C-81/83

JUDGMENT OF 12. 7. 1984 — CASE 81/83

bution of the detrimental effects of were able, by pleading necessity due unavoidable economic circumstances. to serious economic difficulties, to 3. The request that a fine be reduced excuse itself from observance of the cannot be justifed on the ground that restrictions and to exceed at will the payment of a fine could lead to production quota allocated to it. The serious financial difficulties for the chain reaction thereby released would undertaking concerned. The system of culminate in the collapse of the production quotas would be gravely system, so that Article 58 of the compromised if every undertaking Treaty would become a dead letter.

In Case 81/83

ACCIAIERIE E FERRIERE BUSSENI S P A , at present subject to ^ u n c o n t r o l l e d management, an undertaking having its registered office at Nave (Brescia Italy)ľ represented by its sole director, Maurizio Busseni, and advised by Fabrizio Massoni, Adriano Barone and Ferdinando Pelizzoni Avvocati, with an address for service in Luxembourg at the Chambers of Andre Elvinger, 15 Côte d'Eich, applicant,

v COMMISSION OF THE EUROPEAN COMMUNITIES, represented by Sergio Fabro, acting as Agent, with an address for service in Luxembourg at the office ot Manfred Beschel, Jean Monnet Building, Kirchberg, defendant,

APPLICATION requesting the Court to declare void the individual decision of 24 March 1982 by which the Commission imposed a fine on the applicant,

Facts and Issues

The facts of the case, the course of the reference production figures for this procedure and the conclusions, sub- undertaking to a level which corresponds missions and arguments of the parties to a rate of utilization which lies five may be summarized as follows: percentage points below that average rate in the other undertakings :

provided the undertaking undertook to I — Relevant provisions and comply from July 1977 to June 1980 o u t l i n e of t h e facts with the delivery programmes established by the Commission, and 1. Relevant provisions provided the programme for this enterprise was fixed taking 1974 as a . (a) Since the steel industry was facing a basis, and period of manifest crisis within the meaning of Article 58 of the ECSC Treaty, the Commission introduced, by provided that during that year all or part Decision No 2794/80 of 31 October of the undertaking's facilities were not 1980 (Official Journal 1980, L 291, p. 1), on stream." a system of steel production quotas for undertakings operating in the Com- According to Article 4 (5) the munity iron and steel industry, which Commission, in order to take account of was in force from 1 October 1980 to 30 restructuring, is to increase the reference June 1981. Articles 2 to 4 of the decision production figures so as to reach the provide that the Commission is to fix, in total equivalent to the production of the respect of the undertakings and the corresponding quarter of 1974: products to which the system applies, quarterly production quotas based on the reference production of the undertaking "where an undertaking's total pro- concerned and by the application to that duction of the four groups of products production of certain abatement rates. during a reference period falls short of Article 4 (3) of the aforementioned production in the same quarter of 1974, decision provides that: and

experiencing a period of manifest crisis, "If, by virtue of the scale of the the Commission introduced by means of abatement rates imposed in respect of a Decision No 1831/81/ECSC of 24 June given quarter, the quota system creates 1981 (Official Journal 1981, L 180, p. 1), exceptional difficulties for an under- as amended by Decision N o 1832/81/ taking, the Commission shall make ECSC of 3 July 1981 (Official Journal suitable adjustments to the reference 1981, L 184, p. 1), by Decision No production for the categories in question, 2804/81/ECSC of 23 September 1981 provided that the undertaking has made (Official Journal 19,81, L 278, p. 1) and an application to this effect during the by Decision No 553/82/ECSC of first month of the relevant quarter in the 3 March 1982 (Official Journal 1982, following instances: L 65, p. 6), a new system of production quotas for certain products for under- takings in the steel industry which was the total reference production for Cate- also based on Articles 47 and 58 of the gories la to Id comes to less than ECSC Treaty and which as to apply 1 000 000 tonnes a year and at least 7 5 % from 1 July 1981 t o 30 June 1982. of the figures are based on products having an abatement rate of more than 20%, or Article 5 of Decision No 1831/81 provides that the Commission is to fix each quarter for each undertaking its the total reference production for Cate- production quotas and the part of such gories V and VI comes to less than quotas which may be delivered in the 60 000 tonnes and the abatement rate Common Market, on the basis of the exceeds 2 0 % . " reference production and reference quantities of the undertakings in question and by application of certain abatement rates to such production and 2. Outline of the facts quantities.

justified on the ground of its substan- In the alternative, reduce the fines tial financial and social liabilities. As imposed by that decision; the Commission regarded Busseni's arguments as inadequate it imposed on it a fine of 958 084 ECU (or LIT In the further alternative, extend the 1 280 536 751) by decision of 24 March periods within which the fines must be 1983. paid and make all requisite orders in that ' regard." In the meantime Busseni came under the Cassa Integrazione Guadagni [income The Commission contends that the Court supplement fund] under Italian Law should: N o 675 of 12 August 1977 and was therefore subject to amministrazione controüata [court-supervised management "(a) As a preliminary step, declare the procedure]. On 23 April 1982 the application to have the operation of Tribunale [District Court] of Brescia the decision suspended inad- ordered the commencement of the court- missible; supervised management procedure in respect of Busseni. (b) With regard to the substance of the case, dismiss the application;

II — W r i t t e n p r o c e d u r e a n d c o n - Order the applicant to pay the c l u s i o n s of t h e p a r t i e s costs."

Busseni instituted these proceedings by an application under Article 36 of the Ill — Submissions and argu- ECSC Treaty which was registered at m e n t s of the p a r t i e s the Court on 9 May 1983.

In its statement of defence the Commission raises an objection of The applicant's second submission is that inadmissibility with regard to the pre- it experienced exceptional difficulties liminary claim that the operation of the which should have led the Commission contested decision should be suspended. to examine its case without delay under According to the Commission that Article 14 of Decision No 1832/81 and application should have been made in to adjust its reference production on the compliance with Article 83 (3) of the basis thereof. In the absence of such Rules of Procedure by a separate adjustment no blame can be attached to document and in accordance with the it for exceeding its quotas since it was provisions of Articles 37 and 38 of those unable to comply with them without rules and should not have been included accelerating and exacerbating its in the main application. economic and financial difficulties. It had thus been "absolutely impossible to act in any other way". With regard to the submission con- cerning the Commission's failure to apply Article 14 of Decision No 1832/81 Thirdly, the applicant submits that the the Commission contends that that fine is unjust and should also be set aside provision was not applicable in this on the ground that the Commission case because Busseni's production of failed to apply in favour of the applicant products falling within Categories V and Article 4 (5) of Decision No 2794/80, VI was 74 000 tonnes whereas the which was re-stated in Article 6 of provision invoked by the applicant Decision No 1831/81 in the amended requires the annual reference production form laid down in Decision No 1832/81. of the undertaking concerned to be less than 60 000. Moreover the applicant's communications in April and May 1981 contained no reference to Article 14 and The Commission was under a duty to it was only much later in a telex message apply that provision and increase the of 9 December 1981 and in a letter of 17 reference production figure so as to December 1981 — too late — that the reach the total equivalent to the applicant referred to that provision. production of the corresponding quarter of 1974. During that year the production in respect of which ECSC levies were imposed amounted to approximately 180 000 tonnes, whereas the average for With regard to the applicant's third the three reference years was less than submission the Commission observes first 120 000 tonnes. Consequently the that Article 6 of Decision No 1831/81 is Commission should have taken the certainly not a re-statement of Article 4 average of the three years from 1977 to (5) of Decision No 2794/80. Moreover, 1979 inclusive as the reference quota. the applicant did not fulfil one of the

conditions, namely that the undertaking 42 256 tonnes, although it subsequently must have achieved for the year ending increased to 59 400 tonnes in 1978 a i d in 1979 a profit which is shown in its 76 066 tonnes in 1979. In view of those annual report. All that the applicant figures the applicant was entitled to be produced, however, was its tax return allocated different reference quotas for 1979. The tax return bears no under Article 4 (3) and (5) of Decision relationship to the annual report N o 2794/80. If the reference quotas (company balance sheet), the only fixed by the Commission were correct, document which shows whether a by contrast, the undertaking would be company has actually made a profit.Thus forced to close on the ground that the despite what may be contained in the tax rate of utilization of its facilities was return a company's balance sheet may between 2 0 % and 2 5 % , which was lar indicate a loss. That was precisely so in below the average rate and would make the case of Busseni, whose balance sheet the operation of the business unprof­ for 1979 showed a loss for the year of itable. LIT 11837 406. Furthermore, the applicant did not request application of the aforementioned provision until 2 February 1983 when Decision Ņ o 2794/80 was no longer in force, and it failed to reply to the Commission's With regard to the question whether the request of 18 February 1982 for undertaking made a profit in 1979 the production of the balance sheet for 1979. applicant observes that although its The Commission therefore concludes financial statement indicated a loss of that the submission should be rejected. LIT 11 837 406 there was in fact a profit of LIT 414 460 000 in respect of which it paid local income tax to the public auth­ orities. In compliance with the provisions relating to corporate tax it took into account in drawing up the financial statement for 1979 a debit item With regard to the submission that the amounting to LIT 62 169 000 as local fine is unjust not only in principle but income tax for 1979 when in fact the also in relation to the amount thereof, payment for that year was not made the Commission maintains that the sub­ until after 31 December 1979. Of the mission should be rejected for the same sum of LIT 414 460 000 chargeable to reasons as the preceding submission. local income tax for 1979 LIT Finally it observes that it has always 364 128 496 was used to cover previous granted undertakings which could prove liabilities, which left a disposable profit that they were experiencing financial for that year of LIT 50 331 504. It was difficulties an extension of the period for therefore incorrect to say that the paying the fine. company made a loss in 1979.

first place the applicant's assertions with In addition, if the applicant considered regard to its production in 1974 and that the quotas were unfairly allocated it 1976 are contradicted by its statements should have challenged them before the to the department concerned with ECSC Court; since it failed to do so in due levies, according to which its production time it is precluded henceforth from of iron bars amounted to 89 200 tonnes doing so. in 1974 and to 94 146 tonnes in 1976, in addition to its production of crude steel which is not the subject of this action. IV — Reply to the question put In the second place, with regard to the by the Court application of Article 4 (3) of Decision No 2794/80, the applicant did not The Court requested the applicant to submit any information concerning its provide it with further information capacity from 1977 to 1980. It was regarding the manner in which it had therefore impossible to know whether requested the Commission to apply the rate of utilization of its production Article 14 of Commission Decision No facilitites was 10 percentage points or 1832/81. The applicant has failed to more below the average rate of respond to that request. utilization of the other undertakings of the Community. Moreover, Busseni does not fulfil any of the requirements laid V — Oral procedure down in Article 4 (3). In the third place, the Commission At the sitting on 5 April 1984 oral emphasizes the fact that the financial argument was presented by the applicant, statement for 1979 indicates a, loss for represented by F. Massoni, Avvocato, that year of more than LIT 11 000 000. and by the Commission òf the European Furthermore, the statement was for- Communities, represented by Sergio warded to the Commission on 12 April Fabro, acting as Agent. 1983, that is to say, after it had been The Advocate General delivered his decided to impose a fine. opinion at the sitting on 30 May 1984.

3 In the decision the Commission declared that the applicant's production exceeded by more than 10% the production quotas and the part of the quota which could be delivered in the Common Market and that the applicant had already exceeded its production quota, in respect of products falling within Categories V and VI during the third quarter of 1981, and it imposed pursuant to the second paragraph of Article 12 of the aforementioned Decision N o 1831/81 a fine which was 10% above the normal rate, that is to say a fine of ECU 82.5 for each tonne in excess of the quota in respect of the third quarter of 1981 and a fine which was twice that amount above the normal rate, that is to say a fine of ECU 90 for each tonne in excess of the quota in respect of the fourth quarter of 1981. The total fine therefore amounted to 958 084 E C U (or LIT 1 280 536 751) and was to be paid within two months of notification of the contested decision.

4 The quotas were allocated to the applicant by individual decisions adopted by the Commission on 6 August 1981 in respect of the third quarter of 1981 and on 26 October 1981 in respect of the fourth quarter of 1981 pursuant to Article 58 of the ECŞC Treaty and the aforementioned Decision N o 1831/81 and were notified to it, together with its reference production figures, by letters of the same dates.

5 It is common ground that the applicant did not institute proceedings before the Court for a declaration that the said individual decisions were void within the period laid down by Article 33 of the ECSC Treaty.

9 The applicant maintains further, in its second submission, that the fine infringes Article 4 of Commission Decision N o 2794/80 of 31 October 1980 (Official Journal 1980, L 291, p. 1), which it alleged was re-stated in Article 6 of Decision N o 1832/81, inasmuch as the Commission failed to increase its reference production figures pursuant to Article 4 (3) and (5) either "to a level which corresponds to a rate of utilization which lies 5 percentage points below (the average rate of utilization of the same facilities of the other undertakings of the Community during the years 1977, 1978 and 1979)" or "so as to reach the total equivalent to the production of the corresponding quarter of 1974".

BUSSENI v COMMISSION

io In support of that submission the applicant states that in 1974 the production in respect of which ECSC levies were imposed amounted to approximately 180 000 tonnes, whereas the average for the three reference years from 1977 to 1979 was less than 120 000 tonnes. The rate of utilization of its facilities was thus between 20% and 2 5 % and therefore below the general average. It adds that in the financial year ending in 1979 it realized a declared profit of LIT 414 460 000 in respect of which it paid local income tax to the public authorities even though the financial statement showed liabilities of LIT 11 837 406.

1 1 Those two submissions of the applicant relate in fact not to the legality of the contested decision imposing a fine on it but to other individual decisions adopted by the Commission allocating production quotas to the applicant and to the Commission's failure to adopt an individual decision adjusting the applicant's production quota or increasing its reference production figures.

i6 In those circumstances the applicant may not usefully rely in this case on the alleged illegality of the individual decisions fixing quotas or parts of quotas for the third and fourth quarters of 1981; the submissions made by the applicant in that respect must therefore be rejected.

iz The applicant's third submission may be understood as meaning that it was forced to exceed the quotas allocated to it in order to preserve a minimum level of production by the undertaking so as to protect a vital legal interest, namely its very existence, and that it therefore acted under pressure of necessity.

is It must be pointed out that the Court has consistently held that the argument of necessity cannot be entertained in relation to the quota system provided for by Article 58 of the ECSC Treaty, which is based on solidarity between all Community steel undertakings in the face of the manifest crisis in the steel industry and which seeks an equitable distribution of the detrimental effects of unavoidable economic circumstances (cf. especially the judgments of 16. 11. 1983 in Case 188/82 Thyssen [1983] ECR 3721, and of 14. 12. 1983 in Case 263/82 Klöckner [1983] ECR 4143).

i9 Since that submission, too, cannot be upheld the claim that the contested decision should be declared void must be rejected.

T h e claim t h a t t h e fine s h o u l d be r e d u c e d

20 It is clear from the file that the third submission examined above relates not only to the claim that the contested decision should be declared void but also to the claim that the fine should be reduced.

24 It follows from the foregoing that the claim for a reduction in the amount of the fine must be rejected.

T h e claim t h a t t h e C o u r t s h o u l d e x t e n d t h e p e r i o d for p a y m e n t of t h e fine by all a p p r o p r i a t e m e a s u r e s

25 Claims of this sort amounting to a request that the Court issue instructions to the Commission, which alone has the power to grant terms of payment to undertakings which have been fined, are manifestly inadmissible.

JUDGMENT OF 12. 7. 1984 — CASE 81/83

Costs

26 Article 69 (2) of the Rules of Procedure provides that the unsuccessful party is to be ordered to pay the costs if they have been asked for. As the applicant has failed in its submissions, it must be ordered to pay the costs.

Delivered in open court in Luxembourg on 12 July 1984.

For the Registrar

H. A. Rühi K. Bahlmann Principal Administrator President of the Second Chamber