C-220/91

The problems raised by the case have been thoroughly expounded and argued. Apart It applied to certain products, which were from the contested judgment there is a com- divided into so-called categories of products. prehensive Opinion delivered to the Court Every quarter the Commission sent every of First Instance by Judge Biancarelli. I shall undertaking concerned an individual de- refer to it and to the Report for the Hearing cision in which it laid down the production and in what follows I shall try to be as brief quotas applying to that undertaking. At the as is appropriate.

2 — For a survey of the case-law see Charles Funck: 'Le régime de crise de la CECA dans les arrêts de la Cour de Justice des * Original language: Danish. Communautés Européennes', Cahier de Droit Européen, 1 — Case T-120/89 [1991] ECR II-279. 1989, No 3/4, p. 251.

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COMMISSION v STAHLWERKE PEINE-SALZGITTER

'Although Article 58 [of the ECSC Treaty] 5. However, there was in the Commission's provides specifically only for production general decisions an equity clause which quotas, its basic aim is to restore the balance made it possible, according to the circum- between supply and demand on the market. stances, to adjust the effects of the other pro- This aim would not be achieved if, even visions of the general decisions. The applica- though they adhered to the production quo- tion of that provision in the period which is tas, certain undertakings released relatively relevant here — Article 14 of Decision N o greater quantities on to the common market 234/84 — was conditional upon the quota than was the case during the period July system, as a result of the scale of the abate- 1977 to June 1980, which served as the basis ment rate set for a given quarter for a certain for calculating the production quotas.' 3 category of products, creating exceptional difficulties for an undertaking which, during the 12 months preceding the quarter in ques- tion had not received aids authorized by the The ratio between the production quota — Commission with a view to covering operat- called 'Quota P ' — and the delivery quota — ing losses. called 'Quota I' — was of essential impor- tance for the undertakings, because the part of their production which was not sold in the common market, where prices were rela- The Commission made use of that provision tively favourable, would necessarily be sold with regard to Peine-Salzgitter in the three last quarters of 1984. The Commission found that Peine-Salzgitter's I: P ratio for Category 3 — See Decision N o 2794/80 of 31 October 1980 establishing a III products had fallen from 52 to 44% and system of steel production quotas for undertakings in the that that percentage was 20% lower than the iron and steel industry, point 6 of the preamble (OJ 1980 L 291, p. 1). Community average and concluded that that

Since there has been a far-reaching change in the pattern of steel trade between the Com- munity and the rest of the market since the 6. The Commission had stated on several introduction of the quota system, a review occasions that it was necessary to make cer- would also have to be made of the situation tain adaptations to reference production fig- of steel makers whose ratio between the part ures and reference quantities and thus also t o of production quotas which may be deliv- the I: P ratio. That point of view was inter ered in the Community and production quo- alia expressed in the Commission communi- tas is, for all products covered by the system, cation of 25 September 1985 to the Council much lower than the Community average. concerning the continuation of the quota These historical situations are no longer in system after 31 December 1985. 5 In Section line with Community steel policy objectives and the Commission intends, in respect of each firm's production, to bring down this ratio to no more than 10% below the Com- 4 — [1988] E C R 4131. munity average, where this has not been the 5 — D o c . COM(85)509. The Danish version of the communi- cation is dated 8 October 1985. case so far' (my emphases).

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COMMISSION v STAHLWERKE PEINE-SALZGITTER

At the time of the delivery of the said judgments the quota system had just come to an end. It was therefore impossible for the Commission to comply with the judgments, as would have been the case according to the information available, in 7. Peine-Salzgitter brought an action against similar cases, namely by granting the under- the Commission in which it claimed first taking increased quotas. 9The undertaking that Article 5 of the relevant general Com- therefore sought damages from the Commis- mission decision — that is, the provision sion. As the two parties could not agree o n containing the general rules for fixing pro- the matter, the undertaking brought this duction and delivery quotas — should be action for damages. declared void and secondly that the Com- mission's individual decisions concerning the first two quarters of 1986 should also be declared void in so far as they laid down the 9. Peine-Salzgitter claimed that during the undertaking's delivery quotas for products in period 1 January 1985 to 30 June 1988 — Categories la, lb, Ic and III. In its judgment that is, 14 quarters in all — the Commission in Joined Cases 33/86, 44/86, 110/86, had adopted illegal decisions and thus ren- 226/86 and 285/86 (also delivered on 14 July dered itself liable to pay damages.

average. At the same time the Court declared Cases 218/87 and 223/87 and 72/88 and 92/88 Hoogovens void the individual decisions adopted in rela- Groep and Others v Commission [1989] ECR 1711. 9 — In this connection see Judge Biancarclli's Opinion in Case tion to Peine-Salzgitter in so far as they fixed T-120/89, where it is stated, towards the end of Part I: Throughout the currency of the quota system, situations of that kind were resolved fairly simply by the Commission's granting additional quotas to companies which had success- fully pleaded their cases before the Court of Justice.

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OPINION OF MR GULMANN — CASE C-220/91 P

because it was required to sell at lower prices to the High Authority. The High Authority in third countries. shall take the necessary steps to comply with the judgment. If direct and special harm is suffered by an undertaking or group of undertakings by reason of a decision or rec- 10. In its judgment of 27 June 1991 the ommendation held by the Court to involve a Court of First Instance declared inter alia: fault of such a nature as to render the Com- munity liable, the High Authority shall, using the powers conferred upon it by this Treaty, take steps to ensure equitable redress — that the individual decisions referred t o for the harm resulting directly from the above were vitiated by a defect of such a decision or recommendation declared void nature as to render the Community lia- and, where necessary, pay appropriate dam- ble: ages.

— that Peine-Salzgitter had suffered direct and special harm as a result of those deci- If the High Authority fails to take within a sions; reasonable time the necessary steps to com- ply with the judgment, proceedings for dam- ages may be instituted before the Court.' — that the Commission was not required t o comply with the claim for payment of D M 77 603 528, together with interest, The first paragraph of Article 40 provides: on the ground that it was premature; and

— that the case must be referred to the 'Without prejudice to the first paragraph of Commission, which was required t o Article 34, the Court shall have jurisdiction adopt appropriate measures to ensure to order pecuniary reparation from the equitable redress for Peine-Salzgitter. Community, on application by the injured party, to make good any injury caused in carrying out this Treaty by a wrongful act or omission on the part of the Community in the performance of its functions.' Procedural matters

Secondly the Commission claimed that the conditions of Article 34 for instituting pro- 14. The Court of First Instance rejected the ceedings for damages were not met as Commission's objection but for reasons regards the individual decisions which the other than those given by Judge Biancarelli. Court of Justice had not declared void, that Its reasoning originated with the judgment is to say, the individual decisions concerning of the Court of Justice in Joined Cases the last three quarters of 1985, the last two 97/86, 193/86, 99/86 and 215/86 Asteris v quarters of 1986, all four quarters of Commission. 10 The facts of that case were, 1987 and the first two quarters of 1988. The briefly, that the Commission had adopted for Commission pointed out that Article the marketing year 1983/84 a regulation fix- 34 expressly pre-supposes that the relevant ing the coefficients to be applied to the pro- decisions have previously been declared void. duction aid for tomato concentrates. The The Commission further claimed that in Court, in its judgment in Case 192/83, had addition Article 40 could not be relied upon declared that regulation void in so far as it by Peine-Salzgitter. It may be seen clearly led to discriminatory treatment between pro- from Article 40 that its application is 'with- ducers in Greece and those in other Member out prejudice to the first paragraph of Article States. To comply with the judgment the 34' and in the Commission's view it follows Commission adopted a new regulation that undertakings claiming liability for dam- applying to the 1983/84 marketing year. ages on grounds of the illegality of a Com- However, the Commission saw no reason to mission decision can do so only by virtue of repeal regulations with a content entirely Article 34. similar to the regulation declared void for marketing years subsequent to 1983/84. The Court took the view that as a result the Commission was failing to comply with its obligations under Article 176 of the E E C Treaty. The relevant paragraphs of the grounds of judgment are as follows: 13. That question is treated in great depth by Judge Biancarelli in his Opinion. His 'In cases such as this one, where the effect of view is basically that Article 34 cannot be the annulled regulation is limited to a clearly used as a basis for proceedings for damages defined period (namely the 1983/84 market- in relation to decisions which have not been ing year), the institution which adopted the declared void. On the other hand he consid- ers that Article 40 may be used as a basis for proceedings for damages even where the injury alleged has been caused by a decision 10 — [1988] ECR 2181.

In that connection the Court of First 16. I shall not disguise the fact that I find it Instance declared: 'It follows from the judg- hard to show any understanding of the ment of the Court of Justice in Asteris ... Commission's view regarding this objection that, for the application of Article 176 of the of inadmissibility. It seems clear to me that E E C Treaty, express or implied measures Peine-Salzgitter must have a right to consid- which are essentially the same as an annulled eration of the substance of its claim for dam- measure and were adopted between the date ages for the harm it alleges it has suffered on which the annulled measure entered into during the whole period from 1985 to the force and the date of the judgment annulling middle of 1988. them must be treated in the same way as the annulled measure. That approach must also be adopted in applying Article 34 of the 17. In my view it is possible to admit a claim ECSC Treaty, in so far as that provision is for damages on the basis of both Article drafted in terms similar to those of Article 34 and Article 40. 176 of the EEC Treaty as regards the obliga- tion of the institution which adopted the It may be appropriate to mention that the annulled measure to take the measures neces- Court of Justice, in its judgment in Joined sary to comply with the annulling judg- Cases C-363/88 and 364/88 Finsider and ment.' 1 1O n that basis the Court of First Falck v Commission, 12 gave its views on the Instance concluded that the substance of the essentials of the Commission's objection ofi- nadmissibility, namely that Article 40 cannot

'The Commission claims that Article 40 of the Treaty does not make it possible to have the Community declared liable on the basis of the illegality of decisions; however, noth- There is only a question whether the auth- ing in the wording of that provision or in its ority for the claim is to be found in Article general structure makes it possible to restrict 34 or Article 40. It is possible that the Court its field of application in that way' (para- of Justice based its Finsider judgment on the graph 16). concept that the authority to claim damages for harm resulting from decisions not declared void was Article 40. The Court thus 18. I might also mention that Advocate seems in paragraphs 17 and 18 of the judg- General Van Gerven, in his Opinion in the ment to be determining that Article 34 is the Finsider case, expressed the view that in this authority for claims for damages for harm case the Court of First Instance had cor- resulting from decisions declared void, whilst rectly applied the case-law arising from the Article 40 is the authority for claims based Asteris judgment. He was aware of the Com- on other conduct causing injury. mission's appeal against the judgment of the Court of First Instance in this case but did not think it necessary to discuss the Com- mission's objection to that Court's decision on this question, since his view was that the claim for damages was in any case admissible 20. As far as I can see it is not a matter of under Article 40. 13 very great practical importance whether one provision or the other is used as the legal basis in a case such as this. In my view the Court was showing in its Finsider judgment 13 — See section 17 of his Opinion. At the end of section 19 he that the choice has no practical importance said: 'Contrary to the Commission, I think that an action for as far as concerns the principles for establish- damages under the first paragraph of Article 40 may be brought to make good an injury which has been caused by ing liability. In addition, if the Court were to a decision, recommendation or an implied decision of find that Article 40 is the correct basis, I refusal not declared void by the Court. Contrary to the Commission's contention, the saving clause contained in should be inclined to agree with Judge Bian- the first paragraph of Article 40 regarding the provisions of the first paragraph of Article 34 relates solely to the harm carelli that it must follow from a reasonable caused by the measures declared void, which are mentioned interpretation of that provision in the light therein. With regard to measures which have not been declared void (except for measures assimilated to those declared void) that saving clause does not apply and the provisions of the first paragraph of Article 40 — of which it may be stated that in ECSC matters it contains the com- mon rules of law as regards liability of the Community 14 — See section 20 of Advocate General Van Gerven's Opinion — is applicable in its entirety.' in the Finsider case.

The differences between Article 34 of the ECSC Treaty and Article 176 of the EEC The substance Treaty to which the Commission calls atten- tion are not such as to weaken what is basi- cally correct in the reasoning of the Court of 23. The parties discussed in detail before the First Instance. Court of First Instance how best to describe the standard which should apply to the Community's liability for damages. The question is dealt with in paragraphs 71 to 22. The Commission also criticizes the rea- 78 of the contested judgment and the soning of the judgment of the Court of First decision at which the Court of First Instance Instance inasmuch as, in its opinion, the arrived was that the standard developed in Court wrongly interpreted the exchange of the field of the EEC Treaty on the basis of correspondence between Peine-Salzgitter and the second paragraph of Article 215 should the Commission on the basis of which also apply in the context of the ECSC Peine-Salzgitter refrained from bringing an Treaty. action for a declaration that the individual decisions were all void. The Court referred to Articles 33 and 34 of the ECSC Treaty and concluded that it fol- lowed from those provisions 'that the mere However, as I see it, that correspondence is annulment by the Court of Justice of a leg- not decisive for the admissibility of Peine- islative measure of the Commission is not Salzgitter's claim for damages. That claim sufficient to render the Community liable' would have been admissible even if the (paragraph 76), and that 'that conclusion, exchange had not taken place. N o r did the which is based on the very terms of the Court attach independent and decisive ECSC Treaty, is very close to what was importance to it in reaching its decision. In decided by the Court of Justice in relation to my opinion the Court used the exchange of the EEC Treaty regarding liability resulting letters to show that the Commission itself from unlawful legislative measures' (para-

graph 77). The Court further declared: 'In the exercise of its powers and decided that it view of the need, within a single legal order, had, as I have mentioned. albeit one established by three different Trea- ties, to ensure as far as possible the uniform application of Community law relating to non-contractual liability of the Community resulting from unlawful legislative measures 24. The Commission agrees with the Court and the consistency of the system of judicial of First Instance in its decision as to the protection created by the various Treaties standard applicable for liability, but has (see most recently the judgment in Case claimed that the Court applied it wrongly o n C-221/88 Busseni v Commission [1990] ECR several points. I-519, paragraphs 13 to 16), it is appropriate, where a legislative measure is unlawful, to interpret the term "fault of such a nature as to render the Community liable" in the first 25. However, there is no reason to consider paragraph of Article 34 of the ECSC Treaty whether the Court of First Instance was in the light of the criteria laid down by the right in applying the standard of liability laid Court of Justice in its decisions on the sec- down in the case-law of the Court of Justice ond paragraph of Article 215 of the EEC regarding the second paragraph of Article Treaty' (paragraph 78). 215 of the EEC Treaty, since it is clear that in the meantime the Court has given its view on this question. It did so in the judgment in Joined Cases C-363/88 and 364/88, Finsider, previously cited, in which the Court of Jus- tice laid down the standard of liability in the Moreover the Court had summarized the context of the ECSC Treaty in a manner dif- case-law of the Court of Justice regarding ferent from the view of the Court of First the second paragraph of Article 215 as fol- Instance. It may be advisable to quote the lows: 'It follows from decisions of the Court following paragraphs from the judgment: of Justice that there can be no fault of such a nature as to render the Community liable under the second paragraph of Article 215 of the EEC Treaty unless the unlawful measure involves a sufficiently serious breach of a 'It is appropriate to make some observations superior rule of law for the protection of the in limine on the conditions in which the individual ... or where the institution, by Community may be rendered liable on the adopting the unlawful measure, manifestly basis of Articles 34 and 40 of the ECSC and gravely disregarded the limits imposed Treaty' (paragraph 19). on the exercise of its powers ...' (para- graph 74).

'Thus, in order to appraise the nature of the possible to confirm the operative part, it fault required to render the Community lia- might, in my view, be a matter for consider- ble, whether on the basis of Article 34 or of ation whether the Court of Justice should Article 40, neither of which, as has been examine the substance of the case. A revision stated, gives any details in that connection, it of the standard of liability applicable might is appropriate to refer to the areas and con- at first sight appear to be of such importance ditions in which the Community institution that it might be necessary to refer the matter acts. In that respect it is necessary to take back to the Court of First Instance for into account in particular the complexity of reconsideration. I shall nevertheless not pro- the situations which the institutions must pose that for several reasons. In the first regulate, the difficulties of applying the legis- place because it must appear doubtful how lation and the discretion available to the far a different manner of expressing the stan- institution under that legislation' (para- dard of the Community's liability for dam- graph 24). ages would in itself entail a different specific result and also because, as I see it, there is, from a practical point of view, scarcely a decisive difference between the two formula- tions of the standard of liability. In the sec- 'Lastly, Community liability does not ond place because from the point of view of depend solely on the existence of fault as economy of procedure it is advisable for the thus defined and of injury, but also on a Court of Justice itself finally to resolve the direct causal link between that fault and that dispute in this case, and in the third place injury, the burden of proof of which lies because no additional factual information is upon the applicant ...' (paragraph 25). required here. In addition it does not seem, either, that the parties have attached decisive importance for the resolution of the problem to the fact that in the Finsider case the Court of Justice laid down a different standard of liability from that applied by the Court of 26. It is thus on the basis of that determina- First Instance. tion of the standard of liability that it is nec- essary to enquire whether the Community has incurred liability towards Peine- Salzgitter. It is thus already clear before the substance of the case is considered that the ground of judgment set out in the contested judgment cannot be fully upheld.

As I have already mentioned, the essential 'In this case the Commission examined the point in that case was that during the period specific situation of undertakings such as of validity of the general Decision Stahlwerke Peine-Salzgitter and Hoogovens N o 234/84, the Commission had become as it is required to do by Article 58(2), and aware that certain undertakings had a partic- concluded that in order to determine the ularly unfavourable I: P ratio. Among those quotas on an equitable basis, the I: P ratios undertakings Peine-Salzgitter was in a special of those undertakings should be adjusted. position inasmuch as it was the only under- However, instead of adopting the requisite taking with a particularly unfavourable I: P provisions pursuant to Article 58(2), the ratio in all four categories of products, both Commission merely submitted a proposal to in absolute terms and in relation to the the Council pursuant to Article 58(1). Hav- Community average. In the communication ing failed to obtain the Council's assent, it of 25 September 1985 previously quoted, the adopted a new general decision, N o 3485/85, Commission stated that it was 'indispens- which maintained the quota system able' to make adjustments to the delivery unchanged. By failing to alter the I: P ratio quotas so that no undertakings would have which it considered necessary in order to quotas which were more than 10% below determine the quotas on an equitable basis the Community average. As stated, the pursuant to Article 58(2), the Commission Council, which, under Article 58(1), is pursued a purpose different from that laid required to give its assent to the introduction down by that provision and thus committed of a quota system, did not assent to that a misuse of power. Since the Commission point in the Commission communication. had established that it was necessary to elim- According to the information available, the inate the imbalance in the I: P ratio which Council did not give any reason. Subse- characterized the particular situation of quently the Commission adopted the general undertakings such as the applicants, it must Decision N o 3485/85 not containing the be considered that it committed a misuse of adjustment of the I: P ratio which the Com- power affecting the applicants' (para- mission itself in its communication had graph 27).

30. I may say that Advocate General Mis- cho, in his Opinion relating to Joined Cases '. . . that the defendant could not have been 33/86, 44/86, 110/86, 226/86 and 285/86, unaware that it was under an obligation to gave quite convincing reasons for the view determine the delivery quotas on an equita- that the general Decision N o 3485/85 and the individual decisions adopted on the basis thereof should be declared void even if the 17 — In his Opinion Judge Biancarelli summarized the case-law Council's assent to a modification of the I: P of the Court as follows: ratio had been required. 16 Advocate General 'Referring to settled case-law and relying in particular on Articles 3, 4 and 5 of the ECSC Treaty, which prohibit all Mischo's main argument was that the rule set discrimination as between the undertakings covered by the Treaty, the Court of Justice stressed the need, in a period of out in Article 58(2) was so basic that a disre- crisis, where, as a result of administrative control, quantita- tive competition between undertakings is de facto elimi- gard thereof must in any event be disap- nated and where an artificial balance is created between proved by the Court in pursuance inter alia supply of and demand for steel, to respect in full the prin- ciple of fairness laid down in Article 58 of the Treaty.

That finding was confirmed by the judgment of 19 September is an expression of a basic principle in ECSC 1985 (Joined Cases 63/84 and 147/84 Finsider v Commission [1985] ECR 2857) in which the Court laid particular law to the effect that there must be no dis- emphasis on the criterion of equitable distribution of the crimination against undertakings. In its case- production and delivery quotas between the various Com- munity undertakings, b y the judgment of the Court of law the Court of Justice has consistently 21 February 1984 Coined Cases 140/82, 146/82, 221/82 and 226/82 (Walzstahl-Vereinigung and Thyssen v Commission attached decisive importance to the Commis- [1984] ECR 951) and, finally, by the judgment of 6 July 1988 (Case 236/86 Dillinger Hüttenwerke v Commission [1988] ECR 3761) in which the Court held expressly that "the purpose of the quota system .

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COMMISSION v STAHLWERKE PEINE-SALZGITTER

P ratio had become exceptionally unfavour- 34. When account is taken of the factual and able' (paragraph 117). legal background to the Commission's deci- sions and to the limited margin of discretion available to the Commission in the specific situation, my opinion is that in adopting the 32. The Commission has contended that it decisions in question the Commission com- would be an unreasonable failure to appreci- mitted a serious illegality in relation to ate the discretion available to the Commis- Peine-Salzgitter. sion if the Court of Justice were to hold it

P ratio was exceptionally unfavourable there is no question of disapproving the Commis- sion's discretion but of following it. The fact 35. The reasoning leading to this conclusion that the contested rule thus leaves the Com- applies to a considerable extent also to the mission freedom of assessment does not in individual decisions for 1985, which were this specific case detract from the Commis- declared void by the Court in its judgment sion's liability for damages. in Case 103/85 or the illegality of which directly follows from that judgment.

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other provisions. Nevertheless the Commis- excusable, particularly as regards that part of sion refused to allow Peine-Salzgitter addi- the reasoning on which the refusal was tional quotas. based, according to which Article 14 could not apply because Peine-Salzgitter as a whole was showing a profit. The Commission points out that it cannot be blamed for not taking the Court's judgment in Case It is clear that there are differences between 317/82 Usines Gustave Boël v Commission 19 the legal situation in 1985 as compared with into account in deciding whether there were that in 1986 to 1988, on which the Court exceptional difficulties.

The sive respects which I regard as decisive. In Commission further claims that the reason- both situations it was for the Commission to ing in question was in agreement with its administer the quota system in a manner consistent administrative practice according which was equitable and equal for the under- to which, in the application of Article 14, takings and in both situations the position account was taken of the undertaking's situ- was that the I: P ratio applicable to certain ation as a whole because inter alia it was not categories of products was exceptionally a matter of overcoming the crisis for certain unfavourable for Peine-Salzgitter, as was markets but for all the European iron and

18 — [1982] ECR 749. 19 — [1983] ECR 2041.

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Finsider judgment rests upon an overall 38. Finally we must consider whether Peine- appraisal of the Commission's conduct and Salzgitter suffered direct and special harm, as regard being had also to the fact that, in my required by Article 34 of the ECSC Treaty. view, in the context of such an overall The Court of First Instance found that that appraisal in particular it should be stressed was undoubtedly the case. I agree with that that in relation to Peine-Salzgitter the Com- assessment and regard the Commission's mission failed in its duty to administer the arguments to the contrary as untenable. quota system in an equitable and equal man- ner.

As I have already said, it may be assumed Moreover the Court of First Instance rightly that if the quota system had remained in relied in its reasoning on the fact force Peine-Salzgitter would in any case have received, in the form of the allocation of larger quotas, a certain redress for the harm it had suffered. It is hard to see why the ter- mination of the quota system should deci- — that the Court of Justice in its judgment sively alter the Commission's duty to ensure in Case 103/85 referred to its judgment in redress for the harm Peine-Salzgitter had Case 317/82 Usines Gustave Boël v Com- suffered as a result of its conduct rendering it mission to confirm that in determining liable for damages. whether 'exceptional difficulties' exist the Commission may not take account of the position of other categories of products (paragraph 18) and

39. T o s u m u p , I shall therefore p r o p o s e that the C o u r t of Justice confirm the con- tested j u d g m e n t and o r d e r the C o m m i s s i o n t o pay the costs of the appeal.

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