C-219/87

HOOGOVENS GROEP v COMMISSION

OPINION OF MR ADVOCATE GENERAL LENZ * delivered on 28 April 1989

Mr President, (i) la, lb, Ic, II and III (Group 1); Members of the Court,

(ii) III, IV and VI (Group 2). A — Facts

4. According to Article 15(2), the Commission may authorize exchanges, sales 1. In this fresh dispute between the or transfers of all or part of reference Hoogovens Groep BV, the applicant, and production or quantities if the plants corre­ the Commission of the European sponding to the reference figures to be Communities, the defendant, the point at transferred were permanently closed or sold issue is whether the defendant was entitled and transferred to a third country after 1 to abolish with retroactive effect the January 1980. It may also do so within the restrictions on the possibility of transferring framework of restructuring plans which it certain production references under the has approved. system of steel quotas.

5. According to Article 15(3), in the case of 2. By Decision No 3485/85/ECSC of permanent closure or of sale and transfer of 27 November 1985 on the extension of the a plant to a third country after 1 January system of monitoring and production quotas 1980, the Commission may authorize the for certain products of undertakings to the undertaking to transfer, subject to certain steel industry, 1 the Commission extended conditions, the reference figures corre­ the validity of the quota system from sponding to that plant within the two 1 January 1986 to 31 December 1987, albeit groups of categories of products set out in in respect of a smaller number of products Article 15(1). than under the previous rules.

market brought about by artificial inflation 9. The applicant is challenging Decision No of the references of products remaining 1434/87 on the grounds of a misuse of subject to quota as a result of transfers of powers affecting it. In its view, the references of products soon to be liberalized defendant wrongfully failed to incorporate and limited with immediate effect the in the decision rules to restore the application of Article 15(2) and (3) of applicant's relative position on the market to Decision No 3485/85 to products in an equitable level. In any event, it failed to Categories la, lb, II, III, IV and VI. adopt rules which could have prevented a Accordingly, references of products in further deterioration in the applicant's Category Ic could no longer be transferred relative position. The applicant maintains pursuant to Article 15(2) and (3) with that the mere fact that its relative position immediate effect. on the market has seriously deteriorated and will further deteriorate as a result of the contested decision necessarily implies that the defendant has exercised its powers for a purpose other than that for which they were conferred upon it. 7. As a result of that decision, the defendant authorized a transfer requested prior to 19 November 1986 but refused two later requests. The two decisions refusing those requests were challenged by the undertakings concerned before the Court. 3 10. The applicant therefore claims that Decision No 1434/87 should be declared void in its entirety or at least in part.

HOOGOVENS GROEP v COMMISSION

against Decision No 3485/85 was based on relevant here. After all, the adoption of the ground that that general decision did Decision No 3524/86 was intended to take not permit any adjustment to be made to account of the fact that Decision No 6 quotas for delivery in the common market 3746/86/ECSC excluded the galvanized and not on the ground that the decision sheet sector (Category Ic) from the quota adversely affected the applicant's relative system. position on the market.

16. Although, according to its wording, 13. In this context the defendant considers Decision No 1434/87 re-established the itself obliged to ensure a balanced re­ rules formerly applying under Decision No lationship between undertakings but not to 3485/85, it must be stated that Article 15(2) afford absolute protection to their relative and (3) are thereby given a change in position on the market. Furthermore, the meaning, in so far as it is possible liberalization of Category Ic and the possi­ henceforth to transfer references of a bility of effecting transfers has not led to liberalized category of products. Decision substantial shifts in references. No 1434/87 therefore constitutes a measure which, in substantive terms, is partially new.

OPINION OF MR LENZ — CASE 219/87

average. The applicant did not object to that to carry out the necessary adjustments if interpretation of the application by the radical changes occur on the iron and steel Court. In any event, the applicant did not market or if the application of Decision No apply to the Court to supplement its 3485/85 encounters any unforeseen diffi­ judgment pursuant to Article 67 of the culties. Rules of Procedure and it is clear, therefore, that a comprehensive decision has been taken on its claims with regard to Decision No 3485/85. 21. It is apparent from the very wording of Article 18 of Decision No 3485/85 that the defendant enjoys a broad discretion or power of appraisal in this area. 18. Since, therefore, only Article 5 of Decision No 3485/85 but not Article 15(2) and (3) thereof have been contested by the applicant, and since Article 19 of that 22. Although, as part of Decision No decision states that before the end of 1986 3485/85, Article 18 is indeed to be read the Commission intends to ask the Coun­ inter alia in the light of Article 58(2) of the cil, after consulting the Consultative ECSC Treaty which requires the Committee, for its assent to the exclusion of Commission in the context of a quota other categories from the quota system as system to determine quotas on an equitable from 1 January 1987, the applicant's basis, Article 18 should not be regarded as contention can be considered only in so far the actual instrument for setting equitable as it concerns the alleged deterioration of its quotas. Quotas are to be fixed equitably on relative position on the market as a result of the basis of Article 5 of the decision, even the adoption of Decision No 1434/87. though they may be altered in certain However, in so far as the alleged dete­ respects on the basis of the articles which rioration of its position is attributed by the follow that provision. applicant to the basic rule in Decision No 3485/85, it cannot be considered in these proceedings.

25. In November 1986, after it became 28. It is true that, towards the end of 1985, known that products in Category Ic would when the defendant adopted Decision No no longer be subject to the quota system as 3485/85 of 27 November 1985 excluding from 1 January 1987, the defendant feared Category V (reinforcing bars) and Category the possibility of disruption of the steel Id (other coated flat products) from the market brought about by artificial inflation quota system with effect from 1 January of the references of products remaining 1986, the corresponding transfer possibilities subject to quota as a result of transfers of provided for in Article 15(2) and (3) of references of products soon to be Decision No 234/84/ECSC 7had not been liberalized. The defendant therefore saw fit either restricted or excluded. Therefore, in to exclude the possibility of transfers from the event of a further liberalization of the Category Ic. On the assumption that the quota system, traders could expect the defendant's fears were based on facts or defendant to adopt a similar approach, as is serious forecasts, it was entitled to rely on also borne out by the applications in Cases Article 18 of Decision No 3485/85 for the 13/87 and 25/87, referred to earlier. adoption of that measure.

OPINION OF MR LENZ —CASE 219/87

thereby repealed a decision for which the position on the market. 9As no such obli­ requirements laid down by Article 18 were gation exists on the basis of either Article 58 not fulfilled. of the ECSC Treaty or the fundamental provision of Decision No 3485/85 (Article 5), it certainly cannot arise in connection with the special provision for cyclical 31. Accordingly, since there has been no problems in Article 18 of Decision No misuse of powers, it is necessary to consider 3485/85. only incidentally the point that there certainly cannot have been a misuse of powers affecting the applicant. 33. Nor, for that reason, is it any longer necessary to consider the divergent figures submitted by the parties in connection with the applicant's loss of its relative position on 32. The measures adopted under Article 58 the market. In part, those figures are not of the ECSC Treaty are intended to enable comparable since some are estimates whilst the Community's steel industry as a whole others are actual figures. Moreover, the to overcome, on a collective basis and by a data concerning the deterioration of the cooperative effort, the consequences of applicant's relative position on the market crises occurring when demand declines. are confined (except for products in According to the case-law of the Court, Category lb) within a range of between however, that provision in no way places the 0.5% and 1.5%, which is by no means Commission under a duty to guarantee to unacceptable even if the defendant were any given undertaking, to the detriment of held to be under an obligation to guarantee others within the Community, minimum the applicant's relative position on the production 8 or maintenance of its relative market.