C-33/86

2. The actions brought by Peine-Salzgitter in Cases 44/86 and 110/86 are for declar­ ations that the individual decisions of the 5. On 25 September 1985 the Commission Commission fixing the delivery quotas of addressed a communication to the Council that undertaking for the first and second on the 'Introduction of a system of quarters of 1986 are void. Finally, Cases production quotas under Article 58 of the 226/86 and 285/86 concern two actions ECSC Treaty after 31 December 1985' brought by Hoogovens Groep BV against (Doc. COM(85) 509 final). the quotas allocated to that undertaking for the third and fourth quarters of 1986. As a procedural issue, the applicants claim that Decision No 3485/85/ECSC is unlawful. 6. In that communication the Commission stated that: * Translated from the French. 1 — Commission Decision No 3485/85/ECSC of 27 November 2 — See in particular the judgment of 21 February 1984 in 1985 on the extension of the system of monitoring and Joined Cases 140, 146, 221 and 226/82 Walzstahl Ver- production quotas for certain products of undertakings in einigung and Thyssen Aktiengesellschaft v Commission [1984] the steel industry (Official Journal 1985, L 340, p. 5). ECR 951, paragraph 18 at p. 982.

OPINION OF MR MISCHO — JOINED CASES 33, 44, 110, 226 AND 285/86

'VII. ... Alternatively:

12. As regards the respective roles of the High Authority and the Council in the Did the Commission have the power to application of the first two paragraphs of adopt the proposed provision without Article 58, Mr Advocate General VerLoren having to obtain the Council's assent? van Themaat examined in detail the

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different ways in which those provisions two institutions to examine a detailed draft may be interpreted and the opinions of decision' (paragraphs 10 and 11 of the academic writers on this matter (Opinion of judgment). 26 May 1982 in Case 119/81 [1982] ECR 2658, at pp. 2672 to 2677). 15. I think that it may reasonably be concluded from the judgments cited that the 13. He reached the conclusion that for the Court, too, takes the view that the Council adjustment of the quota system the must give its assent only to the essential Commission had a certain degree of inde­ structure of the system and that it is for the pendence and that the Council did not have Commission, acting pursuant to its own to approve all the details of the system. It powers, to regulate all the other aspects. It was sufficient for the Council to give its is not simply a matter of drafting in the assent to 'the basic structure and essential form of articles rules which the Council has features' of the rules. I share that view settled down to the last detail. entirely.

16. Article 58 (2) provides in fact that: 14. The Court itself gave its own views on this question in its judgment of 11 May 1983 in Case 244/81 (Klöckner-Werke AG v 'The High Authority shall, on the basis of Commission [1983] ECR 1451, at p. 1477). studies made jointly with undertakings and After pointing out that when certain associations of undertakings, determine the conditions are fulfilled the Commission is quotas on an equitable basis, taking account under a duty to establish a system of of the principles set out in Articles 2, 3 and 4'. production quotas, the Court stated as follows :

OPINION OF MR MISCHO — JOINED CASES 33, 44, 110, 226 AND 285/86

in the decision establishing or extending the the Commission and not to the Council and quota system. that it is the Commission which is responsible with regard to undertakings for the determination of quotas.

19. In my view, those decisions therefore contain two kinds of provisions: those forming the essential structure of the 22. Therefore in reality Article 18 (1) only system, adopted with the assent of the confirms or refers back to the power which Council, and those which were adopted, or the Commission has under the Treaty to could have been adopted, by the adopt all the measures necessary for Commission exercising its own powers. Into ensuring that the quotas are equitable. the latter category fall in particular provisions providing for fairness and flexi­ bility, such as Article 14 et seq. of the 23. So far, 17 decisions have been adopted decision now in question. by the Commission on the basis of that provision. None of those decisions has been challenged by the Council or by an indi­ vidual Member State. The wide scope of 20. One of the provisions adopted by the some of those decisions is clear, for Commission pursuant to its own powers is example, from a reading of the preamble to Article 18 (1). Article 18 (1) is worded as Decision No 2804/81 (Official Journal follows : 1978, L 278, p. 1) by which the Commission introduced inter alia a different abatement rate for concrete reinforcing bars 'If radical changes occur on the iron and and merchant steel and separate quotas for steel market or if the application of this Categories V and VI and created new possi­ decision encounters any unforeseen diffi­ bilities for derogating from the general culties, the Commission shall carry out the rules. necessary adjustments by general decision'.

25. Of course, there is nothing to prevent 29. It may be deduced from that statement the Commission from submitting to the that the Commission itself took the view Council for its assent provisions which fall that the delivery quotas of the undertakings within its own powers. It is quite under­ in question could no longer be regarded as standable that in a situation in which the equitable. need for more flexibility is becoming apparent at about the same time when the quota system is about to expire, the Commission should wish to take the oppor­ tunity presented by the decision to extend 30. Even those not willing to accept the the quota system in order to introduce new argument that Article 18 (1) merely refers to provisions with the Council's agreement. a power which the Commission has in any case would have to accept, I think, that since the Commission firmly believed that radical changes on the iron and steel 26. However, it would be a misuse of market, within the meaning of that article, power if the Commission was mistaken had occurred, it therefore had to proceed, about the type of provisions requiring the on the basis of that provision and by general Council's assent and, in the absence of its decision, to make the adjustments agreement, refrained from adopting necessitated by the new situation. measures which it considered necessary in themselves in order to enable it properly to carry out its task of determining quotas on an equitable basis. 31. The measure considered necessary by the Commission was a measure 'to bring down this ratio to no more than 10% below 27. The question to be examined now the Community average, where this has not therefore is whether that was the situation been the case so far'. I consider that such a in this case. measure would not have called in question one of the basic or essential features of the quota system. In my view, such essential features are constituted by the very principle of having quotas for delivery on the internal 28. In the relevant passage in the communi­ market, separate from production quotas, cation which it addressed to the Council on and calculating them in relation to a given 25 September 1985 the Commission reference period. explained in a particularly firm manner why it was 'necessary' to review the situation of undertakings whose ratio between the part of production quotas which may be delivered in the Community and production quotas (I:P ratio) is, for all products 32. The Commission's intention to covered by the system, much lower than the introduce, for undertakings in the situation Community average. It considered that described above, a partial derogation from there had been a far-reaching change in the the latter rule would, in my view, merely pattern of steel trade between the have been an exception confirming the rule. Community and the rest of the market since the introduction of the quota system and that those historical situations were no longer 'in line with Community steel policy 33. It is clear from a table set out in the objectives'. defence that six undertakings have an I:P

35. There would be even less justification (i) on the basis of the reference production for accusing the Commission of wanting to and quantities referred to in Articles 4 circumvent the procedure laid down in (5) and 6, Article 14 of the decision because that provision provides no satisfactory remedy for the problem now in question. (ii) by applying the abatement rates referred to in Article 8 to such reference production and quantities'. 36. It may therefore be rightly concluded that the measure envisaged by the Commission did not constitute an amendment of a basic or essential feature of 40. The annulment of that provision would the quota system. The Commission's own therefore have practically the same effect as powers allowed it to introduce an article to the annulment of the entire decision. The that effect, either in Decision No 234/84, annulment of Article 6, which defines the which was in force until 31 December 1985, reference periods, would also remove the by invoking Article 18 of that decision, or basis of all the individual decisions fixing directly in the new Decision No 3485/85, quotas. As the Commission points out, the applicable as from 1 January 1986, or after provision sought by Peine-Salzgitter should that date by invoking Article 18 of that new have been the subject of a separate article. It decision (which was re-enacted without must also be noted that the ECSC Treaty amendment). does not contain a provision like Article 174

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48. The Commission does not therefore 43. I will examine this second question as have the means to require the Council to an alternative possibility. give its assent. Therefore, an action for failure to act brought by an undertaking against the Commission for not having included the provision in question in its 44. In paragraph 6 of its judgment of 7 July general decision would have no purpose. 1982 in Case 119/81 (Klöckner-Werke AG v Commission [1982] ECR 2627) the Court stated in paragraph 6 that 'the obtaining of the assent of the Council is one of the 49. Is this to say that, owing to all those essential procedural requirements laid down special characteristics of the ECSC Treaty, by the Treaty.' the Council's refusal to give its assent to a

OPINION OF MR MISCHO — JOINED CASES 33, 44, 110, 226 AND 285/86

particular provision which an undertaking second refusal would be the most judicious wishes to see included in the quota system attitude to take. can never be challenged, even indirectly?

53. The Commission could also submit to 50. I do not think so. It must be the Council a proposal allowing equitable remembered that, according to Article 31 of quotas to be determined in ways other than the ECSC Treaty, 'the Court shall ensure those originally envisaged. that in the interpretation and application of this Treaty, and of rules laid down for the implementation thereof, the law is observed'. That provision as well as the principle of legal protection require that the Court should be able to ensure that the rule 54. It follows from the argument set out laid down in Article 58 (2) requiring quotas above that the annulment of the general to be determined on an equitable basis is decision and of individual decisions would observed. not be excluded in the present case, even if the Court should come to the conclusion that the Council's assent was necessary.

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57. It is therefore sufficient for the Court to 58. In other words, even if assent was state that, in the view of the authority necessary, the general decision and the indi­ responsible for determining quotas and in vidual decisions which are the subject of the the view of the applicant companies, the actions brought by Peine-Salzgitter and decision in question does not enable that Hoogovens must be declared void. authority to carry out its task properly.

III — Conclusion

59. For the reasons explained in part A of this Opinion I propose that the Court should:

Declare void Commission Decision No 3485 / 85 / ECSC of 27 November 1985 in so far as it does not allow equitable delivery quotas to be determined for under­ takings whose I:P ratios are, for all products covered by the system, significantly below the Community average;

Declare void the individual decisions determining quotas that are the subject of Cases 44, 110, 226 and 285/86;