C-109/75
ECLI:EU:C:1975:133
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ORDER OF THE PRESIDENT OF THE COURT OF 22 OCTOBER 19751
National Carbonising Company Limited v Commission of the European Communities
Case 109/75 R
In Case 109/75 R
National Carbonising Company Limited of Fullarton Lodge, Mansfield, Nottinghamshire, represented and assisted by A. P. Graham-Dixon, Queen's Counsel, of the Inner Temple and Gray's Inn, C. W. Bellamy, Barrister, of Gray's Inn, and A. G. Ground, Solicitor of Linklaters and Paines, of London, with an address for service in Luxembourg at the Chambers of Messrs. Elvinger and Hoss, 84 Grand Rue,
applicant,
v
Commission of the European Communities, represented by John Temple Lang, Legal Adviser, with an address for service in Luxembourg at the office of Mr Cervino, Legal Adviser, Bâtiment CFL — Gare,
defendant,
and
National Coal Board of Hobart House, Grosvenor Place London, represented and assisted by Conrad Dehn, Queen's Counsel, of Gray's Inn, David Vaughan, Barrister of Inner Temple and Ronald V. Cowles, Solicitor, of Hobart House, with an address for service in Luxembourg at the Chambers of Ernest Arendt, 34B rue Philippe II,
intervening,
The President of the Court of the European Communities
makes the following
1 — Language of the Case: English.
ORDER OF 22. 10. 1975 — CASE 109/75 R
ORDER
Facts
The National Carbonising Company NCC is unable to sell domestic coke at a Limited (hereinafter called NCC) has price higher than that charged for the submitted the following statement of same type of product sold by NSF, the facts which has not, in essence, been major supplier in the United Kingdom. disputed. Even with the rebates on the price of It is a limited liability company having coal certain increases in the selling price its registered office in England and of domestic coke the two plants among its activities it manufactures hard belonging to NCC have since about coke in two of its plants at Barnsley and April 1975 incurred substantial losses. A Rotherham. This is sold under the trade decision to close these plants with the name of Rexcoke and is suitable for consequent loss of approximately 650 domestic use. jobs has already been taken unless immediate steps can be taken to restore NCC buys all the coal which it needs the applicant's ability to manufacture and from the National Coal Board (herein sell domestic coke at a profit. after called NCB) which has a virtual monopoly of all coal production in the NCC maintains that the prices for United Kingdom and sells 95 % of all domestic coke charged by NSF have coal used in that country. been held down at an artificially low level at the instigation of the British NCB has a wholly owned subsidiary, Government. In support of this is refers National Smokeless Fuels Ltd. (herein to a meeting between the Chairman of the NCB and the Chief Executive of after called NSF), which manufactures a range of solid smokeless fuels including the NCC on 9 June 1975 and to those suitable for burning in domestic correspondence between the NCC and closed appliances. the Secretary of State for Energy in June and July 1975. It also refers to the accounts of NCB for the year ended 31 The market shares of NCC and NSF in March 1975, presented in July 1975, domestic hard coke in the United where it is stated 'We have also suffered Kingdom for the year 1974/75 were from national policies in the pricing of approximately as follows: domestic cokes and briquettes to the extent that such operations are now NSF: 88 % uneconomic and are not generating NCC: 9 % funds to maintain the assets being Others: 3 % employed. The adverse effect of the restrictions in domestic prices has been The cost of coal has risen sharply since offset during the year by substantial sales 1973 and accordingly the price charged from stock'. by NCB to NCC has also risen. This increase has, however, been reduced in On 21 July 1975 solicitors acting for the fact by a rebate allowed on coking coal applicant wrote to the Commission of bought by NCC from NCB and used for the European Communities explaining the production of domestic coke sold in the problem and asking that the the United Kingdom. Commission might consider:
NATIONAL CARBONISING COMPANY v COMMISSION
1. Whether the low price charged by 'Dear Sirs, NCB on domestic hard coke We refer to the letter by your Solicitors constitutes a pricing practice dated 21 July 1975 which informed us of prohibited under article 60 (1) and, in the difficulties you were experiencing in particular, an unfair competitive covering your costs for domestic hard practice being a temporary or local coke production. price reduction towards the acquisition of a monopoly position The Commission notes, in connexion within the common market. with this matter, that the National Coal
2. Whether the higher price charged by Board grants a rebate on the price of NCB for coal used for hard coke coking coal only to the extent that the intended for export constitutes a domestic coke thereby produced remains discriminatory practice within Article within the United Kingdom. The 60 (1), in particular because NCC is granting of a rebate in this way is thereby forced to sell in other contrary to the principles and provisions common market countries at higher of the ECSC Treaty and following the prices. intervention of the Commission, the NCB has undertaken to modify its grant
3. Whether in the light of all the above of a rebate in the following manner: the circumstances NCB, which we think rebate will be given on the same basis of holds a dominant position shielding it calculation as before, but will be against effective competition in a extended to the full coking coal input substantial part of the common used for the production of domestic coke market, is using that position for destined for sale within all member states purposes contrary to the Treaty within of the European Community.
A better the meaning of Article 66 (7). cost/proceeds ratio can thus be realized 4. Whether the Commission should take for sales of domestic coke to member urgent action under Article 67 on the states outside the UK. This method of grounds that the action by the British granting the rebate will take effect Government in restraining domestic immediately. solid fuel prices is liable to have appreciable repercussions on con However, we feel that we should draw ditions of competition in the coal your attention to the fact that all sales in industry. member states of the European
5. Whether the Commission should in Community are basically subject to the application of the published list prices. the circumstances take urgent action Article 60 § 2 (b) ECSC Treaty permits to fix prices under Article 61. the alignment only with the lower 6. Whether the British Government is, delivered price of competitors. Accord in the circumstances and in the light ingly should you wish to charge a higher of Article 61 and of the Treaty as a price abroad you will have to publish a whole, acting unlawfully in seeking to correspondingly higher list price. restrain NCB from raising its However, you may align this price on domestic hard coke prices. any lower delivered price of competitors within the limits set out in Decision
7. Whether the Commission can or should exercise its powers, praticularly 72/443/ECSC (OJ L 297 of 30. 12. 1972, under Chapter 3 of the Treaty to grant p. 45) financial aid to NCC. The question whether NSF in contrast to yourselves was able to show a profitable By letter dated 12 Spetember the result for rheit domestic coke Commission wrote to NCC in the transactions for the June quarter is the following terms: subject of an investigation which has not
ORDER OF 22. 10. 1975 — CASE 109/75 R
yet been completed. We shall advise you United Kingdom charged by NSF were of the outcome as soon as possible and increased by £2-30 per ton. Increase of also of any further action which we may £1-40 per ton in NCB's prices for coking propose. coal were also due to take effect on 1 October. On 25 September the Yours faithfully, Commission informed NCC that NCB J. Verges was prepared to continue to supply Director' coking coal to NCC at existing prices until 15 October, as a concession, in the To this letter NCC's solicitors replied on expectation that a decision from the 15 September, saying, inter alia: Commission would be forthcoming on or before that date. In reply the applicant 'We could like to thank the Commission stressed that this concession, even if for its intervention on this praticular made permanently, would not enable the point, which goes some way towards the Rotherham and Barnsley plants to relief of our client's coking plant losses. remain in operation even on the most optimistic assumptions as to exports of It is, however, unfortunately the case that domestic coke and revenue from tar such extension of the NCB rebate will by-products. It further stressed the not by itself and without any imminence of a decision to close these improvement in the amount of the plants. rebate, render the operation of either the Barnsley or the Rotherham plant viable At a meeting held on 15 October with and they are therefore still faced with the Commission it was stated to closure.' representatives of NCC that the relevant directorate had formed a provisional The letter continued: conclusion that NCB had not misused its dominant position but that no decision The crucial question underlying our had yet been taken or a recommendation client's difficulties is whether the made by the Commission in terms of substantial change of differential between Article 66. the prices of coking coal with the associated costs of manufacture, and By application registered at the Court of domestic coke after 1 April 1975 and the Justice of the Communication on 16 consequences thereof amount to an October 1975 NCC sought an order form abuse by the NCB of its dominant the Court in the following terms: position so as to infringe Article 66 (7) 1. that the Commission do take a
and also an unfair pricing practice so as decision in relation to the questions to infringe Article 60 (1). raised by the applicant and/or do make recommendations accordingly; On 17 September NCB approached 2. that the Commission do take a NCC to consider the possible acquisition decision and/or make a recommen of one or both of the latter's hard coke dation to the effect that: plants and to enable this matter to be (i) NCB has acted contrary to the considered further NCB persuaded the principles and the provisions of British Steel Corporation to take supplies the ECSC Treaty by applying of industrial hard coke for one month pricing policies contrary to from the applicant instead of from NCB. Article 60 and by using its Some temporary alleviation of NCC's dominant position on the market situation was thus achieved. in domestic hard coke for purposes contrary to Article 66 With effect from 1 October 1975 the and to the general objectives of prices for domestic hard coke in the the ECSC Treaty;
NATIONAL CARBONISING COMPANY ν COMMISSION
(ii) that NCB is required to cease and for coking coal to NCC, or by raising desist from so acting, and the domestic coke price charged by (iii) that NCB is required to ensure, NSF in the United Kingdom, or both, whether by lowering the price that in respect of the period pending charged by NCB for coking coal the determination by this Court of to NCC, or by raising the NCC's Application under Article 35, domestic coke price charged by NCC is able to continue on an NSF in the United Kingdom, or economic basis with the production of both, that production of domestic domestic hard coke at NCC's hard coke for sale in the United Barnsley and Rotherham plants; and Kingdom is economic at the that the Commission do address such coking coal prices charged by decision and/or recommendation to NCB and at domestic coke prices NCB. equivalent to those charged by 2. Alternatively that NCB shall NSF, and forthwith, during the period pending (iv) that the British Government has the hearing by this Court of NCC s acted contrary to Articles 4, 61, 67 Application under Article 35, refrain and 86 of the ECSC Treaty by from pricing policies for coking coal prohibiting NCB from increasing and domestic hard coke which have the prices of domestic hard coke the effect of rendering the production in the United Kingdom and from of domestic coke for sale in the extending 'the arrangements on United Kingdom uneconomic to rebates' in respect of the prices of NCC. coking coal so as to render them 3. That the Commission do pay the costs applicable to domestic hard coke of these proceedings. exported to the Community, and (v) that the British Government is By letter dated 16 October 1975 bearing required to cease and desist from the signature Schlieder, the Commission so acting, and in particular form set out its position with regard to the said imposing on NCB policies letter of 21 July 1975 written to the contrary to the ECSC Treaty or Commission on behalf of the applicant. from encouraging it to do so; The Commission's letter contains the 3. that the Commission do address such following paragraphs: decision, and/or recommendations to NCB and the British Government; The Commission accepts that an 4. that the Commission do pay the costs undertaking which is in a dominant of these proceedings. position as regards the production of a raw material (in this case coking coal) On the same day the applicant NCC and therefore able to control its supply to lodged with the Court in a separate manufacturers of derivatives (in this case, document an application for interim coke) and which is itself manufacturing measures under Article 39 of the ECSC the derivatives in competition with its Treaty and Article 83 of the Rules of own customers, may abuse its dominant Procedure. Referring to the urgency of position if it acts in such a way as to the matter and the irrevokable nature of eliminate the competition from its the damage incurred it requested the customers in the market for the Court to order by way of interim derivatives. measures:
1. That the Commission do forthwith The Commission accepts that in such a take a decision and/or make a situation the enterprise in a dominant recommendation under which NCB is position may have an obligation to required to ensure, whether by arrange its prices so as to allow a lowering the price charged by NCB reasonably efficient manufacturer of the
ORDER OF 22. 10. 1975 — CASE 109/75 R
derivatives a margin sufficient to enable Commission does not consider that NCB it to survive in the long term. has infringed the Treaty'.
However, it cannot be assumed that these By a telex message registered at the principles apply separately to each Court on 17 October 1975 the different kind of derivative when the Commission mentioned the existence of enterprise produces several derivatives for the letter of 16 October and the which different prices are obtainable.' possibility of interim measures.
In support of this the Commission By a telex message registered at the contends that prices and production costs Court on 20 October 1975 NCB
for domestic coke as part of total coke requested that it be allowed to intervene production cannot be viewed in isolation in the proceedings, stating its 'substantial from prices and costs in the production and valid' interest in the dismissal of of other types of coke by the same NCC's application for the adoption of undertakings, since the production of all interim measures and that the judge types of coke is carried out from the could not order such measures without same basic material in the same coke NCB's being heard. By a telex message ovens by essentially the same production registered at the Court on the same day methods. It points out that the applicant NCB gave further particulars of its itself varied the output of both its plants argument. In a second telex message, in the years from 1971 to 1975 between received on 20 October 1975 it repeated industrial and domestic coke. It is the fall its argument. NCB requests the Court: in demand for industrial coke which has 1. to grant NCB leave to intervene; caused the applicant to seek increased 2. to reject NCC's application for sales of domestic coke. Nothing, it is interim measures; contended, in the Treaty obliges NCB to 3. alternatively, to order NCC to provide arrange its prices so as to make domestic security sufficient to cover the losses coke more profitable when the demand which would be incurred by NCB if for industrial coke is reduced. NCB the orders sought are made; found itself in a position, owing to the 4. to order NCC to pay NCB's costs. current competitive conditions in the United Kingdom, in which it would have In view of the explanations already given great difficulty in reducing the price for in the course of the narration of the facts coking coal used in the production of the arguments submitted by the parties domestic coke or in raising the price of should now be set out and summarized. the end product. Moreover after a consideration of the budget of NSF for In the first place the parties disagree on the year 1975/76 and its actual costs and the urgency of the measures to be taken income for the months April to July of and on the inevitable nature of the 1975, the Commission came to the damage suffered by NCC. conclusion that it is not impossible to make a reasonable profit as a coke NCC states inter alia that under the new producer, given NCB's pricing policy, in conditions relating to the cost and sales the medium and long term. Accordingly, prices of the products in question, that is in the view of the Commission NCB to say, when the temporary arrangements does not have a duty under the Treaty to are suspended after 31 October, the increase the profit margin on domestic running loss of the two domestic hard coke to compensate the effects of coking plants will rise to £559 000 per reduced sales of industrial cokes in times quarter. of economic difficulty. The Commission ends its letter as follows: Taking all these In order to close the plants by 31 circumstances into account the October 1975 the final and irreversible
NATIONAL CARBONISING COMPANY v COMMISSION
run-down must begin on 23 October to have established that the Commission 1975. The irreversible nature of this wrongfully failed to take action in the process is due to the cooling of the ovens face of certain alleged infringements of which causes the brick linings to crack the Treaty. and break up. The closure and the loss of these industrial plants will cause an The Commission points out that the irreparable loss amounting to ap wording of the provisions relied on proximately £4 million. Moreover there enable the Court itself to take 'any other will be an inevitable loss of 650 jobs and necessary interim measures' and it would this will take place in the present appear that it can do so in respect of any difficult conditions obtaining on the party, which could include, in the employment market. present case, NCB.
The Commission would only use its inherent powers to The Commission, whilst accepting that take interim measures, for example under interim measures are urgently required in Article 66 (7), if the Court directed it to do so. It leaves this matter to the order to avoid irreparable damage to NCC, points out that these measures discretion of the judge hearing the must be taken in favour of all the proceedings for the adoption of interim undertakings engaged in similar activities measures. It states, however, that a very to those of NCC and that if that is the strong case would need to be made out case, the considerable expense arising in order to justify interim measures from all these measures would have to be involving the dominant undertaking in borne by NCB. the costs resulting from such measures. In this connexion it cites a number of previous cases on the subject of interim NCB stresses that NCC had known since
measures. It declares itself ready to adopt approximately 26 September that NCB's any interim measure ordered by the undertaking to the Commission would Court, even in proceedings instituted expire on 15 October 1975 and yet NCC under Article 35. only submitted its application on the latter date. Thus NCC has itself created NCB states that, since it is not a party to the state of urgency which it pleads in the case, the Court cannot make an order extremis.
If the emergency measures for interim measures against it. The only sought were applied to all those in a like remedy open to NCC is that under position to that of NCC, this would Article 33 of the Treaty, provided that it cause a loss in revenue to NCB in the pleads a misuse of powers. Moreover, the sum of £465 000 for every two weeks. For Commission's letter is not a 'decision' or the same period the loss caused to NCC recommendation within the meaning of by operating the coke ovens at Articles 14 and 15 of the ECSC Treaty. Rotherham and Barnsley would be less There is nothing which enables the than £30 000. Court to exercise, in lieu and instead of the Commission, any powers whatever, The parties disagree on whether the even and above all by way of interim judge hearing the proceedings for the measures, and this so when the adoption of interim measures has the Commission itself has not in the first power to order interim measures: place exercised its power to take a decision. A party to a case cannot obtain NCC relies on Article 39 of the ECSC by interim measures prescribed by the Treaty and Article 83 of the Rules of Court what it could not obtain from the
Procedure as giving the Court executive at the administrative level. jurisdiction to order interim measures 'Necessary' measures are not pending its ruling on the application on automatically those desirable for one of the ground of a failure to act which seeks the parties. The Commission has found
ORDER OF 22. 10. 1975 — CASE 109/75 R
that NCB has not used its dominant procedural steps and from the position for purposes contrary to the technological and economic point of Treaty and has no power to make or view. By a series of concessions NCB has permit to be made any interim measures demonstrated its consideration for NCC against NCB in respect of lawful which still proves to be incapable of conduct. The Commission's only taking advantage at the present time of objection relating to the territorial effect the possibilities open to it of producing of the rebates has already been removed metallurgical coke, to offset the losses by the solution applied to the problem. incurred in producing domestic hard Where there is uncertainty as to the coke, by other production and to reduce economic situation or as to the effects of its production of domestic hard coke to a the interim measures sought, such minimum in order to save its plant. This measures should not be granted. is proved by estimates submitted by NCB.
NCB is not obliged to support alone the loss entailed by the interim measures At the hearing on 21 October 1975 the sought. In particular it is not obliged to parties presented oral argument and suffer the consequences of the delays replied to the questions put to them by caused by NCC's failure to react in good the judge hearing the proceedings for the time both as regards the taking of adoption of interim measures.
On the admissibility of the intervention
1 NCB has made an application to intervene in the proceedings for the adoption of interim measures. The Commission and NCC have not disputed that it has an interest in intervening.
2 NCB's intervention in support of the Commission in the proceedings for the adoption of interim measures is therefore admissible.
On the nature of the main action
3 NCC has instituted proceedings under Article 35 for failure to fulfil an obligation. It has, moreover, made known, orally and in writing, its intention to institute proceedings for annulment under Article 33 in respect of the Commission's letter of 16 October 1975.
4 The judge hearing the proceedings for the adoption of interim measures has no jurisdiction to consider actions which are presently pending or which may be brought or to pre-judge the outcome thereof.
NATIONAL CARBONISING COMPANY v COMMISSION
On the subject-matter of the application
5 The application for the adoption of interim measures in substance seeks an order under Article 39 of the ECSC Treaty and in accordance with Article 83 (2) of the Rules of Procedure for interim measures consisting either of an order to the Commission to take a decision addressed to NCB or alternatively of an order addressed to NCB to refrain from implementing a certain policy on prices. The defendant Commission considers that the complaint against it is that of a failure to fulfil an obligation within the meaning of Article 35 of the ECSC Treaty.
6 It is for the Court and not for the judge hearing the proceedings for the adoption of interim measures, in the first place to rule whether there is in fact a failure to fulfil an obligation or whether the letter of 16 October 1975 bearing the signature Schlieder constitutes a decision of rejection and, in the second place, therefore to define the nature of the dispute and of the form in which the action has been brought. In any event, whether there is an implied or express decision refusing the administrative request of 21 July 1975, it must be stated that the applicant is in fact asking the judge hearing the proceedings for the adoption of interim measures that no effect should be given to a negative decision refusing, in particular, to take emergency measures. To grant such an application would amount, temporarily, to a positive decision taken by the judge hearing the proceedings for the adoption of interim measures in lieu and instead of the Commission.
7 The Commission itself, however, has in the present case, before the judge hearing the proceedings for the adoption of interim measures, adopted a position which makes it apparent that it considers that 'the application addressed to the Court is not clearly unfounded' and that it acknowledges the perilous position in which the two NCC coking plants are placed and the urgency of the measures to be taken and which it nevertheless has failed to take itself. With this in mind the Commission referred in its oral submissions
to the possibility that there might be a 'minor' abuse of a dominant position. In its written submissions it stated that 'the survival of NCC's two plants, and the survival of NCC itself as producer of domestic hard coke are at stake' and that 'the balance of the interests of the enterprises involved seem to permit interim measures'. Having made this finding, the Commission none the less considers that it is 'more appropriate that the Court should order interim measures rather than the Commission' notwithstanding, moreover, that the Commission considers that it has 'an inherent power to adopt a temporary measure to protect the status quo'.
ORDER OF 22. 10. 1975 — CASE 109/75 R
8 In these circumstances it is therefore for the Commission to adopt the measures which it considers necessary. It would in fact be contrary to the balance between the institution which derives from the Treaty for the judge hearing the proceedings for the adoption of interim measures to substitute himself for the Commission in the exercise of a power which belongs primarily, subject to review by the Court, to the Commission which has all the information required for this purpose or the means of obtaining it. The Commission should be permitted to take the measures of conservation in question provided, however, that these measures are strictly confined to the production of coke necessary to keep the plants at Barnsley and Rotherham in operation and to the preservation of the jobs which would be threatened if the coking plants were to cease production. It is for the Commission also to prescribe the guarantees which should properly be sought from NCC in the event of its failing in its main application.
On those grounds,
Having regard to the urgency of the matter,
By way of interim ruling,
The President of the Justice of the European Communities
hereby declares and orders:
1. The intervention of NCB in the proceedings for the adoption of interim measures is admissible;
2. It is for the Commission to take the measures of conservation
which it considers strictly necessary, and subject to all appropriate guarantees, for the purpose of keeping in operation the two NCC plants threatened with closure and only for the shortest time which it considers to be necessary for the completion of the proceedings in the main action;
3. The costs are reserved.
So done and ordered at Luxembourg on 22 October 1975.
A. Van Houtte R. Lecourt
Registrar President