C-188/82

JUDGMENT OF 16. 11. 1983 — CASE 188/82

merely refers to fines "not exceeding itself, in no way precludes the the value" of the excess production, Commission from modifying the and in the light of the term amount of the fines, having regard to "generally" contained in Article 9 the circumstances of the infringement.

In Case 188/82

THYSSEN AG, having its registered office in Duisburg (Federal Republic of Germany), represented by Jochim Sedemund, Rechtsanwalt, Cologne, with an address for service in Luxembourg at the Chambers of Jacques Loesch, 2 Rue Goethe, applicant, v

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by Mr Götz zur Hausen, a member of the Commission's Legal Department, acting as Agent, assisted by Professor Eberhard Grabitz, of the Free University of Berlin, with an address for service in Luxembourg at the office of Oreste Montako, a member of the Commission's Legal Department, Jean Monnet Building, Kirchberg, defendant,

APPLICATION for a declaration that the Commission's decision of 11 June 1982 imposing a fine on the applicant is void,

Facts and Issues

I — Facts and written p r o c e d u r e 288 825 ECU, which is to say 75 ECU per tonne of excess production.

By Decision No 2794/80/ECSC of 31 On 24 July 1982 Thyssen instituted October 1980 (Official Journal 1980, proceedings to contest that decision. L 291, p. 1), the Commission of the European Communities established a Upon hearing the report of the Judge- system of production quotas for steel Rapporteur and the views of the undertakings. Pursuant to that decision, Advocate General, the Court decided the Commission allocated production to open the oral procedure without quotas to Thyssen AG, Duisburg, for the any preparatory inquiry. However it fourth quarter of 1980. Those quotas, requested the parties to provide it with which were notified to Thyssen on 3 certain information before the hearing November 1980, included a quota for and to answer certain questions. products in Group I (hot-rolled wide and narrow strip) which was fixed at 1 159 701 tonnes. The Court also decided, pursuant to Article 95 (1) and (2) of the Rules of Procedure, to assign the case to the Fourth Chamber. By a telex message of 11 November 1980 Thyssen informed the Commission that, in its opinion, the latter quota had been incorrectly determined. II — C o n c l u s i o n s of the p a r t i e s

The Commission recognized that an error had been made in the calculation Thyssen claims that the Court should : of the quota and, by a decision of 11 December 1980, which was notified to 1. Declare that the defendant's decision Thyssen on 17 December 1980, it of 11 June 1982, addressed to the increased the quota to 1 227 736 tonnes. applicant and received by it on 18 June 1982, concerning a fine imposed on the applicant pursuant to Article In the first quarter of 1981 Thyssen 58 of the ECSC Treaty is void; and exceeded by 3 851 tonnes the quarterly production quota allocated to it by the 2. Order the defendant to pay the costs. Commission for products in Group I. The quantity produced in excess of the quota was supplied to Stahlwerke The Commission contends that the Court Bochum, a producer of electrical sheet. should:

III — Submissions and arguments demand, consumers are obliged to deal of the parties with manufacturers established in non- member countries or with producers of substitute materials, which leads to a permanent weakening of the market. That is contrary to Article 3 (d) of the In its first submission, Thyssen claims that Treaty, which entrusts the institutions it was fined for exceeding a quota with the task of ensuring "the main- established in respect of a product which tenance of conditions which will would not have been included within .the encourage undertakings to expand and quota system if Article 58 of the 'ECSC improve their production potential". Treaty had been correctly applied. In its opinion, the Commission's general decision, Decision No 2794/80, which constitutes the basis for the decision Moreover, the general decision contra- imposing the fine, should have exempted venes the principle of equal treatment from quotas both electrical sheet and the laid down in Article 4 of the Treaty by raw materials (hot-rolled wide strips) providing in Article 6 for the exclusion intended for the manufacture thereof. By from the quota system of certain not granting those products exemption, products, such as tubes and tin-plate, the decision infringes a number of rules which were in a similar market situation and principles of Community law and to electrical sheet. It also produced should therefore be regarded as invalid. adverse effects on employment in the undertakings concerned, whereas the second paragraph of Article 2 of the Treaty expressly requires the Community In that regard, Thyssen observes, in the to safeguard continuity of employment. first place, that the Commission made an It is difficult to understand to what end incorrect appraisal as regards the the Commission sacrificed security of existence of a "manifest crisis", within employment. In any event, it was the meaning of Article 58 (1) of the certainly not in pursuance of the ECSC Treaty, in a market such as that in fundamental objective of Article 58, electrical sheet which has been stable and namely the adjustment of excessive well-organized for several years. In the production to an excessive decline in absence of a manifest crisis, the demand, since the Commission was conditions for the establishment of a unable to establish any decline in quota system are not fulfilled. demand for electrical sheet.

contested under the third paragraph of thermore, under Article 58 (2), the Article 36 of the ECSC Treaty in the Commission is required to establish absence of a direct legal connection quotas "on an equitable basis". If the between that decision and the contested only products included within the quota decision. There is no direct legal system were those which are difficult to connection between Decision No sell, undertakings manufacturing largely 2794/80 and the decision imposing the or exclusively products which are easy to

The market submission is admissible under the third surveys undertaken by the Commission paragraph of Article 36 of the ECSC before the introduction of the system of Treaty on two grounds : production quotas did not allow such a clear conclusion to be drawn as regards First, since the Court is asked to electrical sheet. In particular, the dis- consider whether a fine imposed for cussions which took place in September exceeding a production quota is justified, and October 1980 between the it is necessary to determine whether the Commission, the undertakings and quota in question could be fixed validly associations of undertakings, in accord- under Community law; ance with Article 58 (2) of the ECSC Treaty, did not make it possible to Secondly, it is clear from previous establish clearly whether there was any decisions of the Court that submissions justification for excluding materials challenging decisions of a general nature intended for the manufacture of are admissible if they are directed against electrical sheet from the system of provisions on which the contested production quotas. Only later did it individual decision was based. In the emerge from a survey of market trends present case, the unlawful inclusion that raw materials intended for the within the quota system of raw materials manufacture of electrical sheet could be intended for the manufacture of accorded the same treatment as tin-plate electrical sheet manifestly constitutes the and tubes. basis for the decision imposing a fine on the applicant, inasmuch as the latter decision was based solely on the In the Commission's view, since raw additional production of those raw materials intended for the manufacture materials. of electrical sheet were included within the quota system in order to satisfy the As regards the substance of the requirement that there should be an submission, the Commission takes the equitable apportionment of the burdens view that it is not possible to assess the resulting from the quota system, the existence of a manifest crisis within the principle of equal treatment has in no meaning of Article 58 (1) of the ECSC way been contravened. Treaty if only certain steel products or certain sectors of the market are The Commission observes that the

JUDGMENT OF 16. 11. 1983 — CASE 188/82

In those parts. circumstances it cannot rely on Article 8 (2) of Decision No 2794/80 to justify carrying over the unused portion of the tolerance margin, since that provision In the first part of its submission, Thyssen expressly lays down that only under- contends that the difference between the takings which have not exhausted their quota notified to it on 3 November 1980 quotas may carry over the unused and the higher quota resulting from the portion to the following quarter. adjustment notified to it on 17 December 1980 must be regarded as an additional

That practice, as is apparent from various Commission decisions (decision of 6 April 1981 addressed to Thyssen In reply, the Commission states that the concerning the carrying over of an decision of 11 December 1980, which increase, notified on 26 January 1981, in was notified to the applicant on 17 the quota for the fourth quarter of 1980; December 1980, did not allocate an decision addressed to Ferriera Padana additional quota to the applicant. Instead concerning the carrying over of an it must be regarded as a twofold measure increase, notified on 18 December 1980, providing for the revocation of an in the quota for the fourth quarter of

1980) consists in authorizing an under- margin to be carried over since to do so taking to carry over in their entirety to would have amounted to a distortion of the following quarter such portions of Article 8 (2) of Decision No 2794/80, quotas as the undertaking concerned was which authorizes only portions of a unable to use up owing to the quota to be carried over. Commission's delay in notifying it of the quotas for a given quarter. The under-

to produce. Furthermore, in the case of clearly offends against the principle of Ferriera Padana, the undertaking was good faith, which is recognized in permitted to carry over the unused Community law. portion of the quota, even though the conditions prescribed by Article 8 (2) of Decision N o 2794/80 were not fulfilled. The Commission's error prevented Thyssen from exploiting to the full the production possibilities granted to it under Decision No 2794/80 and from The Commission contends that Thyssen supplying certain quantities of products has failed to establish the existence in which had been ordered from it, inter Community law of the principle that the

not enjoy any discretion in fixing the In the first quarter of 1981, Thyssen was production quota relating to Group I for able, as a result of its own efforts, to the first quarter of 1981. offset part of that loss in a specific instance which, moreover, was known to the Commission and in respect of which the Commission had accepted the need Moreover, the two cases referred to by for a solution. Thyssen are not comparable to the present case since in neither of those cases had the quotas been used up in Whilst acknowledging that there can be full, whereas the applicant had already no question of claiming a right to exceeded its quota during the fourth compensation for any difficulties oc-

JUDGMENT OF 16. 11. 1983 — CASE 188/82

forbids the Commission to impose a fine between the alleged loss and the fact that on the applicant merely because the the decision increasing the quota for the latter sought to mitigate the loss with fourth quarter of 1980 was.not received which it was threatened as the result of by the applicant until 17 December of an error committed by the Commission that year. itself.

Without exceeding that margin, it could The Commission denies the existence without difficulty have produced before either of a loss or of a direct causal link 17 December 1980 the 3 851 tonnes of

THYSSEN v COMMISSION

raw materials required by SWB for the In Thyssen's opinion, "promises" of that production of electrical sheet. kind are capable of arousing a "legitimate expectation" even if they are not transformed into an undertaking In its third submission, Thyssen maintains which is directly legally binding on the that the Commission, by imposing a fine defendant. on it, contravened both the principle nemo contra factum suum venire potest and the principle of the protection of The Commission contends that, since no legitimate expectation. promise to refrain from imposing a fine in the event of excess production was made by its officials at the meeting held According to Thyssen, at a meeting on 27 November 1980, no such inference which took place on 17 November 1980 can be drawn from Mr Remy's letter of the representatives of Otto Wolff AG, of 3 December 1980. Moreover, at the Cologne, which together with Thyssen is meeting held on 17 December 1980, the SWB's parent company, explained to the Commission's officials had stressed that Commission's representative the reasons Thyssen was to supply SWB within the why it was absolutely necessary for limits of the sufficiently large quota Thyssen to supply SWB. allocated for products in Group I.

JUDGMENT OF 16. 11. 1983 — CASE 188/82

being exceeded. In fact, there is an accu- statement of reasons that the applicant mulation of unusual factors which had expressed its views, both orally and warrants an exception being made to the in writing, on the charge that it had rule since the effect of each of those exceeded its quotas. This shows that the factors is to mitigate the alleged Commission appraised the facts and infringement. arguments relied upon by the applicant. The Commission is under no obligation By imposing a fine in spite of those to refer to all the details of that appraisal considerations, the Commission adopted in the statement of reasons on which its an attitude manifestly in contradiction decision is based. with the principle of proportionality. In Thyssen's view, its fundamental rights The Commission emphasizes, in the first were infringed because the Commission, place, that under the first paragraph of at a hearing which took place on 15 Article 9 of Decision N o 2794/80 it has January 1982, made a tape-recording of no discretion to decide whether or not the proceedings without the knowledge to impose a fine, nor is it at liberty of the applicant's representatives.

were infringed.

2 T h e contested decision is based on the fact that in the first q u a r t e r of 1981 Thyssen exceeded by 3 851 tonnes the p r o d u c t i o n q u o t a allocated to it for the products in G r o u p I u n d e r the system of steel p r o d u c t i o n quotas established by Commission Decision N o 2 7 9 4 / 8 0 / E C S C of 31 O c t o b e r 1980 (Official J o u r n a l 1980, L 2 9 1 , p. 1).

3 T h e quantity p r o d u c e d in excess of the quota was supplied by the applicant, in fulfilment of an o r d e r received in 1980, to Stahlwerke Bochum (herein-

JUDGMENT OF 16. 11. 1983 — CASE 188/82

after referred to as "SWB"), a manufacturer of electrical sheet which required the supplies in question in order to ensure continuity of production.

4 Thyssen claimed that the following factors relating to the fourth quarter of 1980 should be taken into account in connection with the infringement of the quota.

(a) The quota of 1 159 701 tonnes notified to Thyssen by the Commission on 3 November 1980 was incorrect.

(b) Article 8 (2) of that general decision confers, subject to certain limitations, the right to carry over to the next quarter the unused portion of a quota and the applicant was also entitled to exercise that right in respect of the quantity not produced in the fourth quarter of 1980;

(c) Having developed an administrative practice of authorizing undertakings in the applicant's position to carry over the unused portion of a quota, the Commission could not penalize the applicant for exceeding its quota, without contravening the principle that the administration is bound by its own acts;

THYSSEN v COMMISSION

(d) Since, owing to a wrongful delay in notifying the quota, the Commission prevented the applicant from producing in 1980 the quantity of steel intended for SWB, it cannot, without contravening the principle of good faith, criticize the applicant for having produced that quantity in tke first quarter of 1981;

(e) Certain senior officials of the Commission promised the applicant that a fine would not be imposed if it exceeded its quota solely with a view to supplying SWB with the quantity of raw materials which it needed in order to continue production;

(f) The recording made by the Commission without the applicant's knowledge at a hearing which took place on 15 January 1982 must be regarded as a breach of essential procedural requirements;

s As regards the submission based on Article 8 (2) of Decision N o 2794/80, it must be noted that that provision refers exclusively to the possibility of carrying over to the following quarter the unused portion of the production quota, whereas the applicant had in fact used up the whole of its quota. Its argument to the effect that in the notification of 17 December 1980 the Commission fixed an additional quota which the applicant was unable to use up entirely, after exhausting the initial quota and the tolerance margin relating thereto, must be rejected. In fact, the applicant was allocated a single quota: namely, the one notified to it on 17 December 1980 in place of the incorrect quota notified on 3 November 1980.

9 As regards the reference to the principle that the administration is bound by its own acts, the Commission has demonstrated that the undertakings which were allowed to carry over the unused portion of their quota had not yet, unlike Thyssen, exhausted their quota and therefore fulfilled the conditions laid down by Article 8 (2) of Decision N o 2794/80 for exercising that right. Since the two situations are not comparable, no principle of Community law can be relied upon to support the claim that they should be accorded identical treatment.

io As regards the submission based on the delay which occurred in the notification of the definitive quota, it must be emphasized that a wrongful act on the part of the Commission cannot justify a breach of Community law by an undertaking, regardless of the economic justification relied upon by the latter.

H The arguments which the Court has already held to be unfounded when considering the applicant's other submission may be disregarded forthwith. Thus the sole factors which remain to be considered are SWB's state of necessity and the negligible quantity produced in excess of the quota.

is The argument based on necessity must be rejected. Whatever role that argument may play in Community law in general, an undertaking cannot in any event rely on the alleged necessity of a third party in order to justify its failure to comply with the obligations incumbent upon it under the system of production quotas.

i6 As regards the contention that the quantity produced in excess of the quota was negligible, it must be remembered that such production was penalized because it exceeded the 3 % tolerance margin fixed by Article 8 (1) of Decision N o 2794/80; hence the excess production cannot be regarded as negligible.

JUDGMENT OF 16. 11. 1983 — CASE 188/82

i7 The Commission was therefore right, even in this case, to abide by the principles governing the infringement of Article 58 of the ECSC Treaty and the resulting imposition of a fine.

is However, the Court must consider whether the circumstances of the case justify the amount of the fine imposed by the Commission. In that respect, it must be remembered that the applicant pleads a breach of the principle of proportionality, on the ground that the Commission imposed a fine exclusively on the basis of an arithmetical calculation of the quantity produced in excess of the quota without taking into account the specific circumstances of the case.

23 In that regard, it must be remembered that, under the second paragraph of Article 36 of the ECSC Treaty, the Court has unlimited jurisdiction in appeals against pecuniary sanctions and periodic penalty payments imposed under the Treaty.

24 In view of the exceptional circumstances in which the infringement was committed in the present case, it is appropriate. to impose a token fine of 5 ECU, corresponding to D M 12.

25 Under Article 69 (2) of the Rules of procedure, the unsuccessful party is to be ordered to pay the costs. However, under Article 69 (3) where each party succeeds on some and fails on other heads, or where the circumstances are exceptional, the Court may order that the parties bear their own costs in whole or in part. Since both the applicant and the Commission have failed in some of their submissions, it is appropriate to make such an order.

On those grounds,

T H E C O U R T (Fourth Chamber)

hereby:

The Registrar by order T. Koopmans H. A. Rühi President of the Fourth Chamber Principal Administrator

OPINION OF MR ADVOCATE GENERAL VERLOREN VAN THEMAAT DELIVERED ON 6 JULY 1983 '

that the applicant was no longer able to Mr President, Members of the Court, use the quota in full. The fact is that on 3 November 1980 a quota of 1 159 701 tonnes for products in Group 1 (rolled 1. T h e p r i n c i p a l f a c t s products) was allocated to the applicant. The quota seemed to have been miscal- culated and the applicant informed the This case concerns an application by Commission of this on 11 November by Thyssen AG, a German steel producer, telex. By a decision of 11 December to have declared void the Commission 1980, which was notified to the applicant decision of 18 June 1982 imposing a fine of 288 825 ECU on the applicant on 17 December, the Commission raised pursuant to Article 58 (4) of the ECSC the quarterly quota to 1 227 736 tonnes. Treaty for exceeding the production The applicant now contends that, as a quota allocated to it for the first quarter result of that belated notification, it was of 1981. The applicant contends that the unable to fulfil in their entirety certain Commission was late in notifying it of orders for the supply of raw materials for the correct production quota for the the production of non-oriented electrical fourth quarter of 1980, with the result

1 — Translated from the Dutch.