C-13/92

OPINION OF MR JACOBS — JOINED CASES C-13/92 TO C-16/92

OPINION OF ADVOCATE GENERAL JACOBS delivered on 27 M a y 1993 *

My Lords, the linked inland waterway networks of Bel- gium, France, Germany, Luxembourg and the Netherlands appreciably affects, in those countries, the economics of transport ser- 1. In these cases, the College van Beroep vices, particularly of the carriage of goods by voor het Bedrijfsleven (Administrative Court inland waterway; of Last Instance in matters of trade and industry) of the Netherlands has referred to the Court a question concerning the validity of certain provisions of Council Regulation (EEC) N o 1101/89 of 27 April 1989 on structural improvements in inland waterway transport (Official Journal 1989 L 116, p. 25; Whereas forecasts show no sign of sufficient hereafter 'the Regulation'). The question increase in demand in this sector to absorb referred raises the issue of the compatibility the overcapacity in the next few years; of Article 8(3)(a) of the Regulation with cer- whereas in fact the share of the total trans- tain general principles of Community law, in port market taken by inland waterway trans- particular, the principle of legal certainty, the port is continuing to decline as a result of principle of legitimate expectations, the prin- progressive changes in the basic industries ciple of proportionality and the principle of supplied mainly by inland waterway'. equality.

2. The Regulation was adopted under Arti- cle 75 of the EEC Treaty with a view to reducing the structural overcapacity in the 3. Article 1 of the Regulation provides as fleets operating on intra-Community inland follows: waterway networks. The reasons which led to the adoption of the Regulation are set out in its preamble, the first and second recitals of which provide as follows:

4. Article 2 specifies the types of vessels to which the Regulation applies. Article 3 pro- — where the owner scraps no vessel, he vides for the setting up of a Scrapping Fund pays into the Fund covering his new ves- in each of the Member States whose inland sel ... a special contribution equal to the waterways are linked to those of another scrapping premium fixed for a tonnage Member State and the tonnage of whose fleet equal to that of the new vessel; or is above 100 000 tonnes. Article 4 provides that for each vessel covered by the Regu- lation, the owner must pay into one of the Scrapping Funds a contribution fixed in accordance with Article 6. — where the owner scraps a tonnage smaller than that of the new vessel to be brought into service, he pays into the Fund in question a special contribution equivalent 5. Under Article 5, any owner scrapping a to the scrapping premium corresponding vessel which falls within the scope of the at the time to the difference between the Regulation and which forms part of his tonnage of the new vessel and the ton- active fleet shall receive a scrapping premium nage scrapped'. from the Scrapping Fund to which the vessel belongs. In order to facilitate the immediate operation of a coordinated scrapping scheme, Article 7 provides that Member States must make advance payments in the form of loans to the Scrapping Fund set up in their terri- tory. 7. Under Article 8(4), a vessel may not be brought into service until the owner has ful- filled the requirements provided for in Arti- cle 8(1). Where that prohibition is infringed, 6. Article 8 contains the so-called 'old-for- the national authorities may take steps to new' rules. Article 8(1 )(a) provides as fol- prevent the vessel concerned from participat- lows: ing in the inland waterways trade.

— construction was under way on the date of entry into force of this Regulation, and that 11. By a contract concluded on 14 Decem- ber 1988, Driessen en Zonen V. o. f. ('Dries- sen') made an agreement with the shipyard Van Eijk Scheepsbouw B. V. for the building — work already carried out represents at of a steel hull for an inland waterway vessel least 20% of the steel weight or to be delivered no later than the fourth week 50 tonnes, and that of 1990 for the price of HFL 2 087 250. In response to Driessen's enquiry about the possibility of cancelling the order in view of the 'old-for-new' rules, the shipyard — delivery and commissioning is to take informed Driessen by letter of 14 March place within the six months following 1989 that the costs of cancellation at that entry into force of this Regulation.' time would amount to HFL 550 000. Dries- sen decided not to cancel the contract. In the period between December 1988 and Febru- ary 1989, Driessen incurred commitments to various contractors and suppliers in connec-

Article 11 provided that the Regulation should enter into force on the day of its pub- 1 — See Article 2 of Commission Regulation (EEC) No lication in the Official Journal (28 April 1102/89 laying down certain measures for implementing the 1989) and that it should apply with effect Regulation (OJ 1989 L 116, p. 30); last amended by Commission Regulation (EEC) No 3690/92 (OJ 1992 L 374, from 1 May 1989. The system of scrapping p. 22).

I - 4768

DRIESSEN

tion with the vessel totalling approximately Case C-15/92 Sayonara HFL 1 500 000.

15. On 18 February 1989, C. Mourik en Zoon V. o. f. ('Mourik') made an agreement with the shipyard Gebr. Buys Scheepsbouw 13. By a contract concluded on 25 Novem- B. V. for the building of an inland waterway ber 1988, Mr A. Molewijk ('Molewijk') made vessel for the price of FIFL 2 435 000. A an agreement with the shipyard Grave B. V. written contract was signed between the par- for the building of an inland waterway vessel tics on 25 February 1989. According to that to be delivered no later than 31 March contract, work for the building of the vessel 1990 for the price of HFL 4 000 000. In was to start in May 1989 and the vessel was response to Molewijk's enquiry in March to be delivered in April 1990. By a letter of 1989, the shipyard notified him that the costs 13 October 1989, the Minister notified of cancelling the contract for the building of Mourik that the requirement provided for in the vessel at that time would amount to HFL Article 8(3)(a), second indent, to the effect 1 120 000. It also notified him that it would that on the date of entry into force of the not be possible to deliver the vessel within Regulation the work carried out on the ves- six months from the entry into force of the sel should represent at least 20% of the steel Regulation as he had requested. By a letter of weight or 50 tonnes had not been satisfied. 27 March 1990, the Minister required The vessel entered into service in April 1990. Molewijk to pay FIFL 873 933 by way of By a decision of 9 April 1990, the Minister special contribution. The vessel was deliv- required Mourik to pay HFL 402 234 by ered on 7 April 1990 and entered into service way of special contribution in relation to on 21 April 1990. that vessel.

The duty to consult the Parliament 'Are the special contribution rules provided for in the second indent of Article 8(1 )(a) of Council Regulation (EEC) No 1101/89 and the transitional rules provided in Article 8(3)(a), taken in conjunction with each other, invalid in so far as they take no, 21. The applicants argue that the Regulation or at least insufficient, account of a situation should be annulled on the ground that the such as the one at issue in these proceed- Parliament was not duly consulted. Under ings?' Article 75 of the Treaty, on the basis of which the Regulation was adopted, the Council must first consult the Parliament. They argue that although the Parliament had given its opinion on the Commission's initial 18. Although the question referred by the proposal, the transitional provisions con- national court raises the issue of the validity cerning the 'old-for-new' rules included in

I - 4770

DRIESSEX

that proposal were subsequently amended (b) work is in progress on at least 20% of the without the Parliament being consulted. steel weight or 50 tonnes; They claim that the Council's failure to reconsult the Parliament constitutes an infringement of an essential procedural requirement. (c) delivery and commissioning is to take place within six months of the date referred to in subparagraph (a) above.'

I - 4771

OPINION OF MR JACOBS — JOINED CASES C-13/92 TO C-I6/92

doubt that the Commission's intention was The principles of legal certainty and of legit- to follow the Parliament's views. It is clear imate expectations therefore that there was no need for the Par- liament to be consulted on the Commission's amended proposal.

29. The applicants argue that Article 8(3)(a) infringes the principle of legal certainty and the principle of legitimate expectations.

31. A distinction could be drawn between retroactivity in the strict sense of that term, where measures apply retroactively to trans- actions completed in the past, and the case where new provisions apply with immediate 28. I conclude that the claim that the Regu- effect to pre-existing situations. If such a dis- lation is invalid on the ground that the Par- tinction were drawn, it could not be said that liament was not duly consulted must fail. the Regulation has retroactive effect in the

I - 4772

DRIESSEN

strict sense. It would be more appropriate to rules: see e. g. Case 84/78 Tomadini v say that it has immediate application. This is Amministrazione delle Finanze dello Stato because the 'old-for-new' rules in issue here [1979] ECR 1801, paragraph 21. It remains do not cover vessels which were in service at the case, however, that in adopting legislative the time when the Regulation entered into measures the Community institutions must force. The Regulation does not apply to con- respect any legitimate expectations of the tracts for the construction of vessels which persons concerned unless an overriding were concluded and completely performed Community interest takes priority. before its entry into force but applies to con- tracts which were in progress at the time of its entry into force. For the purposes of the present proceedings, however, I do not find it necessary to draw such a distinction.

I - 4773

OPINION OF MR JACOBS — JOINED CASES C-I3/92 TO C-16/92

those rules. Similar arguments are presented by the other applicants. 38. The Council points out that, in adopting strict transitional rules, it was guided by the wishes of the trade organizations represent- ing inland waterway operators. That point is confirmed by the documents submitted to the Court by the Commission and the Dutch Government. After the submission of the 36. It seems to me that, at least in principle, Commission's initial proposal, the Union a trader who relies on proposed legislation Internationale de la Navigation Fluviale does so at his own risk. If it were accepted (UINF) and the Organisation Européenne that a proposal submitted by the Commis- des Bateliers (OEB), by a letter dated 2 Sep- sion gave rise to a legitimate expectation on tember 1988, recommended the adoption of the part of the traders concerned that the transitional rules identical to those which proposal would be finally adopted by the were subsequently included in the Commis- Council without amendments, that would sion's amended proposal. 2 The Dutch Gov- lead to unacceptable consequences. It would ernment points out that a large number of mean that the Council was bound to follow inland navigation organizations, including the Commission's proposal in direct contra- Dutch organizations, are affiliated to the vention of the provisions of the Treaty. It UINF and the OEB. In addition, in its opin- would also prejudice the Parliament's right ion submitted to the Minister on 14 October to participate in, and influence, the legislative 1988, the Dutch Social and Economic Coun- process as provided for by the Treaty. Fur- cil agreed with the strict transitional rules ther, it would mean that the Commission recommended by the UINF and the OEB. itself was bound by its proposal so that it could not amend it at subsequent stages of the legislative procedure. It follows that the 2 — Although there are slight differences in the various language Commission's initial proposal could not versions of the documents submitted to the Court, it seems clear that the amendments made by the Commission were found a legitimate expectation that the intended to adopt the organizations' recommendations.

42. It is argued not only that the transitional rules contained in the amended proposal 40. During the oral hearing, it emerged that were stricter than in the original proposal, only one of the four applicants in the main but also that the transitional rules included proceedings is a member of a trade organiza- in the Regulation were stricter than those tion represented by the U I N F and the OEB. which appeared in the amended proposal. It In my view, however, this is not of crucial will be remembered that, under Article importance. In the light of the views taken 8(3)(a) of the Regulation, the material date is by the organizations concerned, which were the date of its entry into force whereas, published in the trade journals, it cannot be under the equivalent provision of the said that at the time when the applicants amended proposal, the material date was the concluded the contracts for the building of date on which the scrapping scheme com- new vessels it was unforeseeable that the menced, which was dependent on imple- transitional provisions included in the Com- menting measures to be taken by the Com- mission's initial proposal would be amended. mission. The applicants argue that until the All the applicants could have foreseen the end of March 1989, when the outcome of a possibility that more stringent transitional Council meeting concerning the introduction rules could be adopted. of legislation on structural improvements in inland waterway transport became known, they could expect that the vessels which they had ordered could be brought into service without being subject to the 'old-for-new' rules.

give rise to any legitimate expectation that 45. At the oral hearing, in support of its the transitional rules contained thereby argument that Article 8(3)(a) is invalid, would remain unchanged. As far as the fore- Driessen placed much reliance on the judg- seeable character of the transitional rules ment of the Court in Case C-368/89 Crispol- included in the final version of the Regu- toni [1991] ECR I-3695. In my view, how- lation is concerned, it seems to me that in ever, that case does not support Driessen's order for the requirements of the principle of argument. legitimate expectations to be satisfied in a case such as the present it is not necessary that the traders concerned must be in a pos- ition to predict every detail of the transi- tional rules. It is sufficient if a prudent and well-informed trader in the position of the applicants could have foreseen the possibility 46. In Crispoltoni the Court held that the of strict transitional rules being introduced at retroactive effect of certain regulations gov- the time when he concluded a contract for erning the common organization of the mar- the construction of a new vessel: see Case ket in tobacco, whose validity was in issue in C-350/88 Delacre and Others v Commission those proceedings, was not necessary in [1990] ECR I-395, paragraph 37. order to achieve the objectives of those reg- ulations and indeed was incapable of doing so (paragraphs 18 to 20 of the judgment). As will become clear from what follows, how- ever, I consider that the transitional provi- sions of Article 8(3)(a), second and third indents, were necessary to achieve the objec- tives of the Regulation. It should also be noted that in Crispoltoni the measures in issue contained no transitional provisions.

The principle of proportionality 51. Nor do I accept the argument that the objective of preventing a late surge in orders for the construction of new vessels could have been achieved simply by requiring that the construction of a new vessel must be under way at the time when the Regulation 48. The applicants dispute that the strict came into force. It is clear that if that were transitional rules provided for in Article the only requirement imposed, it would be 8(3)(a) were necessary in order to achieve the open to traders quickly to place orders for objectives which the Regulation sought to the construction of new vessels shortly pursue. before the Regulation came into force thus adding to the existing overcapacity. More- over it might have been difficult in some cases, after the event, to verify the date on which the order was placed or construction was started. I am satisfied that in order for 49. They concede that the transitional provi- the effectiveness of the 'old-for-new' regime sions relating to the 'old-for-new' rules had to be guaranteed, the transitional rules to fulfil an important function: they had to should only cover vessels whose construc- prevent a surge in orders by inland waterway tion was relatively advanced at the time of operators for the construction of new vessels entry into force of the Regulation and whose shortly before the Regulation was due to completion could be achieved within a lim- come into force with a view to avoiding the ited time thereafter. The requirements of adverse effects of the 'old-for-new' rules. Article 8(3)(a), second and third indents, They argue, however, that the transitional could properly be regarded as necessary, in rules provided for in Article 8(3)(a), second my view, if the aims of the Regulation were and third indents, went beyond what was to be achieved. necessary to achieve that objective.

53. According to the case-law of the Court, 55. The view that the time-limit of six however, the duty of the Community insti- months is not disproportionate is also sup- tutions to ensure that burdens imposed on ported by the fact that, as appears from the traders are no greater than is required to observations of the Commission and the achieve the aim pursued by the measure Council, only a limited number of traders imposing the burden does not necessarily failed to meet it. The majority of the vessels mean that that duty must be measured in under construction at the time when the relation to any particular group of operators: Regulation entered into force were delivered see e. g. Case 5/73 Balkan-Import-Export v within that time-limit. It should also be noted that the applicants exceeded that time- Hauptzollamt Berlin-Packhof [1973] ECR limit by a significant period. It would there- 1091, paragraph 22, Case 9/73 Schlüter v fore not have been possible for them to Hauptzollamt Lörrach [1973] ECR 1135, avoid their new vessels being subject to the paragraph 22; see also Joined Cases 'old-for-new' rules unless the transitional 154/78 etc. Valsabbia v Commission [1980] provisions had provided for a significantly ECR 907 at paragraph 49. longer period after the Regulation came into force for the completion of vessels under construction.

I - 4778

DRI ESSEN

in Article 8(3)(a) were necessary to achieve 59. In my view that argument must fail. those objectives. I consider therefore that the According to the case-law of the Court, the Council has duly discharged its duty as the principle of equality precludes comparable enacting institution to provide adequate rea- situations from being treated differently sons justifying the immediate application of unless the difference in treatment is objec- the Regulation subject to the transitional tively justified: see e. g. Case 84/87 Erpelding rules of Article 8(3)(a). v Secrétaire d'Etat à l'Agriculture et à la Viti- culture [1988] ECR 2647, paragraph 29, Joined Cases C-181/88, C-182/88 and C-218/88 Deschamps and Others v O fival [1989] ECR 4381, paragraph 18.

The principle of equality

I - 4779

OPINION OF MR JACOBS — JOINED CASES C-13/92 TO C-16/92

vessels in the transitional rules depending on to be provided depending on the size of the the size of the shipyard which undertook the vessel to be constructed. In my view the construction of a vessel since disagreement principle of equality cannot preclude the leg- could arise as to the criteria to be used in islature from adopting a criterion of general order to distinguish between small and large application — indeed that is inherent in the shipyards. Secondly, if such different time- nature of legislation. It may affect different limits were provided for, further distinctions persons in different ways, but beyond certain might be necessary in the interests of equal- limits any attempt to tailor the legislation to ity. It could be argued, for example, that the different circumstances is likely only to lead efficiency of a shipyard depends not only on to new claims of unequal treatment. its size but also on its technical equipment and therefore that different time-limits should be provided depending on the techni- cal equipment used by the shipyard which 62. I conclude that the claim that the Regu- undertook the construction of a new vessel. lation is invalid on the ground that it Further, different time-limits might also have infringes the principle of equality must fail.

Conclusion

63. I am therefore of the opinion that the question referred to the C o u r t should be answered as follows:

Consideration of the matters examined has disclosed n o factor of such kind as to affect the validity of Council Regulation (EEC) N o 1101/89 of 27 April 1989 on structural improvements in inland waterway transport.