C-350/85

1. In the present application Cockerill- It is not denied (indeed the Commission Sambre SA claims that the Court should took it into account in reducing the amount declare void the Commission decision of of the fine) that Cockerill-Sambre 9 October 1985 imposing a fine of encountered production difficulties 22 750 ECU on it for exceeding its following the fire in January 1983 at its production quotas for Category IV steel plant at Valfil. It was thus natural that to products during the fourth quarter of 1983. meet its commitments to its customers it exercised the right given it by Article 11 (4) to transfer part of its quota during the fourth quarter of 1983 to other producers, Judgment in the case will involve interpre­ including the company Thyssen. tation and application of Article 11 (4) of Commission Decision No 2177/83 of 28 July 1983 on the extension of the system of It is true that during the first quarter of monitoring and production quotas for 1984, more precisely on 15 February, certain products of undertakings in the steel Thyssen in turn transferred to the applicant industry. 1 4 892 tonnes of quota stating that it was returning the quota which it had received during the past quarter. As the Court is aware, the quotas are fixed on a quarterly basis. Article 11 (4) provides: 3. I agree with the Commission's view that the quota was returned too late and that the quantity in issue could not be completely or 'Undertakings may, each of the under­ partly deducted from the excess with which takings concerned having made a prior Cockerill-Sambre was charged. declaration to the Commission, enter into arrangements with other undertakings during the current quarter for the exchange or sale of quotas or the parts of quotas Any private agreements between which may be delivered on the common Cockerill-Sambre and Thyssen (the latter market pertaining to that quarter.' had carried out processing for the applicant and had undertaken to return any unused quotas at the beginning of the following quarter) cannot be relied upon against the 2. The applicant complains that the Commission and cannot affect the quarterly Commission has adopted a formalistic inter­ basis on which the rules at issue operate. pretation of Article 11 (4) which disregards economic reality and has led to the Those rules were originally introduced by * Translated from the French. Commission Decision No 2794/80/ECSC I — Official Journal 1983, L 208, p. 1. of 31 October 1980 establishing a system of

In Lucchini it was emphasized If the return of quotas by Thyssen, although effected during the first quarter of 1984, had been accepted, it would have gone 'that the quarterly nature of the quota against its tolerance margin for the previous system established by Decision No 2794/80 quarter. That is not the purpose of the is an essential element of the scheme'. 3 tolerance margin, which is intended to allow for uncertainties in forecasting and not to constitute a kind of surplus to be used subsequently. To be deducted from Cockerill-Sambre's undisputed excess production Thyssen should have returned the quotas before the expiry of the fourth quarter of 1983 and not This is the essence of the economic reality, on 15 February 1984. which must be understood from the viewpoint of the steel undertakings and the Community. 4. Is such a view too formalistic, as Cockerill-Sambre maintains, is it purely a matter of accounting and does it disregard As regards the Community, the Commission's task is to exercise control economic reality? over the total production of steel products. In order to do so it sets quotas on a quarterly basis so as to allow it to adjust I do not think so and indeed am convinced them in accordance with the economic of the contrary. The Commission was not situation, and it checks that the quotas are observed in order to ensure that the 2 — Official Journal 1980, L 291, p. 1. measures it has adopted to remedy the state 3 - Case 179/82 Lucchini v Comminimi [1983] ECR 3083, at of manifest crisis are effective. paragraph 20 on p. 3094.