C-236/86

1. This action essentially concerns the allo­ cation of additional references on a merger 4. In the light of these factors, may the of undertakings within the framework of view be taken that the limitation period Decision No 3485 / 85 / ECSC . 1 But first, began to run in the absence of publication the Court has to examine the objection of or notification? It may be observed that in inadmissibility based on the allegation that the Kònecke case, 2decided under the EEC the action brought by the Dillinger Treaty, the Court did not rule out as a company is out of time. matter of principle a dies a quo resulting from circumstances other than these publicity formalities, although it considered, in that case, that the 'communication' addressed to the applicant was not sufficient Admissibility in order to enable it 'to identify the decision taken and to ascertain its precise content in such a way as to enable it to exercise its right to institute proceedings.' 2. Article 33 (3) provides, as we know, that an action for annulment must be brought within a period of one month of publication or notification of the decision. 5. In the present case, the information available to the applicant related to the allo­ cation to BSC of additional reference quan­ tities with no indication of the reasons therefor other than a reference to Article 13 3. The application states that it was of the general decision. To put it in other informed by a letter from Eurofer dated 14 words, only the formal references in the May 1986 — which came to its notice preamble and the operative part were later — of the allocation to the British Steel known, not the reasons. In its judgment in Corporation (BSC), in respect of the merger Tezi Textiel v Commission 3the Court held with Alpha Steel, of special references on that a communication from the Commission the basis of Article 13 of Decision No under Article 115 of the EEC Treaty which 3485/85/ECSC. Also, the Commission sent contained only a summary of the provisions to the Wirtschaftsvereinigung Eisen- und of the decision in question did not enable Stahlindustrie on 27 May 1986 a document the applicant 'to acquire knowledge of the containing references fixed for the second text of the contested decision or, in quarter of 1986. According to the applicant, particular, of the reasons on which it was based'. * Translated from the French. 1 — Commission Decision of 27 November 1985 on the extension of the system of monitoring and production 2 — Case 76/79, judgment of 5 March 1980 [1980] ECR 665. quotas for certain products of undertakings in the steel 3 — Case 59/84, judgment of 5 March 1986 [1986] ECR 887 industry (Official Journal 1985, L 340, p. 5). (emphasis added).

7. Particularly as regards the exercise of rights of action, the statement of the reasons on which a decision is based is too essential 10. According to the first of the a requirement for the view to be taken that submissions relied on, Article 13 of Decision a person to whose knowledge it has not No 3485/85/ECSC did not constitute a come is sufficiently apprised of its precise valid legal basis for allocating additional contents. I may remind the Court at this references. point of the terms of its judgment in Federal Republic of Germany v Commission 5where the Court held that a duty to give reasons, 11. First of all, I cannot agree with the such as that laid down in Article 190 of the applicant when it argues that Article 13 (4) EEC Treaty: only covers the situations referred to in paragraphs 2 and 3 of the article. Any doubt 'seeks to give an opportunity to the parties on this point is dispelled by the second of defending their rights, to the Court of paragraph of the eighth recital of Decision exercising its supervisory functions and to No 3485/85/ECSC which makes clear that: Member States and to all interested nationals of ascertaining the circumstances in which the Commission has applied the Treaty.' 'this option [the necessary adjustments] should also be extended to mergers, and in particular to mergers resulting in closures of 8. Thus, in the present case it cannot be hot-rolling mills which account for an said that the period of time for bringing an exceptionally large share of the capacity action has begun to run, in view of the shedding.' incomplete nature of the information brought to the applicant's notice. Certainly, the reasons given for the contested decision seem, to say the least, succinct. But it would 12. The phrase 'any adjustments needed' be paradoxical to hold this fact against the mentioned in Article 13 (4) must be capable applicant. The result of such a solution of covering corrections, alterations and, if would be that the period of time for necessary, increases of references as a result of the method of calculation laid down in 4 — Case 150/86 was initially joined with this case but ordered Article 13 (1). But it remains necessary to to be removed from the Register after withdrawal of the application. try to define the scope of the power thereby 5 — Case 24/62, judgment of 4 July 1963 [1963] ECR 63. conferred on the Commission.

14. It is in the light of these observations that I propose the Court should examine the contested decision. 18. Let it be stated clearly: both the scheme of the general decision and the prin­ ciples mentioned above cause me to have very serious doubts as to the lawfulness of 15. The applicant argues that the merger these increases. obtained for BSC a considerable economic advantage merely by virtue of the fact that it benefited from Alpha Steel's references in category la. Therefore, this transaction, which moreover comprised the absorption 19. The general decision seems to me to of an unprofitable unit of production which preclude the solution adopted by the had in fact been closed down since 1984, Commission. On the one hand, it is difficult did not justify the allocation of additional to accept that the adjustments mentioned in references. I would first point out that Article 13 (4) can, in principle, relate to evidence of the applicant's assertion as to products other than those covered by the the date of closure of the Newport factory references mentioned in Article 13 (1), has not been adduced, whereas the namely those which are affected by the Commission submits in evidence an merger. On the one hand, Article 15 (3) of Inspectors' report showing that the plants the general decision which relates, it is true, concerned were functioning at the end of to closures, adopts a very restrictive policy 1985. with regard to transfers between categories.

16. Therefore, in view of the very large production capacities which were eliminated 20. Certainly, the complexity of merger by the merger in this case — about 15 % of operations should not be ignored or the

need to take into account all the underlying 25. In fact, the individual decisions industrial, economic and social aspects. undoubtedly fall within the Commission's responsibility. It is not necessary to examine here in detail the division of responsibilities as regards the quota system laid down by 21. Indeed, the Commission argues that a the Treaty as between the Council and the concentration of additional quantities in Commission. Suffice it to quote in this 6 category la alone would have disturbed the connection Mr Advocate General Mischo market in this area .. The conclusion is who, after analysing the Court's case-law, unavoidable that the possibility of this risk expressed the opinion that: in no way necessitates a massive allocation of additional references in categories lb, Ic and II. 'the Council must give its assent only to the essential structure of the system ... it is for the Commission ... to regulate all the other 22. This reasoning presupposes that the aspects'. very principle of granting additional references in categories not affected by the merger is justified. However, as we have seen, that has still be proven. In any event, It cannot therefore be argued that an indi­ the extent of the references granted in vidual decision requires the Council's assent, 7 categories of products which Alpha Steel in view of this division of responsibilities. did not manufacture leads me to express the In accordance with the fundamental strongest reservations as to whether the principle of the hierarchy of legal norms, contested decision complies with the individual decisions adopted by the requirements of the principle of propor­ Commission must observe general rules. tionality, and thus to propose that the Court And it is those rules, but only those, declare it void. assuming that they establish the 'basis' of the quota system, which must have received the Council's assent. I propose that the Court should therefore reject this 23. In its second submission, the applicant submission. maintains that the interpretation accepted by the Commission was not covered by the Council's assent. 26. However, should the Court consider that, by necessary implication, a plea of illegality is raised with regard to Article 24. There has been much discussion as to 13 (4), I would make the following obser­ the conditions under which Article 13 (4) vations. It is not disputed that a proposed was introduced by the Commission after the draft Article 14B, which would generally Council had refused to accept a proposed have enabled additional references to be Article 14B the text of which has moreover not been produced. In the context of this 6 — Opinion of 1 December 1987 in Joined Cases 33, 44, 110, 226 and 285/86 Stahlwerke Peine-Salzgiller ana Others action brought against the individual [1988] ECR 4309, at p. 4323. decision of 16 March 1986, I strongly doubt 7 — Even if we accept the analysis according to which it is the the relevance of this submission and of the draft decision which must be submitted to the Council (see to that effect, Kovar, Le pouvoir réglementaire dans la discussion which has taken place regarding CECA, LGDJ, Paris 1964, p. 174), that does not call in it. question the fact that only general decisions must be the subject of the Council's assent.

30. The Commission maintains that 'the argument that quotas must be shared on an equitable basis is certainly pertinent but has 27. The submission alleging misuse of nothing to do with the principle of pres­ powers cannot succeed either. Although the erving relative market shares'. And, in its applicant claims that Article 13 (4) was view, the applicant failed to base this adopted merely to be applied to the specific submission on an infringement of Article BSC-Newport case, there is no escaping the 58 (2). I cannot agree with this analysis. In fact that the Commission has stated, fact, the application expressly refers to this without being contradicted, that it has provision and the principle therein applied this provision to other situations. contained. In addition, the applicant relies Moreover, the allegation of misuse of on the Alpha Steel judgment in which the powers presupposes that an objective was Court had to consider a claim that the pursued other than the reduction of surplus quotas had been inquitably distributed production capacities. There is nothing to in breach of Article 58 (2). Thus, the indicate, in the context of this merger, that Commission's attitude on this point seems to it was for any other purpose that additional me excessively formalistic. Whatever references were allocated. description is used by the applicant, it is evident that an inequitable distribution of references is alleged.

28. The submission based on a breach of the principle of non-discrimination should also be rejected. In fact, it is sufficient to 31. The applicant stated that it had lost, as a result of the contested decision, 1.9% of 8 — Commission Decision No 194/88/ECSC of 6 January 1988 its production and delivery references in (Official Journal L 25, 29.1.1988). 9 — Commission Decision of 31 January 1984 (Official Journal L 29, 1.2.1984). 10 — Case 14/81, judgment of 3 March 1982 [1982] ECR 749.

Declare void individual Commission Decision No SG (86) D/3794 of 26 March 1986 addressed to the British Steel Corporation in pursuance of Article 13 (1) and (4) of Commission Decision No 3485/85/ECSC of 27 November 1985 to the extent that it allocates additonal references in categories not affected by the merger operation;

Order the Commission to pay the costs.