C-2/83

J U D G M E N T O F T H E C O U R T (FIFTH CHAMBER) 14 FEBRUARY 1984 1

SpA Alfer ν Commission of the European Communities (ECSC — Exceeding delivery quotas — Fine)

Case 2/83

ECSC — Production — System of steel production and delivery quotas — Exceeding the delivery quota in a particular quarter — Reduction of deliveries in a subsequent quarter in order to compensate for the excess — Not permissible — Exceptional difficulties of the undertaking in observing the quota — Belated reaction by the Commission — Reduction infine (ECSC Treaty, Art. 58; General Decision No 1831/81, Art. 8, as amended by Decision No 2804/81, and Art. 12)

In Case 2/83

SPA ALFER, Pisogne (Brescia, Italy), represented by its managing director, Antonio Giordani, assisted by Cesare Castelli of the Brescia Bar, with an address for service in Luxembourg at the Chambers of Guy Thomas, 11a Boulevard Joseph-II, applicant, ν

Advocate G e n e r a l : G. Reischl Registrar: P . H e i m

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of the L 180, p. 1). On the basis of that procedure and the conclusions, sub- decision the Commission adopted missions and arguments of the parties Decision No 1833/81/ECSC of 3 July may be summarized as follows : 1981 fixing the abatement rates for the third quarter of 1981. Pursuant to the latter decision it informed the company SpA Alfer (hereinafter referred to as "Alfer"), of Pisogne, by registered letter I — Facts and written p r o c e d u r e of 10 August 1981, that for the third quarter of 1981 (July, August and September), in addition to the reduction By Decision No 1831/81/ECSC of 24 in production quotas, there would be a June 1981 the Commission established a reduction in quotas for deliveries within monitoring system and a new system of the common market and that for production quotas in respect of certain Category V and VI products the products for undertakings in the iron production quota was 18 057 tonnes and and steel industry (Official Journal 1981 the delivery quota 5 079 tonnes.

ALFER ν COMMISSION

By letter of 4 November 1981 the Commission informed the applicant that It is apparent from the aforesaid letter of it had increased the quarterly reference 4 November 1981 that the increase in the quantity to 23 217 tonnes with a delivery quota was calculated on the corresponding increase to 15 091 tonnes basis of a reference quantity amounting of the delivery quota for the common to 90% of Alfer's reference production. market and that those amounts were to be substituted for those fixed in its previous letter of 10 August 1981. The By letter dated 25 February 1982 the Commission added that the provisions in Commission complained to Alfer under question applied to the third quarter of Article 36 of the ECSC Treaty that for 1981 but the undertaking was neverthe­ the third quarter of 1981 it had exceeded less authorized to carry forward to the by 2 402 tonnes the part of its fourth quarter the amounts allocated as a production quota which could be result of the increase in the quota which delivered in the common market in could not be used during the third respect of products of Categories V and quarter. VI.

The increase in the delivery quota was In a letter dated 9 March 1982 Alfer made pursuant to the second indent of stated that it was not until 4 November Article 8 (2) of Decision No 1831/81, as 1981 that it had been informed of the amended by Decision N o 2804/81/ amount by which the quota for the third

JUDGMENT OF 14. 2. 1984 — CASE 2/83

The first is that there is no infringement. Upon hearing the report of the Judge- Since the Commission only notified Alfer Rapporteur and the views of the of the quotas for the third quarter of Advocate General the Court decided to 1981 in its letter of 10 August 1981, it open the oral procedure without any cannot claim that they apply from 1 July preparatory inquiry. 1981 since they are deemed to apply from the date of their notification. Alfer By order of 6 July 1983 the Court takes the view that the general decision assigned the case to the Fifth Chamber. of the Commission has legal effect either from the date of its publication in the Official Journal or from the date of its notification to the undertaking. In view of the non-automatic nature of the II — C o n c l u s i o n s of t h e p a r t i e s system, which provides that quotas are to be notified individually to the various undertakings, and the fact that it would Alfer claims that the Court should: have been necessary for Alfer to perform a calculation to determine its quotas before their notification, the decision Declare the contested decision void and, could not have full effect from the date wholly in the alternative, reduce the fine of its publication. The Commission was in an equitable manner; thus quite wrong in seeking to apply the decision retroactively.

Order the defendant to pay the costs. At a practical level Alfer claims that it is impossible for logistic reasons connected The Commission contends that the Court with stocking, staff employed and firm should: orders to suspend production or, in the

present case, sales to compensate in a the delivery quota allocated to it could single month (September) for the not be confined to the quantity actually increase in production and sales in the sold during the period in which the previous two months. special situation existed; it ought to have been calculated on the basis of the undertaking's actual production, that is to say according to the criteria which the Commission employed subsequently in The Commission replies that the con­ Decision No 2804/81. tested decision was published in the Official Journal on 4 July 1981 and that it is from that date that the undertakings should have had, or at least were deemed to have had, knowledge thereof. In the Commission's view the undertakings Alfer claims that there was a manifest could, by means of a simple calculation, lack of proportion between its own ascertain the quotas which could be treatment and that of other undertakings delivered on the market. After denying in view of the fact that it was required to that the alleged delay in the notification accumulate stocks in spite of the crisis of the quotas had any practical or legal affecting the industry and the under­ consequences, the Commission adds that, taking itself. The accumulation of stocks in view of the annual closure of the was not possible both because of the lack undertakings, it was practically im­ of funds necessary for the purchase of possible for an undertaking to exhaust its material and the logistic impossibility of quota before the Commission officially stocking material which was not auth­ notified it thereof at the beginning of orized to be sold. Furthermore, the August 1981. threat of difficulties with trade unions had to be taken into account by the undertaking. In addition, there was the distortion, in relation to other under­ takings, arising from the possible need to reduce production for the aforesaid The Commission maintains that Alfer reasons in the event of the restriction of was obliged to comply with Decision No its sales. It is therefore clear that, 1831/81/ECSC from the date of its pub­ confronted with the unlawful Com­ lication in the Official Journal and that mission decision. Alfer considered that it in this particular case the individual was under no obligation to comply decision was merely a measure applying therewith and to limit its sales to 5 079 the general decision and therefore tonnes. conferred no new rights on the party in question, since the rights and duties of the undertakings had already been specified in the general decision.

above-mentioned reasons and that con- The third submission made by Alfer is sequently the undertaking was under no that there is a manifest inconsistency in obligation to comply therewith. the contested decision. Although the Moreover, that fact was, by implication, Commission refused Alfer permission to admitted by the Commission when it compensate in the following quarters for increased the quota after the amendment exceeding its quotas, it authorized Alfer, of Decision No 1831/81. in its letter of 4 November, to carry forward to the fourth quarter of 1981 the whole of the quantities referable to the increase in the quota allocated to Alfer which were not used during the As evidence of its good faith, Alfer third quarter of 1981. Alfer sees in the maintains that it has always observed its alleged inconsistency a patent defect production quotas and has reduced its vitiating the grounds of the contested sales quotas in proportion thereto. measure.

ALFER ν COMMISSION

As regards a reduction in the fine, the In answer to a question put by the Commission refers to the arguments Court, Alfer explained that it had no which it put forward against the claim difficulty in relation to the quota system for a declaration that the decision as regards sales between the date on imposing the fine was void. which it ceased processing on behalf of Acciaieria di Posognc and the third quarter of 1981 since deliveries at thc IV — Oral procedure time were not subject to a quota. At the sitting on 16 November 1983 SpA Alfer, represented by C. Castelli, and the The Advocate General delivered his Commission, represented by S. Fabro, opinion at the sitting on 14 December presented oral argument. 1983.

Decision

1 By application lodged at the Court Registry on 6 January 1983, SpA Alfer (hereinafter referred to as "Alfer"), a company established in Pisognc, brought an action under the second paragraph of Article 36 of the ECSC Treaty requesting the Court to declare void an individual decision, Decision No C(82)1631/4 of the Commission of 24 November 1982, imposing a fine on the applicant pursuant to Article 58 (4) of the ECSC Treaty and Article 12 of the general decision, Decision No 1831/81 of 24 June 1931 establishing for undertakings in the iron and steel industry a monitoring system and a new system of production quotas in respect of certain products (Official Journal 1981 L 180, p. 1), or, in the alternative, to reduce the fine imposed.

2 It appears from the documents before the Court that until June 1980 Alfer carried out processing for another company and that this accounted for approximately 6 0 % of its production. In June 1980 the company for which Alfer worked went into liquidation. Since that date Alfer has therefore been obliged to sell its production solely on its own behalf.

7 By letter dated 4 November 1981 the Commission therefore informed Alfer that, on the basis of the above-mentioned article, it was increasing its delivery quota to 15 091 tonnes for the third quarter of 1981. It is apparent from the letter that the increase in the delivery quota was calculated on the basis of a reference quantity equal to 90% of Alfer's reference production,

ALPER v COMMISSION

that is to say the maximum provided for by Decision No 2804/81. Since Alfer was notified of the new quota after expiry of the third quarter, the Commission authorized Alfer to cany forward to the fourth quarter that part of the increase in the quota which could not be used during the third quarter.

8 Alfer has not challenged before the Court either the first communication, dated 10 August 1981, or the second, dated 4 November 1981, notifying it of the quotas.

9 By letter dated 25 February 1982, the Commission complained that Alfer had exceeded by 2 402 tonnes the delivery quota specified in the second communication and invited it to submit its observations pursuant to Article 36 of the ECSC Treaty. In its reply of 9 March 1982, Alfer stated inter alia that it was prepared to reduce by 2 402 tonnes its deliveries in the common market during a subsequent quarter in order to compensate for the aforesaid excess.

10 By the contested decision of 24 November 1982, the Commission found that the quota had been exeeded and, applying the normal rate of 75 ECU pel- tonne provided for in Article 12 of Decision No 1831/81, imposed on Alfer a fine of 180 150 ECU, that is to say LIT 241 498 291.

15 The Commission admits that the quota set out in its first communication was unjust and that the second was notified to the undertaking too late for it to be able to adjust its deliveries for the quarter in question. It emphasizes, however, that at the time the general decision in force did not allow it to take account of the undertaking's difficulties, that by Decision N o 2804/81 of 23 September 1981 it obtained as quickly as possible the legal basis necessary for that purpose, that in allocating the quota notified to Alfer on 4 November 1981 it made full use thereof and that the fact that Alfer exceeded even that maximum quota shows a lack of effort on the part of Alfer to limit its deliveries during the quarter in question.

16 It is clear from the quota system and in particular Decision N o 1833/81 fixing the rates of abatement for the third quarter of 1981 that the quotas fixing the quantities which could be delivered in the common market were, in any event, appreciably lower than those imposed on production. In delivering in the common market almost the whole of its production quota, which it had in no way challenged, Alfer failed to act prudently.

17 On the other hand, it must be admitted that the Commission could have foreseen such situations and should have drafted its general decisions in a manner which would have enabled it to rectify them quickly. In any event,

ALFER ν COMMISSION

Alfer rightly complains that the Commission took no action in its case until its decision of 4 November, that is to say, well after the end of the quarter in question, whereas it was aware of the problem confronting the undertaking on receipt of its letter of 28 August. Since it was thus informed of the exceptional difficulties encountered by the undertaking in observing the delivery quota allocated by the first decision, the Commission ought to have indicated in good time what its interventions were with regard to remedying the unjust situation and how the undertaking might tackle its difficulties without incurring the risk of exceeding the final quota. In view of those omissions, the Commission must bear a large part of the responsibility for the fact that the quota was exceeded.

1. Reduces the fine imposed on the applicant from 180 150 ECU to 20 000 ECU, that is to say LIT 26 810 800;

OPINION OF MR REISCHL — CASE 2/83

2. Dismisses the remainder of the application;

3. Orders the Commission to pay the costs.

Galmot M a c k e n z i e Stuart Due Everling Kakouris

Delivered in o p e n court in L u x e m b o u r g on 14 F e b r u a r y 1984.