C-357/95

E N U ν COMMISSION

OPINION OF ADVOCATE GENERAL FENNELLY delivered on 5 December 1996

1. The judgment under appeal touches on a with the other countries by creating the con­ number of important questions of principle, ditions necessary for the speedy establish­ and in particular whether the Commission ment and growth of nuclear industries' can be required by a uranium producer to (Article 1). To this end, in accordance with order the Euratom Supply Agency to apply Article 2(d) and (g), 'the Community shall, certain provisions of the Euratom Treaty 1 as provided in this Treaty, .... ensure that all which are alleged to have fallen into desue­ users in the Community receive a regular tude, and be held liable for refusing to issue and equitable supply of ores and nuclear such an order. For reasons which will appear fuels' and 'ensure wide commercial outlets shortly, I do not consider that it is necessary and access to the best technical facilities by for the Court to reach these issues in the the creation of a common market in special­ present proceedings. ized materials and equipment, by the free movement of capital for investment in the field of nuclear energy and by freedom of employment for specialists within the Com­ munity'.

I — Legal framework

source materials and special fissile materials of ownership'; pursuant to Article 57(2), produced in the territories of Member States '[the] Agency shall exercise its right of and an exclusive right to conclude contracts option by concluding contracts with produc­ relating to the supply of ores, source materi­ ers of ores, source materials and special fis­ als and special fissile materials coming from sile materials', while obliging producers to inside the Community or from outside'. offer to the Agency the nuclear materials they produce on the Community territory. Article 59 defines the conditions under which a producer may process or export nuclear materials over which the Agency does not exercise its right of option. 4. Article 53 of the Treaty provides as fol­ lows:

6. Article 60, which plays a central role in 'The Agency shall be under the supervision the present proceedings, merits being cited in of the Commission, which shall issue direc­ full: tives to it, possess a right of veto over its decisions and appoint its Director-General and Deputy Director-General.

'Potential users shall periodically inform the Any act, whether implied or expressed, per­ Agency of the supplies they require, specify­ formed by the Agency in the exercise of its ing the quantities, the physical and chemical right of option or of its exclusive right to nature, the place of origin, the intended use, conclude supply contracts, may be referred delivery dates and price terms, which are to by the parties concerned to the Commission, form the terms and conditions of the supply which shall give a decision thereon within contract which they wish to conclude. one month.'

9. The first paragraph of Article 66 provides as follows:

If the Agency cannot meet in their entirety all the orders received, it shall, subject to the provisions of Articles 68 and 69, share out the supplies proportionately among the orders relating to each offer.

'Should the Commission find, on application by the users concerned, that the Agency is not in a position to deliver within a reason­ able period of time all or part of the supplies ordered, or that it can only do so at exces­ Agency rules, which shall require approval sively high prices, the users shall have the by the Commission, shall determine the right to conclude directly contracts relating manner in which demand is to be balanced to supplies from outside the Community, against supply.' provided that such contracts meet in essen­ tial respects the requirements specified in their orders.'

4 — The word 'to' before 'applications' is missing in the English 7. The Agency is obliged under Article 61 to version of the Treaty issued by the Office of Official Publica­ 'meet all orders unless prevented from so tions, European Union —Selected instruments taken from the Treaties, Book I, Volume II, Luxembourg, 1995, ISBN doing by legal or material obstacles'. 92-824-1180-X, page 357.

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11. The rules determining the manner in which demand is to be balanced against the supply of nuclear materials, referred to in the sixth paragraph of Article 60 of the Treaty, were adopted by the Agency on 5 May 1960 and approved on the same day by the Com­ mission. 5 Certain amendments to these rules '6. ... At [a] meeting, held on 24 October were adopted on 16 July 1975; 6 Article 5bis 1989, the Agency proposed finding a prag- of the amended rules allows users of nuclear matic solution [to the problem of the dis- materials 'to invite tenders directly from the posal of E N U ' s uranium stocks], with the producers of their choice and to negotiate agreement of users, that is to say using per- the supply contract freely with the latter', suasion and not compulsion. By a letter of though reserving to the Agency a right to 25 October 1989, a copy of which was sent conclude, or refuse to conclude, each con­ to the Commission, E N U again requested tract negotiated. the Agency to act in conformity with the rules of the Treaty.

5 — OJ, Special English Edition 1959-1962, pp. 46 and 45 respec- tively. 7 — Joined Cases T-458/93 and T-523/93 ENU v Commission 6 — OJ 1975 L 193, p. 37. [1995] ECR II-2459.

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(b) The allocation arrangements and prin­ require Community users, pursuant to the ciples for determining the prices paid to provisions of Chapter VI of the Treaty, to producers could be as follows: adopt the action it envisaged.'

— the uranium would be shared out in 14. O n 2 May 1990, the Agency informed proportion to the generating power E N U that the users were not prepared to of nuclear power stations in indus­ adopt the outline solution it had proposed. trial or commercial service; Following 'various talks and a voluminous exchange of letters with the Agency and the Commission', E N U wrote to the Commis­ sion on 21 December 1990, 8 'in accordance with the second paragraph of Article 53 and Article 148 of the EAEC Treaty', requesting — the price paid to the producer (free- that it: at-Community conversion plant of choice) would be the producer's cost price plus 10%, indexed (the cost price to be satisfied by a firm of accountants and reviewed every three years), '(a) ... order the Agency pursuant to Article 53 of the Treaty ... to restore the proper functioning of the machinery established by the Treaty under Chap­ ter VI, requiring compliance with the provisions concerning the common sup­ — once the market price was higher ply policy, etc.; than the producer's cost price plus 10%, the system would cease to apply.

(b) ... immediately undertake an investiga­ tion and thereafter take action accord­ ingly — to determine how it was pos­ sible that, without any check by [the 9. E N U agreed that the Agency should take Commission] under Article 66 of the the "special action" as outlined at the meet­ Treaty, the Community users freely ing held on 12 December 1989 in order to obtain supplies of uranium on foreign resolve the problem of disposing of its ura­ markets, despite the availability at a nium production. However, both during that meeting and in its letters of 31 January and 9 April 1990, it informed it of its doubts about the effectiveness of the plan, set out in 8 — The version of the text quoted is that published in sec­ tion 1(3) of the contested Decision, OJ 1993 L 197, p. 54; the preceding paragraph, in that it did not only the Portuguese version is authentic.

31. Second, it must be held that it was in reply to that same request, which was also addressed to the Commission, that the latter informed the applicant, by letter of (e) ... therefore direct the Agency to imple­ 8 December 1989, that it shared the view that ment the Decision which it addressed to the Agency's supply policy should include it, by finding a satisfactory solution to "special action" enabling cases such as that the problem of the E N U , without of E N U to be resolved and that it requested prejudice to the application of the pro­ the Agency to move on to take concrete visions of the Treaty, in a manner which will make it possible to lessen the effects of any future difficulties.' 9 — Case C-107/91 ENU ν Commission [1993] ECR I-599.

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steps to implement the proposals for action 16. In the operative part of the judgment, which the Agency had submitted to that the Court held that 'contrary to the second effect. paragraph of Article 53 of the EAEC Treaty, the Commission [had] failed to take a decision on the request submitted to it by the applicant pursuant to that provision'.

32. It is against that background that the let­ ter sent by the applicant to the Commission on 21 December 1990 must be treated, hav­ ing regard to the second paragraph of Article 53 of the Treaty. 17. In order to comply with the Court's judgment, the Commission adopted Decision 93/428/Euratom of 19 July 1993 on a procedure for the application of the second paragraph of Article 53 of the EAEC Treaty (hereinafter 'the [contested] Decision'). 1 0 Under the heading 'Legal Assessment', the Decision rejects each of the five points in 33. The various requests regarding the E N U ' s letter of 21 December 1990. The policy which the Agency ought to be pursu­ essence of the Commission's answers may be ing and the request relating to the discussion presented as follows: of the amount of damages to be paid to the applicant do not come within the scope of the second paragraph of Article 53 of the Treaty.

(b) 'Article 5a of the rules of the Euratom Against this background, the "special course Supply Agency of 5 May 1960 autho­ of action" can only consist of serious and rizes Community users to negotiate with sustained efforts on the part of the Supply the producers of their choice, both Agency to encourage Community users to within the Community and outside, obtain supplies from the E N U . The Agency without the EAEC Treaty or the above- has undeniably been doing this since 1987.' mentioned rules laying down a "Com­ munity preference". Article 66 of the EAEC Treaty does not apply in the present case . [...] N o action should therefore be taken against Community users who obtain supplies from outside the Community ...'; 18. The operative part of the Decision states in Article 1 that '[the] requests submitted by' the Empresa Nacional de Urânio in its letter of 21 D e c e m b e r 1990 are rejected', while Article 2 indicates the addressee of the Decision.

(c) 'A claim for damages is the subject of an action for compensation ... which is pending' [before the Court of First Instance];

request ... for guaranteed disposal of its ura­ rule, to the same procedures for balancing nium production' were as follows: demand against supply as Community prod­ ucts. In particular, according to the second paragraph of Article 65 of the Treaty, the Agency may decide on the geographical ori­ gin of supplies only providing that condi­ tions which are at least as favourable as those specified in the order are thereby secured for the user. Furthermore, the first paragraph of '61. The Treaty does not... contain any pro­ Article 61 requires the Agency to meet all vision guaranteeing, expressly or implicitly, orders unless prevented from doing so by preferential disposal of production coming legal or material obstacles so that it has no from the Community. O n the contrary, power, where there are no such obstacles, to under the system by which offers from oppose the importation of ores at a more Community producers and applications competitive price in order for Community from Community users are centralized with production to be disposed of at a higher the Agency so as to enable it to ensure that price, even if that price is not excessively all users have regular and equitable supplies, high within the meaning of Article 66. That no distinction is made according to the ori­ is the context in which it is necessary to gin of products. The first paragraph of interpret Article 59 of the EAEC Treaty, Article 65 of the Treaty states in fact that which expressly makes provision for the case Article 60, which relates to the procedure for in which the Agency does not exercise its balancing demand against supply, "shall right of option on the whole or any part of apply to applications from users and to con­ Community output, thus confirming that the tracts between users and the Agency relating Agency is not bound to guarantee the dis­ to the supply of ores, source materials or posal of ores and nuclear fuels coming from special fissile materials coming from outside within the Community, offers of which are the Community". notified to the Agency pursuant to the sec­ ond paragraph of Article 60.

the procedure ordinarily applicable, laid origin (see paragraphs 61 and 62 above) down in Article 60 of the Treaty, which pro­ which generally leads to the fixing of prices, vides for demand to be balanced against sup­ following the law of supply and demand, ply, which is meant to enable the Agency to without any Agency intervention on the exercise its exclusive rights in order to guar­ level of prices .... In this regard, the Agency antee supplies. Article 66 excludes any inter­ only has, under the second paragraph of vention by the Agency. It provides, in ;1 sub­ Article 69 of the EAEC Treaty, the power to stance, that, if the Commission rinds that the propose to users, and not impose on them, Agency is not in a position to supply users that prices be equalized. In this context, the within a reasonable period, or can do so only Agency could therefore only oppose imports at excessively high prices, users are to have of ores or other nuclear fuels at prices lower the right to conclude directly contracts relat­ than those sought by Community producers ing to supplies from outside the Community if those imports might jeopardize the for a period of one year, which may be achievement of the aims of the Treaty, in par­ extended. It follows that, in the scheme of ticular by their effect on sources of supply. Chapter VI, the criterion of "excessively Such a risk could be regarded as a legal high" prices, specifically stated in Article 66 obstacle to the meeting of an order, within in order to define the scope of an exceptional the meaning of the first paragraph of procedure, cannot be interpreted, in the Article 61 of the Treaty. It would release the scheme of the Treaty, as if it were also Agency from its obligation to meet all orders intended to ensure preference for Commu­ or conclude all contracts submitted to it, in nity output, under the same ordinary pro­ practice, under the simplified procedure cedure established by Article 60. Further­ introduced by Article 5bis of the Regulation, more, the applicant's arguments that imports whatever the origin of the products, where of ore or other nuclear fuels are governed by they are offered at a more favourable price. the procedure established by Article 66, The price-fixing mechanisms established by which excludes any power on the part of the the Treaty under the system governing sup­ Agency, is incompatible with the combined plies thus confirms that that system does not provisions of Articles 52(2)(b), 60, 61, 64 and allow preferential treatment to be given to 65, which were considered in the paragraph ores and other nuclear fuels coming from above and which in principle laid down the within the Community when they are Agency's exclusive right to conclude such offered at prices higher than those prevailing contracts and define the Agency's powers on the world market, in the absence of spe­ when exercising that exclusive power. cific circumstances which would impede attainment of the aims of the Treaty pursued by Chapter VI, without Council intervention under Article 69 of the Treaty.

66. It follows from all the considerations set out above that, in the scheme of the Treaty, offers from Community producers are gener­ 67. It must also be pointed out that, even in ally in competition with those from outside that case where the Agency has the power to the Community. It follows that, contrary to exercise its right of option on ores produced the applicant's contentions, the Agency has in the Community — if these are offered on no power, in the absence of exceptional cir­ price terms which are just as favourable for cumstances which might jeopardize attain­ users as those proposed by competitors, in ment of the aims of the Treaty, to exercise its particular for ores coming from outside the right of option when the price sought by the Community — it is not, however, obliged to Community producer is too high to secure favour the disposal of Community output, outlets on the market. In any case, "save since the system governing supplies estab­ where exceptions are provided for in [the] lished by the Treaty does not lay down any Treaty", the price-fixing system established principle of Community preference for pro­ by Chapter VI of the Treaty does not in ducers, as has already been shown (see para­ principle require users to purchase ores com­ graphs 61 and 62 above). In particular, the ing from the Community at a price higher Agency may exercise its exclusive rights so than the market price, resulting from the bal­ as to dispose of natural uranium offered by a ancing of demand and supply. Specifically, it Community producer and thus ensure that it follows that the Agency could not, in such continues to remain in business on Commu­ cases, in the absence of legal obstacles nity territory only where this is combined

with the pursuit of the objectives laid down derogation from Article 67 establishing a by the Treaty. Where decisions concerning trade mechanism for determining prices economic and commercial policy and nuclear based on balancing supply against demand as policy are concerned, the Agency has a provided for in Article 60. broad discretion when exercising its powers. In those circumstances, the Court's review must, in any event, be confined to identify­ ing any manifestly wrong assessment or mis­ use of power (see, in particular, the judgment of the Court of Justice in Case C-280/93 Germany ν Council [1994] ECR1-4973, paragraphs 51 and 89 to 91). 69. Given the legal framework set out above, it must be stated that, in the present case, the applicant has not referred to any particular circumstance which would constitute a legal obstacle to Community users' obtaining sup­ plies of ores from outside the Community and which would require the Agency to exercise its right of option on the applicant's production, having regard to the objectives pursued by the Treaty. In that regard, in con­ sidering that the threats, mentioned by 68. Similarly, the provisions of Chapter VI E N U , to the pursuit of exploitation of its which, if the occasion arises, allow deroga­ natural uranium mines, whose output repre­ tions to be made from the commercial sents approximately 1.5% of Community mechanism for balancing supply against consumption, did not jeopardize regular and demand established by the Treaty (see para­ equitable supplies to Community users, the graphs 62 to 64 above) give this power only Agency and the Commission did not exoeed to the Agency and to the Commission or to the limits of their discretion. the Council. Thus, in order to ensure in par­ ticular geographical diversification of outside sources of supply, the Agency has a discre­ tion to bar — using its exclusive right to conclude contracts for the supply of ores and other nuclear fuels so as to ensure reliability of supplies according to the principle of equal access to resources, in accordance with the task conferred upon it by the Treaty — .... (omissis) certain imports of uranium which would reduce such diversification. The same is true of the power which the Commission has in implementing the second paragraph of Article 72 of the Treaty, which authorizes that institution to decide to build up emer­ gency stocks, for which the method of financing must be approved by the Council. 71. In those circumstances, without there Finally, the Council has the power to fix being any need to rule on the legality of the prices, under Article 69 of the Treaty, by simplified procedure for balancing supply

'82. The applicant's argument that the "spe­ cial course of action" was binding cannot be accepted. First of all, the letter of 8 Decem­ ber 1989 sent by Commissioner Cardoso e Cunha cannot in any way be interpreted as referring to a directive addressed to the Agency. Formally, it did no more than state a mere policy envisaged by the competent '... in the present case, since the conduct commissioner as part of his functions as alleged against the Agency and the Commis­ regards the Agency. It was therefore a com­ sion's refusal to accede to the requests sub­ munication of a political character meant to mitted to it by the applicant are not vitiated open negotiations which could eventually by any irregularity, as held above, the claim lead to companies' entering into undertak­ for damages must be dismissed as unfounded ings. Consequently, that letter does not refer in any event, without its being necessary to to a directive previously adopted by the consider its admissibility.' 1 3 Commission, in its collegiate capacity, on the basis of the first paragraph of Article 53 of the Treaty. Furthermore, the actual terms of the request thus addressed to the Agency 13 — Paragraph 91 of the judgment.

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III — Opinion of E N U ' s uranium production, or obliged the Agency and/or the Commission to guar­ antee the disposal of this production.

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available at a reasonable price. In addition, in order to resolve the urgent problem of dis posing of its uranium stocks, the applicant was requesting the Commission (B) to order the Agency to implement the "special action" part of its supply policy, concerning Portuguese uranium. . . .' 27. Prior to any consideration of this pre liminary question as to the scope of the con tested Decision, however, it is necessary for me to examine the jurisdiction of this Court to raise on appeal the partial inadmissibility of the original application which had not been raised before the Court of First Instance; the question arises here as regards E N U ' s request that the Commission order

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before the Court of First Instance. In an that 'matters going to the jurisdiction of the appeal the Court's jurisdiction is thus con­ Court are matters of public policy, and must fined to review of the findings of law on the be so raised'. It seems to me that the same pleas argued before the Court of First principle applies to the question of the 1 Instance'. 4 Court's jurisdiction on appeal; the fact that the Court of First Instance decided an issue, in casu the validity of the Commission's refusal to direct the Agency to 'restore the proper functioning of the machinery estab­ lished by the Treaty under Chapter VI' which should have been rejected as inadmis­ 28. An exception to the general principle sible, cannot have the effect of bestowing thus laid down in Brazzelli Lualdi should in jurisdiction on this Court to decide that my view be allowed where the jurisdiction of issue on appeal. Thus in Rendo and Others ν the Court is at issue; as noted above, lack of Commission, the Court raised of its own competence of the Court of First Instance is motion the objection that the appellant no the first ground on which an appeal may lie longer had any interest in bringing or main­ to this Court. While the Commission is dis­ taining the appeal, in that a subsequent event barred by Article 113(2) of the Court's Rules might have removed the prejudicial effect of of Procedure from questioning on appeal the the original judgment as regards the appel­ admissibility of this ground of the original lant. 1 7 It is true that no issue of the admis­ application in the present proceeding, this sibility of the grounds relied upon before the rule does not affect the competence of the Court of First Instance was raised in Rendo; Court to raise such an issue of its own however, this case does illustrate that this motion in accordance with Article 92(2) of Court can, and should, examine of its own its Rules of Procedure. motion questions concerning its own juris­ diction on appeal.

tuted a reply'. The first paragraph of ciple, do not affect the legal situation of the Article 53 of the Treaty describes the broad complainant. A Commission decision under extent of the supervisory powers of the this provision may not, in my view, be chal­ Commission over the activities of the lenged on grounds based on such elements in Agency. The second paragraph of this article annulment proceedings under the Treaty; to is more limited; it allows economic operators hold otherwise would in effect grant econ­ in the nuclear materials market to refer to omic operators a wider right of judicial the Commission a certain category of acts of review than that which is provided by the Agency, those performed 'in the exercise Article 146 of the Treaty. of its right of option or of its exclusive right to conclude supply contracts'. It follows that only the exercise of these rights by the Agency, or the refusal to exercise them, properly come within the scope of this pro­ vision. Where the Commission upholds the complaint of the operator, it will address an appropriate directive to the Agency pursuant to the first paragraph of this article; where it rejects the complaint, the Commission will address a decision to this effect to the opera­ 32. This is the approach which, in my view, tor. Such a negative decision could, at the informed the Opinion of the Advocate Gen­ material time, be challenged before the Court eral and the judgment of the Court of Justice in accordance with the conditions laid down in Case C-107/91 between the same parties. in the second paragraph of Article 146 of the That case had arisen because the Commis­ Treaty, which was identical to the second sion had not given any decision on the very paragraph of Article 173 of the EEC letter of 21 December 1990 which is at issue Treaty. 1 9 in the present case. Having defined the subject-matter of those proceedings in the same terms as have been relied upon by E N U in the present appeal, to wit, the Com­ mission's failure to order the Agency to comply with Chapter VI of the Treaty and to implement the 'special course of action', 31. The Commission, in its decision on such Advocate General Gulmann took the view a refusal, might take a position both as that: regards the legality of the Agency's exercise of the right of option and the right to con­ clude supply contracts, and on more general policy matters. In rejecting a complaint sub­ mitted under the second paragraph of Article 53, the decision of the Commission may thus contain elements, which, in prin­

specific acts which relate to the right of individual concern to the applicant'. The option or the exclusive right to conclude Court also held that it was only 'in so far as contracts conferred by the Treaty. the Commission is formally requested ... in particular to order the Agency to take "spe­ cial action" enabling an immediate solution to be found for the problem encountered by E N U in disposing of its uranium' that the request came within the scope of the second paragraph of Article 53 of the Treaty. 22 It followed that E N U ' s complaint concerning the Commission's failure to act was admis­ sible only as regards 'the implied act of the Agency refusing to exercise its right of option in respect of the applicant's uranium production'. 2 3 The Agency's overall supply policy is not, in my view, a specific act capable of being referred to the Commission under the sec­ ond paragraph of Article 53. It is perfectly clear that E N U wishes the Agency to amend its supply policy in such a way that it will at some point exercise its right of option to purchase E N U ' s uranium; however, E N U precisely does not submit that the Agency breached a specific duty to exercise its right 34. O n the other hand, the 'various requests of option.' 2 0 regarding the policy which the Agency ought to be pursuing', including that relating to the application of Chapter VI of the Treaty, 'and the request relating to ... the amount of damages' were expressly held 'not [to] come within the scope of the second 33. The Court was similarly at pains to iden­ paragraph of Article 53'. 2 4 While not deter­ tify the parameters of the request which minative, it is worthy of note that para­ could properly be made by E N U in accord­ graph 38 and the operative part of the judg­ ance with the second paragraph of Article 53. ment in the languages in which the judgment In examining the Commission's contention is available 2 5 refer to the Commission's fail­ that E N U lacked locus standi under ure to take a decision on a single request, Article 148 of the Treaty, the Court found though E N U ' s letter of 21 December 1990 that 'the decision requested by E N U was indubitably contained a number of different meant to provide a solution for the specific requests. problem which it had submitted to the Agency and the Commission ... even if it had been addressed to the Agency, [the Commis­ 21 — Paragraphs 16 and 17 of the judgment, emphasis added. sion decision], would have been of direct and 22 — Paragraph 34 of the judgment. 23 — Loc. cit. 24 — Paragraph 33 of the judgment. 25 — With the exception of the Greek version, which uses the word 'αιτήματος' in paragraph 38 and 'αιτήσεως' in the 20 — Case C-107/91, paragraph 12 of the Opinion. operative part.

35. In so holding, the Court implicitly reason that Article 1 of the operative part of rejected the contention made by E N U in the the contested decision, unlike the judgment framework of the present appeal, that its of the Court in Case C-107/91, refers to a capacity as an economic operator in the plurality of requests rather than a single 27 nuclear market gives it sufficient standing to request. challenge the alleged non-application by the Agency and the Commission of Chapter VI, regardless of whether the Commission's rejection of its request on these matters affected its legal situation. Underlying the Court's refusal to interpret the second para­ 37. Notwithstanding the wording of graph of Article 53 of the Treaty more Article 1 of the operative part of the widely is the familiar notion that 'only mea­ Decision, I am of the view that the 'Legal sures producing binding legal effects of such Assessment' of the contested Decision a kind as to affect the applicant's interests by should be treated as a statement of reasons, clearly altering his legal position constitute not all of which is an integral and reviewable acts or decisions open to challenge by an part of the decision taken by the Commis­ application for annulment'. 2 6 sion under the second paragraph of Article 53 of the Treaty. I agree in this regard with the conclusion drawn from IBM ν Commission by the Court of First Instance in Nederlandse Bankiersvereniging, to the effect that 'whatever the grounds on which ... an act is based, only its operative part is capable of producing legal effects and, as a consequence, of adversely affecting [the] interests [of the applicant] .... The legality 36. The contested decision in the present [of the statement of reasons] might be open case expressly cites the second paragraph of to review by the Community judicature only Article 53 of the Treaty as its legal basis, and to the extent to which, as grounds of an act the Commission could, in order to comply adversely affecting a person's interests, they with the Court's judgment in Case constituted the necessary support for its C-107/91, only have responded to that part operative part'. 2 8 of E N U ' s letter of 21 December 1990 which concerned the Agency's refusal to exercise its right of option in respect of E N U ' s uranium production. That the Commission chose to respond to each of E N U ' s requests is per­ haps understandable in the circumstances, given the breadth of the arguments raised 38. In the light of the foregoing, I take the and the expressed willingness of both the view that the operative part of the contested Commission and the Agency to provide Decision should be interpreted as being E N U with some assistance in disposing of its restricted to the Commission's refusal to unsold uranium concentrates. It is for this

order the Agency to implement the 'special that the rules laid down in Chapter VI are course of action', for the reason given by the not being respected, and that the 1960 rules Court in Case C-107/91, namely its connec­ of the Agency, as amended in 1975, are tion with the exercise by the Agency of its incompatible with the Treaty. In concluding right of option. E N U ' s plea regarding the its arguments in this regard, E N U identifies Commission's refusal to direct the Agency as 'a fundamental point for the resolution of to implement the 'special course of action' is the dispute' the alleged systematic breach of examined below (see (ii)). Article 66 of the Treaty. According to this view, it is not the fact that producers and users enter into contracts directly which adversely affects E N U ' s interests, as this would not prevent it from selling its produc­ tion on the Community market, in which only 25% of the demand is met by uranium produced in the Community. It is instead the 39. I therefore recommend that the Court fact that nuclear materials are imported reject as inadmissible that part of the appeal freely from outside the Community, in sup­ which relates to the dismissal by the Court posed breach of Article 66, which adversely of First Instance of E N U ' s action for the affects E N U ' s interests by preventing the annulment of the contested Decision as disposal of its production. This approach regards the Commission's refusal to order was confirmed at the oral hearing, where the Agency to apply Chapter VI of the E N U ' s agent accepted that it was only if Treaty, including the alleged illegality of the Article 60 were applied in combination with Agency rules. Although my recommenda­ Article 66 and a consequential effective pro­ tion is based on a different ground from that hibition on importing uranium, where Com­ upon which the Court of First Instance munity production is available, that E N U based its decision, 2 9 the interpretation of the would achieve the disposal of its production. scope of the second paragraph of Article 53 of the Treaty adopted by this Court in Case C-107/91 was clear and clearly relevant to the present case and should, in my view, be followed.

munity operators. Where Community pro­ argued in the present appeal that the Agency duction is insufficient to meet the demand must exercise its right of option in all cir­ from Community users, and after a pro rata cumstances, but only in a situation of a defi­ distribution of the available (Community) cit in Community production compared to production, the Agency may, and indeed, consumption (which undoubtedly does pursuant to Article 61, must, resort to the exist). importation of nuclear materials in accord­ ance with Article 64, but these imported materials would not be in competition with Community production. Article 65 should therefore be interpreted as applying to imported uranium only those provisions of Article 60 which concern orders from users 43. I agree with the statement that this point and the supply of materials, to wit, the first, is fundamental; indeed, it is clear both from fourth and fifth paragraphs. The remaining E N U ' s pleadings in the present appeal and paragraphs, which regulate the offers of the contested judgment that its entire case Community producers and the balancing of depends upon the existence of the alleged offers and requests, could not be applied to Community preference, and the consequent nuclear materials originating outside the prohibition on the importation of non- Community. Community uranium whenever Community supplies are available at a price which is not 'excessively high'.

tracts for the importation of nuclear materi­ Agency to exercise the power it enjoys by als, are merely means to achieve the same virtue of the second paragraph of Article 65 end, viz. to enable the Agency to supervise to determine the geographical origin of sup­ all the production of nuclear materials in the plies; the circumstances leading to the pro­ Community, and the use of all nuclear mate­ ceedings in Kernkraftwerke Lippe-Ems dem­ rials for civil purposes within the Commu­ onstrate that the Agency considers this a nity territory, whether indigenous or necessary element in the management of the imported. E N U has not put forward any Community's supply policy. 3 1 reason why any provision of Article 60 which can apply to users' applications and the relevant contracts should not apply; fur­ thermore, the reference to 'contracts' in the first paragraph of Article 65 would in effect be superfluous if Article 60 did not mean that Community demand was to be balanced with imported supplies. 46. I might add that E N U ' s selective appli­ cation of Article 60 to imported supplies would, even on a literal reading of the provi­ sions in question, lead to certain anomalies. Thus the fourth paragraph of Article 60, which, according to E N U , applies to imported supplies, would require the Agency to make known the terms on which it can meet the orders it has received; as E N U would exclude the third paragraph, however, the Agency would not have received any orders for imported materials. Moreover, under E N U ' s interpretation, potential users would not have been informed of 'the offers and the volume of applications' the Agency 45. I agree in this regard with the analysis of has received in respect of imported supplies, Advocate General Roemer in Commission ν which seems to me to be essential in order to France that 'the system of Article 60 ... ensure respect for the principle of equal mainly regulates the balancing of supply access. against demand for ores, source materials, 30 etc. by the Supply Agency'. If this is so, then Article 65 would lose much of its useful effect if it were interpreted as requiring the Agency to balance all of the demand from Community users with only part of the sup­ ply to which they can have access through the Agency. Furthermore, the fact that 47. E N U further argues on the basis of Article 60 obliges users to specify the 'place Article 66 that Community users can only of origin' in the requirements they commu­ reject Community production, thereby justi­ nicate to the Agency, in turn allows the fying the Agency's importing supplies from

48. N o trace of the preference for Commu­ nity production of nuclear materials over imported materials upon which E N U relies so heavily is to be found in the other rel­ evant Treaty provisions. Thus, for example, Article 67, which is not in section 2 of Title II and hence presumptively applies to both 50. It is also difficult to avoid the impression Community and imported materials, estab­ that, given the state of the market in nuclear lishes that 'prices shall be determined as a materials in 1957, if the Treaty authors result of balancing supply against demand as had intended to discriminate against non- provided in Article 60'. There is no evidence Community production, as E N U has that the Treaty intended a two-tier price argued, they would have included specific structure such as would arise if Community provisions to this effect. The nuclear indus­ production were automatically to be given try was in its infancy in the Member States, preference as E N U has maintained and which would in effect lead to the subsidiza­ tion, directly or indirectly, of E N U ' s pro­ 32 — Case 7/71 Commission ν France, cited in footnote 30 above, duction. Community preference would also page 1014. be inconsistent in principle with the facility 33 — Ibid., paragraph 41 of the judgment.

I - 1354

E N U ν COMMISSION

52. It should also be remembered that nuclear materials are highly sensitive prod­ ucts, of strategic importance to the economy, and in some cases the defence arrangements, of the Member States, whose production cannot readily be compared with that of 51. E N U has also sought to rely on Com­ other products, such as agricultural or indus­ munity preference as a general principle of trial products. They are the raw materials for Community law, supposedly established by the entire nuclear cycle and the various the Court in Beus. 3 6 In the first place, the forms of activity associated with it: conver­ Treaty does not contain any provision estab­ sion, enrichment, fuel fabrication and repro­ cessing. I do not consider that the Treaty can be interpreted as imposing a competitive dis­ 34 — See Case 7/71 Commission ν France, cited in footnote 30 advantage in all these fields on the Commu- above, paragraphs 39 to 43 of the judgment. 35 — Cusack 'External Relations of the European Atomic Energy Community in the Fields of Supply and Safeguards; Back­ ground ana Developments in 1982 and 1983' 3 Yearbook of European Law (1984) p. 347, at p. 349. France is reported to 37 — See, for example, Case 58/86 Coopérative Agricole have produced almost three times as much natural uranium d'Approvisionnement des Avirons ν Receveur des Douanes in 1995 as the remaining Member States put together (Com­ [1987] ECR 1525, paragraph 9 of the judgment. mission, Draft Illustrative Nuclear Programme, 31 July 38 — Euratom, Third General Report on the activity of the Com­ 1996, Annex 1.2 (not yet published)). munity, Office of Official Publications, Luxembourg, I960, 36 — Case 5/67 Beus ν Hauptzollamt München [1968] ECR 83. p. 59.

nity nuclear industry, because of the higher 54. E N U has argued that the Treaty would prices which could be demanded, under be profoundly unjust and unbalanced if it E N U ' s view, by Community producers. obliged Community producers to make their entire output available to Community users, without establishing a Community prefer­ ence as a quid pro quo. The Community was set up with a view to encouraging first and foremost the production of 'nuclear energy [which] represents an essential resource for the development and invigoration of indus­ try and will permit the advancement of the cause of peace' as noted in the first recital in the preamble; its objective is to promote the Community economy in general, and the Treaty restrictions on the disposal of nuclear materials produced in the Community reflect 53. At one point, E N U admits that the the strategic character of the product, rather Agency can import in order to meet orders, than any intention to favour users over pro­ but argues that, as a true European public ducers. Indeed, in a world market where ura­ service with general responsibility for the nium supplies exceed demand, this restric­ normal operation of the common market, it tion is in fact of no particular benefit to should not resort to needless importation users, while in the converse situation of a when Community production is available. In world market where demand exceeds supply, its view, this would run counter to its duty the disposal of Community production to ensure wide outlets, in accordance with would in practice be guaranteed in any case. Article 2(g) of the Treaty. Even if uranium concentrates could be considered 'specialized materials' for which the Community should seek to ensure wide commercial outlets, this obligation can only be carried out 'as pro­ vided for in this Treaty', and there is in my view no provision which would require a Community preference. Furthermore, the imposition of a restriction on the importa­ tion of the basic materials would render the production of the other specialized materials less competitive, and hence run counter to 55. E N U has also invoked the necessity to the objective of ensuring wide commercial protect Community production per se as a outlets for these materials. Finally, I do not Treaty objective. For the reasons given in see how this general objective, which is con­ paragraph 69 thereof, the judgment under cerned with the establishment within the appeal cannot, in my view, be impugned on Community of a common market in nuclear this ground. It is also clear that the Commu­ materials (Chapter IX), rather than supply nity's duties in this regard are limited, and policy from both within and outside the that a Member State is at most obliged to Community (Chapter VI), could be inter­ carry out prospecting and mining activities preted as modifying the duties which arise where 'the prospects for extraction appear for the Agency under the specific provisions economically justified on a long-term basis' of the latter Chapter. (fourth paragraph of Article 70 of the Treaty,

emphasis added), on pain of being deemed to argues that the Commission should therefore have waived its right of equal access. E N U have ordered the Agency to implement it as has not demonstrated how the general inter­ E N U had requested. Noting that the Com­ est of the Community is better served by missioner responsible had approved the plan, extracting all the available uranium in the and that the Commission had given under­ Community territory than by availing of the takings to both the Portuguese Government low-cost supplies on the world market. and the European Parliament to find a satis­ factory solution to the problem of the dis­ posal of E N U ' s uranium, E N U argues that the contested Decision violates Article 2(g) and Chapter VI of the Treaty and its legiti­ mate expectations and good faith. 56. It follows that the balancing of supply and demand provided for in Article 60 applies equally to Community and imported production, and there is no Community preference which would guarantee preferen­ tial disposal of Community production. It is therefore unnecessary to consider the ques­ tion of whether the judgment of the Court ol First Instance should be annulled because 59. In seeking to establish the obligatory it upheld the Commission's refusal to order character of the Agency's implementation of the Agency to 'restore the mechanism of the 'special course of action', E N U relies on Chapter VI' of the Treaty, as by E N U ' s own Article 2(g) of the Treaty and the alleged admission, such an order would only affect Community preference for uranium pro­ its legal situation if the Treaty imposed such duced in the Community. I have already a Community preference. examined the latter at some length above. 3 9 E N U does not, however, establish how a general obligation to create a common mar­ ket in specialized materials could impose a specific obligation on the Commission to order the Agency to implement a special 57. I therefore recommend that, should the course of action in its favour, or on the Court decide to examine the merits of this Agency to exercise its right of option in the ground, the appeal be rejected. circumstances of the present case. The terms of the Commissioner's letter of 8 December 1989, supporting the view that the Agency's supply policy should include 'uma vertente especial' for the solution of cases such as (ii) Commission refusal to order the Agency ENU's, which seems to me in the circum­ to adopt the 'special course of action' stances to be no more than 'special consider­ ation' for Portuguese uranium, could not in my opinion be interpreted as constituting a directive to the Agency to exercise its right of option. Indeed, in its judgment in Case

62. The Commission has challenged the admissibility of E N U ' s action in damages on 60. N o r are E N U ' s arguments in relation to two grounds. In the first place, it contends its legitimate expectations and its good faith that the action is an abuse of procedure, in any more substantial. While it is true that the that the annulment action, if successful, principle of legitimate expectations has been would constitute an adequate means of recognized as 'form[ing] part of the Com­ redress for E N U , whose principal interest in munity legal order with the result that any the proceedings is the disposal of its ura­ failure to comply with it is an "infringement nium. It further contends that, as the Agency of this Treaty or of any rule of law relating has legal personality, the action should have to its application"', 4 2 there is no evidence been directed against it rather than the Com­ before the Court that E N U had ever been mission, in so far as any alleged damage led to believe the plan was binding. Further­ could be attributed to the Agency, and that more, E N U has not shown how the refusal the action should therefore be declared inad­ of the Commission to require the Agency to missible. The Court of First Instance dis­ implement the plan could impugn its good missed the action in damages as unfounded, faith, in so far as it might be considered rel­ without discussing the question of admissi­ evant in the present proceedings. 43 bility.

40 — Case C-107/91, cited in footnote 9 above. 41 — Paragraph 9 of the judgment under appeal. 42 — Case 112/77 Tapfer ν Commasion [1978] ECR 1019, para­ graph 19 of the judgment. 43 — For a recent application, see the Opinion of Advocate 63. If the Court were to follow my recom­ General Jacobs of 12 November 1996 in Case C-24/95 mendation to reject E N U ' s appeal concern­ Land Rheinland-Pfalz ν Alcan Deutschland GmbH, [1997] ECR I-1591, I-1594, paragraphs 23 and 33. ing the action on annulment, it would not be

IV — C o n c l u s i o n

66. I n the light of the foregoing, I r e c o m m e n d t o the C o u r t that it:

(1) reject t h e appeal against t h e j u d g m e n t of t h e C o u r t of First I n s t a n c e in C a s e T-523/93 as inadmissible, as regards t h e appellant's r e q u e s t c o n c e r n i n g t h e application of C h a p t e r V I of t h e Treaty, a n d u n f o u n d e d for t h e r e m a i n d e r ;

(2) reject t h e appeal against t h e j u d g m e n t of t h e C o u r t of First I n s t a n c e in C a s e T-458/93 as u n f o u n d e d ; and

(3) o r d e r t h e appellant t o bear t h e costs.

I-1359