C-258/80

JUDGMENT OF 16. 2. 1982 — CASE 258/80

and December to take account of and associations of undertakings in their quotas for the quarter and conducting such studies, that thereby avoid any infringement. obligation does not imply that it must 3. Although in general the principle of consult each undertaking individually legal certainty precludes a Com- or that it must obtain the agreement munity measure from taking effect of the steel producers to the measures from a point in time before its publi- proposed. cation, it may exceptionally be otherwise where the purpose to be 5. Under the terms of Article 58 (1) of achieved so demands and where the the ECSC Treaty the Commission has legitimate expectations of those power to take "to the necessary concerned are duly respected. extent" the measures provided for in Article 74 at the same time as any 4. Although, pursuant to its obligation measure taken on the basis of Article under Article 58 (2) of the ECSC 58. The appraisal of the necessity of Treaty to carry out studies jointly taking such measures is a matter for with undertakings and associations of the Commission, subject to the undertakings in order to determine Court's power to review the production quotas, the Commission lawfulness of the Commission's is obliged to consult undertakings exercise of its discretion.

In Case 2 5 8 / 8 0

S P A METALLURGICA R U M I , w h o s e registered office is in B e r g a m o , Italy, in t h e p e r s o n of its c h a i r m a n , C a r l o R u m i , represented b y G i a c o m o Fustioni a n d Giuseppe M a r c h e s i n i , Advocates at t h e C o r t e di C a s s a z i o n e of t h e Italian Republic, with an address for service in L u x e m b o u r g a t t h e C h a m b e r s of J e a n H o s s , 84 G r a n d - R u e ,

composed of: J. Mertens de Wilmars, President, G. Bosco, A. Touffait and O. Due (Presidents of Chambers), P. Pescatore, Lord Mackenzie Stuart, A. O'Keeffe, T. Koopmans, U. Everling, A. Chloros and F. Grévisse, Judges,

Advocate General: G. Reischl Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of the 134 respectively of the Eurostat ques- procedure and the submissions and tionnaire 2-13. arguments of the parties may be summarized as follows: 2. Article 1 (4) of Decision N o 2794/80 provides for the quota system, to be managed by the Commission. It I — Facts and P r o c e d u r e also provides that the Commission may obtain assistance from independent agencies or from experts and that the A — The background to the dispute business secrecy of the undertakings must be maintained. 1. By Decision No 2794/80/ECSC of 31 October 1980 (Official Journal 1980, 3. By virtue of Articles 3, 4 and 5 of L 291, p. 1), the Commission, consider- that general decision, the quotas for ing that by reason of the decline in Group IV for the fourth quarter of 1980 demand for steel the Community was were to be fixed by application of an confronted with a period of manifest abatement rate of 17.39 % on the basis crisis within the meaning of Article 58 of of the reference production figures referred the ECSC Treaty and that the means of to in Article 4. By virtue of Article 5 (2) of the decision, the rate of abatement in action provided for in Article 57 were the case of crude steel is to correspond not sufficient to deal with that situation, to the average abatement rates of the established a system of production four groups of rolled products weighted quotas for crude steel (Article 1) and according to the reference production of for four groups of rolled products each of those groups of products. (Article 2).

Reference figures Quota Reduction 4th quarter October 1978 November 1979 December 1977 Total 1980

tonnes tonnes tonnes tonnes % tonnes

Rolled products Group I 20-78 Group II 18-93

Group III 21-53 Group IV 36 390 40 466 35 833 112 689 17-39 93 092

Total I-IV 36 390 40 466 35 833 112 689 93 092

Steel 46 500 47 392 42 010 135 902 17-39 112 269

9. The applicant refused to agree to the Taking note of these explanations, the checking of its production quotas on the applicant informed the Commission by a ground that the engineer engaged by the telex message dated 28 November 1980 Commission was an employee of a that: competing steel producer. By engaging that engineer as an expert for the purpose of executing the inspections "Having regard to the fact that the which had to be carried out at the technical experts will not have any power applicant's premises the Commission was of initiative and may be removed or failing to maintain the applicant's excluded from the inspection in the event business secrecy and that was contrary to of the company's having reason to Article 1 (4) of the decision of apprehend damage to its interests 31 October 1980. protected by the Treaty, we raise no further objections in view of those specific assurances." A report dealing with that refusal was drawn up and signed by the Commission's agents and by the rep- B — The course of the procedure resentative of the applicant.

1. By an application dated 20 10. In a telex message sent to the November 1980, which was received at applicant on 26 November 1980 the the Court Registry on 24 December Commission confirmed that since it was 1980, the applicant brought an action in responsible for carrying out inspections it which it seeks a declaration that the must inevitably have recourse to the Commission's decision of 1 November

JUDGMENT OF 16. 2. 1982 — CASE 258/80

1980 fixing the applicant's production Advocate General, the Court decided to quotas for the fourth quarter of 1980 open the oral procedure without any pursuant to the general decision, preparatory inquiry. Decision N o 2794/80, is void.

In its observations on the application for (ii) the minutes of the meeting at which interim measures the Commission the Council of Ministers of the contended that the Court should dismiss European Communities considered the application. the aforesaid measures under Article 58 and the necessary assent; By a reasoned order of the President of the Court of 16 December 1980 the (iii) the minutes of the meetings between application for the adoption of interim the Commission's representatives measures was dismissed and the costs and the representatives of the were reserved. Association of Italian Steel Producers (the ISA) and the records of the consultations with individual 3. Upon hearing the report of the undertakings held under Article 58 Judge-Rapporteur and the views of the of the ECSC Treaty;

RUMI v COMMISSION

(iv) the standard-form contract between the express declaration contained in the the Commission and the under- preamble (last paragraph of section 4). takings which made their own employees available to the Com- Such retroactive effect is contrary to the mission to carry out the inspections general principles recognized by the and verifications. Member States and constitutes a breach of a general principle of law.

The applicant recognizes that the Commission did not conceal its intentions and that it created in advance Ill — Submissions and argu- a defence against the undertakings (cf. m e n t s of t h e p a r t i e s the statement of reasons on which Decision N o 2794/80/ECSC was based, last paragraph of section 4). However, the wording of the decision, which has 1. Retroactive nature of Decision No been represented as fixed by the 2794/80/ECSC (breach of the general Commission since the beginning of rules of law governing the application October, underwent such vicissitudes of the Treaty) that its abandonment appeared more probable than its adoption. In fact the press gave such prominence to the The applicant complains that the general diverging views which prevailed within decision, Decision N o 2794/80/ECSC, the Council of Ministers that even the took into account, in determining the least perceptive reader might reasonably maximum production permitted during have predicted that the plan would be the year and the deliveries of related dropped, that other solutions would be products within the ECSC, the adopted or that negotiations for production and sales effected from voluntary restrictions would be resumed. 1 October 1980. In other words the It was not until the first weekend of decision is retroactive both as regards its November that the specialist press actual text (Articles 5 and 11 (2)) and announced that the Council had finally

JUDGMENT OF 16. 2. 1982 — CASE 258/80

Furthermore, even if the provision in It maintains its arguments concerning the question is considered retroactive it does protection of the legitimate expectations not follow that it is automatically of the persons concerned.

RUMI v COMMISSION

Finally, it submits that no-one — least of on 4, 17 and 30 October, it claims that all the institutions — is entitled to create the Association had neither the time nor in advance specified effects by means of the means to put forward its counter- unilateral declarations which the sub- proposals to two aspects of the quota sequent facts or legal measures related to system, which was presented in the an expression of intention or of opinion course of those meetings to the rep- of other persons cannot confirm. resentatives of the Association as a "Diktat". The two aspects in question are the method of calculating the quotas and the percentage reductions by groups In its rejoinder the Commission of products announced within minimum challenges the applicant's claim that the and maximum limits within which the penalties prescribed by the decision "may Commission reserved the right to fix the be applied to economic operations coefficient. effected prior to the adoption of the provisions which introduced them". In fact the quotas were fixed for periods of three months and the "retroactive effect" The applicant further claims, in the alter- only applied to one month so that the native, that an essential procedural undertakings were entirely free to reduce requirement was infringed. The Court has their production during the other two in fact in a number of decisions treated months and avoid any penalty. as equivalent to such an infringement the absence of the required assent and consultations (cf. Case 6/54 Netherlands v High Authority [1954 to 1956] ECR For the rest, the Commission refers to its 103, pp. I l l to 112, and Joined Cases statement of defence. 154/78 etc. Valsabbia and Others v Commission [1980] ECR 907, paragraph 37, p. 999).

The applicant replies by developing the confirming the substantive defect arguments which it advanced in its complained of, also constitutes an application concerning the consultation infringement of an essential procedural of the Italian undertakings. It further- requirement. more deplores the fact that the Commission failed to have regard for the views expressed. According to the Commission, this part of the application is inadmissible on the ground that it is unrelated to the contested In its rejoinder the Commission replies individual decision. In fact an objection that it can only refer to what it has said of illegality submitted in accordance with on this subject in its statement of Articles 33 and 36 of the ECSC Treaty defence. must, in accordance with a general principle of law, be strictly limited to that part of the legislative measure of a general nature on which the individual

T h e opposite view would permit an individual to contest legislation directly, which Under this head the applicant contests would be contrary to the general system the lawfulness of Article 7 (2) of the of judicial remedies within the general decision which restricts under- Community (cf. Case 9/56 Meroni [1957 takings' sales within the Community. In and 1958] ECR 133). fact, although Article 58 of the ECSC Treaty empowers the Commission to fix production quotas it does not also With regard to the substance of the case, empower it to limit the volume of sales and in the alternative, the Commission within the common market. The considers that the power conferred by Commission thus acted ultra vires. It also Article 58 to fix production quotas infringed Article 3 (b) and (f) and Article necessarily implies the power to adopt 4 (b) and (d) of the ECSC Treaty which the provision in question.

It is clear that the same treat the exceeding of the ratio between principle must be applied to that part of Community deliveries and total deliveries Community production which is on the same basis as the exceeding of the exported to non-member countries: if, production quotas." The inadequacy of when prices began to rise again on the that statement of reasons, in addition to Community market, Community pro-

In this connection the applicant observes inter alia that the system of production The applicant complains that the quotas established by the Commission Commission failed to employ the was intended to limit the quantities of provisions of Article 74 of the Treaty. steel products placed on the markets (in That article, to which Article 58 particular on the Community market) in expressly refers, envisages, according to the hope of causing an increase in prices the applicant, conditions which are as a result of a reduction in supply. precisely those obtaining in this case (cf. Accordingly, the restriction on deliveries Article 74 (3): "if one of the products imposed upon Community undertakings referred to in Article 81 . . . is imported pursuant to Article 7 (2) of Decision into the territory of one or more No 2794/80/ECSC constitutes a factor Member States in relatively increased which cannot be dissociated from the quantities and under such conditions that production quotas. This is shown in. these imports cause or threaten to cause particular by the fact that the exceeding serious injury to production within the of delivery quotas within the common common market of like or directly market is treated as equivalent, for the competing products"). purposes of penalties, to the exceeding of production quotas.

The Commission expressly declared to the In its rejoinder the Commission maintains Council on 30 October 1980 that it would that, with regard to the admissibility of not have recourse to measures reducing

JUDGMENT OF 16. 2. 1982 — CASE 258/80

RUMI v COMMISSION

features of the arrangements now in general decision, (cf. section 10 of the force have not been modified since the preamble). Furthermore, such employees end of 1977 and, as the applicant itself cannot be considered as "third parties" has said, are effective in maintaining a or "independent agencies" within the parallel between the prices of imports meaning of Article 1 (4) of the decision. and those of Community products subject to reductions. According to the Commission, that part of the application is inadmissible for the Further, the Commission disputes that same reasons as those which it invoked there is, in legal terms, a link between in its contention that the submission the aid granted to a State undertaking concerning the restrictions on deliveries and the production quotas and queries was inadmissible. whether, if there were no aids, the applicant would consider the quotas justified. With regard to the substance of the argument, and in the alternative, the Commission states that, as it had only 15 inspectors, it was obliged to have In any case the Commission recalls that, recourse in exceptional circumstances to on its proposal, the Council has adopted external staff. For accounting matters it a decision in this field (Decision N o resorted to firms of auditors, whilst for 257/80/ECSC establishing Community technical problems it was obliged to rules for specific aids to the steel conclude contracts with steel under- industry, Official Journal 1980 L 29) and takings which made available to it their that it follows carefully the measures production engineers (76 in all) to carry adopted by the Member States and out the inspections in question. The endeavours to ensure that they are Commission lists the steps which it took compatible with the general pattern of in order to ensure in those circumstances Community policy. It has recently that business secrecy was maintained; in submitted to the Council a report on particular it invited the applicant to developments in this field. notify it of every request submitted by the technical experts which related to its industrial or commercial secrets.

Finally, the applicant relies upon the The Commission's argument does not judgment of the Court in Case 18/62 remove all possibility of taking legal Barge v High Authority ([1963] ECR action in relation to the inspections. In 259), in which the Court departed from fact an undertaking which believes that it the principle that only the parts of a has just cause may refuse an inspection general decision which are put into effect and contest any decision imposing a fine in the individual measure implementing on it; in the ensuing proceedings it may that decision may be challenged. rely on the illegality of the general decision with regard to the inspections. With regard to the substance, the applicant adheres in essence to the Contrary to the claims of the applicant, arguments advanced in its application. the judgment of the Court in the Barge case is entirely in accordance with the argument of the Commission. In fact the In its rejoinder the Commission maintains objection of illegality may refer either to that the order made by the President of the general decision as a whole or to the the Court on 16 December 1980 upheld parts of it on which the individual the Commission's argument that Article decision is based. The part of the 1 (4) of the general decision, Decision application concerning the inspections N o 2794/80/ECSC, did not form the does not come within either of those basis of the contested individual decision categories. and rejected the applicant's submissions with regard to that provision on the ground that "claim for interim relief must have a direct link with the subject- IV — O r a l p r o c e d u r e matter of the main action" (paragraph 21 of the decision). The inadmissibility of the application for interim measures concerning the inspections entails the At the sitting on 15 September 1981 oral inadmissibility of that part of the main argument was presented by the application which has the same subject- following: Giacomo Fustinoni and matter. Giuseppe Marchesini, Advocates, for the applicant; and Alberto Prozzillo, for the Commission. The arguments to the contrary presented by the applicant in its reply are, The Commission put in evidence a table according to the Commission, entirely concerning the applicant's production in invalid. In fact: relation to its quotas for the period from October 1980 to June 1981 and the Court fixed a time-limit within which the The fact that the part of the general applicant was to reply in writing on this decision based on Article 58 of the ECSC Treaty and the part based on point. The applicant provided that reply Article 47 of that Treaty are on 24 September 1981. The Commission interdependent is irrelevant since the sent its comments on 30 September 1981. individual decision, which forms the subject-matter of the application, merely The Advocate General delivered his applies certain articles of the part of the opinion at the sitting on 29 October general decision based on Article 58. 1981.

4 The applicant, however, has not claimed that there was any breach of its business secrecy during the inspections carried out by the Commission. This submission must accordingly be rejected.

JUDGMENT OF 16. 2. 1982 — CASE 258/80

The second submission

5 The second submission concerns the provisions of Article 7 (2) of Decision N o 2794/80/ECSC, according to which undertakings may not exceed, for deliveries within the common market, the ratio which existed, before the entry into force of the quota system, between Community deliveries and total deliveries.

6 It should be pointed out that although, in an action for a declaration that an individual decision is void, the applicant may submit that certain provisions of the general decisions which the contested decision implements are illegal, he may do so only if the individual decision is based on the rules alleged to be illegal.

7 In this case the individual decision does not concern the implementation of Article 7 (2) of the general decision and its lawfulness does not depend on the lawfulness of that provision. The applicability of that article flows directly from the general decision without the need for the Commission to issue individual decisions to the undertakings. The ECSC Treaty does not permit undertakings to challenge by means of a direct action such provisions unless a misuse of powers has occurred. On the other hand, it provides for judicial review of any decision of the Commission imposing a fine on an undertaking which has infringed the general decision. This submission is therefore inadmissible.

1 1 Moreover, although in general the principle of legal certainty precludes a Community measure from taking effect from a point in time before its pub- lication, it may exceptionally be otherwise where the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected.

12 Those two conditions are fulfilled in the circumstances of this case. It was necessary to include the month of October in the system in order to prevent undertakings from increasing their production in October in anticipation of the reductions subsequently to be applied. Furthermore, the Commission respected the legitimate expectations of the persons concerned by means of the communication of 11 October 1980 (Official Journal C 264, p. 2), whereby it gave notice of its intention to include the month of October in the system of quotas, and by means of the decision published on the same date (Official Journal L 268, p. 25) requiring the undertakings to supply information on their production for October 1980. Although in its communi- cation of 11 October 1980 the Commission did not in fact indicate what the level of the quotas would be, which might have prevented the undertakings from establishing the precise consequences of the Commission's recommendation and ensuring that their production was not excessive in relation to the quotas which were to be allocated for the quarter as a whole, it nevertheless remains that the undertakings received notice of the Commission's intentions.

JUDGMENT OF 16. 2. 1982 — CASE 258/80

The fourth submission

1 4 The Commission's obligation to carry out studies jointly with undertakings and associations of undertakings must receive a wider interpretation than that placed upon it by the applicant. In fact the Commission obtains infor- mation on the general situation in the steel industry and its various sectors by conducting continuous studies. In this connection it should be recalled that, according to Article 46 of the ECSC Treaty, undertakings and their associations are entitled to present any suggestions or comments to the High Authority on questions affecting them. Furthermore, the applicant, like any other steel producer, is bound regularly to furnish the Commission with its production figures and prices. In addition the Commission carried out specific studies concerning the requirements of the quota system. These various factors constitute the studies within the meaning of Article 58 (2) of the ECSC Treaty which the Commission was able to take into account.

15 Although the Commission is obliged to consult undertakings and associations of undertakings in conducting such studies, that obligation does not imply that it must consult each undertaking individually or that it must obtain the agreement of the steel producers to the measures proposed under Article 58. In this case the Commission informed the steel producers of the measures which it itended to take and it held meetings with the associations of under- takings concerned, including the association of Italian producers of concrete reinforcing bars, allowing them to bring their proposals to the Commission's attention. The applicant was represented at one at least of these meetings, namely the meeting on 17 October 1980. The Commission thus discharged its duty to conduct studies jointly with undertakings and associations of undertakings.

19 It is important to point out also that in its negotiations with non-member countries the Commission faces considerable difficulties as a result of the fact that the ECSC is a net exporter of steel; in such circumstances it is compelled to ensure the continuance of Community exports at the same time as it must attempt to limit imports into the Community, and it had reason to fear that by taking non-negotiated restrictive decisions with regard to non- member countries it might provoke retaliatory measures on their part which would be detrimental to the general interest.

20 In view of the foregoing the application must be dismissed as unfounded.

JUDGMENT OF 16. 2. 1982 — CASE 258/80

Costs

21 Under Article 69 (2) of the Rules of Procedure, the unsuccessful party must be ordered to pay the costs.

22 Since the applicant has failed in its submissions it must be ordered to pay the costs, including the costs of the application for the adoption of interim measures.

Due Pescatore Mackenzie Stuart O'Keeffe

Koopmans Everling Chloros Grévisse

Delivered in open court in Luxembourg on 16 February 1982.

P. Heim J. Mertens de Wilmars Registrar President