Judgment — ECLI:EU:C:1997:401
Date: 1997-09-16
Language of the case: English
Court formation: First Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Dumping;External relations;Commercial policy
Concepts: Appeals;Causal link
Procedure: Appeal - unfounded;Action for damages
Origin: United Kingdom

summary of Blackspur'sposition regarding its imports from China, that between July 1988, when itwas set up, and August 1990, when the proceedings which were to lead toits liquidation were instituted, Blackspur imported only one consignment ofbrushes from China, in July 1988, for a total value of UKL 40 948.38, onwhich the provisional anti-dumping duty payable was in the region of UKL18 116.83. Second, as is clear from the above letter from the charteredaccountants, Blackspur had a turnover of UKL 1 435 384 over the periodfrom 1 July 1988 to 31 August 1989. 46 It is thus clear from the documents in the case that Blackspur was notengaged in importing brushes from China prior to the imposition of thecontested anti-dumping duty and that Blackspur's assertion that imports ofbrushes from China accounted for half of its turnover during the periodprior to the imposition of the anti-dumping duty is uncorroborated by anyevidence. In those circumstances, it cannot be accepted that the alleged lossof the commercial outlet represented by the sales of brushes from Chinawas the principal cause of the poor financial results that led to Blackspur'sbeing wound up. 47 However, even if this assertion by Blackspur were to be accepted for thepurposes of the Court's reasoning, the Court holds that, as is apparent fromthe above letter from the firm of chartered accountants, 40.44% ofBlackspur's turnover for the period from 1 July 1988 to 31 August 1989(UKL 1 435 384) resulted from sales of brushes for a total value of UKL580 503. The Court notes that this finding is at odds with the applicants'assertion that it was because of the imposition of the anti-dumping duty thatBlackspur was unable to find alternative sources of supply and was for thatreason obliged to withdraw from the market for sales of cheap brushes. Itis also apparent from the above letter that, although the percentagerepresenting sales of brushes fell during the subsequent period (from1 September 1989 to 31 July 1990) from 40.44% to 3.01%, Blackspur'sturnover, in contrast, increased significantly, by some 30%, to UKL1 864 016. 48 It follows from the foregoing that, even if it could have had the effect ofreducing the turnover achieved on Chinese brushes during the financial year1989/1990, the alleged loss of the commercial outlet represented by the saleof such brushes did not in fact in any way prevent Blackspur fromcontinuing with its commercial activities and even considerably increasingits turnover during the financial year 1989/1990, the period immediatelypreceding the institution of the proceedings which led to its liquidation. TheCourt finds that the above letter from the firm of chartered accountantsdoes not contain any reference, indication or explanation of such kind as toenable the Court to determine the extent to which Blackspur's financialresults during the financial year 1988/1989 were, as it claims, influenced bythe loss of the market in cheap brushes, or why the turnover achieved byBlackspur during the years 1988/1989 and 1989/1990 was not sufficient toenable it to give effect to the commercial plan approved by its bank andthus avoid the bank's calling in the receivers. Consequently, in the absenceof any other evidence adduced by the applicants as to the causes of thepoor financial results allegedly recorded by Blackspur and as to the precisereasons for the institution in August 1990, at the request of its bank, ofproceedings which led to the company's liquidation, it cannot be acceptedthat Blackspur's liquidation was attributable to poor financial resultsoccasioned by the discontinuance of its sales of Chinese brushes, deprivingit of profits estimated by the applicants to be UKL 586 000, following theimposition of an anti-dumping duty on those brushes, and, even less so, tothe allegedly unlawful conduct of the defendant institutions in connectionwith the imposition of that duty. 49 Finally, it cannot in any event be seriously argued that there is a directcausal link between the customs duties of UKL 18 116.83 owed in respectof the anti-dumping duty applied to the consignment of brushes whichBlackspur imported from China in July 1988, and the company's liquidation,since the applicants did not, during the proceedings before the Court,provide any credible explanation as to how a debt of a small amount couldhave led to the winding-up, by court order, of a company established withcapital contributions of approximately UKL 750 000 ... As regards the damage which the other appellants claim to have suffered in theircapacity as directors of Blackspur, through loss of their capital contributions to thecompany, and also in their capacity as guarantors, through being called upon tohonour personal guarantees given to it, and in their capacity as shareholders,through the loss in value of their holdings, the Court of First Instance held, atparagraph 52 of the contested judgment: '... since, as [the Court] has just found, it has not been established that theliquidation of Blackspur is directly attributable to the allegedly wrongful conductof the defendant institutions, there can also be no direct causal link between thedamage which the above applicants claim to have suffered and the wrongfulconduct of which the Community institutions stand accused. It must also be addedthat, as is also clear from the case-law of the Court of Justice, losses caused by theinstitution of insolvency proceedings amount to indirect and remote damage of sucha kind that the Community cannot be under an obligation to make good everyconsequence which may flow from it (judgment [of the Court of Justice] in [JoinedCases 64/76 and 113/76, 167/78 and 239/78, 27/79, 28/79 and 45/79] Dumortier Frèresand Others v Council [1979] ECR 3091, paragraph 21). The appeal In support of their appeal, the appellants put forward a number of pleas in law,essentially concerning, first, the nature of the damage taken into account inassessing the causal link, secondly, the assessment of the evidence for the existenceof that link and, thirdly, the dismissal of the directors' claims for compensation. The Council and the Commission request the Court of Justice to declare the appealinadmissible, or, in the alternative, to dismiss it as unfounded. Should the Courtnevertheless hold the appeal to be well founded, they consider that no purposewould be served by referring the matter back to the Court of First Instance, sincethe facts are already sufficiently well established to enable the Court to givejudgment. Findings of the Court Before examining the appellants' pleas, it should be noted that, in accordance withArticle 168a of the EC Treaty and the first paragraph of Article 51 of the ECStatute of the Court of Justice, an appeal may rely only on grounds relating to theinfringement of rules of law by the Court of First Instance, to the exclusion of anyappraisal of the facts (judgment in Case C-283/90 P Vidrányi v Commission [1991]ECR I-4339, paragraph 12; order in Case C-19/95 P San Marco v Commission[1996] ECR I-4435, paragraphs 39 and 40). The nature of the damage taken into account in assessing the causal link In their first plea, the appellants submit that the Court of First Instance failed tounderstand the exact measure of the damage suffered by Blackspur and the otherappellants in this case, with the result that it failed to adopt the correct approachin law to the question of the causal link between that damage and the conductcomplained of on the part of the institutions concerned. In particular, the appellants submit that paragraph 41 of the judgment is vitiatedby an error of law in that the Court of First Instance there attributed to them theclaim that sales of Chinese brushes represented half of Blackspur's turnover,whereas in fact they had asserted that those sales were to represent about one halfof Blackspur's projected turnover. Furthermore, in the same paragraph, the Courtof First Instance also attributed to the appellants the claim that profits amountingto UKL 586 000 were lost because Blackspur was placed in receivership, whereas,in fact, the appellants argued that that loss resulted from the fact that, because ofthe imposition of the contested anti-dumping duty, Blackspur had been deprivedof a substantial part of its business from November 1989 to June 1990, that is,before it was placed in receivership. The Court notes at the outset that the Court of First Instance dismissed theappellants' claim for compensation on the ground that they had not established acausal link between the allegedly unlawful conduct of the Community institutionsand the damage claimed. In that connection, the Court of First Instance correctly restated the appellants'description of the alleged damage, since it found, at paragraph 26 of the judgment,that that damage corresponded to 'the profits which [Blackspur] could have madeby selling Chinese brushes if the Community institutions had not acted in themanner criticized, that is to say UKL 586 000. Moreover, at paragraph 48 of the contested judgment, the Court of First Instancefound that the appellants had not adduced any evidence to explain how, as theyalleged, the poor financial results previously referred to were due to thediscontinuance of sales of Chinese brushes. The Court of First Instance noted inthe same paragraph that, on the contrary, the loss of the commercial outletrepresented by the sale of such brushes did not in any way prevent Blackspur fromcontinuing with its commercial activities until August 1990, when the receivershipproceedings were instituted. From a reading of the documents supplied by theappellants, the Court of First Instance concluded, at paragraph 47 of its judgment,that turnover for the period from July 1988 to August 1989 alone amounted toUKL 1 435 384, of which 40.44% resulted from sales of brushes, and that, for thesubsequent period (from 1 September 1989 to 31 July 1990), turnover increased bysome 30%, despite a sharp diminution in the percentage representing sales ofbrushes, from 40.44% to 3.01%. In the absence of any other conclusive evidence, the Court of First Instance wasjustified in finding, at paragraph 48 of the contested judgment, that the appellantshad not proved a causal link between, on the one hand, the cessation of sales ofbrushes originating in China, following the imposition of an anti-dumping duty onthose brushes, and, on the other hand, the alleged loss of profits leading to thecompany's liquidation. In those circumstances, the plea alleging erroneous attribution to the applicants, inparagraph 41 of the judgment, of the assertion that half of Blackspur's turnoverconsisted in sales of Chinese brushes cannot affect the result. Even assuming it tobe established, that plea relates to supplementary grounds set out in the contestedjudgment for the sake of completeness and cannot call into question the finding onwhich the Court of First Instance based its dismissal of the claim for compensation,namely that the appellants had not adduced any evidence to establish a causal linkbetween the financial losses, estimated by the appellants at UKL 586 000, and thecessation of sales of brushes originating in China (see, in particular, the judgmentin Case C-137/95 P SPO and Others v Commission [1996] ECR I-1611, paragraph47). As regards the second assertion alleged to have been erroneously attributed to theappellants, to the effect that the loss of profits of UKL 586 000 was due toBlackspur's being placed in receivership, it is sufficient to observe that, at the endof paragraph 48 of its judgment, the Court of First Instance pointed out, in orderto reject that assertion, the position of the appellants as now set out before thisCourt, namely that the economic loss was a cause of the company's liquidation andnot a consequence of it. The first plea must therefore be dismissed as unfounded. The assessment of the evidence as to the existence of a causal link In their second plea, the appellants argue that, in assessing the evidence as to theexistence of a causal link, the Court of First Instance infringed the right to a fairtrial and the rights of the defence. They reiterate that the Court of First Instancealso incorrectly approached the question of the causal link because it did notproperly understand the claim for damages. In the first part of their second plea, the appellants maintain that, without givingreasons, the Court of First Instance took no account of relevant evidence, in casuthe information contained in Annex 1 to the application and in Annex 26 to thereply, and based itself on a single document, namely the chartered accountants'letter concerning Blackspur's financial results for the periods 1988-1989 and 1989-1990, referred to in paragraph 44 of the contested judgment. That letter wasdrafted, according to the appellants, specifically in response to a request by theCourt of First Instance for information regarding Blackspur's turnover, and not forthe purpose of examining the question of the causal link. The appellants add thatthe Court of First Instance ought to have ordered measures of inquiry. In that regard, it is sufficient to point out that paragraph 27 of the contestedjudgment refers to the report contained in Annex 1 to the application, which wasproduced by the appellants in support of the evaluation of the damage claimed, asbeing taken into account in the assessment of the causal link. Moreover, paragraph45 of the judgment refers to Annex 22 to the reply and paragraph 46 refers to the'documents in the case. That being so, the appellants cannot validly maintainthat, in analysing the causal link, the Court of First Instance took only one pieceof evidence into consideration, namely the letter from the firm of charteredaccountants referred to in paragraph 44. In any event, as the Court of Justice has repeatedly held, it is for the Court of FirstInstance alone to assess the value which should be attached to the items ofevidence adduced before it (judgment in Case C-136/92 P Commission v BrazzelliLualdi [1994] ECR I-1981, paragraph 66; order in San Marco v Commission, citedabove, paragraph 40). That appraisal does not, therefore, save where the senseof the evidence has been distorted, constitute a point of law which is subject, assuch, to review by the Court of Justice (judgment in Case C-53/92 P Hilti vCommission [1994] ECR I-667, paragraph 42). In this case, it has not been established that the Court of First Instance distortedthe sense of the evidence by deducing from the chartered accountants' letter,referred to in paragraph 44 of the contested judgment, information not apparentfrom it. That document, prepared by the appellants themselves, contains figuresconcerning Blackspur's economic position, and in particular its turnover and thepercentage represented by sales of brushes. The fact that the document wasproduced in response to a question by the Court of First Instance concerningBlackspur's turnover did not prevent that Court from having recourse to its contentin considering the question of the existence of a causal link or from finding that thedocument did not contain any conclusive evidence in that respect. Moreover, it is first and foremost for the party seeking to establish theCommunity's liability to adduce conclusive proof as to the existence or extent of thedamage he alleges and to establish the causal link between that damage and theconduct complained of on the part of the Community institutions (see, in particular,the judgment in Case 26/74 Roquette Frères v Commission [1976] ECR 677,paragraphs 22 and 23). In this case, the Court of First Instance found, at paragraph 48 of the contestedjudgment, that the applicants had not adduced sufficient evidence to prove thecauses of the poor financial results allegedly recorded by Blackspur and as to theprecise reasons for the institution in August 1990, at the request of its bank, ofproceedings which led to the company's liquidation. In any event, as the AdvocateGeneral points out at paragraph 26 of his Opinion, the documents before thisCourt do not show that the appellants formulated sufficiently clear and preciserequests for measures of inquiry. It follows that the appellants' arguments seeking to challenge the assessment by theCourt of First Instance of certain items of evidence produced to it are inadmissibleand must therefore be rejected, since the appellants have neither established, noreven argued, that that Court distorted the sense of those items of evidence. The first part of the second plea must therefore be dismissed. In the second part of their second plea, the appellants criticize the Court of FirstInstance for having misunderstood their claim for damages. In the first place,according to the appellants, the Court of First Instance mentioned, at paragraph46 of the contested judgment, an alleged assertion by Blackspur that imports ofbrushes from China represented, for the period prior to the imposition of the anti-dumping duty, half of its turnover, and then went on to hold that this assertion wasunsubstantiated by any evidence. Second, they claim that, at paragraph 47, theCourt of First Instance wrongly attributed to them the assertion that the actualimposition of the anti-dumping duty prevented Blackspur from finding alternativesources of supply, which consequently forced it to withdraw from the market forsales of cheap brushes, and then went on to hold, in the light of the figures foractual sales of brushes between 1 July 1988 and 31 August 1989, that that assertionwas inaccurate. The appellants maintain that their real argument before the Court of First Instancewas that Blackspur, a company established in 1988 and whose first financial resultswere poor, was liable to be particularly affected by the disruption to trade whichcould result from the imposition of an anti-dumping duty on a product line which,according to its operating plan, should have represented approximately one half ofits turnover. The continuation of its business, and consequently the increase in itsturnover, following the imposition of the anti-dumping duty, as a result of, inparticular, the search for alternative (that is to say, non-Chinese) sources of supply,or by the sale of certain stocks of paint brushes, reflect the efforts by Blackspur tosurvive the consequences of the imposition of the anti-dumping duty, but in no wayallows the inference that the appellants have not suffered harm consisting in theloss of market share as a result of the imposition of the anti-dumping duty. Furthermore, it was for the Council and the Commission to prove that thecircumstances were such that the appellants could and should have taken particularsteps to avoid the damage complained of, or that the steps actually taken by theappellants either worsened the position or were so inadequate that the appellantswere at least in part responsible for the eventual loss. In that regard, this Court observes that in paragraph 26 of the contested judgmentthe Court of First Instance stated that, according to the appellants, 'the damagesuffered by Blackspur corresponds to the profits which the company could havemade by selling Chinese brushes if the Community institutions had not acted in themanner criticized, that is to say, UKL 586 000. Furthermore, in paragraphs 34and 35 of the contested judgment it is stated: '34 The applicants submit that it was because of the imposition of theprovisional anti-dumping duty in the circumstances described above ... thatBlackspur was finally driven from the market, since the development ofsales in its other product lines was not sufficient to compensate for thelosses incurred in the sector of paint-brushes originating in China or toprevent its bank from deciding in August 1990, in view of the weakness ofBlackspur's business, to appoint receivers to wind up the company. 35 In particular, the applicants consider that in so far as Blackspur's businessplan assumed a 40% gross profit margin on sales of brushes from China, theimposition of an anti-dumping duty of 69% could not but make it impossibleto sell those brushes at a profit. According to the applicants, the onus wastherefore on the defendant institutions to prove that there was some otherreason which resulted in the losses incurred by Blackspur. It follows from the above that the Court of First Instance properly understood theposition of the applicants as set out in paragraph 36 of this judgment. Moreover, as is already clear from paragraph 23 above, the description of theappellants' argument which appears in paragraphs 41 and 46 of the contestedjudgment, even assuming that it were in fact erroneous and could not be redressedby reading paragraph 35 of that same judgment to which paragraph 41 refers, isirrelevant to the reasoning, set out in paragraphs 47 and 48 of the contestedjudgment, on which the Court of First Instance based its decision. The second part of the second plea must therefore be dismissed as unfounded. The dismissal of the directors' claims for compensation In their third plea, the appellants maintain that paragraph 52 of the contestedjudgment is vitiated by an error of law inasmuch as the Court of First Instancefailed to give reasons for its conclusion that the directors' claims for compensationshould be dismissed in their entirety. They criticize the Court of First Instance fornot having taken into account in that regard the information supplied by theappellants on this matter during the proceedings, for having reversed the burdenof proof and for having distorted the sense of paragraph 21 of the judgment inDumortier Frères, cited above, to which it referred. In that respect, as has already been found, in order to reach the conclusion that adirect causal link had not been established between Blackspur's liquidation and theconduct complained of on the part of the institutions, the Court of First Instanceundertook an assessment of the facts which cannot be questioned before the Courtof Justice. In the absence of a duly established causal link between, on the onehand, the alleged loss of profits and the liquidation of Blackspur and, on the otherhand, the conduct complained of on the part of the Community institutions, theCourt of First Instance was entitled to hold that such a link had also not beenestablished as between the damage suffered by the directors, guarantors orassociates and that same conduct. In those circumstances, it is irrelevant that the Court of First Instance also held,referring to paragraph 21 of the judgment in Dumortier Frères, cited above, thatlosses caused by the institution of insolvency proceedings amount to indirect andremote damage. Since this point of the reasoning was not necessary to the result,the criticisms to which it is subject cannot lead to annulment of the contestedjudgment and cannot therefore affect the result (see the order in SPO and Othersv Commission, cited above, paragraph 47). The third plea must therefore be dismissed as inadmissible. It follows from all the foregoing considerations that the applicants' pleas in supportof their appeal are in part inadmissible and for the rest unfounded. The appealmust therefore be dismissed. Costs Under Article 69(2) of the Rules of Procedure, which applies to the procedure onappeal by virtue of Article 118, the unsuccessful party is to be ordered to pay thecosts. Since the appellants have been unsuccessful, they must be ordered to paythe costs. On those grounds, THE COURT (First Chamber) hereby: Dismisses the appeal; Orders Blackspur DIY Ltd, Steven Kellar, J.M.A. Glancy and RonaldCohen to bear their own costs and to pay those of the Council and theCommission. SevónEdward Wathelet Delivered in open court in Luxembourg on 16 September 1997. R. Grass L. Sevón Registrar President of the First Chamber 1: Language of the case: English.