Judgment — ECLI:EU:T:1999:137
Date: 1999-07-07
Language of the case: German
Court formation: Fourth Chamber, Extended Composition
Based on: Treaty establishing the European Coal and Steel Community (1951)
Subject matter: State aids;Competition;Steel industry;ECSC matters
Concepts: Acts of the institutions;Limitation periods;Investments and financial aid;Principle of the protection of legitimate expectations;Principle of equality and non-discrimination
Procedure: Action for annulment - unfounded
Origin: Germany

Summary of the Judgment
1. Actions for annulment — Time-limits — Point from which time starts to run — Date
on which the measure came to the applicant's knowledge — Subsidiary criterion —
Date of publication
(ECSC Treaty, Art. 33, third para.)
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2. ECSC — Steel aid — Commission authorisation possible — General decisions and
individual decisions •— Adoption of individual decisions to authorise aid falling outside
the categories authorised by a general decision — Powers of the Commission
(ECSC Treaty, Arts 4(c) and 95; General Decision No 3855/91)
3. ECSC — Steel aid — Commission authorisation possible •—Conditions — Treaty
objectives to be reconciled — Discretion of the Commission — judicial review —
Limits
(ECSC Treaty, Arts 3, 4(c) and 95)
4. ECSC •— Steel aid — Aid granted without prior notification — Subsequent Commis­
sion decision declaring the aid compatible with the common market — Lawful —
Actions may be brought before the national courts
(ECSC Treaty, Arts 4(c) and 95)
5. Community law — Principles •—· Equal treatment — Discrimination — Meaning
6. Acts of the institutions — Choice of legal basis — Criteria— Article 95 of the ECSC
Treaty — Scope
(ECSC Treaty, Art. 95; EC Treaty, Art. 235 (now Art. 308 EC))
7. Community law — Principles— Protection of legitimate expectations — Limits —
Predicated upon traders being prudent and discriminating
8. ECSC — Steel aid —· Commission authorisation possible — Conditions — Obser­
vance of the principle of proportionality •—• Whether the Commission is required to
impose capacity reductions — No such obligation •—• Political, economic and social
considerations may be taken into account
(ECSC Treaty, Arts 5 and 95, first para.)
9. Acts of the institutions — Statement of reasons— Obligation — Scope — ECSC
Decision
(ECSC Treaty, Arts 5, 15 and 33, second para.)
1. In the absence of publication or noti­
fication, it is for the party which has
knowledge of a measure concerning it
to request the whole text thereof within
a reasonable period; subject to that,
however, time for the purposes of
bringing an action can start to run only
from the moment when the third party
concerned acquires precise knowledge
of the content of the measure in
question and of the reasons on which
it is based, in such a way as to enable it
to exercise its right of action.
However, the criterion of the date
when a measure came to the knowl­
edge of an applicant, as the starting
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point of the period prescribed for
instituting proceedings, is subsidiary
to the criteria of publication or notifi­
cation of the measure.
2. The Fifth Community Code governing
aid to the steel industry constitutes an
exhaustive and binding legal frame­
work only for the types of aid which it
lists and which it deems compatible
with the ECSC Treaty. In the case of
aid within the exempted categories
which it defines, it establishes a com­
prehensive system intended to ensure
uniform treatment governed by a single
procedure. This system is thus binding
on the Commission only when it must
determine whether aid covered by the
Code is compatible with the Treaty.
Consequently, it cannot authorise such
aid by an individual decision which
runs counter to the general rules estab­
lished by that Code.
Conversely, aid not falling within the
categories exempted from the prohibi­
tion by the provisions of the Code may
qualify for an individual derogation if
the Commission considers, in the exer­
cise of its discretion under Article 95 of
the Treaty, that such aid is necessary to
attain the objectives of the Treaty. The
Fifth Code cannot be intended to
prohibit aid which does not fall into
any of the categories which it lists
exhaustively.
3. Article 4(c) of the ECSC Treaty prohi­
bits in principle State aid in so far as it
is liable to compromise attainment of
the Community's primary objectives
laid down in the Treaty, particularly
the establishment of conditions of free
competition.
However, Article 4(c) does not prevent
the Commission from authorising, by
way of derogation, aid contemplated
by the Member States and compatible
with the objectives of the Treaty, on the
basis of the first and second paragraphs
of Article 95, with a view to dealing
with unforeseen situations. The Com­
mission is empowered to take all mea­
sures necessary to attain the objectives
of the Treaty and, accordingly, under
the procedure thereby established, to
authorise such aid as it may consider
necessary in order to attain those
objectives. The criterion of need is
satisfied in particular where the sector
concerned is in a state of exceptional
crisis. In that connection, there is a
close link, for the purposes of imple­
menting the Treaty, in times of crisis,
between the granting of aid to the steel
industry and the restructuring which
that industry is required to undertake.
In the context of that implementation,
the Commission determines at its dis­
cretion whether aid to accompany
restructuring measures is compatible
with the fundamental principles of the
Treaty. In its review of legality in such
matters, the Court must confine itself
to determining whether the Commis­
sion has exceeded the scope of its
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discretion by a distortion or manifest
error of assessment of the facts or by
misuse of powers or abuse of process.
In view of the diversity of the objectives
set by the Treaty, the Commission's
role consists in ensuring at all times
that those various objectives are recon­
ciled, by exercising its discretion, in
order to meet the requirements of the
common interest. If the Commission
detects any conflict between the var­
ious objectives considered individually,
it must grant such priority to one or
other of the objectives laid down in
Article 3 of the Treaty as appears
necessary having regard to the eco­
nomic facts and circumstances in the
light of which it adopted its decision.
Where an undertaking is privatised in
order to ensure its viability, and jobs
are shed, within reasonable limits, this
contributes to attainment of the objec­
tives of the Treaty, given the sensitive
nature of the steel industry and the fact
that any worsening of the crisis could
lead to extremely serious and long-term
problems for the economy of the
Member State concerned.
4. Lack of prior notification of State aid
within the Coal and Steel Community
is not sufficient to excuse or even to
prevent the Commission from taking
action on the basis of Article 95 and,
where appropriate, declaring the aid
compatible with the common market.
Where the Commission has found that
the aid for the restructuring of a steel
undertaking was necessary for the
proper functioning of the common
market and that it did not give rise to
unacceptable distortion of competition,
the fact that notification has not been
made does not affect the legality of the
contested decision, whether as a whole
or solely in so far as the non-notified
aid is concerned.
Furthermore, if the Commission adopts
that position, individuals affected by
the advance payment of the aid are not
thereby prevented from claiming before
the national courts that the measures
implementing the unlawful aid are
illegal or from seeking compensation
for any damage suffered, even if the aid
has subsequently been declared com­
patible with the common market.
5. For the Commission to be accused of
discrimination, it must be shown to
have treated like cases differently,
thereby subjecting some traders to
disadvantages as opposed to others,
without such differentiation being jus­
tified by the existence of substantial
objective differences.
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6. The choice of the legal basis for a
measure may not depend simply on an
institution's conviction as to the objec­
tive pursued but must be based on
objective factors which are amenable
to judicial review. Those factors
include, in particular, the aim and
content of the measure.
The use, by way of a 'last resort', of
Article 95 of the ECSC Treaty (equiva­
lent to Article 235 of the EC Treaty,
now Article 308 EC) as the legal basis
for a measure is justified only where no
other provision of the Treaty gives the
Community institutions the necessary
power to adopt the measure in ques­
tion.
7. Whilst the principle of the protection
of legitimate expectations is one of the
fundamental principles of the Commu­
nity, traders cannot have a legitimate
expectation that an existing situation
which is capable of being altered by the
Community institutions in the exercise
of their discretionary power will be
maintained.
The proper functioning of the common
market in steel clearly requires con­
stant adjustments to fluctuations in the
economic situation and economic
operators cannot claim a vested right
to the maintenance of the legal situa­
tion existing at a given time. Moreover,
where it is possible for prudent and
discriminating traders to foresee the
adoption of specific measures intended
to deal with clear crisis situations, the
principle of the protection of legitimate
expectations cannot be relied upon.
8. According to the first paragraph of
Article 95 of the Treaty, decisions
adopted by the Commission to deal
with cases not provided for in the
Treaty must conform with Article 5 of
the Treaty, according to which the
Commission is to carry out its task
'with a limited measure of interven­
tion'. The latter provision must be
interpreted as embodying the principle
of proportionality.
In matters of State aid, the principle of
proportionality does not require a
quantitative relationship to be estab­
lished between the amount of aid
granted and the size of the capacity
reductions required. Nor does it dictate
that capacity reductions are the only
measures possible and sufficient to
counterbalance the authorisation of
aid. Where the Commission believes
that a capacity reduction is not possible
or would not best serve the objectives
pursued, it may always impose other
counterpart measures, such as produc­
tion and sales restrictions, provided
that they serve to minimise the impact
of the aid on competition. The Com­
mission's assessment cannot be
reviewed solely by reference to eco-
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SUMMARY— CASE T-106/96
nomie criteria. The Commission may
legitimately take account of a wide
variety of political, economic and
social considerations in the exercise of
its discretion under Article 95 of the
Treaty.
9. The statement of reasons must be
appropriate to the act at issue and
must disclose in a clear and unequi­
vocal fashion the reasoning followed
by the institution which adopted the
measure in question in such a way as to
enable the persons concerned to ascer­
tain the reasons for the measure and to
enable the Community judicature to
review it. It is not necessary, however,
for the reasoning to go into all the
relevant facts and points of law. The
statement of reasons must be assessed
with regard not only to its wording but
also to its context and to all the legal
rules governing the matter in question.
It must also be appraised in relation to
the interest which the addressees — or
other persons concerned by the mea­
sure for the purposes of the second
paragraph of Article 33 of the ECSC
Treaty ·—• may have in obtaining an
explanation. Furthermore, the greater
the degree to which, through its repre­
sentative on the Consultative Commit­
tee, the undertaking concerned played
an active role in the procedure prior to
the adoption of the contested decision,
and was aware of the factual and legal
considerations which led the Commis­
sion to consider the aid to be compa­
tible with the common market, the
more feeble the foundation of a com­
plaint that the statement of reasons was
inadequate.
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