C-20/81

2. STAHLWERKE RÖCHLING-BURBACH GMBH, whose registered office is in Völklingen (Federal Republic of Germany),

3. NEUNKIRCHER EISENWERK AKTIENGESELLSCHAFT, VORMALS GEBRÜDER S T U M M , whose registered office is in Neunkirchen (Federal Republic of Germany),

represented by Arved Deringer and Jochim Sedemund of t h e Cologne Bar, with an address for service in Luxembourg at the office of Georges Faber, Arbed SA, Avenue de la Liberté,

applicants, v

COMMISSION OF T H E EUROPEAN COMMUNITIES, represented by H . Matthies, Legal Adviser, assisted by E. Grabitz, Professor at t h e Free University of Berlin, with an address for service in Luxembourg at the office of O . M o n t a k o , a member of t h e Legal Department, Jean M o n n e t Building, Kirchberg,

defendant,

I — The background to the quarterly reference production figures dispute both for rolled products and for crude steel. They read as follows: 1. By general Decision 2794/80/ECSC of 31 October 1980 (Official Journal "(1) For each month of the relevant 1980, L 291, p. 1), the Commission quarter, reference shall be made to instituted a system of production quotas the same month during the period for steel for the undertakings in the steel from July 1977 to June 1980 during industry. which the total production of the four groups of rolled products was the highest. The three months thus 2. According to Article 2 of that chosen, which will not necessarily decision, the Commission is to fix be consecutive, shall constitute the quarterly production quotas for crude reference period. steel and for the four groups of rolled products defined in that article and, in (2) The reference production figures greater detail, in Annex I to the decision. shall be the same, for crude steel and for each of the other groups of rolled products, as the production 3. According to Article 3 of the general of the corresponding items during decision, the Commission is to fix the reference period." quarterly production quotas "for each undertaking" on the basis of the reference production figures as referred to in Article 4 of that undertaking and 5. Subparagraphs (3), (4) and (5) of by application of abatement rates to Article 4 describe special cases in which these reference production figures as the production reference figures and, referred to in Article 5. However, Article consequently, the quotas are to be 1 (3) of the decision states that, for the increased. According to Article 4 (3), the purpose of applying the decision, that is Commission is to increase, in conformity to say, as regards both the calculation of with certain specified criteria, the the reference production figures and the production reference figures for under- establishment of the production quotas takings which during the period from resulting from these, any group of July 1977 to July 1980 had an average concentrated undertakings within the rate of utilization of production facilities meaning of Article 66 of the ECSC 10 percentage points or more below the Treaty is to rank as a single undertaking, average rate of utilization of the other even if these undertakings are located in undertakings of the Community during different Member States. the years 1977, 1978 and 1979.

Group III Heavy sections (sheet-piling, wide-flanged beams, other beams and other sections, permanent way material) 19-59%

Group IV Light sections (corded wire rod, concrete rein- forcing bars and other merchant bars) 27-64%

Crude steel 26-18%

7. According to Article 14 of the examine the case without delay, in the decision, where the production or light of the objectives of the decision. delivery restrictions imposed by the After examination, the Commission is to decision or its implementing measures adapt, where appropriate, the provisions entail exceptional difficulties for an of the decision. Lastly, Article 9 provides undertaking, it may refer the matter to for fines on undertakings exceeding their the Commission. The Commission is to production quotas.

ORDER OF 26. 2. 1981 — CASE 20/81 R

8. By individual decision of 19 for the whole of the Arbed group for the December 1980, confirmed by telex period from 1 January 1981 to 31 March message of 30 December 1980, the 1981 as follows: Commission fixed the production quotas

II — T h e w r i t t e n p r o c e d u r e the production quotas provided for in Article 4 (5), the benefit of which 1. By application, registered at the they could claim if their production Court on 4 February 1981, the applicants reference figures and their quotas brought an action for a declaration that had been fixed individually; the decisions of 19 December 1980, or failing that, those of 30 December 1980, (c) for the same reason the applicant fixing the production quotas allocated to Röchling-Burbach is deprived of the them for the first quarter of 1981 are benefit of the increases in quotas void in part. They say that these which result from Article 4 (3) and decisions infringe various provisions of which it, too, could claim individu- the ECSC Treaty, Article 4 (3) and (5) ally both for rolled products and for and Article 14 of Decision 2794/80/ crude steel; ECSC, and also the principle of non- discrimination inasmuch as: (d) the Commission failed to take (a) the calculation of the reference account, in issuing the contested production figures and of the decision, of the difficulties resulting production quotas is based on a for the applicants from the above- concept of an undertaking which is cited provisions of the general incorrect and incompatible with decision, when Article 14 of that Articles 4 (b), 58 (2) and 80 of the decision requires it to do so. ECSC Treaty; (b) as a result of this incorrect concept of an undertaking the applicants 2. A correct calculation would lead to Arbed and Neunkircher Eisenwerk the production reference figures and, are unable to rely on the increases in consequently, the production quotas for

3. On 4 February 1981, the applicants From the economic point of view, this made an application, pursuant to Article reduction would cause a further sub- 39 of the ECSC Treaty and Article 83 of stantial deterioration in the results of the the Rules of Procedure of the Court, for undertaking, since the particularly high the adoption of interim measures. The fixed costs of the operations of this object of that application is to "compel industry would be supported by an even the defendant" to grant a general smaller production. increase, to the extent of two-thirds of the quantities stated in their main application, in "the reference production As regards the social consequences, the figures and, consequently, in the Röchling-Burbach steelworks and the applicants' production quotas for the Neunkircher Eisenwerk AG would have first quarter of 1981". to pass from already very considerable partial unemployment to massive dis- 4. In its observations on the request for missals. Furthermore, the resultant social emergency measures, the Commission difficulties could no longer be met by contends that the Court should social measures, as is the case in the Dismiss the request for an order for the context of reorganization programmes, grant of interim relief. since the necessary financial means for that purpose would not be available.

III — S u b m i s s i o n s and argu- If, on the other hand, the applicants m e n t s of the p a r t i e s were to choose to exceed the production quotas to a limited extent in order to A — Observations of the applicants avoid these grave social consequences, The applicants consider that it is the financial charges then to be reckoned impossible to see how a judgment on the with as a result of the heavy fines would

be just as serious. Even if the Court were increases in production quotas which subsequently, in the main proceedings, to were submitted by the applicants at the rule in whole or in part in favour of the end of 1980 had, after examination, to applicants, it would be impossible to be rejected as unfounded. It may also be make up for the present lack of noted that the applicants did not bring production. What could not be produced an action against the fixing of the group during the first quarter of 1981 would be quotas for the fourth quarter of 1980 lost once and for all to the applicants. and the Commission is surprised that, in respect of the first quarter of 1981, they From another point of view, the should contest a method which they Community's interest in a strict accepted in respect of the last quarter of compliance with the production quotas is 1980. not sufficiently great to constitute an obstacle to a limited increase for the first For a request for the adoption of interim quarter of 1981. Article 14 of the general measures to be successful, the applicants decision provides that the Commission must prove that the measures requested: may, where appropriate, adapt the provisions of that decision when the measures for their implementation entail (a) shall be without prejudice to the exceptional difficulties for an under- decision to be given on the substance

It is apparent from the request for the adoption of interim measures that the measures requested prejudge the decision B — Observations of the defendant to be given on the substance of the case. It seeks in effect, by means of an emergency procedure, to produce a The Commission states that it is aware of result whereby the main application the difficulties experienced by numerous would succeed to the extent of two- steelworks, and that it understands that thirds of the claim. An interim measure the undertakings should use all the of this kind is in fact a definitive means at their disposal to have the measure: if unrealized production cannot quotas fixed at a higher level. These be made up, it is a fortiori precluded that considerations lead it to apply the quota production achieved can be annulled. system with the greatest care by keeping Nor, on the other hand, is it possible to permanently in contact with those contemplate making the measure subject

ARBED v COMMISSION

Lastly, the purpose of Article 14 of the general decision is not to grant special advantages to certain undertakings but, on the contrary, to mitigate excessive IV — O r a l p r o c e d u r e sacrifices which the application of the general decision would entail for certain undertakings, but without placing in The parties were duly summoned and jeopardy the attainment of the objectives presented oral argument at the hearing of the quota system. on 19 February 1981.

ORDER OF 26. 2. 1981 — CASE 20/81 R

Decision

1 Article 39 of the Treaty establishing the European Coal and Steel Community provides that actions brought before the Court do not have suspensory effect. However, the Court may, if it considers that circumstances so require, order that application of the contested decision be suspended. It may also prescribe any other necessary interim measures.

2 Under Article 83 (2) of the Rules of Procedure of the Court, the grant of an application to suspend the operation of a measure and a decision ordering interim measures are subject to the existence of circumstances giving rise to urgency and grounds establishing a prima facie case for such measures.

3 By general Decision 2794/80/ECSC of 31 October 1980 (Official Journal 1980, L 291, p. 1), a system of production quotas for steel was established for the undertakings in the steel industry. According to Article 2 (1) of that decision, the Commission is to fix quarterly production quotas for crude steel and for four groups of rolled products.

Total I—IV 1 771 371

Crude steel 2 276 678

6 By application, registered at the Court on 4 February 1981, three under- takings of the group, namely, Arbed SA, Röchling-Burbach and Neunkircher Eisenwerk, instituted proceedings under Article 33 of the ECSC Treaty essentially for a declaration that the individual decision of 19 December 1980 is void to the extent to which the reference production figures and the production quotas communicated for the first quarter of 1981 are not fixed at a higher rate.

7 These proceedings are essentially founded on the assertion that Article 1 (3) of the general decision infringes Articles 4 (b), 58 (2) and 80 of the ECSC Treaty in that, for the purposes of the application of the quota system, it ranks a group of undertakings as a single undertaking. For the purposes of calculating the reference production figures and the production quotas resulting from them, the Commission unlawfully aggregated the reference production figures of the various undertakings of the group. The only method in conformity with the Treaty would be to fix these reference production figures and production quotas for each individual undertaking in turn.

8 The applicants also contend that if this method of calculation by reference to each individual undertaking in turn had been adopted, the result would have been, first, that the sum of the reference production figures of the under- takings of the group would have exceeded by 54 252 tonnes per quarter those allocated to the group as a whole and that, as a result, the sum of the production quotas of those same undertakings would have exceeded by 39 245 tonnes the production quotas allocated to the group for the first quarter of 1981.

12 It is common ground between the parties that the three applicants form part of a group of concentrated undertakings within the meaning of Article 66 of the Treaty. It follows that, having regard to the rule laid down in Article 1 (3) of general Decision 2794/80/ECSC, the Commission did not exercise a discretion in this matter but applied in automatic fashion the criteria established in a precise and detailed manner by Articles 3, 4 and 5 of the general decision. The purpose of the application is thus to obtain from the judge responsible for granting interium relief an individual dispensation from the terms of general Decision 2794/80/ECSC by substituting, in favour of the undertakings concerned, criteria for fixing the quotas different from those applicable to all those steel undertakings which, like the applicants, form part of a group within the meaning of Article 1 (3) of the general decision. This request for a derogation is based on the idea that Article 1 (3), which constitutes the legal basis of the individual decision contested in the main action, is itself unlawful.

1 3 By virtue of Article 39 of the ECSC Treaty and Article 83 of the Rules of Procedure, as well as of a consistent line of decisions of the Court, measures of this kind may be adopted by the judge hearing the application for such

ARBED v COMMISSION

measures if it is established that their adoption is prima facie justified in fact and in law, if they are urgent in the sense that it is necessary, in ordet to avoid serious and irreparable damage, that they should be laid down, and should take effect, before the decision of the Court on the substance of the action and if they are provisional in the sense that they do not prejudge the decision on the substance of the case, that is to say that they do not at this stage decide disputed points of law or of fact or neutralize in advance the consequences of the decision to be given subsequently on the substance of the action.

ORDER OF 26. 2. 1981 — CASE 20/81 R

18 The answer to the question whether the applicants meet, in particular, the second of these conditions is so much the subject of controversy that the premise necessary for the grant of an interim measure, namely that this condition may be considered as prima facie fulfilled, in law and in fact, is wholly lacking.

19 The same applies as regards the applicant Röchling-Burbach's argument that the refusal to consider it as an individual undertaking deprives it of the benefit of Article 4 (3) of the general decision. The application of the special system provided for by Article 4 (3) depends on the finding by the Commission that "during the period from July 1977 to June 1980, the average rate of utilization of the production facilities of an undertaking was 10 percentage points or more below the average rate of utilization of the same facilities of the other undertakings of the Community during the years 1977, 1978 and 1979".

20 The Commission expressly denies that, even considered individually, this applicant meets the conditions which would enable it to claim the benefit of that provision. According to the Commission, the average rate of utilization of the production capacity of Röchling-Burbach is not, as regards rolled products, 10 percentage points below the average rate of utilization referred to in the said paragraph (3), which rules out the application of that provision. The applicant on the other hand makes the point that its production of crude steel is at a level which, according to it, makes it possible to call for an increase in quotas both for crude steel and for rolled products, even if, as regards the latter, the level of minus 10 points were not reached.

Costs

25 It is appropriate, at this stage, to reserve the costs.

On those grounds,

THE PRESIDENT OF THE COURT,

by way of interlocutory decision,

hereby orders as follows :