C-54/76

(1) 54/76: COMPAGNIE INDUSTRIELLE ET AGRICOLE DU COMTÉ DE LOHEAC, having its registered office at Sainte-Rose (Guadeloupe), represented by its Managing Director, C. Simmonnet,

(2) 55/76: COMPAGNIE SUCRIÈRE ET RHUMIÈRE DE LA MARTINIQUE, having its registered office at Galion-Trinité (Martinique), represented by its General Manager, Mr de Laguarigur,

(3) 56/76: SOCIÉTÉ INDUSTRIELLE DE SUCRERIE, having its registered office at Paris 8e, represented by its General Manager, Mr de la Rochefoucauld,

(4) 57/76: DISTILLERIE SUCRERIE GROSSE-MONTAGNE, having its registered office at Lamentin (Guadeloupe), represented by its Manager, C. Simmonnet,

(5) 58/76: SOCIÉTÉ SUCRIÈRE DE LA GRAND TERRE, having its registered office at Gardel-Le-Moule (Guadeloupe), represented by its General Manager, A. Huygues-Despointes,

(6) 59/76: SOCIÉTÉ DES USINES DE BEAUPORT, having its registered office at Bordeaux, represented by its Chairman and General Manager, Mr Ardant,

and

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by its Legal Adviser, Peter Gilsdorf, acting as Agent, assisted by Jacques Delmoly, member of the Legal Service, with an address for service in Luxembourg at the offices of Mario Cervino, Legal Adviser to the Commission, Jean Monnet Building,

defendants,

Application for damages under the second paragraph of Article 215 of the EEC Treaty, in respect of damage allegedly suffered for the sugar marketing years from 1971 to 1975 by reason of the discrepancy between the harvesting period in Guadeloupe and Martinique and the fixing of the intervention price for sugar by the Community authorities,

THE COURT

composed of: H. Kutscher, President, A. M. Donner and P. Pescatore, President of Chambers, J. Mertens de Wilmars, M. Sørensen, Lord Mackenzie Stuart, A. O'Keeffe, G. Bosco and A. Touffait, Judges,

The facts, procedure and submissions intended to make good the damage and arguments of the parties may be allegedly suffered during the sugar years summarized as follows: 1971/72, 1972/73, 1973/74 and 1974/75, on the basis of the difference between the prices obtained under Regulation No I — Facts and procedure 1009/67 and subsequent regulations, and the prices which they could have The applicant companies are sugar obtained under the system in force as producers in Guadeloupe and from the introduction of Regulation No Martinique. Whereas in the European 3330/74. territory of the Community the harvesting and selling period for sugar The procedure followed the normal runs from 1 July to 1 January each year, course. By an order of 19 July 1976, the in the islands the sugar year runs from 1 Court decided, after hearing the views of January to 1 July. Until the end of 1974, the Advocate-General, to join Cases 54 to the Community regulations did not take 60/76 for the purposes of the procedure this peculiarity into account and the and the judgment. prices came into force only on 1 July, while the producers in the islands could benefit from them only during the By a decision of 14 December 1976, the month of May, that is, in the following Court decided, after hearing the views of calendar year. the Advocate-General, to open the oral procedure without any preparatory On 19 December 1974, the Council of enquiry. the EEC adopted Regulation No 3330/74 on the common organization of the market in sugar (OJ L 359 of 31. 12. II — Conclusions of the parties 1974, p. 1); this new regulation repeals Regulation No 1009/67 of 18 December All the applicants claim that the Court 1967 of the Council, under which the should; situation described above had developed. The second subparagraph of Article 3 (6) 'Grant their applications for of the new regulation provides that: compensation in respect of the non-contractual liability of the The derived prices fixed for any given Community and order that the Council marketing year for the French and the Commission, in accordance with departments of Guadeloupe and the general principles common to the Martinique shall apply to their sugar laws of the Member States, should make production during the calendar year in good the damage caused to them by both which that marketing year begins. Regulation No 1009/67/EEC of the Council of 18 December 1967 on the On 29 June 1976, the applicant common organization of the market in companies lodged applications against sugar, adopted on a proposal from the the Council and the Commission for an Commission, and a number of order that they should pay jointly sums subsequent regulations.'

and are jointly and severally liable to pay should 'dismiss the applications as sums amounting to entirely unfounded,' while the Council contended that the Court should 'declare FF 671 536 (Case 54/76) the applications ... inadmissible and at FF 395 234 (Case 55/76) any event unfounded, dismiss them and FF 7 992 279 (Case 56/76) order the applicants to bear all the FF 2 037 895 (Case 57/76) costs.' FF 3 606 000 (Case 58/76) FF 3 783 000 (Case 59/76) FF 2 639 000 (Case 60/76) III — Summary of the sub­ missions and arguments 'in principal and interest calculated at the put forward by the parties rate of 8 % from 1 July 1971 to 1 July during the written 1976 (with the interests to be made up to procedure the date of the delivery of the judgment of the Court), in compensation for the The applicants set out the facts of the damage suffered by the applicant during case and point out that until the the 1971/72, 1972/73, 1973/74 and adoption of Regulation No 3330/74 of 1974/75 sugar years.' 19 December 1974, which proves that the Council realized that the previous Furthermore, the applicants made the regulations were causing them damage, following claim in the course of their they suffered a loss in each marketing observations: year in respect of which a variation was recorded in the price of sugar in relation That without prejudice to any of the to the preceding marketing year, that is other submissions the Court should rule from the 1971/1972 marketing year. that the Community regulations previous In law, the regulations previous to to Regulation No 3330/74 were Regulation No 3330/74 are manifestly manifestly vitiated by illegality and that vitiated by illegality and constitute a they constituted in addition a wrongful wrongful act or omission giving rise to act or omission on the part of the direct, special and abnormal damage. Community institutions and caused the applicants direct, special and abnormal The illegality stems from a manifest damage.' infringement of superior rules of law, and in particular of the principle of the In its defence, the Commission protection of the legitimate expectations contended that the Court should: of interested parties who are normally — 'Dismiss the applications as entitled to expect proper implementation unfounded; of the rules of the Treaty and of — Order the applicants to bear the secondary Community law. The costs.' principles to be observed in this case are laid down by Regulation No 1009/67, In its defence, the Council contended Article 39 of the EEC Treaty setting out that the Court should: the objectives of the common agricultural policy, and the second 'Declare all the claims of the applicants subparagraph of Article 40 (3) of the unfounded, dismiss them, and order the EEC Treaty which prohibits any applicants to bear the costs.' discrimination between producers or In their reply, the applicants maintained consumers within the Community. To be their initial conclusions. precise, the sugar producers in the islands were unable to obtain 'fair In its rejoinder, the Commission remuneration', which caused dis­ maintained its contention that the Court crimination by comparison with the

sugar producers in the European territory year in which their marketing year falls of the Community. only the market price for the preceding year'. These unlawful and discriminatory regulations also constitute a wrongful act The Commission examines in turn the or omission because the Community three 'submissions' put forward by the institutions did not have regard for the applicants as a basis for their applications interests of the sugar producers in the for compensation under the second islands, in that they failed to take paragraph of Article 215 of the Treaty. sufficiently into consideration the geo graphical characteristic of Guadeloupe As regards the alleged unlawfulness of and Martinique; moreover the Regulation No 1009/67 of the Council, institutions admitted this wrongful act or the Commission does not dispute the omission by belatedly enacting admissibility of this submission within Regulation No 3330/74. the framework of extracontractual liability, although it observes 'with the Finally, there is direct and special greatest respect that the reasons stated damage, in view of the 'limited and for the submission do not seem adequate geographically identifiable number' of for the purposes of law.

No 3330/74. Since there is no difference to 98/74, 15 and 100/75, [1975] ECR between the two prices for the 1968/69 1644), it is a question of a 'particular and 1969/70 marketing years, no damage condition', an illustration of the principle was suffered. On the other hand, for the of legal certainty, which must be assessed marketing years from 1970 to 1974, the in each particular case and which applicants have calculated the damage supports principally the maintenance of suffered by them on the basis of the an existing legal situation or a request for abovementioned difference in prices and transitional measures designed to prevent according to a method of calculation losses likely to be suffered when specified in a table annexed to the transactions are carried out under applications. amended or repealed regulations.

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sugar from the islands. These prices are sufficiently precise. derived from the derived intervention price fixed for Italy less freight charges; Finally, with regard to the damage, the after this first calculation has been made Commission points out that the on the value of white sugar, it is applicants make rather undiscriminating corrected in order to be applicable on a use of the criteria of French flat-rate basis to unrefined sugar from the administrative law alone. The alleged loss islands, which is deemed to have a rate of resulting from the difference in price

of the Community. After pointing this connexion between any loss and the out, the Commission stresses on the one contested Community measures, since hand, that owing to the discrepancy the applicants sold their sugar not to the between the calendar year and the sugar intervention agency in return for money year, the applicants were likely to benefit from the Guarantee Section of the in respect of much of their sugar, refined European Agricultural Guidance and last of all, from any tendency for the Guarantee Fund, but through the usual price on the European sugar market commercial channels, as emerges from progressively to come into line with the the contracts appearing in the file, and, it new Community price applicable from seems in general above the intervention 1 July, and on the other, that the price, which is normal, since, even if it is applicants have never offered their sugar sometimes used as a reference price, that for intervention and were in a position in price is a floor price. which they had freedom of contract and in which the price is fixed to a large In its defence, the Council of the extent by the action of supply and European Communities recalls the facts

COMPAGNIE INDUSTRIELLE DU COMITÉ DE LOHEAC v COUNCIL AND COMMISSION

for the four marketing years in question. Hauptzollamt Berlin-Packhof); on the The Council emphasizes that the other, the Treaty in fact speaks of 'a fair contracts were freely concluded on the standard of living' for the agricultural basis of prices distinct from and higher community, which is completely than the intervention price, with the different. It should also be pointed out possibility where appropriate of a partial that the applications seek to obtain application of the price for the following insurance against the effects of currency

In this applicants. connexion, moreover, the difference in treatment between producers in At first sight, the first submission relates continental Europe and in the islands rather to an application for annulment amounts to a difference resulting from and, as such, is inadmissible as out of only two months of currency time and made by individuals against a depreciation. Finally, the Council general measure (a finding which would reiterates the argument of the be inescapable if annulment was in fact Commission concerning the fact that the being sought).

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Court in this field (43/72, Merkur V slightly higher than the intervention Commission; 9 and 11/71, Compagnie price, is fixed by order of the Prefect d'Approvisionnement v Commission). because the function of distributor is fulfilled on the spot by the The second submission relating to the wholesalers and because of special wrongful act or omission allegedly marketing conditions, or contracts acknowledged by the belated enactment concluded with European refiners in of Regulation No 3330/74 is nugatory the Community, at a price sometimes and does not hold good in the light of in fact 0.8 % above the intervention the case-law of the Court which, for the

different economic situations, and for the regulations is not direct; finally, currency depreciation cannot be the cause of overseas departments of France are special and abnormal damage. always lower than the European prices; moreover, the Commission is comparing In their reply, the applicants develop the prices of a different nature, ex works arguments set forth in their applications prices for the north of the Community and answer the arguments developed in and free-on-board prices for the overseas the defences on precise points: departments, the free-on-board prices — the price received when their including the costs of transport to the production was marketed in fact quayside and the costs of reloading: corresponds to the prices fixed for — the argument that the marketing of the corresponding marketing year but the sugar grown in the islands always is received too late; took place at a favourable period, — the argument of the defendants while the new fixed price exerted an concerning the prices obtained in upward influence on prices, is freely negotiated contracts leaves out defeated by the fact, proved by of account the true function of the experience, that the applicants have intervention price, which is a floor never been able to sell except at the price with which market prices come old intervention price; if that line of into line in periods of sufficient or argument was valid, it is impossible surplus production; to understand why the executive

enacted Regulation No 3330/74; adoption of Regulation No 3330/74 finally, a delayed sale during the proves that this is not the case, as marketing year would have moreover it should always be in necessitated storage, which is Community agricultural matters as the particularly expensive in a country second subparagraph of Article 40 (3) of subject to cyclones. the EEC Treaty states. The wording of this subparagraph ('exclude any As to the principle of regard for discrimination between producers or legitimate expectations, the applicants consumers within the Community') stress that the instances quoted by the clearly shows that there should not be Council in which this principle has been any discrimination between producers applied by the Court have never themselves in common agricultural considered the case in which a matters within the Common Market as a completely original situation occurs. whole and that consequently no Here, reference must indeed be made to distinction should be made between the the statements of Mr Advocate-General regions or the territories of the Member Trabucchi concerning the particular States (Judgment in Case 153/73, [1974] condition and assessment in each ECR 675).

stated in the judgments in Joined Cases 9 and 11/71, [1972] ECR 391, Case The applicants take the view that the 43/72, [1973] ECR 1055, and Case 14/74, wrongful act or omission on the part of [1974] ECR 899, 908; therefore it is the Community results not only from the indeed a major and fundamental infringement of the superior rules of law objective. That does not constitute a (the principles of legitimate expectation search for insurance against currency and of equality) already invoked, but also fluctuations but for the adaptation of the from negligence characterized by the fair standard of living, recognized as delay in adopting new regulations necessary by the executive itself in its complying with the law; The Court has successive regulations. required the necessary diligence from the institutions in the adaptation of The applicants also insist upon defective regulations (Judgment in the compliance with the principle of Holtz case, [1974] ECR 695).

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— The allegedly 'very belated' receipt of only if the price obtained on that market the intervention price within the is above the special intervention price for framework of Regulation No 1009/67 is the overseas departments, unless explained by the 'principle of validity for traditional relationships explain trading periods of one year and the unity of the patterns which cannot be explained by marketing year' common to all the the laws of the market, which would put agricultural policies and necessary for the discussion on a different level. their good management. A system of regular adaptation of prices on the basis — The 'losses in weight' of sugar which of the rise in the cost of living is allegedly justify the making of sales conceivable, along the lines of a sort of above the intervention price are not 'sliding scale', but would upset the peculiar to cane sugar; the higher price is present structure of the market not the result of the generosity of the organizations, which are based upon buyers but rather of the regional market validity for periods of one year. In the in question. event of a discrepancy between harvests, the legislature can only 'link' the — The figures provided by the marginal production to the bulk of the Commission are the official figures and total production, past or future. Thus, in reproduce the prices fixed by the relation to sugar, the system of the 'same Council. Those prices, obtained by marketing year' (Regulation No 1009/67) derivation, result from the application of has given way to the anticipation system objective criteria which are not in (Regulation No 3330/74); that was a dispute. In any event, it is not clear why lawful choice of economic policy. The the applicants take up their position Commission makes no secret of its within the framework of intervention

COMPAGNIE INDUSTRIELLE DU COMITÉ DE LOHEAC v COUNCIL AND COMMISSION

According to the agricultural prices? Council, it is not only unlawful situations which are amended. The two systems — The Commission points out that the each had their justification. The Council derived price for the overseas explains the principle of validity for departments, derived from the highest periods of one year as the Commission derived price in Europe, was extremely did, in the context of the world sugar favourable and higher than the market; in particular, it was natural to corresponding price in most of the link the limited harvest of cane sugar to Community, which constitutes an almost the much larger harvest of sugar beet. preferential system. It also refers to the Then, in a period of currency system of special aid and to its depreciation and in order to favour the Regulation No 834/74 granting a price overseas countries, it was provided that supplement to sellers of unrefined sugar the harvest in the Caribbean should grown in the overseas departments. receive the price for the subsequent marketing year in the parent country. — The infringement of the principle of That measure was the outcome of a equality is not proved. The judgment in choice motivated by political expediency, the Holtz case has no relevance here, which brings it outside the context of the since no 'deficiency' or 'defect' has been law. Therefore, such a step does not proved in the system set up by imply that the policy of the preceding Regulation No 1009/67. The amendment years was unlawful. of that regulation is not conclusive; on the contrary, it can be said that it The complaint of unfairness is contested handicaps the European producers. It is by the Council in terms very similar to impossible to find either a wrongful act those used by the Commission; it or omission or a flagrant violation of contends that, in particular, Article 39 of superior rules of law in the old system; at the EEC Treaty does not constitute an the most, it was adapted in the light of 'obligation to attain a particular result'.

The complaints put forward are based The complaint of discrimination can upon a comparison between the systems relate only to comparable situations. But

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Law

1 The applications are for damages in respect of loss which the applicants, cane sugar producers in the French departments of Martinique and Guadeloupe, consider that they have suffered in respect of the sugar marketing years from

COMPAGNIE INDUSTRIELLE DU COMITÉ DE LOHEAC v COUNCIL AND COMMISSION

1971 to 1975 by reason of the fact that the Community institutions failed to take into consideration, for the purpose of fixing the intervention prices for sugar, the discrepancy between the harvesting and selling periods for this product in the European territory (1 July to 30 December) and the same periods in the departments of Guadeloupe and Martinique (1 January to 30 June).

Admissibility

2/4 In its rejoinder, the Council contends generally that the requests of the applicants are inadmissible. First, that conclusion is not accompanied by any reasoning or arguments, and secondly, having regard to Articles 40 and 42 of the Rules of Procedure, it was lodged out of time. Therefore, that conclusion must be dismissed.

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18 December 1967 on the common organization of the market in sugar (OJ, English Special Edition 1967, p. 304) is alleged to have caused the applicants.

7 Therefore they can be examined at the same time.

8 Since the disputed measure is of a legislative nature and constitutes a measure taken in the sphere of economic policy, the Community cannot be liable for any damage suffered by producers as a consequence of that measure under the provisions of the second paragraph of Article 215, unless a flagrant violation of a superior rule of law for the protection of the individual has occurred.

9 Therefore it is necessary to enquire whether, in the present case, such a violation has been committed.

10 The objective of the rules enacted for the common organization of the market in beet and cane sugar, taking into account the situation of the world market in that product and the situation foreseeable in the medium term, was to strike a balance between the general interest of the proper management of the market so as to avoid fluctuations in prices over the sugar economy as a whole, and the maintenance of the guarantees necessary to ensure the producers of sugar beet and sugar cane of their employment and of a fair standard of living.

15 It follows from all these factors that by opting in 1967 for the validity for periods of one year and the unity of the marketing year, and then in 1974 for another system for the market, the Council made a choice of economic policy coming within its discretionary powers, in accordance with the objectives of the common agricultural policy as defined by the Treaty and in particular by Article 39 thereof.

16 It appears from all these considerations that it is inappropriate for the applicants to plead an infringement of Article 40 (3), all the more so as they have never offered their sugar for intervention and have always chosen commercial outlets for their production on the open market outside the Community arrangements and have dealt at a price fixed by contract, a system which excludes all discrimination between producers.

17 Nor has it been proved, moreover, that the legitimate expectations of those concerned were disappointed, since no Community measure forecast the introduction of arrangements other than those fixed in 1967.

18 Consequently, the applicants' claim for the retroactive application of a new system to transactions freely concluded under old rules, which moreover protected them from the risks of the world market, cannot be taken into consideration.

19 Finally the complaint of having suffered direct, special and abnormal damage cannot be substantiated, particularly since the damage is alleged to result not

JUDGMENT OF 31. 3. 1977 - JOINED CASES 54 TO 60/76

THE COURT

hereby:

1. Dismisses the applications.

2. Orders the applicants to pay the costs.

Kutscher Donner Pescatore Mertens de Wilmars Sørensen

Mackenzie Stuart O'Keeffe Bosco Touffait