of a causal link between the producing durum wheat, by the fixing of system under Regulation No 120/67 and the single derived intervention price, it its application, on the one hand, and the would have been sufficient to fix the unfavourable situation of which the threshold price at the same level, i.e. applicants complain, on the other.

WERHAHN v COUNCIL

Whilst admitting the distinction be estimated at 14 % up to the official devaluation of the dollar on 9 repeatedly asserted by the Court as May 1972 and which was still 5 to existing between the action for annulment and the action to establish 6 % subsequently. liability (Judgment of 2 December 1971, — To calculate the gap between the Case 5/71, Aktien-Zuckerfabrik threshold price (125-25 u.a.) and the Schöppenstedt v Council, Rec. 1971, p. market price, one also ought to take 975; Judgment of 13 June 1972, Case into account the profit — margin of 11/71, Compagnie d' Approvisionnement the collecting agencies, as well as the v Commission, Rec. 1972, p. 391), the possibilities of advance fixing of the Council is of the opinion that it follows levy. from the abstract and general nature of the acts on the basis of which In the Council's view, the impossibility facing the German cereal meal producers Community liability is alleged, that insofar as an action for annulment in of obtaining durum wheat in France and in Italy — insofar as one admits it to be relation to acts not affecting the real — is due not to the organization of applicants by reason of their particular characteristics is not admissible the market but to a lack of vigilance on the part of the German cereal meal (Judgment of 15 July 1963, Case 25/62, producers in not paying sufficient Plaumann v Commission, Rec. 1963, p. attention to market development and 197; Judgment of 2 July 1964, Case becoming interested only at a late stage 7/64, Glucoseries Reunies v Commis in the possibilities of entering the French sion, Rec. 1964, p. 811), an action to and Italian market in durum wheat. establish liability based upon the financial consequences of these acts is likewise not admissible since, as those Issues of law consequences do not affect the applicants directly, they also could not As regards the defendant institutions cause them a direct and special damage, and their joint liability this being a basic condition for establishing liability.

JUDGMENT OF 13. 11. 1573 — JOINED CASES 63 TO 69/72

insolation of the French market by ity, when alleged against a general and reason of long-term contracts entered abstract act constituting a choice of into by the French cereal meal producers economic policy, must amount to an resulted from the system under infringement of a particularly serious Regulation No 120/67 and its kind which it is said was not the case application. here.

As regards culpability C — Defence of the Commission According to the Council, it is essentially a liability based upon culpability which Issues of fact the applicants allege, that is to say: — infringement of two higher rules of On the substance, the Commission law, that is first, respect for the supports the point of view of the Council and considers: objective of stabilization of markets (Article 39 (1)(c)) and, secondly, the — that the threshold price in respect of rule against discrimination contained durum wheat was not fixed at too in Article 40 (3), second paragraph. high a level in relation to the — infringement of the principle of intervention price applicable in the proportionality which must exist production areas and that therefore between an administrative measure there had not been either

WERHAHN v COUNCIL

A problems that arise where the irregular stricter interpretation of the principle of act was committed within the sphere of equality would limit the discretionary influence of other institutions ought to power of the legislator in an be resolved by agreement between the unacceptable manner. institutions. The consequences triggered off did not Finally, as regards admissibility, the have the effect attributed to them and Commission feels that if one accepts that did not directly result from the acts the Community may be rendered directly criticized. A handicap of DM 15 to 20 liable for legislative measures, then one per metric ton on the price of durum ought to put some limits to this wheat cannot, in the context of an principle, as had indeed been done by organization of the market, be the Court in its Judgments of 2 considered a sufficient indication of a December 1971 (Case 5/71, Zuckerfa clear infringement of the principle of brik Schöppenstedt, Rec. 1971, p. 985) equality. This is all the more true if that and 13 June 1972 (Joined Cases 9 and advantage even though undeniable 11/71, Compagnie d'Approvisionnement, derives from the totality of market Rec. 1972, p. 391). Thus the applicants' conditions and not only from the acts account did not adequately show 'a criticized. sufficiently flagrant violation of a higher The Commission compares such a rule of law for the protection of the limitation of liability for legislative acts individual'. with the French doctrine of 'particular The Commission nevertheless considers serious detriment to a small number of it preferable to examine this question persons' ('prejudice special et grave à un within the framework of the substance petit nombre de personnes'), with the of the application rather than in relation special conditions of Article 34 of the to its admissibility. ECSC Treaty and with the 'Sonderopfer' in German legal theory. As regards the legality of the acts As regards the complaint of infringement

Administration. would imply a certain gravity both from the point of view of the extent and scope As regards the existence of intentional of the act in question and from the point and flagrant culpability of view of the importance of the consequences. The Commission rejects the argument In the case of a legislative measure of according to which the Council and the

Commission intentionally divided the imports of durum wheat and cereal meal market and knowingly discriminated made from durum wheat are said to against German cereal meal producers in cancel each other out. terms of price. The difficulties experienced by German cereal meal producers in obtaining As regards the detriment supplies in France are said to be Finally, the Commission disputes the connected with the fact that, bearing in mind the existence of contracts entered calculation of the detriment, which it finds all too simple. In order to calculate into by the 'Symprodur' organization, it correctly, it would be necessary to durum wheat does not reach the open prove that the alleged price advantage market and cannot influence the price resulted in the loss of a definite part of levels on that market.

Issues of fact wheat production, enable French cereal The applicants say in reply that if the meal producers to spread their fixed Community institutions are entitled to costs over a bigger production and to encourage the cultivation of durum lower their cost price. They are thus wheat by the grant of aids, then these enabled to refrain from modifying their measures ought to be harmonized in a sale price within the country and to way which would not affect the lower their export prices considerably. economic interests of the citizens of the This procedure enables them also to Community. pass on solely on the French market the increase in cost due to obtaining some In the course of criticizing the 20 % of the supplies in durum wheat Commission's calculations on various from third countries und to keep export points, such as the under-valuation of prices at a low level. the importers' profit margins and the failure to include the costs of customs In practice, therefore, German cereal clearance, of phyto-sanitary inspection, meal producers could not, by reason of of providing security and of insurance, their geographical disadvantage effectiv the applicants estimate the price ely compete with the exports of French cereal meal producers to Germany, even advantage in favour of French cereal meal producers to be 13-54 u.a. per if there was a theoretical possibility of so metric ton of cereal meal, instead of 8 doing. The cost of the necessary

WERHAHN v COUNCIL

both institutions. Compensation for the adapted to regional differences and if, damage caused can of course only be where the situation so requires, several claimed once. threshold prices are fixed. In the applicants' view there was grave As regards the illegal aspects of the negligence on the part of the Council organization of the market in durum and the Commission resulting in liability wheat on their part, in that they did not take these circumstances into account, all the Both the prohibition of discrimination more so since the particular features of and respect for the principle of propor the market in durum wheat were known tionality constitute higher rules of law to them as a result of a study made in protecting the individual and the flagrant 1965 by the Commission services. violation thereof justifies an action for

The upon the private sector. applicants argue that, despite the The function of the threshold price for Bundesgerichtshof having laid down the durum wheat is to protect on the one requirement of a direct link between the hand the market in common wheat and intervention and the damage, an indirect on the other hand the domestic market link between cause and effect is in fact sufficient. in durum wheat. The first objective could have been achieved by fixing the Since Article 215, second paragraph, of threshold price at 112-44 u.a., i.e. the the Treaty in no way links liability to single derived intervention price, which the existence of a fault or to a direct is considered as protecting common link, the principle of an intervention wheat in France and Italy sufficiently. equivalent to an illegal dispossession is a The second objective could have been part of Community law and ought to be achieved by fixing a threshold price for applied in the present litigation since the Rotterdam reduced to the intervention legislative acts by which the aids were price level, this applying solely in fixed, as well as the price systems that respect of cereal meal producers installed were set up, were illegal, not being

necessary for the purpose of achieving purchase durum wheat in France by the objects of Article 39 of the Treaty, as reason of Community regulations. long as there were other possibilities of In fact, ever since 1967 there had been fixing prices and promoting the growing an increase in exports of French durum of durum wheat without distorting wheat to the Federal Republic and the competition between cereal meal Benelux countries. The fact that this producers. increase remains on a modest scale, is due to the fact that the marketing of As regards the extent of the damage durum wheat follows the channels that exist for common wheat and because Under international law, an injured up to 1972 the applicants made no real party has the possibility of evaluating efforts to investigate the market possibil the damage sustained either in an ities. abstract or in a concrete manner. By Secondly, the price advantage enjoyed by basing themselves upon the difference French producers of cereal meal is between the threshold price fixed for appreciably reduced by reason of the 1971/72 and that which, in their view, fact that Community production does ought to have been fixed, the applicants not show a surplus. It has not been

the Commission intervention price and a single target In its rejoinder the Council argues firstly price, the fixing of a lower threshold that the argument raised by the price for non-producing States coupled with an international customs inspection, applicants concerning expropriation or the reduction of the threshold price or the encroachment on property equivalent to abandoning of the aid to durum wheat dispossession is inadmissible. Article 42 production — would hinder the (2), first paragraph of the Rules of realization of the common agricultural Procedure, in fact prohibits the raising of market and would ruin the possibilities fresh issues in the course of proceedings, of developing the production of durum unless they are based on matters of law wheat, an objective conforming with or of fact which only came to light in

In meal producers had not been able to comparing the situation of the German

price. Finally, the proposed measure would As regards the advantages that accrue to run counter to the objective of removing French cereal meal producers from their internal customs barriers and would geographical location, the Commission prompt a series of similar demands in regards this as an inevitable consequence respect of other products for which a of the enlargement of the market. It is, common price has been fixed and for as a result, perfectly natural that a which at production level there are geographical choice made in a national regional disparities. context might subsequently, in the larger It follows from the foregoing arguments common market framework, turn out to that the price advantages allegedly have been eroneous or at least less enjoyed by French cereal meal advantageous. It is certainly not the producers, are of no more than Community's imperative objective to put secondary importance, and the an end to imports of durum wheat Community is not obliged to reduce the originating from third countries and to threshold price. The fact that the attain a point of self-sufficiency, but if to Commission did not take into account further the cultivation of durum wheat is the importers' profit margins in its recognized as a reasonable objective and comparative calculations, was quite if following from this, priority is given to deliberate: the Commission had, in fact, trade within the Community, that would disregarded all the incidental costs which amount to no more than confirmation of are practically the same for French and that Community preference which is German cereal meal producers. recognized by the Court of Justice, Following an analysis of transport costs, particularly in the Beus Judgment of 13 the Commission points out that it is not March 1968 (Case 5/67, Rec. 1968, p. denied by the applicants that the 147). producer price may be and sometimes is As regards the aid granted to durum in excess of the intervention price, a fact wheat production, the applicants which shows that effectively the level of themselves admitted that it formed part the producer price depends on market of the framework of objectives aimed at conditions and on competition and by Article 39. It likewise does not violate might thus show tendency to rise. the principles of non-discrimination and The Commission likewise insists that of proportionality. during the period covered by the case, To differentiate the threshold price as there existed a monetary advantage in suggested by the applicants would have favour of German cereal meal disastrous effects. Thus the fixing for producers. On a long-term basis this

advantage is said to have been three to If the applicants' thesis were to be four times the advantage derived by admitted then it would follow from this French cereal meal exporters and could that the liability on the part of the therefore not have been absorbed by the Community, aimed at by Article 215, higher prices that applied on the French second paragraph, would rest on a market. double legal basis, when in fact the Court ought to adhere to the uniform In fact, the price advantage enjoyed by principle of liability on the part of the French cereal meal producers could in

take a different view, then a careful case law, be invoked against legal acts examination of the costs situation would on the part of the Community be required so as to find out whether institutions. there had been a clear infringement of the principle of equality. Neither is it a case of the fundamental As regards Italian cereal meal producers, right of the individual provided for by the Commission denies that these the general principles of Community constituted even a potential danger for legislation, the observance of which the German producers, having regard to the Court of Justice is obliged to ensure. relatively high transport and marketing costs, and it affirms that in any case on the Italian market a not inconsiderable Besides, in the defendants' view the situation at issue, both in its factual and quantity of durum wheat from third legal aspects, does not lend itself to an countries, competing with the local application of the theory in question, production, is imported. even if — which is not the case — the theory were accepted.

Article 215. The defendants on this point materials, are not part of the elements quote the opinion of Mr Advocate-Ge necessary for its functioning, in relation neral Gand in Joined Cases 5, 7 and 13 to which it can ask for protection to 24/66 (Kampffmeyer, Rec. 1967, p. against an intervention equivalent to 358) from which it appears that, in this dispossession. That was the decision in field, a principle common to the laws of a judgment of the Bundesgerichtshof of the Member States does not exist. 31 January 1966 (BGHZ, Vol 45, p. 87).

The Regulations particularly referred to Regulation No 120/67 of the Council of 13 June 1967 (OJ L 117, 19. 6. 1967, p. 2269/67) establishing a common organization of the market in cereals, Regulation No 1054/71 of 25 May 1971 (OJ L 115, 27. 5. 1971, p. 8), No 1120/71 of 28 May 1971 (OJ L 118, 31. 5. 1971, p. 3) and No 1530/71 of 12 July 1971 (OJ L 162, 20. 7. 1971, p. 16) fixing in relation to the cereal marketing year 1971/1972 the target price for durum wheat at 127-50 u.a., the threshold price at 125-25 u.a., the basic intervention price at 119-85 u.a., the single derived intervention price at 112-44 u. a. and the guaranteed minimum price at 147-90 u. a.

JUDGMENT OF 13. 11. 1973 — JOINED CASES 63 TO 69/72

3 The system of aid to Community production of durum wheat within France and in Italy, as set up by these Regulations, allowed the French and Italian cereal meal producers to obtain home-grown durum wheat at the intervention price (112-44 u.a.) or close thereto, whilst the German cereal meal producers were obliged to purchase durum wheat imported from third countries at the threshold price (125-25 u.a.)

Pursuant to Article 10 of Regulation No 120/67, aid granted to durum wheat producers shall be equal to the difference between the guaranteed minimum price (147-90 u. a.) and the intervention price applicable to the marketing centre of the area with the largest surplus, i.e. it amounts in the present case to the single derived intervention price, that is to say 112-44 u.a.

This provision, combined with the structure of the durum wheat market in France, in the applicants' view necessarily results in giving French mills an artificial advantage as regards their cost of production which on the German market for cereal meal produced distortions in competition to the detriment of German cereal meal producers.

6 According to the defendants the appeal is inadmissible since it applies for an order against the Council and the Commission jointly, whilst Article 215 lays down that it is the Community which has to make good damage caused by its institutions.

According to the Council, the Community ought in such proceedings to be represented by the institution against which the allegation is made.

According to the Commission on the other hand one must by analogy to Article 211 of the Treaty hold that whatever the institution that caused the fact alleged, it is the Commission's function to represent the Community before the Court.

7 Article 211 of the Treaty deals with the legal capacity and the representation of the Community in the legal systems of the different Member States.

By reason of the differences in this respect which are inherent in these legal systems it was desirable to establish a rule applicable to all cases.

Under the Community legal system on the other hand it is in the interests of a good administration of justice that where Community liability is involved by reason of the act of one of its institutions, it should be represented before the Court by the institution or institutions against which the matter giving rise to liability is alleged.

to Since the matter deals with a legislative act involving choices of economic policy, there is no liability on the part of the Community for damage which individuals may have suffered by the reason of this act, bearing in mind the provisions of Article 215, second paragraph, of the Treaty, unless there is a sufficiently flagrant infringement of a superior rule of law protecting the individual.

1. As regards the infringement of Article 39 (1) (c)

11 The applicants allege against the defendant institutions an infringement of Article 30 (1) (c), pursuant to which the common agricultural policy has inter alia the objective of stabilizing markets.

12 In creating a system of aids intended to favour the production of durum wheat in the Community the institutions sought to attain several of the objectives in Article 39, in particular assuring the availability of supplies in the Common Market and the stability of the market by encouraging the cultivation of durum wheat which is showing an unfavourable balance as compared with that of common wheat.

The concept of stabilization of the markets cannot cover the maintenance at all costs of positions already established under previous market conditions.

Besides, it emerges from parts of the record that the production of durum wheat, which before 1966 had only a local economic significance, has increased to such an extent that at the time of the application it permitted Community requirements to be covered to the extend of more than 80 %.

According to the latter this advantage arose — at any rate to a large extent — from the unusually large difference — compared with the price of other cereals — between the threshold price and the single derived intervention price for durum wheat.

16 If the authors of the Regulation — following in this respect the declarations made by the respondents at the hearing — believed that the prices demanded by French agricultural producers would notwithstanding the aid be above the level of the intervention price, then reality did not accord with this forecast, since the prices paid by the cereal meal producers in fact remained at about that price level.

Nevertheless everything seemed to encourage these agricultural producers to demand a higher price, since the aid granted to them in addition to the price they obtained did not amount to bringing their income to the level of the guaranteed minimum price, but was in fact once and for all fixed at 35-46 u.a.

JUDGMENT OF 13. 11. 1973 — JOINED CASES 63 TO 69/72

for the cereal marketing year 1971/72 (i.e., the difference between the inter­ vention price and the guaranteed minimum price) whatever the market price they could obtain from the cereal meal producers.

Accordingly the advantageous prices obtained by the latter seemed to originate in the closed structure of the French market in durum wheat and especially in the particularly close ties there existing between mills and agricultural producers.

According to the applicants the objectives aimed at by the system of aids could have been attained without imposing upon them that distortion of competition of which they complain, particularly by a reduction in the thres­ hold price for durum wheat.

WERHAHN v COUNCIL

The alleged infringement of the principle of proportionality results from the excessively high level of threshold prices, that is in excess of its function of protecting the Community market, contrary to Article 40 (3) of the Treaty, according to which the common organization may include all measures 'required' to attain the objectives set out in Article 39 but 'shall be limited' to pursuit of these objectives.

Such protection it is said, does not necessitate a threshold price of 125-25 u.a.

19 There is a relationship between the cost price of durum wheat and of common wheat, the former being generally approximately 20 % higher than the latter.

At the risk of seeing an undesirable kind of interference making its appearance on the market in these cereals, this relationship must be taken into account in fixing their respective threshold prices.

22 Such a differentiation would not only run counter to the realization of the single market aimed at by Regulation No 120/67 of 13 June 1967 setting up a common organization of the market in cereals but would put the free circulation of goods in jeopardy.

23 It is also necessary to examine whether the objectives of the aid system for durum wheat ought not to have been achieved by fixing a higher intervention price whilst respecting the equality of competitive conditions as between German and French cereal meal producers.

24 Such a procedure could be considered as being of a kind to place in jeopardy the objective of encouraging the Community durum wheat production.

It was capable — particularly in consumer areas situated at a distance from production centres — of creating the risk of Community durum wheat production being replaced by common wheat, of either Community or imported origin.

In fact, under the system in force, the threshold price for common wheat (107-25 u.a.) was already lower than the intervention price for home-grown durum wheat (112-44 u.a.).

It follows that a further increase in the intervention price, would risk creating an inducement to substitute common wheat for Community durum wheat.

Since the adoption of a single derived intervention price is permissible by reason of the deficit in durum wheat production it follows logically from the system to treat (as provided by Article 32 of Regulation No 120/67) the lowest derived intervention price — that is to say, that from the area showing the greatest surplus — as the single derived intervention price.

28 Thus, if the Council omitted to correct the disadvantages to which German meal producers were indirectly subject, by reason of the fact that their French competitors enjoyed an advantage from this system, such an omission is nevertheless not capable of rendering the provisions in question illegal.

In enacting them, the Council was at the period in question and in the light of the relevant circumstances not obliged to ascertain whether circumstances of so special a kind could militate against the application of provisions that normally would have been satisfactory.

29 By way of reply and as a subsidiary point the applicants cite the existence of a principle that calls for compensation by reason of an illegal intervention on the part of a public authority, comparable to an expropriation.

30 "Without it being necessary to decide the question whether Article 215 covers such a liability, it suffices to state that since the criticised interventions involve no illegality, the submission relating thereto must be rejected.

Costs

THE COURT

hereby:

1. Dismisses the actions;

2. Orders the applicants to bear the costs.

Lecourt Donner Sørensen Monaco Mertens de Wilmars

Pescatore Kutscher Ó Dálaigh Mackenzie Stuart