C-74/81

J U D G M E N T OF T H E C O U R T 10 FEBRUARY 1982 1

Rudolf Flender KG and Others v Commission of the European Communities

(ECSC — Application for a declaration of nullity brought by undertakings not subject to the Treaty)

Case 74/81

Application for declaration of nullity — Action having lost its purpose — No need to give a decision (ECSC Treaty, Art. 33, second paragraph)

A declaration that there is no need to has not had, and can no longer have, give a decision must be made in respect any adverse effects on the applicants and of an action concerning a decision which which has therefore lost its purpose.

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by Götz zur Hausen, a member of its Legal Department, acting as Agent, with an address for service at the office of O. Montalto, a member of its Legal Department, Jean Monnet Building, Kirchberg, defendant,

APPLICATION for a declaration that Commission Decision 385/81/ECSC of 13 February 1981 concerning certain obligations to be fulfilled by Community producers of steel tube (Official Journal 1981, L 42, p. 17) is void or, in the alternative, that it is void as regards the applicants,

THE COURT

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

established. According to the Com- Treaty, as defined by Article 80 of the mission, that exemption and the special Treaty. regime require the Commission to be informed of, and enabled to check, the actual use to which the material in 2. Under Article 33 of the ECSC question is put and, in view of the fact Treaty undertakings subject to the that such a check can be carried out only Treaty may institute proceedings to have on the premises of the manufacturers individual decisions concerning them who, as such, are not undertakings declared void on grounds of lack of within the meaning of the ECSC Treaty, competence, infringement of an essential the Commission resorted to Article 95 of requirement, infringement of the Treaty that Treaty for the purposes of adopting or of any rule of law relating to its the contested decision. Article 1 of the application, or misuse of powers decision requires tube producers to affecting them. furnish to the Commission, on a monthly basis, information about the production of tube and the origin of the material for 3. Article 36 provides that, in appeals such tube. Article 2 of the decision against pecuniary sanctions and periodic renders the provisions of Article 47 of penalty payments, the Court is to have the Treaty applicable as regards the unlimited jurisdiction based on all the Commission's powers to verify the grounds of action enumerated in accuracy of the information provided Article 33. (without any need for an individual decision for the purpose) and to impose fines and penalty payments. 4. Under Article 95, where a decision, although not provided for by the Treaty, is necessary to attain one of the It is that decision which the four objectives of the Treaty, the decision applicants are challenging in this action may be taken by the Commission with which was brought on 7 April 1981. the unanimous assent of the Council and after the Consultative Committee has It is a matter of fact that Decision been consulted. Any decision so taken is 385/81/ECSC ceased to apply on 30 to determine what penalties, if any, may June 1981 and that the Commission be imposed. requested no information from the applicants; nor did it impose any fines on them during the period of validity of the decision. I I I — C o n c l u s i o n s of t h e p a r t i e s

Dismiss the application as inadmissible 3. The second part of Article 80, which and, in any event, as unfounded; makes subject to the law of the European Coal and Steel Community, "for the purposes of Articles 65 and Order the applicants to pay the costs. 66 and of information required for their application and proceedings in connection with them, any under- taking or agency regularly engaged in I V — A r g u m e n t s of t h e p a r t i e s distribution other than sale to 1. Admissibility domestic consumers or small craft industries" and which confers upon those concerned a right of action, (a) The applicants stress on the one even if they are only required to hand that the second paragraph of supply information and are not Article 33 of the ECSC Treaty in required to allow verification work to principle gives undertakings subject to be carried out as in the present case. the ECSC Treaty the right to institute proceedings and, on the other hand that neither the ECSC Treaty nor general On this point of admissibility the Community law, which is governed by applicants submit that: the constitutional principles and legal traditions common to the Member Either, under the terms of the second States, recognizes executive measures paragraph of Article 33 of the ECSC which are exempt from the possibility Treaty, tube producers are denied the of being challenged by the parties right to institute proceedings on the concerned subject to generally accepted ground that they are not "undertakings" conditions. within the meaning of Article 80 of the ECSC Treaty, which however necessarily The applicants refer to special cases implies that legal or administrative provided for by the Treaty, in which the measures of the institutions of the recognition of limited powers extending European Coal and Steel Community to undertakings not subject to the may not be addressed to them; Treaty, is linked to the concomitant right to institute proceedings before the Court. Or, notwithstanding all objections based The articles in question are as follows: on Community law, constitutional law or public international law, the purported 1. Article 63 (2) which, in a case where extension of sovereign powers in the an undertaking is prohibited from present case is recognized and in that dealing with certain purchasers, case legal protection conferred by the confers upon the purchasers the right, ECSC Treaty and unwritten constitu- without prejudice to Article 33, to tional traditions dictate that a right of bring an action before the Court; action must be granted by going beyond the limits of positive law which are laid 2. Article 66 (5) according to which any down in the second paragraph of Article person directly concerned by an order 33 of the ECSC Treaty.

Under the first of these propositions the actions to have a general decision present action is certainly inadmissible declared void. The possibility of but the Court should nevertheless ensure contesting general decisions constitutes, that the legal situation is clarified in a even for undertakings subject to the proper manner in the context of the ECSC Treaty, a narrowly defined decision as to costs. Such a clarification exception which may not be extended, in is of overiding necessity for the the absence of an overriding reason, to applicants because of the present legal undertakings which do not come within uncertainty and the risks which that the ECSC Treaty. entails. The reference made by the applicants to various articles of the ECSC Treaty is The Commission states that the action is without relevance. directed against a general decision creating obligations for undertakings not 1. In the case of Article 63 (2) the subject to the ECSC Treaty and in the purchaser, although not subject to a event of failure to comply with those prohibition, is in effect the person objectives an individual decision may be most closely affected by it and usually adopted imposing fines and periodic is much more affected by it than penalty payments on the undertaking producers. The sole possibility of concerned. Article 95 of the Treaty is in ensuring his legal protection is to give itself a general provision and has not him a right of action under Article 33 settled the question of rights of action in against a decision which is not such a case. It may be assumed, however, addressed to him. that in addition to giving the Commission powers as regards the 2. Article 66 (5) gives a right of action matters governed by it, it also gives the to undertakings not subject to the Commission the power to grant a right ECSC Treaty but only against of action to the undertaking concerned. individual decisions and it may not be Decision 385/81/ECSC might therefore relied upon as a ground for applying have expressly provided that producers by analogy Article 33 in order to of steel tube should have the right to contest a general decision. institute proceedings under the second 3. The second part of Article 80 widens paragraph of Article 33 of the ECSC in certain cases the definition of Treaty against the general decision or, "undertaking" as defined in the under Article 36, against any decision Treaty and thus makes no mention of imposing a penalty or that both rights of the legal protection to be conferred action should be available to them. The on undertakings not subject to the decision however contains no such ECSC Treaty. express provisions.

where a fine or a periodic penalty persons not subject to the rules of the payment is imposed on them. Treaty. In doing so the Commission has used the simpler procedure contained in (b) The applicants state that the the first and second paragraphs of Article contested decisions must be classified as 95 in order to "avoid having recourse to a general decision within the meaning of formal requirements considered as more the second paragraph of Article 33. onerous than the procedure "such as Moreover they acknowledge that, whilst the procedure which should really be individual decisions may be challenged applied", namely an amendment to the on the standard grounds of lack of Treaty under Article 96 subject to rati- competence, infringement of procedural fication by the legislatures of the requirements or substantive provisions as respective Member States. well as misuse of powers and whilst the Court, in appeals against decisions That constitutes a misuse of procedure imposing sanctions and periodic penalty which comes within the concept of payments has unlimited jurisdiction, the "misuse of powers" within the meaning second paragraph of Article 33 of the of Article 33 of the Treaty. ECSC Treaty only allows general decisions of the Commission to be In avoiding the procedure laid down in contested on the ground of misuse of Article 96 for amendments to the Treaty powers. the Commission resorted to the simplified procedure provided for by the However, for an action to be admissible first paragraph of Article 95 for a it is sufficient, according to the purpose other than that for which it was applicants, to adduce relevant facts and legally provided in order to give effect to to indicate the reasons why there has its intention to extend its own sovereign been a misuse of powers affecting the powers to undertakings which are not

them". According to the case-law of the According to the case-law of the Court Court that condition is satisfied where an there is a misuse of powers where the undertaking "has been subject to or at Commission, through want of foresight any rate the victim of the misuse of or serious lack of care amounting to powers which it alleges". disregard for the purpose of the law, has pursued objectives other than those for That condition is satisfied since the which the powers provided for by the applicants, whilst not being subject to the Treaty were conferred upon it. legislation of the European Coal and Steel Community or to the sovereignty In this respect it makes no difference of its institutions, have suffered damage whether the authority applies a sub- to their rights and interests by being stantive provision for a purpose for subjected to obligations to supply infor- which it is not intended or whether it mation which are imposed upon them uses a procedural measure as a basis for directly. adopting measures for which the procedure selected is not intended. In addition to the duty to supply infor- mation, provision has also been made for In this case the Commission has an obligation to allow verification work extended, beyond the field covered by to be carried out.

FLENDER v COMMISSION

Contrary existence of a misuse of powers in order to what the Commission says, there is no that the application may be adjudged to legislative vacuum to be filled. In the first be admissible. That is a matter of place, the persons subject to the law substance. In order that the application of the European Coal and Steel may be adjudged to be admissible, they Community, inasmuch as they are the must however formally plead a misuse of persons to whom legislative measures powers affecting them and make out a may be addressed in the sphere covered prima facie case of such misuse of by the Treaty, are expressly named in the powers. Treaty and it was only in respect of them that the Member States delegated powers to the Community. To concede to the Commission the absolute power, in The applicant's argument is not material collaboration with the Council, to exceed since, on the basis of the facts and the limits assigned to positive law would circumstances described by the appli- be purely and simply to grant to the cants, a case of misuse of powers cannot ECSC authorities potential sovereign conclusively be made out. rights in regard to all and sundry.

Even if it considered that continuous information and checks were Moreover the applicants have not made necessary it ought to have confined itself, any allegation appropriate for the in accordance with the fundamental purposes of the contention that they principles of the Treaty and with the alone unlike the other producers of steel spirit of Article 63 (2), to adopting tube, are the victims of a misuse of measures in regard to undertakings powers. Their application therefore fails engaged in production in order to to found a right of action to have a compel them to guarantee, by means of general decision declared void. contractual commitments to that effect,

Decision

1 By application l o d g e d at the C o u r t Registry on 7 April 1981, four u n d e r - takings, p r o d u c e r s of steel t u b e , instituted proceedings u n d e r the second p a r a g r a p h of Article 33 of the E C S C T r e a t y to have C o m m i s s i o n Decision 3 8 5 / 8 1 / E C S C of 13 F e b r u a r y 1981 c o n c e r n i n g certain obligations t o be fulfilled by C o m m u n i t y p r o d u c e r s of steel tube (Official J o u r n a l 1981, L 42, p. 17) declared void.

2 T h e contested decision was a d o p t e d within the f r a m e w o r k of a system instituted by C o m m i s s i o n Decision 2 7 9 4 / 8 0 / E C S C of 31 O c t o b e r 1980 establishing a system of steel p r o d u c t i o n q u o t a s for u n d e r t a k i n g s in the iron a n d steel industry (Official J o u r n a l 1980, L 2 9 1 , p . 1). U n d e r t h a t system, material for t u b e is exempted from q u o t a s provided that it is actually used

FLENDER v COMMISSION

within the common market for the production of tubes. In addition, for some of that material, a special supervisory regime was established.

3 In the recitals in the preamble to the contested decision, the Commission states that the exemption and the special regime require the Commission to be informed of, and enabled to check, the actual use to which the material in question is put and that such a check can be carried out only among tube producers which, in this capacity, are not undertakings within the meaning of Article 80 of the Treaty. For those reasons, the Commission resorted to Article 95 of the ECSC Treaty so as to extend, by means of the contested decision, the application of the provisions of Article 47 of the Treaty to tube producers.

8 In the course of the oral procedure, the Commission emphasized that, in its opinion, the wording of the decision did not permit the mere failure to furnish the information required by Article 1 of the decision to be punished by the imposition of the fines and penalty payments provided for in Article 47 of the ECSC Treaty. Since the reference to Article 47 of the ECSC Treaty appears only in Article 2 of the decision, only non-compliance with the duty, imposed by that article, to allow verification work to be carried out in situ, is capable of attracting a penalty. The Commission, moreover, acknowledged that it no longer has the power to undertake verification work in situ under the decision. As a result, it stated that it would no longer take action against the applicants on the basis of the decision. The applicants have not raised any objection to that standpoint.

9 It must therefore be concluded that the action concerns a decision which has not had, and can no longer have, any adverse effects on the applicants and that accordingly it has ceased to have any purpose.

Costs

10 Under the terms of Article 69 (5) of the Rules of Procedure, where a case does not proceed to judgment the costs are to be in the discretion of the Court. In the circumstances of this case the parties must bear their own costs.

FLENDER v COMMISSION

On those grounds,

P. Heim J. Mertens de Wilmars Registrar President

O P I N I O N O F MR ADVOCATE GENERAL REISCHL DELIVERED O N 24 N O V E M B E R 1981 1

Mr President, certain materials intended for the Members of the Court, production of tubes were exempted from the rules laid down in Decision 2794/80/ ECSC (Official Journal 1980, L 291, p. 1 The system of steel production quotas et seq.). A r t i c l e6 of that decision has already been before the Court in a provided that undertakings must be series of cases. In the course of exempt from production quotas in preparation of the quota system it was respect of the following products found that the demand for certain tubes intended for production within the was increasing. This was the reason why common market: 1 — Translated from the German.