Judgment — ECLI:EU:T:1997:159
Date: 1997-10-24
Language of the case: English
Court formation: First Chamber, Extended Composition
Based on: Treaty establishing the European Coal and Steel Community (1951)
Subject matter: State aids;Competition
Concepts: Acts of the institutions;Investments and financial aid;Ancillary procedures and applications;Principle of the protection of legitimate expectations
Procedure: Action for annulment - unfounded
Origin: United Kingdom

Summary of the Judgment 
1. Procedure — Intervention — Objection of inadmissibility not raised by the defendant — 
Inadmissible — Absolute bar to proceeding with a case — Consideration by the Court of its 
own motion 
(ECSC Statute of the Court of Justice, Arts 34, second para., and 46, first para.; Rules of Pro­
cedure of the Court of First Instance, Arts 113 and 116(3)) 
I I -1887 
SUMMARY — CASE T-243/94 
2. ECSC — Aid to the steel industry — Authorization by the Commission — General dedsions 
and individual dedsions — Adoption of individual dedsions to authorize aid not falling 
within the categories of aid authorized by a general decision — Whether permissible 
(ECSC Treaty, Arts 2, 3, 4, 5 and 95) 
3. Community kw — Prindples — Protection of legitimate expectations — Limits — Prudent 
and discriminating traders 
4. ECSC — Aid to the steel industry — Authorization by the Commission — Conditions — 
Recondliation of Treaty objectives — Commission's discretion — Proportionality — Account 
taken of political, economic and social considerations — Review by the Court 
(ECSC Treaty, Arts 2, 3, 4, 5, 33, first para., and 95) 
5. ECSC — Aid to the steel industry — Authorization by the Commission — Conditions — No 
distortion of competition contrary to the common interest 
(ECSC Treaty, Arts 3 and 4) 
6. Acts of the institutions — Statement of reasons — Obligation — Scope — ECSC dedsion 
(ECSC Treaty, Arts 5, 15 and 33, second para.) 
7. ECSC — Aid to the steel industry — Authorization by the Commission — Procedure — 
Assent of Coundl — Procedures 
(ECSC Treaty, Art. 95) 
1. Pursuant to the second paragraph of 
Article 34 and the first paragraph of 
Article 46 of the ECSC Statute of the 
Court of Justice and Article 116(3) of the 
Rules of Procedure of the Court of First 
Instance, interveners are required to 
accept the case as they find it at the time 
of their intervention and the submissions 
made in their applications are to be lim­
ited to supporting the submissions of one 
of the parties. It follows that an inter­
vener has no standing to rely on an objec­
tion of inadmissibility that has not been 
raised in the submissions of the defen­
dant. 
On the other hand, those provisions do 
not prevent an intervener from submit­
ting arguments different from those of the 
party which it supports, provided that the 
intervention seeks at all times to support 
the forms of order sought by that party. 
Moreover, under Article 113 of the Rules 
of Procedure, the Court may at any time 
of its own motion consider whether there 
exists any absolute bar to proceeding 
with a case, including any raised by the 
interveners. 
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BRITISH STEEL v COMMISSION 
2. In the scheme of the ECSC Treaty, 
Article 4(c) does not preclude the Com­
mission from authorizing, by way of 
derogation, aid envisaged by the Member 
States and compatible with the objectives 
of the Treaty, on the basis of the first and 
second paragraphs of Article 95, in order 
to deal with unforeseen situations. 
The first and second paragraphs of 
Article 95 empower the Commission to 
adopt a decision or a recommendation 
with the unanimous assent of the Council 
and after the ECSC Consultative Com­
mittee has been consulted, in all cases not 
provided for by the Treaty in which such 
a decision or recommendation appears 
necessary in order to attain, within the 
common market in coal and steel and in 
accordance with Article 5, one of the 
objectives of the Community set out in 
Articles 2, 3 and 4. They provide that any 
decision or recommendation so made is 
to determine what penalties, if any, may 
be imposed. 
The Commission is thus competent, in 
the absence of any specific Treaty provi­
sion, to adopt any general or individual 
decision necessary for attainment of the 
objectives of the Treaty. The first and sec­
ond paragraphs of Article 95, which con­
fer that power upon it, do not give any 
specific indication of the scope of the 
decisions which the Commission may 
adopt. In those circumstances, it is for the 
Commission to assess in each case which 
of the two kinds of decision, general or 
individual, is the most appropriate to 
attainment of the objectives pursued. 
A general decision, such as the Steel Aid 
Code, is only intended to authorize gen­
erally, and subject to certain conditions, 
derogations from the prohibition of aid 
for certain categories of aid which it lists 
exhaustively. Aid not falling into catego­
ries which the Code exempts from that 
prohibition therefore remains subject 
exclusively to Article 4(c). It follows that, 
where such aid nevertheless proves neces­
sary to attain the objectives of the Treaty, 
the Commission is empowered to rely on 
Article 95 of the Treaty in order to deal 
with that unforeseen situation, if need be 
by means of an individual decision. 
3. There is no justification for economic 
operators having any legitimate expecta­
tion that an existing situation which is 
capable of being altered by the Commu­
nity institutions in the exercise of their 
discretionary power will be maintained. 
That is particularly so in a sphere such as 
that of the common market in steel, the 
proper functioning of which involves the 
obvious need for constant adjustments to 
fluctuations in the economic situation. 
Moreover, since a prudent and discrimi­
nating trader must foresee the adoption 
of Community measures intended to deal 
with clear crisis situations, the principle 
of the protection of legitimate expecta­
tions cannot be relied upon. 
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SUMMARY — CASE T-243/94 
In that context, a steel undertaking of 
very substantial economic importance 
which participates on the ECSC Consul­
tative Committee should realize that an 
overriding need to adopt effective mea­
sures to safeguard the interests of the 
European steel industry may arise and 
that recourse to Article 95 of the Treaty 
may justify the adoption of ad hoc deci­
sions by the Commission, even though a 
Steel Aid Code is in force, since the 
decisions and the code pursue different 
objectives. 
4. In the context of implementation of the 
ECSC Treaty, the Commission considers 
in its discretion whether aid intended to 
accompany the restructuring measures in 
the steel industry is compatible with the 
fundamental principles of the Treaty. In 
view of the diversity of the objectives 
determined by the Treaty, the Commis­
sion's role consists in ensuring that those 
various objectives are reconciled at all 
times, exercising the discretion available 
to it in order to meet the requirements of 
the common interest. 
In that regard, the rationalization of the 
European steel industry through the 
restructuring of certain groups, the clo­
sure of obsolete or uncompetitive plant, 
the reduction of excess capacity, privati­
zation of a group in order to ensure its 
viability and, within reasonable limits, the 
shedding of jobs, contribute to attainment 
of the objectives of the Treaty, having 
regard to the sensitive nature of the steel 
industry and the fact that continuation, or 
indeed aggravation, of the crisis is liable 
to give rise to extremely serious and 
enduring disturbances of the economies 
of the Member States concerned. It fol­
lows that Commission decisions autho­
rizing the grant of State aid for the pur­
poses of such rationalization are intended 
to safeguard the common interest, in 
accordance with the objectives of the 
Treaty. 
However, the Commission would under 
no circumstances be entitled to authorize 
the granting of State aid which was not 
necessary to attain the objectives of the 
Treaty and would be likely to give rise to 
distortions of competition on the com­
mon market in steel. 
Since the exercise of the Commission's 
discretion in relation to State aid involves 
complex economic and technical assess­
ments, the Court's review of the legality 
of decisions adopted under the first para­
graph of Article 33 of the ECSC Treaty 
must be limited to verifying that the facts 
are materially accurate and that there has 
been no manifest error of assessment. 
Moreover, for those decisions, adopted in 
relation to a steel market characterized by 
excess production capacity, to be 
regarded as in conformity with the prin­
ciple of proportionality, it is necessary to 
verify whether they require the benefi­
ciary undertakings to make appropriate 
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BRITISH STEEL v COMMISSION 
closures and reductions of capacity as a 
counterpart to the aid authorized. 
To that end, no exact quantitative ratio 
has to be established between the amount 
of the aid and the size of the required 
cuts in production capacity. On the con­
trary, the factors which are liable to influ­
ence the exact amounts of the aid to be 
authorized do not consist simply in the 
number of tonnes of production capacity 
having to be cut; there are other factors, 
too, which vary from one region of the 
Community to another, such as the 
restructuring effort made, the regional 
and social problems occasioned by the 
crisis in the steel industry, technical 
change and the adaptation of undertak­
ings to suit market requirements. It fol­
lows that the Commission's assessment 
cannot be subjected to a review based 
solely on economic criteria. The Com­
mission may legitimately take account of 
a wide variety of political, economic and 
social considerations in exercising its dis­
cretion under Article 95 of the Treaty. 
5. Although any aid to the steel industry is 
likely to favour one undertaking in rela­
tion to another, the Commission cannot 
approve aid the grant of which may result 
in distortions of competition to an extent 
contrary to the common interest. Specifi­
cally, the Commission's obligation under 
Article 3 of the Treaty to act in the com­
mon interest does not mean that it must 
act in the interest of all those involved 
without exception, for its function does 
not entail an obligation to act only on 
condition that no interest is affected. On 
the other hand, when taking action it 
must weigh up the various interests, 
avoiding harmful consequences where the 
decision to be taken reasonably so per­
mits. The Commission may, in the gen­
eral interest, exercise its decision-making 
power according to the requirements of 
the situation, even to the detriment of 
certain individual interests. 
6. It is clear from the fourth indent of the 
second paragraph of Article 5 and the 
first paragraph of Article 15 of the Treaty, 
and from the general principles thereof 
that the Commission has an obligation to 
state reasons when adopting general or 
individual decisions, whatever the legal 
basis chosen for that purpose. 
The statement of reasons must be appro­
priate to the act at issue and must disclose 
in a clear and unequivocal fashion the 
reasoning followed by the institution 
which adopted the measure in question in 
such a way as to enable the persons con­
cerned to ascertain the reasons for the 
measure and to enable the Community 
judicature to carry out its review. It is not 
necessary for the reasoning to go into all 
the relevant facts and points of law. The 
act in question must be assessed with 
regard not only to its wording but also to 
its context and to all the legal rules gov­
erning the matter in question. Moreover, 
the statement of the reasons on which a 
measure is based must be appraised 
in relation, inter alia, to the interest 
which the addressees or other persons 
concerned by the measure for the 
I I -1891 
SUMMARY — CASE T-243/94 
purposes of the second paragraph of 
Article 33 of the ECSC Treaty may have 
in obtaining an explanation. Where there 
was close involvement in the procedure 
preparatory to the adoption of the deci­
sions, there is less need for an extremely 
detailed statement of reasons concerning 
the facts on which the contested decisions 
were based. 
7. Whilst Article 95 provides that a Com­
mission decision authorizing aid to the 
steel industry must be taken with the 
unanimous assent of the Council, it does 
not lay down the procedures under which 
the Commission must seek that assent: in 
particular, it does not state clearly 
whether the Commission must submit a 
draft decision to the Council. 
II - 1892