C-241/87

OPINION O F MR DARMON — CASE C-241/87

OPINION OF MR ADVOCATE GENERAL DARMON delivered on 1 J u n e 1989 *

2. On 24 October 1985 the Executive judgment on the question — the English Chairman of the ITC decided to suspend courts have taken the view that the members the operations of the buffer stock because of the ITC were not bound by its no more resources were available. That contractual debts having regard to the ITC's action brought about the collapse of the distinct legal personality. The Court of market in tin. The London Metal Exchange Appeal considered incidentally that for its (hereinafter referred to as 'the LME') was part the Community could not claim obliged to suspend quotation of prices for immunity in that action. tin which to this day appears not to have been resumed. (However, The Times of 1 June 1989 (p. 24), under the headline 'LME returns to tin trading', reported that 5. Maclaine Watson obtained an arbi- trading is being resumed). The ITC's debts tration award against the ITC. 3 It brought allegedly amounted at that time to some against the United Kingdom alone an action UKL 900 million. for payment of that sum which was dismissed on the ground that the ITC has distinct personality. 4 It also asked for a

Ltd v the International Chamber of Commerce of 3 March 1984, Department of Trade and Industry and Others, upheld by the in the case of Westland v Arab Organization for Industrial- Court of Appeal on 27 April 1988; the case is now pending ization, Arab Republic of Egypt and Other States, ILM before the House of Lords. XXIII (1984), p. 1082; see also some of the examples 5 — Translator's note in other language versions — does not given by I. Seidl-Hohenveldern in 'Responsibility of Member States of an international organization for acts of apply in English version. trust organization', studies in honour of Roberto Ago, Vol. 6 — In a judgment of 13 May 1987. III, 1987, pp. 427 to 428. 7 — Judgment of 27 April 1988.

6. It was during the period of application 9. Within the Council each member holds of the Sixth International Tin Agreement a fixed number of votes to which is added a (hereinafter referred to as the 'Sixth number of votes in proportion to its Agreement') that the ITC suspended production or consumption. It should be payments. The International Tin pointed out that Article 15 provides that in Agreements are multilateral agreements principle decisions are to be adopted by a intended to provide for adjustment between simple distributed majority. 10 world production and consumption of tin and to prevent excessive fluctuations in the price of tin. They are part of the Integrated Programme for Commodities adopted by 10. The Council designates by a two-thirds the United Nations Conference on Trade distributed majority an independent and Development (Unctad). 9 Executive Chairman responsible to the Council and it is to him that the Manager of the Buffer Stock is responsible. The latter is appointed by the Council. 7. The two principal means provided in order to attain the objectives of those agreements are: 11. Article 16(1) of the Sixth Agreement provides as follows: 'The [ITC] shall have legal personality. It shall in particular have the capacity to contract, to acquire and (a) intervention in the market by means of dispose of movable and immovable property a buffer stock, financed by the members and to institute legal proceedings'. Moreover, a Headquarters Agreement 8 — 9 July and 18 December 1987, upheld by the Court of relating to the status and privileges and Appeal on 27 April 1988. immunities of the ITC was concluded 9 — See Opinion 1/78 of the Court of Justice of 4 October between the ITC and the United Kingdom 1979, [1979] ECR 2871, on the International Agreement on Natural Rubber, in paragraphs 4 and 5 of which the on 9 February 1979. Court examined the Integrated Programme and its objectives which are principally to improve market structures in international trade in commodities of 10 — That is to say by a simple majority of both the producing importance to developing countries. countries group and the consuming countries group.

17. It should be pointed out that Article 55 13. That joint participation is the result of of the Sixth Agreement provided that the the decision that the financing of the buffer definitive entry into force of the Agreement stock fell to the Member States and not to was conditional on the deposit, by 1 July the Community, thus requiring the partici- 1982, of instruments of ratification, pation of the former in accordance with acceptance, approval or accession by Opinion 117% of the Court of Justice on the governments of producing countries International Agreement on Natural Rubber accounting for at least 80% of total in which the Court stated: production and by governments of consuming countries accounting for at least 80% of total consumption. 14 'The question of the exclusive nature of the Community's powers depends in this case on the arrangements for financing the oper- ations of the buffer stock which it is proposed to set up under that 18. Article 55(2) indicated that if, on the a g r e e m e n t . . . If... the charges are to be said date, the Agreement had not entered borne directly by the Member States that will into force definitively, it was to enter into imply the participation of those States in the force provisionally if governments of agreement together with the Community.'12 producing countries and consuming countries accounting for 65% of total production and 6 5 % of total consumption 14. It should be noted that Article 56(1) of had deposited instruments of ratification, the Sixth Agreement provides expressly for acceptance, approval or accession, or had the participation of 'intergovernmental given notification that they would apply the organizations' and states that 'in the case of Agreement provisionally. voting on matters within their competence, such organizations shall cast the number of votes equal to the total number of votes attributable... to their member States, 19. Finally, Article 55(3) provided that in which in this case shall not cast their votes the event that on 1 June 1982 the individually'. percentages required under Article 55(1) and (2) were not met, the Secretary-General of the United Nations was to invite those 15. The Sixth Agreement was negotiated governments which had deposited during the conference on tin organized instruments of ratification (etc.) to meet to under the auspices of the United Nations decide whether the Agreement should enter between 1980 and 1981 and opened for into force definitively or provisionally signature on 3 August 1981. among themselves, in whole or in part, on such date as they might determine. 11 — Australia, Indonesia, Malaysia, Nigeria, Thailand and Zaire, producing countries; Canada, Finland, India, Japan, Norway, Sweden, Switzerland and the 10 Member States 13 — OJ L 342, 3.12.1982, p. 1. of the Community, consuming countries. 14 — The percentages taken into account here are set out in 12 — Cited above in footnote 9, at p. 2920, emphasis added. Annex A to the Agreement (OJ L 342, 31.12.1982, p. 30).

21. It was thus on the basis of Article 55(3) of the Agreement that the decision was 25. Furthermore, neither the United States, taken to bring the Sixth Agreement the world's major consumer, which also provisionally into force from 1 July 1982. held considerable stocks available for sale on the market, nor major producing countries such as Bolivia and Brazil were signatories to the Sixth Agreement. 22. Much has been written 15 on the subject of the ITC crisis in an attempt to throw light on its deep-rooted causes. Maclaine Watson has prepared a study which it is essential to summarize the better to situate 26. Hence export controls were bound to its legal arguments in context. be ineffective since the producing countries party to the Sixth Agreement, which were the only producers bound by those controls, represented only 50 to 60% of world 23. The Sixth Agreement was negotiated production. Such controls, while in any case and concluded first of all against a liable to be circumvented by 'smuggling', structural background of overproduction of reduced the export earnings of the ITC tin. Furthermore, during the course of members concerned without affecting those 1980-81 speculative operations by a of the non-member countries. Furthermore, under the Agreement, the ITC did not 'mystery' buyer caused a steep but artificial adopt measures to control production in rise in prices and a consequent revision consuming member countries 16 and the upwards of the ITC's floor and ceiling EEC opposed any decision of that sort. prices.

33. Consequently the Buffer Stock 29. While the Agreement was in force, the Manager found himself attempting to ITC continually sought to maintain a floor control more tin than the resources available price that was too high and could but to him permitted by means of a complicated attract more tin onto the market and thus system of transactions whose compatibility reinforce the downward trend of market with the Sixth Agreement was doubtful; prices. those transactions were entered into in particular with brokers and were intended to create an appearance of greater demand than supply in order to maintain market 30. In those circumstances the buffer stock prices at the level of the artificially inflated had a particularly heavy burden of responsi- floor price. bility to bear. It was, however, not granted the means to fulfil its task. First of all, quite apart from the fact that the resources 34. In that connection, by using 13 provided for under the Sixth Agreement different brokers the Buffer Stock Manager were inadequate, the full amounts had not was able to conceal from them the extent of been paid into the buffer stock because of the operations. In addition, he indicated the non-participation of some States in the that he held sufficient resources and Sixth Agreement. Finally, the majority of vigorously denied any suggestions that the contributions to the stock had been made in financial stability of the ITC was ques- the form of tin, not cash. tionable.

41. Although it is not for me to comment on the way in which the parties have put 37. Hence, if the members' lack of forward their claims and arguments in knowledge stemmed from the terms of the defence, I would nevertheless point out that Sixth Agreement itself, that demonstrates they do not lighten the task of the Court, the defects of that Agreement when the which is rendered extremely difficult by the Community acceded to it and decided to very complexity of the facts and legal bring it into force. On the other hand, if questions at issue. their lack of knowledge cannot be attributed to such defects, it resulted from the negligence of the ITC's members, among them the Community, which failed to 42. For while Maclaine Watson has cast its support the United Kingdom's initiatives. 'net' extremely wide, in view of the number of submissions it makes, the defendant institutions have countered with a gener- alized objection of inadmissibility from which it is often hard to determine the 38. However the ITC's members' lack of precise submissions it applies to. The United knowledge related only to the precise date Kingdom, intervening in support of the on which the ITC would default. They Community on whose arguments it knew enough to have surely appreciated expounded, showed greater consideration that a default was inevitable. for the Court by attempting to provide a more precise analytical framework.

(1) the Community is liable for the acts of (6) the Commission failed to take steps to the ITC which, before its collapse, ensure that all the Member States of the contracted debts which were beyond its Community ratified the Sixth means to honour; if the ITC does not Agreement and made their contributions have legal personality, its wrongful acts to the buffer stock, including the are directly imputable to its members; if, payment of additional contributions; in on the other hand, it should be treated so acting, the Member States were in as having legal personality, its members breach of Article 5 of the EEC Treaty are liable in application of the general whereupon it was open to the principles common to the laws of the institutions to take appropriate steps, Member States which govern the such as, in the case of the Commission, liability of directors of commercial opening proceedings under Article 169 companies ; of the Treaty;

(2) the Community neglected to warn (7) given the number of votes it had, the Maclaine Watson of the risk involved in Community was liable in law for the dealing with the organization and, more 'acts and defaults' of the ITC because generally, failed to discharge its duty of of the influence it possessed within that care; organization which it failed to exercise in the interest of the Community and so as to control the ITC's operations; (3) the Community has acted unlawfully in signing the Sixth Agreement and partici- pating in the decision to bring it (8) the Community was at fault in failing to provisionally into force in view of the prevent the abuse of a dominant fact that it was inherently defective and position constituted by the ITC's acti- incompatible with the EEC Treaty; vities;

(i) the application is inadmissible because 48. In the first place, whether damage has it refers to acts and transactions of the been suffered constitutes, in my opinion, a Community concerning the conduct of question which goes to the merits. Of international relations; course, the Court has in the past sometimes held that actions to establish liability were premature, but I would point out that the (ii) the application constitutes a misuse of Court has also stated that: the remedy provided for in Article 215, in particular because it is in fact seeking satisfaction from the 'The Council's objections in fact Community for the ITC's contractual concern . . . the substantive pre-conditions liability, the annulment of numerous for liability on the part of the Community, decisions taken by the Community, by namely the existence of damage. They will the ITC or by its members, and to therefore be considered when the substance of impose on the Community liability the case is examined.' 19 incurred by the ITC which is not within the jurisdiction of the Court; 49. At all events it seems to me highly debatable whether the damage alleged to (iii) the application is moot and premature, have been suffered here is contingent in inasmuch as it is asking the Court to character. What is uncertain, in my view, rule regarding a principle of merely given the length of time that has elapsed hypothetical and conditional liability at since 24 October 1985, is whether the ITC's a time when it is not certain that the debts will be paid. proceedings pending against the ITC before the English courts will ulti- mately fail. 50. In addition I would point out that the Court has in fact held that applications 'for a declaration that the Community is liable' 46. I shall deal first with that last argument are admissible, following the example of the for the application's inadmissibility which, solution adopted in the legal systems of after I have examined it briefly, I shall several Member States, stating that: recommend should be dismissed.

56. Thus, in the first Fediol judgment 24 the 52. Finally, in the Granaria case, 21 the Court had to decide on an objection of Court pointed out that it could be led to inadmissibility raised by the Commission concerning an application directed against a refusal to initiate an investigation with 'give a decision at an early stage of the regard to Brazil in the context of anti- proceedings on the question whether the subsidy proceedings. It was claimed that the conduct of the institutions has been such as assessments made in that sphere fell within to entail the liability of the Community, the exercise of powers of a political nature reserving consideration of questions relating which were not subject to review by the to causality, as well as those concerning the Court. nature and extent of the damage, for a later stage.' 22 57. The Court dismissed that argument, referring to specific procedural rights enjoyed by Community industry under the 53. It is not insignificant, in my opinion, rules applicable. The Court held that the that in holding the application to be Commission's attitude was 'excessive' admissible the Court stated: inasmuch as it was aimed at precluding any action in principle. The Court pointed out that it is bound under the terms of Article 'In this case the problem of the legal basis of 164 of the Treaty to ensure that the law is complied with and to undertake a review liability is particularly appropriate for separate appropriate to the nature of the powers treatment in accordance with that reserved to the Community institutions on practice'. 23 the subject.

59. In the Adams case 27 the Commission 'since Community institutions enjoy a again relied on its sovereign discretionary margin of discretion in the choice of the powers in the conduct of external relations means needed to achieve their policies, with regard to a complaint by the applicant traders are unable to claim that they have a in respect of the Commission's failure to legitimate expectation that an existing refer the matter to the Joint Committee set situation which is capable of being altered up under the Free Trade Agreement by decisions taken by those institutions concluded between Switzerland and the within the limits of their discretionary Community. But it was as a submission on power will be maintained'. 30 the substance that the argument was put forward and the Court examined it as such in rejecting the application, holding that 63. The judgment in the case concerning special aid for Turkey 31 also appears to me to be significant. As will be recalled, that 'the decision whether or not to refer the decision was in an action brought by the matter to the Joint Committee may not be Hellenic Republic against a decision of the taken except for purposes which have to do Council relating, in substance, to aid to exclusively with general interests of the Turkey. It is clear that that was a matter of Community, following an assessment which external relations and the political is essentially political and which cannot be dimensions of the case are self-evident. No challenged before the Court by an indi- reference at all was made to any limit to the vidual'. 28 Court's power of review.

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OPINION OF MR DARMON — CASE C-241/87

66. In view of the importance of the point (The responsibility of the organs of of principle at issue, it is undoubtedly government for international acts is political appropriate to examine what solutions have and cannot be raised before the courts but been adopted by the laws of the Member only using the means and institutions for the States to the question of the judicial control implementation of political control of acts of external relations. of the government.)

Parliament. Moreover, no action before the conferred directly on the government by the Consiglio di Stato lies if governmental Constitution, such as the establishment of measures have been adopted in the exercise an embassy or the recognition of a State. It of its political power. would seem that the obstacles to such an action stem from the general conditions for bringing proceedings, thus, in the case of an 68. The conclusion and ratification of action for damages, the requirement that international treaties and, generally, the would-be plaintiff has a legally measures relating to international relations, protected right. On the other hand, the view are regarded as 'political measures' which, among writers is that measures concerning as the corte di cassazione has very plainly diplomatic protection of a Danish national indicated, enjoy absolute immunity. abroad may be called in question either by means of an action for annulment or an action for damages.

72. In addition the Bundesverfassungs- gericht has pointed out that the exercise of 36 — Rivista di diritto intemazionale, Vol. II, 1969, p. 583, especially at p. 586. the judicial function presupposes the

existence of legal rules. One illustration is a 74. The law of the United Kingdom has decision dismissing an action against a frequently been cited by the parties who do declaration of a state of military alen on the not seem to agree on the exact position in ground of lack of any relevant legal this connection. In fact it would appear that criteria. 37 According to legal theorists 38 the two types of situation should be distin- Bundesverfassungsgericht took an analogous guished. approach in its judgment of 16 December 1983 39 concerning the decision of the Federal German Government to authorize the installation of Pershing missiles. 75. On the one hand, there are political Although that court held that certain claims acts involving the relations of the Crown could not give rise to judicial review with other States, such as the conclusion because of the margin of discretion enjoyed and performance of treaties and declar- by public authorities in the conduct of ations of war: any action before the courts defence policy, it nevertheless examined which questions the validity of such acts is whether there existed a general principle of precluded. 42 As far as actions for the estab- international law within the meaning of lishment of liability are concerned, it would Article 25 of the Grundgesetz prohibiting seem that the decisive criterion is whether the possession and use of nuclear arms but the act was committed outside or within concluded that there was no such principle.

bounds. If such bounds exist, as they do in it cannot be relied on as a defence against Article 25 of the Grundgesetz, the court will any plaintiff.45 fulfil its function and scrutinize the contested act in the light of highly regarded rules'. 41 76. On the other hand, English courts have sometimes adopted a position of 'judicial restraint' in the case of actions between 73. In a general way, the margin of private individuals which indirectly put in discretion that public authorities are issue the conduct of foreign sovereign recognized as possessing in the field of States. Reference was made to the Buttes external relations is considerable, because case, in which Lord Wilberforce stated: the Federal German Government must in 'Leaving aside all possibility of embar- particular be in a position to take the rassment in our foreign relations (which it reactions of its international partners into can be said not to have been drawn to the consideration when adopting decisions. attention of the court by the executive) there are. . . no judicial or manageable 37 — Bundesverwaltungsgericht, 12 October 1962, BVerwGE 15, pp. 63 and 65. 42 — Rustomjee v The Queen [1876] 2 QBD69, 73, CA. 38 — R. Ergec: 'Le contrôle juridictionnel de l'administration 43 — That would be an 'Act of State', but as Lord Wilberforce dans les matières qui se rattachent aux rapports interna- points out in Buttes Gas and Oil Co. v Hammer [1982] AC tionaux: actes de gouvernment ou réserve du pouvoir 888, at pp. 930 and 931, the term 'Act of State' may also discrétionnaire', Revue de droit international et de droit refer to cases where the court is called upon to adjudicate comparé, 1986, p. 72, in particular at p. 77. on the applicability of foreign municipal legislation within 39 — Archiv des Völkerrechts, 1984, p. 220. its own territory. 40 — Ergec, op. cit., p. 78. 44 — Attorney General v Misan [1970] AC 179 HL. 41 — Ibid. 45 — Ibid.

46 — The law reports, 1982, p. 938. 47 — Underhill Hernandez [1897] 168 US 250, 252 laid down the principle: 'Every sovereign State is bound to respect the independence of every other sovereign State, and the courts of one country will not sit in judgment on the acts (i) the theory of 'detachable acts', which of the government of another done within its own territory. means that such acts can be adjudicated Redress of grievances by reason of such acts must be obtained through the means open to be availed of by sovereign powers as between themselves'. 50 — On the whole question see K. Lenaerts: Le juge et la 48 — Legal theorists draw a distinction between 'Act of the constitution aux États-Unis d'Amérique et dans l'ordre government' and 'Act of State': 'the doctrine of Act of juridique européen, p. 98 et seq. and the references cited, pp. State is a legal concept of mainly common-law origin, and 104 and 105. consists in precluding assessment by the courts of the 51 — In ruling out application of the doctrine in Baker v Carr, legality of "sovereign acts" of foreign States, whereas the Brennan J. stated: 'Nor need the appellants, in order to concept of "act of the government" refers to acts of the succeed in this action, ask the Court to enter upon policy State of the court seised. The doctrine of Act of State is determinations for which judicially manageable standards mainly concerned with public international law and private are lacking', 369 US 186, p. 691. international law, whereas act of the government arises mainly in the sphere of domestic public law' (Ergec: 'Le 52 — But not exclusive, see the list of conditions given by contrôle juridictionnel de l'administration dans des matières Brennan J. in Baker v Carr, cited above, p. 691; See also qui se rattachent aux rapports internationaux', Revue de Lenaerts, op. cit. droit international et de droit comparé, 1986, p. 73, in 53 — A consistent line of case-law; see for example Conseil particular at p. 74). Similarly, it has been said that Act of d'État (CE), 5 February 1926, Dame Caraco, p. 125; CE, State is a 'secondary conflict of laws rule', Falck, quoted by 16 March 1962, Prince Siiman Bey, p. 179; CE, 13 July Brazyova in 'Reflections on immunity of States from the 1979, Cofarex, p. 319. point of view of international law', Questions of Interna- tional Law, Vol. 3, Dordrecht, 1986, p. 46. 54 — Suspension of navigation in a maritime safety zone in order to conduct nuclear tests (CE, 11 July 1975; Paris de 49 — In the First National City Bank case, Rehnquist J. stated: la Bollardière, p. 423); intervention with a foreign State to 'It would be wholly illogical to insist that such a rule [Act protect the goods or interests of a French national (CE, 2 of State], fashioned because of fear that adjudication March 1966, Cramennel, p. 157); refusal to take would interfere with the conduct of foreign relations, be proceedings before an international court (CE, 9 January applied in the face of an assurance from that branch of the 1952, Geny, p. 17); refusal to communicate to a union Federal Government that conducts foreign relations that proposals addressed to an international body (CE, 10 such a result would not obtain', p. 483. February 1978, CFDT, p. 61).

on by the courts 'if the French auth- 81. In some relatively old cases 60 the orities have some independent choice Luxembourg Conseil d'État has applied the with regard to the procedure by which concept of 'act of the government' as they perform their international obli- recognized in French law. It is clear that as gations and can themselves take the the law now stands only the sovereign's initiative as regards the means by which relations with a foreign State 61could enjoy they comply with those obligations'; 55 legal immunity. in that connection I would refer to the decisions concerning deportation and the extradition of aliens;

relations. 83. In Belgium there is debate on the question whether the theory of act of the government has been accepted by domestic courts. A recent and very detailed study 62 80. It must, moreover, be pointed out that on judicial control of the administration's the 'act of the government' doctrine has activities in the area of international been subjected to severe criticism, 5 8but it relations has tended rather to discern in the has also been defended as simply the case-law a reservation in respect of discre- expression of the courts' lack of jurisdiction tionary powers. to deal with governmental activity as distinct from administrative activity. 59

Le contentieux administratif banished from the 'systems of public law of all civilized et la procédure administrative non-contentieuse en droit countries', Duguit, Traite de droit institutionnel, 3rd ed., III luxembourgeois, p. 28, No 74 1930. 61 — F. A. Schockweiler, op cit 59 — Chapus: 'L'acte du gouvernement, monstre ou victime?', D 1958, Chr p. 5; other authors consider that the courts' 62 — Ergec, op. cit. lack of jurisdictionis a consequence of the mixed character 63 — 4 December 1963, JT 15 December 1963, p. 782, see also

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91. The adoption of the Spanish Constitution of 1978 70 has abrogated the 88. However, the wide discretionary immunity enjoyed by political acts before powers vested in the government in this area administrative courts pursuant to Article lead to the courts' exercising very 2(b) of the Law of 27 December 1956. In considerable restraint in their review of such acts. Nevertheless, it is not impossible that 67 — 21 May 1984, KG 1984, 168. 68 — President Rechtbank Den Haag, 5 November 1985, KG 1985, p. 376. 64 — 15 September 1969, Pasicrisie beige, p. 247, in particular at 69 — 2 March 1951, NJ 51.217. p. 249. 70 — In particular Article 24(1) thereof, according to which 65 — 14 January 1963, JT 27 January 1963, p. 64, in particular 'any person shall be entitled to effective protection by the at p. 66. courts in the exercise of his legitimate rights and interests 66 — 14 December 1973, Recueil des arrêts, p. 955. and in no case shall such protection be denied to him'.

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MACLAINE WATSON v COUNCIL AND COMMISSION

any event, that article did provide for 94. What conclusions may be drawn from compensation to be ordered by the court in this examination? respect of the acts in question. The judgments of the Tribunal Supremo granting compensation to individuals for damage resulting directly or indirectly from 95. In my opinion it would be a manifest the exercise by the State of diplomatic overstatement to suggest that the inadmissi­ protection in their regard merit special bility of actions for damages in respect of attention. 7 1 acts by the State in the field of international relations is one of the 'principles common to the laws of the Member States'.

71 — 29 December 1986, REDI 1988, No 2, Note by 98. Moreover, the concept could not truly Castro-Rial Garrone, see also, 16 November 1974, Aranzadi, Jurisprudencia, 1974, No 4510; see in purport to derive from a principle common connection with that decision 'Discrecionalidad en el ejercicio de la protección diplomatica y responsabilidad to the laws of the Member States but would del Estado en el orden interno'. M Paľ Andres Saenz de be carrying too far the frequently criticized Santa Mana, ADI. Vol III (1976), p 321 doctrine of 'act of the government' whose 72 — Byrne v Ireland 1972 I R 241 73 — Crotty v An Taoiseach [1987] 2 CMLR657, in which it was scope is tending to be considerably held that the applicant was entitled to bring an action narrowed in some legal systems where it putting forward claims relating to the constitutionality of the Single European Act was formerly most rigourously applied.

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99. Nevertheless, the role of the courts is hold the application to be admissible at this to ensure that the law is observed. There are stage only to dismiss it subsequently on the certain acts that are based on assessments ground which positive law does not enable the court to review because it would be substituting its own decision for that of the institution 'that the decision . . . may not be taken whose conduct was in question. That is, as except for purposes which have to do exclu- we have seen, the analysis expressly sively with general interests of the adopted, in particular, by the German Community, following an assessment which Bundesverfassungsgericht.74 I believe that is essentially political and which cannot be the Court itself has on occasion adopted an challenged before the Court by an indi- analogous approach. 75 vidual'. 77

The latter solution appears more appropriate in the present circumstances. It might seem an overlegalistic approach to 103. The principle of ex post facto control has been disputed on the ground that the 74 — See also the judgment of the French Conseil constitu- existence of a prior review procedure tionnel of 15 January 1975 on voluntary termination of precludes any subsequent application to the pregnancy: 'Article 61 of the Constitution does not confer ott the Conseil constitutionnel a general power of assessment Court even in a case where it had not been and decision identical to that of Parliament, but merely gives it jurisdiction to rule on the conformity with the requested to give its opinion. 79 The Constitution of laws submitted to it for examination', counterargument has been raised that it Decision 74.54, Rec DC 19 (emphasis added); the approach of the United States Supreme Court might also would enable the institutions and Member

Droit communuataire et droit interna- rejecting the objection of inadmissibility raised by the tional public, Geneva, 1979, p. 237. Commission on the ground that the rules on measures to 79 — Catalano: Manuel de droit des Communautés européennes, counter illicit trade practices gave the applicant only Paris, 1965, p. 73, who is in favour of excluding the possi- limited legal protection, Mr Van Gerven pointed out, when bility of any ex post facto review. examining the merits of the case, that there does exist discre- tionary power of a political nature which is not reviewable 80 — P. Pescatore: Les relations extérieures des Communautés by the courts if the principles to which that power is subject européennes, 1961, p. 129. are not legally definable (paragraph 18). 81 — Ibid., p. 128.

104. As regards the basis of the Court's Community and whether, in a given case, jurisdiction on this question, it has been such power has been exercised in conformity observed that it would be impossible to with the provisions of the Treaty is, in describe as a 'unilateral act' 82 of the principle, a question which may be institutions an agreement that is the product submitted to the Court of Justice, either of a 'meeting of minds' with a party not directly, under Article 169 or Article 173 of subject to the Court's jurisdiction 83 and the Treaty, or in accordance with the therefore cannot form the subject-matter of preliminary procedure, and it must therefore an application for annulment before the be admitted that the matter may be referred Court. 84 to the Court in accordance with the preliminary procedure of Article 228.' 88 105. Moreover, the consequences of the annulment of an international agreement 107. Hence the principle of ex post facto simply cannot be envisaged from the legal review has been unreservedly upheld by the point of view. 85 Finally, the appropriateness Court. 89 of such control is strongly disputed 'on the grounds of legal certainty, the protection of third parties and the political credibility of 108. The Court has, moreover, reviewed the Community'. 86 the legal basis for a Council decision on the conclusion of an international agreement even though, as has been seen, some legal 106. However, notwithstanding that line of reasoning, which is not without some force, writers have urged that such a measure the Court has held, on the one hand, that should be classed as an act of the an agreement concluded by the Council government. 90 constituted 'as concerns the Community, an act of one of the institutions of the 109. But what is the extent of the Court's Community' and as such was subject to powers of review in this case? First of all, is interpretation by the Court 87 and, on the the exercise of any control in respect of a other, more importantly, that mixed agreement, such as the Sixth Agreement, in principle impossible? Some 'The question whether the conclusion of a writers 91 have maintained resolutely that given agreement is within the power of the that is the case, pointing out that the

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procedure in such a situation is identical in excluded that the Court could examine the substance to that of the amendment alleged wrongful nature of decisions on procedure under Article 236. Elsewhere it external agreements in so far as those has been observed that 'the Member States decisions involve strict assessments of what is are regarded as having participated (in the appropriate 93 which are not subject to agreement) only as regards matters that fall review by the Court pursuant to any within their competence, not as regards provision of the Treaty. It seems to me that matters falling within the competence of the this fits squarely within the analysis set out Community. The possibility of review by the above. I would therefore maintain my view Court is thus intact as far as the provisions and propose that the Court reserve falling within that latter area of competence judgment on the submission of inadmissi- are concerned'. 92 bility until its decision on the merits.

110. Consideration of the merits of those III— Misuse of the remedy provided for in two points of view is outside the scope of Article 215 these observations. At all events, the first does not seem to me to be tenable in the case of agreements concluded, as in this instance, on the basis of Article 113, because 113. Let it be said quite plainly: the in this case the procedure applicable is objection of inadmissibility raised by the fundamentally different from that of Article defendant institutions in this respect is not 236, in particular in so far as consultation of always wholly to the point. the European Parliament is not required.

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MACLAINE WATSON v COUNCIL AND COMMISSION

evidence of some consideration for the action for annulment 95 and action for Court but does not constitute a ground of failure to act 96 is firmly established in the inadmissibility. Court's case-law and, moreover, accepted by the defendant institutions in their obser- vations. Those principles are applicable to this case, including in my opinion, the claim 117. On the other hand, they argue, the that the Commission did not take 'appro- application would 'in effect require the priate steps' against the Member States of Court to order the Community institutions the EEC, if appropriate by commencing to act now in certain ways which are proceedings under Article 169 of the EEC consistent with the applicant's view of what Treaty, with a view inter alia to compelling the Community should have done as a them to fulfil their financial obligations with participant in the Sixth International Tin regard to the ITC, 97 and to the submission Agreement, notwithstanding that even had concerning the failure to prevent the abuse the Community so acted the result for the of the dominant position that allegedly applicant would not necessarily be resulted from the ITC's activities. different'. That argument relates in part to the causal link, thus going to the substance of the case, and is a further reference to the 121. That argument as to inadmissibility issue of the limits of the Court's control. should therefore be dismissed.

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OPINION OF MR DARMON — CASE C-241/87

123. From an economic point of view the carrying on business. Although, on a market damage suffered by Maclaine Watson such as the LME, a dealer may run risks obviously originated in ITC's failure to fulfil because of fluctuations in market prices and its obligations. But, as Maclaine Watson defaults by trading partners on their obli- quite rightly points out, the intervention of gations, the default of the ITC does not fall a third party may have led to the within the limits of the risks inherent in non-performance of a contract. The action operating on the LME. Since it arose only brought by a creditor against the perpe- because of the making of the Sixth trator of the harmful act will nevertheless Agreement and the way in which the ITC still be seeking to establish non-contractual, was allowed to operate, the entire risk delictual or quasi-delictual liability. should not be imposed solely on Maclaine Watson (and others who had direct dealings with the ITC). Thus, if the public interest 124. Maclaine Watson states that it is not justified the Community's accession to the asking the Court to order the Community Sixth Agreement and its membership of the to honour the ITC's contracts, but to make ITC, the harmful consequences should be good the damage caused by the borne by the Community as a whole rather Community's own conduct. than by a few individuals.

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on the question of the obligations of the votes it held, which would have enabled it members of the ITC, as such, towards the to ensure that a responsible attitude was creditors of the organization. Consequently adopted. that submission is a surreptitious attempt to bring before the Court an issue which, point for point, is identical with the claim that Maclaine Watson itself indicated did not form part of this action. It was at pains to 131. Let me say right away that those two inform the Court of what it describes as its submissions are inadmissible: 'primary claim', namely that the members of the ITC are liable 'in contract' to satisfy the debts of that organization, which is at present being pursued before the English courts. 98 It should be noted that this (i) the first because the mere fact of the submission is in fact seeking to raise the Community's being a member of the same issue before the Court. ITC does not, in view of the ITC's separate personality, enable the wrongful acts and omissions of the ITC to be imputed to the Community;

129. The Community institutions maintain (ii) the second because an attempt to render that the application seeks to impose on the the Community liable for what is said to Community, by virtue of its participation in be its own conduct within the ITC the ITC, an alleged liability of that organ- requires in any event a prior finding of ization and to bring the dispute before the mismanagement on the part of the ITC Court of Justice, which is a court to whose and, more generally, of its liability jurisdiction the ITC is not subject. therefor; however, such an assessment is outside the jurisdiction of the Court.

commercial companies should apply with charged with pursuing the attainment of the regard to the question of the members' latter's objectives: namely, essentially to liability. ensure world-wide equilibrium in the market in tin. It is not limited to 'harmonizing' the members' efforts in this 133. It is necessary first of all to determine respect, but in any event carries out the task whether the ITC has personality distinct itself, using means that are its own. In so from that of its members. It does not doing, the Council exercises its own suffice, in my opinion, to rely on Article 16 decision-making power distinct from that of of the Sixth Agreement which concerns the the members who make up the organ- 'civil' personality of the organization.99 ization, in so far as essential decisions are adopted on the basis of a majority vote, either simple or qualified as the case may

content to make the Organization created by it merely a centre for "harmonizing the actions of nations in the attainment of these Secondly, the position of the members in common ends" . . . It has equipped that relation to the ITC is defined inasmuch as centre with organs, and has given it special they are bound by all decisions of the tasks. It has defined the position of the Council (Article 41(2)) and must use their Members in relation to the organization by best endeavours to promote the attainment requiring them to give it every assistance in of the Agreement's objectives.

135. First, the International Tin Council, is a genuine organ of the organization. It is when implementing the Sixth Agreement, is to that independent chairman, appointed by a two-thirds majority of members, that the 99 — As to the distinction between civil personality and inter- national personality, and the two aspects of the latter, see Buffer Stock Manager is responsible. In Pescatore: Les relations extérieures aes Communautés euro- addition, the Chairman has his own powers, péennes, p. 32 et seq. 100 — Denys Simon: L'interprétation judiciaire des traités such as the power to limit or suspend the d'organisations internationales, Pedone, 1981, p. 639. operations of the buffer stock when the 101 — Advisory Opinion of 11 April 1949, ICJ Reports 1949, p.

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In those circumstances, the reference to solutions adopted in the field of private law concerning the liability of persons running 138. In consequence the Court should commercial companies has no relevance declare the submission imputing the whatsoever. No guidance can be derived wrongful acts and omissions of the ITC to from the judgment of the International the Community merely by virtue of its being Court of Justice in the Barcelona Traction a member of the organization inadmissible. case, 102 for instance. That court did indeed consider that the concept of the lifting of the 'corporate veil' might apply in interna- tional law, but there it was precisely a 139. Let us now proceed to examine the question which concerned private submission which seeks to impose liability

In particular, it did not support the United Kingdom's 137. Although that reflection deals with efforts to clarify the situation of the buffer the liability of the members of the ITC for stock and opposed an increase in the its debts, 104 a fortiori it must apply to the financial contributions and any control on question of imputing the ITC's conduct to production. The 'blocking minority' its members. The fact that it is impossible to allegedly at the disposal of the Community impute the conduct of an international thus constitutes the ground on which the case is brought before the Court. 102 — Order of 5 February 1979, ICJ Reports 1970, p. 1, particularly p. 39. 103 — 'Crise du Conseil international de l'étain', P. Eisenmann, op cit., p. 730. 104 — The separate personality of the organization and the 140. It should be recalled that the number liability of its members are two distinct problems; that is what gives rise to all the discussion regarding the of votes held by the Community, more than question of the members' liability for the ITC's debts, half of those attributed to consuming which is not at issue in these proceedings.

It must be

pointed out in this connection that the 143. The Court cannot, however, make a Community's liability for having failed to finding on the prior question of the ITC's prevent wrongful conduct on the part of the liability for its mismanagement. The Court's ITC necessarily presupposes that such jurisdiction is confined to the powers which wrongful conduct has been established and have heen conferred upon it. That jurisdiction that it did cause the damage for which does not enable it to rule on the alleged Maclaine Watson seeks compensation. The mismanagement by the ITC in connection whole edifice of the arguments submitted to with the Sixth Agreement. Examination of the Court on this point is based on the the submission in question presupposes that enumeration of a very large number of the Court should first arrive at a decision in examples of wrongful conduct on the part this regard, thus exceeding its jurisdiction.

Is that impasse not a result, however, of the fact that the alleged 'conduct' of the Community is in reality an integral part of 142. However, the attempt to impose the internal decision-making process of that liability on the members of the ITC, organization? It is quite clear that if the including the Community, although the Court were to consider that the partici- alleged damage arose from the acts and pation of one of its members in the activities omissions of the organization, requires a of the ITC could not be 'detached' from the prior finding on the issue of the wrongful activities of the organization, then Maclaine conduct on the part of the ITC and an Watson would be found to be asking the examination of whether that conduct caused Court to examine exclusively the conduct of the damage alleged. I say 'a prior finding' the ITC itself. because it is clear that in the event, for example, that the wrongful acts and omissions could not be regarded as causing the damage, quite obviously it would not be 145. However, the submission concerning possible to hold the Community liable for breach by the Community of its 'duty to conduct consisting of not preventing those give sufficient warning' and its 'duty of wrongful acts and omissions. That is a care' to Maclaine Watson does not by any condition precedent for any liability on the means presuppose that the Court should part of the Community for its alleged first make a finding on the ITC's liability. conduct within the ITC. An examination of that submission would involve first of all determining whether the Community was bound by such duties in the 105 — See paragraph 164 of the application. 106 — If reference is made to the application in Case 19/89, as context of the Sixth Agreement.

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MACLAINE WATSON v COUNCIL AND COMMISSION

146. The submission based on the alle- applied, Community law against the ITC. In gation that the Community did not prevent other words, is the relationship between the the abuse of a dominant position constituted ITC and its members subject to the law of by the activities of the ITC raises, in my one of those members? That is the form in view, an issue which is not quite the same as which I suggest the Court should examine that of examination of the conformity of the the question, with the substance, since the Sixth Agreement with the EEC Treaty. It substantive aspect and the admissibility of poses the question whether the Community this submission are so closely bound up with institutions could have relied on, or indeed each other.

147. Consequently I propose that the Court should:

(1) reserve for consideration with the substance of the case the question of the admissibility of the submissions concerning

(i) the breach by the Community of its duty to give sufficient warning and of its duty of care with regard to the applicant;

(3) reserve the costs.

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OPINION OF MR DARMON — CASE C-241/87

Annex

(1) For the cases brought against the ITC, see in particular:

(i) 17 April 1986 Standard Chartered Bank v ITC and Others (Queen's Bench Division — Bingham, J.) (1986) 3 A11ER257, (1987) 1WLR641, in re ITC, 22 January 1987 (Chancery Division — Milieu, J.) 1Ch419, (1987) 1AllER890 (1987) 2WLR1229 and, on appeal, 27 April 1988 (Court of Appeal — Civil Division), Financial Times of 4 May 1988;

(ii) for the appeals against those two decisions see the judgments of 27 April 1988 (Court of Appeal —Civil Division) reported in The Times of 28 April 1988 and 30 June 1988. The High C o u r t of Justice refused in part to grant immunity to all the member States of the ITC, defendants in the actions alleging their wrongful conduct brought by various creditors of the ITC.

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