T-41/97

ANTILLEAN RICE MILLS v COUNCIL

ORDER O F T H E PRESIDENT O F T H E COURT O F FIRST INSTANCE 21 March 1997 *

In Case T-41/97 R,

Antillean Rice Mills NV, a company constituted under the law of the Netherlands Antilles, established in Bonaire, Netherlands Antilles, represented by W. Knibbeler, of the Amsterdam Bar, and K. J. Defares, of the Rotterdam Bar, with an address for service in Luxembourg at the Chambers of M. Loesch, 11 Rue Goethe,

applicant,

supported by

Council of the European Union, represented by R. Torrent, J. Huber and G. Houttuin, of its Legal Service, acting as Agents, with an address for service in Luxembourg at the office of B. Eynard, Director-General of the Legal Affairs Directorate of the European Investment Bank, 100 Boulevard Konrad Adenauer,

defendant,

supported by

Italian Republic, represented by F. Quadri, Avvocato dello Stato, acting as Agent, with an address for service in Luxembourg at the Italian Embassy, 5 Rue Marie- Adélaïde,

and

Commission of the European Communities, represented by T. van Rijn, Legal Adviser, acting as Agent, with an address for service in Luxembourg at the office of C. Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,

Order

Facts and procedure

1 Antillean Rice Mills NV ('ARM') processes brown rice, from which the husk has been removed, from Surinam and Guyana, to make semi-milled rice in the Neth- erlands Antilles. Semi-milled rice is a semi-finished product obtained by removal of part of the pericarp. It is generally sold with a view to further processing into milled rice, from which the whole of the husk and the pericarp have been removed. ARM also produces milled rice.

2 The Netherlands Antilles form part of the overseas countries and territories ('OCT') associated with the Community. The association of the O C T with the Community is governed by Part Four of the EC Treaty and by Council Decision 91/482/EEC of 25 July 1991 (OJ 1991 L 263, p. 1, 'the O C T Decision'), which was adopted pursuant to the second paragraph of Article 136 of the Treaty.

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7 Article 133(1) of the Treaty provides that customs duties on imports into the Member States of goods originating in the O C T are to be completely abolished in conformity with the abolition of customs duties between Member States in accord- ance with the Treaty. Article 101(1) of the O C T Decision provides that products originating in the O C T are to be imported into the Community free of customs duties and charges having equivalent effect.

8 By derogation from the principles set out in Article 101(1), Article 109(1) of the O C T Decision allows the Commission to take safeguard measures 'if as a result of the application of [that] Decision serious disturbances occur in a sector of the economy of the Community or of one or more of its Member States, or their external financial stability is jeopardized, or if difficulties arise which may result in a deterioration in a sector of the Community's activity or in a region of the Com- munity'. Under Article 109(2), for the purpose of implementing Article 109(1), priority is to be given to such measures as would least disturb the functioning of the association and the Community. Such measures are not to exceed the limit of what is strictly necessary to remedy the difficulties that have arisen.

9 Pursuant to Article 109 of the O C T Decision and at the request of the Italian and Spanish Governments, the Commission adopted Regulation (EC) N o 21/97 of 8 January 1997 introducing safeguard measures in respect of imports of rice originat- ing in the O C T (OJ 1997 L 5, p. 24). That regulation introduced a tariff quota allowing imports of rice originating in the O C T and benefiting from exemption from customs duties up to a ceiling of 4 594 tonnes for rice originating in Mont- serrat, 1 328 tonnes for rice originating in the Turks and Caicos Islands and 36 728 tonnes for rice originating in the other OCT.

1 3 By application lodged at the Registry of the Court of First Instance on 27 February 1997, ARM sought the annulment of Regulation N o 304/97.

1 4 By separate application under Articles 185 and 186 of the Treaty, lodged at the Court Registry on the same day, it also sought suspension of operation of the con- tested regulation as regards consignments of rice originating in the Netherlands Antilles processed by the applicant in the Netherlands Antilles and, in the alterna- tive, the adoption by the President of the Court of First Instance of any measure considered by him to be necessary or appropriate. In that interlocutory applica- tion, the applicant also requested suspension of operation of the contested regu- lation with regard to it, without waiting for the Council's observations, pending the decision on the application for interim measures.

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15 The President of the Court took the view that the circumstances of the case did not call for that request for immediate suspension to be granted pursuant to Article 105(2) of the Rules of Procedure of the Court of First Instance, and pre- scribed a period for the Council to submit its written observations, which it did within that period by document registered at the Court on 7 March 1997.

16 By applications lodged at the Court Registry on 17 March 1997, the Kingdom of the Netherlands applied to intervene in support of the applicant and the Commis- sion applied to intervene in support of the Council. The Italian Republic also applied to intervene in support of the Council by application lodged with the President at the hearing on 19 March 1997.

20 In the present case, the President considers it appropriate to examine first the con- dition relating to urgency.

Urgency

Arguments of the parties

21 The applicant claims that the interim measure sought is necessary to prevent seri- ous and irreparable harm. The tariff quota introduced by the contested regulation was exhausted by the second day of its being in force. The effect of that safeguard measure is to bring ARM's activity practically to a halt until 30 April 1997.

22 In that context, if the interim measures sought are not granted, the risk of serious and irreparable harm derives in the first place from the applicant's need to make prompt arrangements for laying off 80 employees. The applicant sought authoriza- tion for that purpose from the Department of Labour and Social Affairs in Bonaire by letter of 24 January 1997 (Annex 8 to the application for interim measures).

23 Before it began exporting semi-milled rice to the Community, ARM employed some 22 staff in the production of milled rice for the local Netherlands Antilles market. Since 1992, its exports to the Community free of import duties have led

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27 In view of those considerations, the applicant submits, the balance between the competing interests favours suspension of the contested regulation. The only con- sequence of such a measure would be to reestablish the flow of trade as it existed in previous years. That would enable part of the Community's deficit in Indica rice to be made up. The Council could pay close attention to developments on the Community rice market and carefully assess any measures of commercial policy to be taken with regard to non-member countries to protect the Community rice market.

28 The applicant further points out that the contested safeguard measure does not produce the effect which the Council wished to achieve. According to a summary in the Weekly Rice Market News (Annex 16 to the main application), price fluctua- tions for milled rice of Community origin are marginal whereas the price of milled rice processed from semi-milled rice originating in the O C T went up by more than US $100 between 6 and 10 January 1997.

29 In those circumstances, suspension of operation of the contested safeguard meas- ure could not harm the Community's interests. The prices at which rice of O C T origin is offered could not give rise to any disturbance on the Community rice market since that rice is, the applicant asserts, appreciably more expensive than Community rice. Suspension of the contested regulation would harm only rice- processing undertakings established in non-member countries, which now profit from the safeguard measure, contrary to the order of preferences established in favour of Community products and products originating in the OCT.

33 The Council, supported by the Italian Republic and by the Commission, which endorsed all of its submissions at the hearing, rejects the arguments put forward by the applicant and the Kingdom of the Netherlands. It challenges, in the first place, the claim that the applicant was obliged to discontinue its activity specifically because the tariff quota had been exhausted two days after its introduction. It is not impossible that the applicant and/or its customers had simply forgotten to submit applications for import licences diligently, despite having already been informed in late 1996 that safeguard measures would probably be introduced. The origin of the alleged harm would thus lie in the lack of diligence on the part of the applicant or its customers, thus breaking the causal link between the contested regulation and that harm.

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34 The Council goes on to challenge the serious nature of the alleged harm. Licences issued in December 1996 were valid and transferable until the end of February 1997. N o r can it be ruled out that the applicant's mill has been used for processing by rice traders holding licences. Finally, at the hearing, the Council specified that the level of the contested quota was determined on the basis of the average imports of rice of O C T origin between 1992 and 1995 — a period marked by a succession of two good and two bad years for Community production.

35 Furthermore, the Council states, the applicant provides only minimum infor- mation as regards its annual production and use of capacity. It has made no state- ment as to the possibility of its continuing production at a lower level than during the previous period. It has given no information as to its turnover or as to profits and/or assets acquired since 1992. It is thus to be doubted that it cannot operate at reduced capacity for four months and even, perhaps, bear real losses during that period. In that regard, the Council points out that Community imports of rice originating in the O C T doubled in December 1996 over December 1995, in par- ticular once it had been disclosed that the Commission would be introducing safe- guard measures.

39 In its oral observations made at t h e hearing in s u p p o r t of the Council, t h e Italian Republic, which is the main rice-producing c o u n t r y in t h e C o m m u n i t y , stressed that t h e safeguard measure in question is an emergency measure applicable for a limited period. T h e balance of interests should be between mere loss of earnings suffered by a single undertaking and the preservation of the C o m m u n i t y ' s interests in the rice-cultivation sector. In particular, the effect of C o m m u n i t y aid granted t o p r o m o t e cultivation of Indica rice has been set at nought by massive imports of low-priced rice from the O C T , going b e y o n d what was intended when t h e O C T Decision was adopted. Conversely, t h e harm suffered by the Netherlands as a result of the contested regulation is limited because, according t o t h e figures p r o - vided by the Commission at the hearing, i m p o r t licences for rice from t h e O C T as a whole were issued in D e c e m b e r 1996 for unusual quantities — a r o u n d 67 000 tonnes.

40 The Commission also stated at the hearing that, contrary to what the applicant asserts, the contested safeguard measure is gradually producing the desired effects. The price of Indica rice on the Community market, which had been ECU 320 pel- tonne — thus appreciably lower than the intervention price of ECU 350 per tonne — from the third week of November to the first week of January, reached ECU 335 throughout the period from mid-January to the end of February and has since been rising slightly. That price increase is due to the fact that the effect of the licences issued in December and, up to the quota ceiling, until 9 January, which are valid for two months, is disappearing.

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44 Without there being any need at this stage to consider whether the safeguard meas- ure in issue is justified and prima facie effective, it is sufficient to note that, accord- ing to the explanations provided by the Council and the Commission, in particular at the hearing, that measure was introduced with the aim of remedying the instab- ility of the market for Community-produced Indica rice, which was being sold, during the last six weeks of 1996, at a price very considerably lower than the inter- vention price. It seeks to limit low-priced imports of rice originating in the O C T in order to encourage producers of Japónica rice to change over to Indica rice, in particular before the beginning of the sowing season, which begins in April.

45 In those circumstances, granting the suspension sought would be likely to pre- judge the decision of the Court in the main proceedings by definitively depriving the safeguard measure of its effectiveness.

46 In accordance with the case-law, account must therefore be taken, when weighing up the competing interests, of the irreversible nature of any suspension of opera- tion of the contested regulation, and the application must be granted only if, in particular, the urgency of the measures sought appears undeniable (see the order in Case T-179/96 R Antonissen v Council and Commission [1997] ECR II-425, para- graph 22).

47 It is thus necessary to examine the effects of the application of the contested regu- lation on the applicant's situation, bearing in mind at the outset that, according to settled case-law, damage of a financial nature is not in principle considered to be serious and irreparable unless, in the event of the applicant's being successful in the main action, it could not be wholly recouped. That may be so in particular if the alleged damage threatens the very existence of the undertaking in question or if the damage, even when it occurs, cannot be quantified (see the order in Joined Cases C-51/90 R and C-59/90 R Comos-Tank and Others v Commission [1990] ECR I-2167, paragraph 24).

51 In any event, even on the assumption that the applicant may be compelled to lay off 80 employees out of a total workforce of 117 — which cannot, as established above, be an inevitable consequence of the contested safeguard measure — it would not thereby lose its know-how, since it would retain 37 skilled staff. In that connection, it should be noted that ARM has taken on most of its workforce since

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1992, including, as it stated itself at the hearing, employees from other O C T who have 'emigrated' to the Netherlands Antilles in order to take up employment. That rapid increase in its workforce, which comprised 22 employees before it began exporting to the Community in 1992, seems to belie the applicant's assertions regarding the difficulty of recruiting qualified staff.

52 As regards, in the second place, the alleged danger of irremediable loss of its mar- ket shares, the applicant has not adduced any sufficient evidence from which the truth of its allegations might be established. It has merely produced two letters from its main customers in the Community, Euryza and Nidera, dated 24 and 29 January respectively, stating that they might have to look for other suppliers if the safeguard measure were not suspended. However, it appears from the applicant's statements at the hearing that it has a steady business relationship with those undertakings, which obtain supplies from it on a regular and stable basis both because of the quality of its processing and because of its reputation even though, as it has itself agreed, they could buy rice on the world market at prices lower than it can charge.

56 It follows from all of the foregoing that the applicant has not demonstrated that it is in danger of suffering irreversible harm as a result of the application of the con- tested regulation. That regulation cannot entail an inevitable threat to the retention of the applicant's know-how or market position. Rather than loss of know-how and market shares, it appears that the implementation of the safeguard measure entails financial losses for ARM, related to a considerable reduction in its activity over a limited period. Such pecuniary damage, the degree or extent of which the applicant has not specified, cannot, even on the assumption that it is considerable, be irreversible.

57 It is thus clear that appropriate compensation could be awarded were the contested regulation to be annulled. Furthermore, in any event, the fact that the regulation had already been implemented and its period of application had expired would m no way deprive the applicant of adequate protection of its interests, since the insti- tution concerned would have to take the necessary measures to comply with the judgment and might thus be required to take adequate steps to restore the appli- cant to its original situation or to avoid the adoption of an identical measure (see Joined Cases T-480/93 and T-483/93 Antillean Rice Mills and Others v Commis- sion [1995] ECR II-2305, paragraph 60).

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58 Consequently, in the absence of any undeniable risk of serious and irreversible harm for the applicant, the need to uphold the Community's interest in the imme- diate application of the measures adopted in order to ensure stability on the mar- ket in the rice-growing sector and the need not to prejudge the Court's decision on the main application must prevail over the risk of purely financial loss suffered by a single undertaking, without there being any need to examine the substantive pleas in law and arguments put forward by the applicant to justify granting the interim measure sought.

3. The application for interim measures is dismissed.

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4. Costs are reserved.

Luxembourg, 21 March 1997.

H. Jung A. Saggio