C-220/82

ORDER OF T H E PRESIDENT OF T H E COURT 20 SEPTEMBER 1982 '

Moselstahlwerk GmbH & Co. KG. v Commission of the European Communities

Case 223/82 R

Interim relief — Suspension of operation — Interim measures — Conditions under which granted (ECSC Treaty, Art. 39; Rules of Procedure, Art. 83 (2))

A suspension of the operation of a sense that it must be necessary for them measure and any other interim measures to be adopted and to have effect even which the Court of Justice may order before the Court's decision on the main pursuant to Article 39 of the ECSC application, in order to prevent the party Treaty may not be contemplated unless which requests them from suffering the factual and legal circumstances relied serious and irreparable damage: finally, upon establish a prima facie case in they must be temporary in the sense that favour of granting them. Furthermore, they must not prejudge the decision on such measures must be urgent, in the the main application.

In Case 220/82 R

makes the following

ORDER

Facts and Issues

The applicant is a steel-making under- seeable period required for the taking in Trier which, by its own conclusion of the proceedings on the account, produces exclusively wire rod. main application; On 19 August 1982 it lodged an application with the Court Registry seeking a declaration that the individual 2. A panel of experts should in any case decision of the Commission dated 6 July be set up with the task of giving its 1982 was'void. That decision, which was opinion whether "compliance with the notified on 12 July 1982, had fixed the quotas imposed by the individual applicant's quota for wire rod during the decision of 6 July 1982 inevitably third quarter of 1982 at 37 371 tonnes entails making the applicant's business and had fixed the portion of that quota unprofitable, thereby obliging it to which could be delivered within the dismiss its labour force and to common market at 36 809 tonnes. commence winding-up proceedings in pursuance of German legislation on insolvency." In a document lodged on 27 August 1982 the applicant requested, pending judgment on its main application, the 3. The costs should be reserved. adoption of the following interim measures: Bv Decision No 1696/82/ECSC of 30 I. The Commission should be ordered June 1982 (Official Journal 1982, L 191 to take such protective measures as it p. 1), the Commission extended, with considers necessary in order to ensure amendments, the system of monitoring that Moselstahlwerk's faeton·, which and restricting the production of certain is threatened with closure, continues products of undertakings in the steel to operate during the minimum fore- industry over a period running from

1 July 1982 to 30 June 1983. That system TV) the rate of abatement, both for the was instituted by Commission Decision establishment of production quotas and No 2794/80/ECSC of 31 October 1980 for the part of the production quotas (Official Journal 1980, L 291 p. 1) and which might be delivered in the common was first amended bv Commission market, was fixed at 40°/c. Decision No 1831/81/EČSC of 24 June 1981 (Official Journal 1981, L 180, p. 1), which applied from 1 July 1981 to 30 June 1982. By an individual decision dated 6 July 1982 the Commission notified the applicant on 12 July 1982 of its reference production and, in accordance with the Wire rods, which had been brought procedure described above, fixed its within the system of production quotas production quota for the third quarter of by Decision No 2794/80 but had been 1982 and the pan of that quota which excluded from it by Decision No might be delivered in the common 1831/81, were reincluded (under cat­ markei. egory IV) with effect from 1 July 1982 by virtue of Article 4 of Decision No 1696/82/ECSC. In a series of letters to the Commission dated 13 July and 12 and 19 August Like the earlier general decisions 1982, the applicant requested that the mentioned above, Decision No 1696/82 quota be increased, arguing that contains a provision (Article 14) enabling compliance with the quota assigned to it the Commission, at the request of the was bound to bring its business to a halt undertaking concerned, to make suitable in the near future. It stated that it was adjustments to its reference production prepared to expon outside the common and/or reference quantities if, by virtue market any extra production which was of the scale of the abatement rates set in allocated to it. respect of a given quarter, the quota system creates exceptional difficulties for that undertaking. However, the On 19 August 1982 the applicant redrafting of that aniele narrows the commenced proceedings io have the scope offered by Decision No 2794/8C above-mentioned decision of 6 July 1982 for appealing to the Commission, by declared void. In accordance with Anicie stipulating thai, in order to qualify- for 33 of the ECSC Treaty, the action is an adjustment, the total reference based upon the alleged infringement of production for categories IV (wire rods), that Treats- and oi tne general principles V (concrete reinforcing bars) and VI ot law, as recognized and guaranteed by (merchant bars) must amount io less the Coun of Justice of the European than 1CCC3C metric tonnes a year and Communities. The applicant aiso ques­ that the abatement rate for one or more tions the legaluv ot Anicie 14 oi of those categories must exceed 22·/:. Decision No 1Ö9O/$2, claiming thai the conditions governing its applicability are framed in such a restrictive manner that Bv Decision No 1697/S2/ECSC of 3 : a number ot undenakings, the applicant June 19S2 (Official Journal. L m p. 42) included, are ceDarred trom the outset the Commission fixed the abatement from seeking me oenefit ot a quota rates for the third quarter of 19S2 in adjustment. The Commission is thus accordance with Decision No lo9o/82/ alieged to have contravenea Anieles 2. 3 ECSC. In the case of wire rods icaiegorv ana 4 ot tne ECSC Treaty, in panicular

the second paragraph öf Article 2 In an application lodged at the Court thereof, which reads: ' T h e Community Registry on 27 August 1982 the applicant shall progressively bring about conditions requested the adoption of interim which will of themselves ensure the most measures pursuant to the third paragraph rational distribution of production at the of Article 39 of the ECSC Treaty and highest possible level of productivity, Article 83 of the Rules of Procedure while safeguarding continuity of of the Court. It requests that the employment and taking care not to Commission be ordered to take such provoke fundamental and persistent protective measures as it considers disturbances in the economies of necessary in order to ensure that the Member States." The decision under applicant's factory, which is threatened challenge would, if applied as it sunds, with closure, continues to operate during not only cause the applicant irreparable the minimum foreseeable period required and irreversible damage but would also for the conclusion of the proceedings on upset the socio-economic balance of the the main application. It requests that at Land Rheinland-Pfalz. The applicant all events a panel of experts should be set further asserts that the Commission has up with the task of giving its opinion as exceeded the limits of its discretion by to whether compliance with the quotas failing to act in an equitable, circum­ imposed by the Commission would stantial and prudent fashion so as to inevitably cause it to become un­ safeguard employment as far as possible, economical and would condemn it to thereby contravening the provisions of insolvency. Article 58 of the ECSC Treaty. The applicant is a medium-sized undertaking which has managed, since the major crisis of 1976 and without either State subsidy or ECSC assistance, to break even each year or even to show a slight profit. By making the benefits available under Article 14 of Decision No 1696/82 subject to conditions which According to the applicant, the preclude a pńori certain undertakings conditions for the granting of interim such as the applicant from seeking such measures are satisfied. The matter is relief, the Commission is condemning it urgent since the Commission's decision to insolvency. of 6 July 1982 was immediately applicable and, in order to comply with it, the applicant would have to close down its business, either partially, towards the end of the third quarter, or wholly, by the end of 1982. The relief sought is prima facie, justified both in fact and in law, since the monolithic nature of its production prevents it from diversifying and because its debts are growing to intolerable proportions. Moreover, according to the applicant, Moreover, by narrowing down the Commission infringed the principle excessivelv the field of application of of equahtv of treatment because in Amele 14 of Decision N o 1696/82. the undertaking such as the applicant cannot Commission is alleged to have infringed, support the same burdens as the large for the reasons stated above, the ECSC multinational undertakings which have a Treatv and the general principles of law diversified range of products recognized and protected by the Court

By a document of 9 September 1982, lodged at the Court Registry on 10 September 1982, the Commission contended that the Court should dismiss The Commission contends that the the application for the adoption of applicant has also failed to take account interim measures. After recalling how the of the production targets notified to the system applicable to wire rod has undertakings as part of the voluntary developed since Decision No 2794/80, system at the time when Decision No the Commission describes how the 1831/81 was in force, with the result output of wire rod progressed between that the applicant itself aggravated the 1977 and 1981 and how the situation reduction in its output due to the deteriorated in 1981 and 1982 when only compulsory quota imposed for the third the system of monitoring was in quarter of 1982. If the applicant had operation. It emphasizes that between observed those production targets the the introduction of anti-crisis measures reduction in its output would have been (in 1977) and 1981 the applicant only about 11%. increased production by 20.6%, whereas other producers of wire rod did so onlv by 2.5%. In the first half of 1982 Moselstahlwerk's output increased by 10.48% in relation to the same period in In conclusion, the Commission argues the previous year, whereas the average that any adjustment of the quota increase among the other producers awarded to the applicant is warranted within the common market was 3.05%. because such a quota does not constitute The average utilization of capacity in the a disproportionate sacrifice, is relatively third quarter of 1982 was 69.53% in the favourable to the applicant and would case of Moselstahlwerk but only 45.56% have caused it fewer problems if it had among the other producers. joined the voluntan' system in 1981 and 1982 and that since any adjustment is detrimental to competitors, there are no grounds for making such an adjustment here. The Commission maintains that the applicant had, at the time when the earlier quota system was in force, taken advantage of an exceptional increase in its production quotas under Anicie 14 of Turning specifically to the question of Decision No 2794/80, because it had interim relief, the Commission considers received exceptional orders from non- that the application is inadmissible and, member countries which it was in the at all events, unfounded. The request for interests of the common market to carry protective measures is vague and the out. As these additional quotas were question to be put before a panel of included in the calculation to establish experts is irrelevant. If in fact the the reference production under the applicant wishes to be awarded an extra

MOSELSTAHLTCRK v COMMISSION

3 Since the applicant's annual reference production for the period under consideration is more than 100 000 tonnes, it is, by virtue of the limit set by Article 14, precluded altogether from qualifying for an adjustment of its quota. It maintains that the Commission's self-imposed limitation on its power to grant special relief is a breach of Articles 2, 3 and 58 of the ECSC Treaty.

« The applicant further argues that the limitation of its production which the disputed quota entails is such as to constitute an immediate and serious threat to its economic and financial standing even before a decision can be taken on its main application: interim measures should therefore be adopted in order to avoid that situation.

s Thus, in a document dated 27 August 1982, the applicant requested that by way of interim measures pursuant to Article 39 of the ECSC Treaty and Article 83 of the Rules of Procedure of the Court of Justice:

1. The Commission should be ordered to take such protective measures as it considers necessary in order to ensure that Moselstahlwerk's factory, which is threatened with closure, continues to operate during the minimum foreseeable period required for the conclusion of the proceedings on the main application;

2. A panel of experts should in any case be set up with the task of giving its opinion as to whether "compliance with the quotas imposed by the individual decision of 6 July 1982 inevitably entails making the applicant's business unprofitable, thereby obliging it to dismiss its labour-force and to commence winding-up proceedings in pursuance of German legislation on insolvency."

10 At the hearing the applicant explained that the broad wording given above was designed to obtain an increase in its quota or, failing that, a loan from the Commission to enable it to meet financial commitments which would become especially onerous if it had to comply with the quota allocated to it.

M Without its being necessary to examine whether the measures sought could in practice be taken by the Commission, the application must be dismissed.

12 The 40c/o abatement rate applied to the reference production which the Commission decided to fix in view of the market conditions for wire rod is valid for all the 63 wire-rod producers which are subject to the system of

MOSELSTAHLTFERK v COMMISSION .

production quotas. Of those 65 undertakings, 16 are integrated, whereas 49 are said to be non-integrated: 12 of those 65 undertakings have an annual reference production of less than 100 000 tonnes. These statistics, admitted by the applicant, demonstrate that the latter is, as regards the abatement rates imposed and the impossibility of obtaining any exemption, in the same situation as most of its competitors. The applicant underlined the fact that it is an independent family firm producing exclusively wire rod. That factor is, however, not such as to modify its competitive position in relation to its business rivals and does not make its situation an exceptional one in the prevailing market conditions as created by the application of the quota system.

i3 Moreover, it appears from the information supplied by the Commission that the applicant actually found itself in a more favourable situation, as regards the determination of the disputed quota, than the majority of its competitors. Indeed, on the basis of Article 14 of Decision No 2794/80/ECSC, the applicant had previously obtained increases in its quotas, which were taken into account in the calculation of its reference production for the purpose of fixing the quota which it is now disputing.

is It follows from the above considerations, and for the same reasons as those which oblige the Court to dismiss the first head of claim, that there are no grounds for allowing this second head.

On those grounds,

THE PRESIDENT,

by way of interim decision,

hereby orders as follows:

1. The application is dismissed.