61988CC0363_EN
Opinion of the Advocate-General
Opinion of the Advocate-General
++++
Mr President,
Members of the Court,
1. Joined Cases C-363 and C-364/88, now before the Court, both concern proceedings for damages under the second paragraph of Article 34 and the first paragraph of Article 40 of the ECSC Treaty. The Società Finanziaria Siderurgica Finsider SpA and Italsider SpA, the applicants in Case C-363/88 (hereinafter referred to as "Finsider-Italsider") and the Società Acciaierie e Ferriere Lombarde Falck SpA, the applicant in Case C-364/88 (hereinafter referred to as "Falck", claim that, by refusing to adopt, for 1984 and 1985, the measures provided for in Article 15B(4) and (5) of Commission Decision No 234/84/ECSC (1) and, for 1986, the measures provided for in Article 15B(4) of Commission Decision No 3485/85/ECSC, (2) with a view to correcting the imbalance in traditional patterns of trade, the Commission was guilty of a wrongful omission. In addition the applicants claim that, by granting to a number of undertakings in the steel industry in other Member States, under the second subparagraph of Article 10(1) of the said decisions, additional quotas for products intended for the production of small welded tubes without having regard to the principle embodied in the said Article 15B of conformity with traditional patterns of trade, the Commission committed an wrongful act. The consequence of these additional quotas was to accentuate still further the imbalance established in traditional patterns. The applicants are demanding from the Commission redress for the injury they claim to have suffered as a result of the said wrongful conduct and of the consequent reduction of their deliveries of steel products in categories Ia, Ib and II on the Italian market during 1984, 1985 and 1986.
1. The factual and legal background
1.1 Article 15B of Commission Decision No 234/84/ECSC and the refusal to apply it for 1984
2. The purpose of the measures in question was to ensure, during the most critical period of the crisis in the iron and steel industry, the restructuring of the industry within a competitive context compatible with the solidarity imposed by the production quota system. (3) With that object Article 15B of Commission Decision No 234/84 of 31 January 1984 provided as follows:
"1. A Member State may submit a complaint to the Commission if it establishes, with regard to categories Ia, Ib, II and III, that deliveries of products in one of these categories have been altered during a quarter to a significant extent compared with traditional deliveries.
2. A complaint as referred to in paragraph 1 must be submitted not later than eight weeks following the end of the quarter in question.
3. The Commission shall examine whether such a complaint is justified, on the basis of the monthly statistics sent by the Member States pursuant to Decision No 3717/83/ECSC. When making its assessment it shall take account of all the circumstances pertaining to the case in question.
4. It shall consult the Member States concerned if it considers that the complaint is justified. In this event, it shall request the undertakings in question to give a commitment in writing that, during the following quarter, they will correct the imbalance in their traditional deliveries.
5. If an undertaking does not give such a commitment, or if the commitment is not honoured, the Commission may reduce the part of the undertaking' s quota which may be delivered in the common market for the following quarter by a quantity not exceeding that which caused the imbalance in traditional deliveries.
6. The Commission shall inform the Member States concerned of the action taken on the complaint."
3. The European Independent Steelwork Association (EISA) brought before the Court on 20 February 1984 an application for a declaration that that article was void on the ground that it was incompatible with the principles of the common market in steel products and in particular with the principle of free movement of steel products and with the principle of the abolition of measures causing discrimination between producers, purchasers or consumers or interfering with the freedom of purchasers to choose suppliers. At the same time EISA also made an application for the suspension of the operation of Article 15B.
Although the Commission took the view that the said Article 15B and the principle of conformity with traditional patterns of trade laid down therein were compatible with the ECSC Treaty, (4) it recognized that the article should be very restrictively interpreted. During the interlocutory proceedings the Commission therefore undertook to apply Article 15B only according to the following conditions:
"(a) First, Article 15B will not be applied simply because an alteration in traditional deliveries has been observed; it will only be applied where the change in traditional deliveries may be ascribed to the action of undertakings engaging in practices which are contrary to Community law;
(b) secondly, the mere fact that the undertaking concerned is in receipt of aid authorized by the Commission may not give rise to a quota reduction pursuant to Article 15B;
(c) thirdly, if the Commission' s inquiry reveals infringements of other provisions of Community law such as those on prices, quotas, competition or State aid, it will first of all apply the sanctions provided for those infringements". (5)
4. By order of 28 March 1984, the Court dismissed EISA' s application for the suspension of the operation of Article 15B. (6) Two points may be noticed from the statement of the reasons on which the Court' s decision was based. First, they show that the Court had some doubts as to the compatibility of Article 15B with Article 58 of the ECSC Treaty:
"Since the procedure provided for in Article 15B will be used against undertakings which have altered their deliveries to a significant extent compared with traditional deliveries, it cannot as first sight be excluded that Article 15B may be directed towards objectives other than those permitted by Article 58 of the Treaty, inasmuch as it conduces to the establishment of quantitative restrictions on trade between Member States in some steel products". (7)
Secondly it appeared from the order that the Court had taken note of the said commitment by the Commission to interpret Article 15B restrictively and that it was relying on that commitment in refusing EISA' s application for the suspension of the operation of Article 15B on the ground that:
"... those assurances remove the threat with which the undertakings were confronted and which could have justified the urgent measures requested by the applicant". (8)
After that order EISA did not in fact proceed with its application for a declaration that the article was void, so that the Court did not have occasion to give judgment on the compatibility of Article 15B with the ECSC Treaty. In any event the Court' s order seems to have confirmed the Commission' s view that it should confine itself to a restrictive interpretation of Article 15B and even its view that otherwise the validity of Article 15B would otherwise be at risk.
5. After establishing that deliveries of steel products in categories Ia, Ib and II had been substantially altered in comparison with traditional deliveries, the Italian Government, by letters of 5 June, 3 August and 30 November 1984 and 25 February 1985 relating to the first, second, third and fourth quarters of 1984 respectively, submitted a complaint to the Commission in pursuance of the said Article 15B of Commission Decision No 234/84. It asked the Commission to take the measures provided for in Article 15B to correct the imbalance established in the traditional patterns of trade. (9) In a letter of 11 March 1985, the Italian authorities repeated that request on the basis of data relating to the whole year 1984.
The Commission in no way challenged the accuracy of the data supplied by the Italian authorities as to the imbalance in the traditional patterns of trade but on the contrary stated that these data were confirmed by its own calculations. (10) Nevertheless, it did not decide to take the measures envisaged in Article 15B of Decision No 234/84. It did however in March 1985 initiate procedures against the producers responsible for the imbalance in the traditional patterns of trade for infringement of the pricing rules for iron and steel products and on 27 September 1985 it imposed fines on six producers for infringement of those rules. That approach by the Commission was clearly in accordance with the restrictive interpretation of Article 15B which it had advocated before the Court in Case 45/84R EISA v Commission (see in particular subparagraph (c) of the passage set out in section 3) and of which the Court had taken note in its order in that case (see section 4 above).
6. In view of this refusal by the Commission to take the measures provided for in Article 15B with regard to the imbalance in the traditional patterns of trade established in 1984, Assider, the Italian steel industry federation, and the Italian Government, on 31 May and 12 July 1985 respectively, brought an action before the Court under the third paragraph of Article 35 of the ECSC Treaty for a declaration that the implied decision of refusal was void.
The Court gave judgment in that case on 9 April 1987. (11) In view of the fact that the Commission had acknowledged the imbalance in the traditional patterns of trade of which the Italian Government complained, Commission, the Court declared that the Commission was required by the provisions of Article 15B(4) to request the undertakings concerned to give a commitment in writing that they would correct the imbalance during the following quarter. (12) The Commission' s refusal to apply Article 15B(4) was therefore illegal and the Court declared the implied decision of refusal void. Hence the Court rejected the restrictive interpretation which the Commission had thought it should give to Article 15B of Decision No 234/84 and on which the Court based its order in Case 45/84R rejecting the urgent interim measures applied for. In fact, in its judgment in Joined Cases 167 and 212/85 the Court expressly rejected the Commission' s arguments to the effect that the outcome of the procedures for infringement of the pricing rules (initiated in March 1985 and terminated by the imposition of fines in September 1985) ought to be known before it could apply Article 15B(4). (13) In that judgment the Court did not deal with the question whether, as regards the imbalance in the traditional patterns of trade established in 1984, the failure to apply Article 15B(5) of Decision No 234/84 was also illegal. (14)
1.2 The implied refusal to apply Article 15B of Decision No 234/84 and of Decision No 3485/85 for 1985 and 1986 respectively
7. As emerged clearly from the data supplied by the Italian authorities to the Commission (15) and as was substantially confirmed by the Commission, (16) deliveries on the Italian market of steel products in categories Ia, Ib and II by the steel undertakings of other Member States were altered to a significant extent in comparison with traditional deliveries. (17) The Italian authorities therefore repeatedly requested the Commission to apply the said Article 15B of Decision No 234/84 and, after 1 January 1986, Article 15B of Decision No 3485/85 which replaced it. The latter Article 15B was identical to the Article 15B previously quoted with the exception of paragraph 5, which had been deleted in Decision No 3485/85/ECSC because, at the end of 1985, the Council and the Commission took the view that the iron and steel industry had already seen the worst of the crisis and that the power conferred by the said paragraph 5 to reduce quotas was no longer justified. Moreover, in view of the improvement in the situation of the European steel industry, Article 15B of Decision No 3485/85 was repealed in its entirety as from 1 January 1987. (18)
In spite of these repeated requests by the Italian Government, the Commission also refused to take for 1985 and 1986 the measures provided for in Article 15B of the abovementioned decisions. It should be stated here that the investigation previously mentioned with regard to the results of the fines imposed in September 1985 for infringement of the pricing rules was still in progress in December 1986, (19) so that at that time the Commission was still under the impression - the Court' s judgment in Joined Cases 167 and 212/85 (see section 6 above) was not delivered until 9 April 1987 - that, in view of the need to interpret Article 15B restrictively, it could not have recourse to the powers conferred on it by Article 15B(4) (or, for 1985, to those conferred on it by Article 15B(5)).
1.3 The second subparagraph of Article 10(1) of Commission Decisions Nos 234/84 and 3485/85 and the granting of additional delivery quotas during the period from 1984 to 1986
8. The Commission not only refused to take the measures provided for in Article 15B of the abovementioned decisions to correct the imbalance in traditional patterns of trade. During the period from 1984 to 1986 it is alleged even to have encouraged the imbalance in the traditional patterns by granting to steel undertakings in other Member States under the second subparagraph of Article 10(1) of Decision No 234/84 or Decision No 3485/85 (whose wording is identical), additional delivery quotas for products intended for the production of small welded tubes, that is, a sub-category of category Ia.
Article 10(1) of the abovementioned decisions laid down, for products intended for the production of small welded tubes within the quota system, a special semi-liberal scheme under which:
"1. With regard to category Ia products which are used in the form of hot-rolled products for the production of welded tubes in the Community, with a diameter not larger than 406.4 mm, undertakings shall be authorized to increase their quotas and parts of quotas which may be delivered in the common market by an amount up to 5 000 tonnes per quarter or up to 30% of the quantity of these products contained in the parts of quotas which may be delivered in the common market. ... The undertaking may make this increase only on condition that, no later than the month following the quarter in question, it provides proof that the relevant deliveries have been used for the intended purposes.
On a duly substantiated request by an undertaking, the Commission may adjust the quotas and parts of quotas which may be delivered in the common market by a larger amount. The Commission may make the granting of such an adjustment conditional on the production by the undertaking concerned, at the latter' s expense, of a report drawn up by a firm of auditors certifying receipt of the undertakings' semi-finished products by the tube-manufacturing client or clients and their actual use for the production in question."
9. The question raised by Article 10(1), which has given rise to considerable differences of opinion between the Commission on the one hand and certain Member States and steel undertakings on the other, is whether Article 15B, which has been discussed above, and the principle of conformity with traditional patterns of trade embodied therein, applied also to the products intended for the production of small welded tubes, referred to in Article 10(1).
As may be seen from the annexes to its defences, (20) the Commission' s view was that that question should be answered in the affirmative. Its opinion was that the said principle did apply to products intended for the production of small welded tubes, a view which may be found inter alia in a memorandum on the application of Article 10(1) (commonly called the "l2-point memorandum"), which the Commission sent to all interested parties in December 1984 stating inter alia as follows:
"2. The semi-finished products form part of the traditional patterns of trade within category Ia. The increase in deliveries to tube-manufacturers which might result in an overstepping of the traditional patterns must be corrected by a corresponding reduction in deliveries to other category Ia consumers in the same country.
4. Steel undertakings must submit to the Commission, in the middle of the quarter, the contracts finally concluded, with deliveries broken down by country.
5. If the total deliveries resulting from the contracts exceeds the estimated demand for semi-finished products for small welded tubes on a given market the Commission will call a meeting with the producers to discuss the market situation and the traditional patterns of trade.
6. The Commission will allot to undertakings additional quotas exceeding 30% but will ask the undertakings concerned not to exceed traditional patterns by a significant extent ...
7. Where a steel producer cannot entirely correct the increase in deliveries to tube-manufacturers by a reduction in deliveries to other consumers on the market in question during the same quarter he may, by way of exception, effect the remaining correction during the following quarter.
12. With a view to achieving the aims set out in Recital 9 in the statement of the reasons on which Decision No 234/84/ECSC is based, any undertaking not complying with the rules set out above will be refused additional quotas for small welded tubes in excess of the 30% referred to in point 6. ...
The scheme set out above will apply as from the first quarter of 1985. The Commission will abolish the scheme as soon as market order has been restored." (21)
However, the Benelux Member States in particular and their steel industries have never accepted that the principle of conformity with traditional patterns of trade should be applied, as advocated in that memorandum, to products intended for the production of small welded tubes. They therefore refused to provide the Commission with the information mentioned in point 4 or to take part in the meetings envisaged in point 5.
10. It may be seen from the annexes to the defences that the Commission had in fact informed the steel undertakings at the time that Article 15B was also applicable to products intended for the production of small welded tubes. It thought therefore that the steel undertakings ought to offset an increase in the deliveries to the tube-manufacturers, which might create an imbalance in traditional patterns of trade, by a corresponding reduction in deliveries to other purchasers, in the same Member State, of products in category Ia (that is, the category to which products intended for the production of small welded tubes belonged). (22) However, the opposition of the Member States and undertakings referred to, without whose active participation the application of Article 15B as advocated in the memorandum was impossible - certainly after the Court' s order of 28 March 1984 in Case 37/84R - (23) dissuaded the Commission from insisting on conformity with the traditional patterns of trade. (24) As the applicants complain, the Commission, during the period from 1984 to 1986, therefore granted to undertakings additional quotas products intended for the production of small welded tubes without ensuring conformity with traditional patterns of trade, which, according to the applicants, considerably aggravated the imbalance in the said traditional patterns.
1.4 The claim for compensation
11. After the judgment in Joined Cases 167 and 212/85 Assider in which the Court declared void the implied decision refusing to apply Article 15B(4) of Decision No 234/84 for the year 1984 (see section 6 above) Assider and its members Finsider-Italsider and Falck, by letters of 29 May and 30 July 1987, informed the Commission of the amount of the injury they had suffered as a result of the failure to apply Article 15B for the years 1984, 1985 and 1986. They asked the Commission, in pursuance of the first paragraph of Article 34 of the ECSC Treaty, to take steps to ensure, by the payment of damages, equitable redress for the harm resulting directly from the failure to apply Article 15B. By letters of 8 July, 7 November, 30 October and 10 November 1987, the Italian Government put forward through administrative channels a similar claim for damages. It should be stated that at that time the Commission was no longer in a position to use the power conferred on it by Article 15B(5) to reduce quotas, since that paragraph had already been deleted as from 1 January 1986 and, moreover, the remainder of the article had also ceased to apply as from 1 January 1987.
Following these claims, the Commission and representatives of the Italian Government met on two occasions at the beginning of 1988, but did not reach agreement on redress for the harm suffered by the Italian steel undertakings. The Commission refused to admit any liability and, as a sign of good will, merely suggested granting the applicants additional quotas for steel products in category Ia and, in particular, for products intended for the production of small welded tubes, that is, the products in respect of which the traditional patterns of trade showed the most serious imbalance. However, the Italian Government rejected that suggestion, taking the view that it lacked substance and furthermore related only to products intended for the production of small welded tubes.
In response to the Commission' s clear refusal to redress the harm they had suffered, Finsider-Italsider (in Case C-363/88) and Falck (in Case C-364/88) instituted these proceedings for damages before the Court under the second paragraph of Article 34 and the first paragraph of Article 40 of the ECSC Treaty.
12. In the following sections I shall consider first the legal basis of the proceedings for damages (below, sections 13 to 21) and secondly the question whether, in these cases, the conditions for liability on the part of the Community are met (below, sections 22 to 35).
2. The legal basis and admissibility of the actions
2.1 Imprecise nature of the legal basis for the applicants' action for damages
13. As has already been mentioned, these actions for damages are based on the second paragraph of Article 34 and the first paragraph of Article 40 of the ECSC Treaty. The second paragraph of Article 34 provides:
"If the High Authority fails to take within a reasonable time the necessary steps to comply with the judgment, proceedings for damages may be instituted before the Court",
and the first paragraph of Article 40 provides:
"Without prejudice to the first paragraph of Article 34, the Court shall have jurisdiction to order pecuniary reparation from the Community, on application by the injured party, to make good any injury caused in carrying out this Treaty by a wrongful act or omission on the part of the Community in the performance of its functions".
In its defences the Commission observes, not entirely incorrectly, that in their applications the applicants have not given a sufficiently precise indication of the legal basis for their actions for damages, but it does not raise an objection of inadmissibility on that account. It may however be seen clearly from the applicants' replies that their actions are based on the second paragraph of Article 34, in so far as they concern redress for the harm caused by the implied decision of refusal, declared void by the judgment in Joined Cases 167 and 212/85, to adopt for 1984 the measure provided for in Article 15B(4) of Decision No 234/84, whereas the same actions are based on the first paragraph of Article 40 in so far as they concern making good the injury caused by the other wrongful acts or omissions with which the Commission is charged. In this case that involves in particular the injury caused by: (a) the refusal to adopt the measure envisaged in Article 15B(4) of Decisions Nos 234/84 and 3485/85 for 1985 and 1986; (b) the refusal to adopt the measures provided for in Article 15B(5) of Decision No 234/84 for 1984 and 1985; and (c) the granting to other steel undertakings, during the period 1984 to 1985 of additional quotas for products intended for the production of small welded tubes on the basis of the second subparagraph of Article 10(1) of Decisions Nos 234/84 and 3485/85.
14. In the legal basis relied on by the applicants as far as the second paragraph of Article 34 of the ECSC Treaty is concerned it is possible to note a further lack of precision arising from the wording of that article. I shall mention it briefly as it gives me the opportunity to explain the provisions of Article 34.
In the second paragraph of Article 34, and there only, reference is made to the possibility of instituting proceedings for damages before the Court. It may be seen, however, from the wording of the first paragraph of Article 34 that those proceedings for damages must be preceded by a procedure requiring the Commission to take the necessary steps to comply with a prior judgment of the Court declaring a decision or recommendation void (first and second sentences of the paragraph).
One of those steps consists where necessary in the payment of appropriate damages to ensure equitable redress for the harm resulting directly from the decision or recommendation declared void by the Court (second part of the third sentence). That last step must however be preceded by a finding by the Court of a fault "of such a nature as to render the Community liable" towards an undertaking or group of undertakings which, as a result of the decision or recommendation declared void, has suffered "direct and special harm" (first part of the third sentence). After such a finding by the Court, the Commission, according to the second paragraph of Article 34, has "a reasonable time" for taking, as I have said, to take the necessary steps to comply with the decision that the measure is void, and only when such a period has expired may proceedings for damages be instituted should the Commission fail to act.
This somewhat complicated procedure is clearly inspired by the concern to maintain a balance between the powers of the Community institution whose act has been declared void and the rights of the undertakings injured. It may be seen from the description of this procedure that there is between a judgment by the Court declaring a measure void and proceedings for damages before the Court an independent right of action with a view to a finding by the Court of a fault of such a nature as to render the Community liable and, where appropriate, of the existence of direct and special harm suffered by the undertakings. (25) As will appear subsequently, the procedure to which the applicants have had recourse is, for a number of the measures which they are contesting, at the intermediate stage described in the first paragraph of Article 34. My view is, however, that it is not possible to deduce a ground for inadmissibility (which in any case the Commission is not doing) from the fact that the applicants are basing their action on the second paragraph of Article 34, which mentions the final stage of the action for damages, and not also on the first paragraph. In fact the written and oral observations submitted to the Court by the applicants and in particular the broad definition of the operative part of their applications have made it sufficiently apparent that their actions for damages include all the stages laid down in Article 34 and that the express reference to the second paragraph of that article (only) is due to the drafting of that article, in view of the fact that it is only there that there is a reference to "proceedings for damages".
2.2 Legal basis for the action for damages where a Community measure is declared void (Article 34 of the ECSC Treaty)
15. According to the applicants, the grounds on which they rely in claiming redress, set out above at the end of section 13, are based in law on Article 34 or the first paragraph of Article 40 of the ECSC Treaty.
The Commission rightly claims, by reference to the drafting, which is clear on this point, of both paragraphs of Article 34, that the actions brought by the applicants under Article 34 are admissible only in so far as the harm results from a decision or recommendation, or from an implied decision of refusal, which has been declared void in pursuance of Article 33 or, as the case may be, Article 35 of the ECSC Treaty. That point was moreover confirmed by the Court in the judgment in Joined Cases 81 and 119/85 Usinor. (26) It must be further observed that, as may be seen from the opening words of the first paragraph of Article 40 of the ECSC Treaty, redress for the harm resulting from a decision or recommendation (or from an implied decision of refusal) declared void by the Court may be claimed only under Article 34.
That is undoubtedly the position with regard to the Commission' s implied refusal to apply Article 15B(4) of Decision No 234/84 with regard to the imbalance in the traditional patterns of trade established for 1984. That refusal was declared void by the Court in the Assider judgment previously mentioned. (27) That means, according to Article 34, that an action for damages may be brought only where the Court has found that the implied decision of refusal which has been declared void involves a fault of such a nature as to render the Community liable and that the harm suffered is direct and special and after the Court has so found and provided that, after that finding, a reasonable time has elapsed during which the Commission has had the opportunity to take the necessary steps to make good the harm suffered as a result of the refusal which has been declared void.
In view of the fact that the Court has not so far made such a finding and that the reasonable time available to the Commission has not yet started to run, the claim relating to the finding and acknowledgment of injury with regard to this decision of refusal (which has been declared void) is premature. (28) In my view that does not mean, as I have already said in the previous section, that the Court is not already seised of the actions brought by the applicants so as to give judgment in this case on the question whether the decision of refusal which has been declared void involves on the Commission' s part a fault rendering the Community liable and one which has caused the applicants direct and special harm (see, on this subject, sections 26, 31 and 32 to 34).
2.3 Legal basis for the action for damages relating to Community measures with the same content as a measure declared void
16. The question arises whether the same view must be taken with regard to the applicants' actions in so far as they claim redress for the harm resulting from the Commission 's implied refusal to apply, for 1985 and 1986, Article 15B(4) of Decision No 234/84 and of Decision No 3485/85 respectively although the Court did not declare that refusal void.
A similar question arose in the judgment of the Court of First Instance in Case T-120/89 Peine-Salzgitter. (29) Referring to the judgment of the Court in Joined Cases 97, 193, 99 and 215/86, (30) the Court of First Instance took the view that, for the purposes of the application of Article 34 of the ECSC Treaty, express or implied measures having substantially the same content as a measure declared void and adopted between the date on which the decision declared void came into force (with retroactive effect) and the judgment declaring it void should be assimilated to the measure declared void. In fact the Court of First Instance took the view that the solution adopted by the Court in the Asteris judgment for the purposes of the application of Article 176 of the EEC Treaty should be valid also for the application of Article 34 of the ECSC Treaty in view of the fact that the two articles are drafted in similar terms.
17. It seems to me that the Peine-Salzgitter judgment of the Court of First Instance correctly applies the solution already adopted by the Court in the Asteris judgment and that the same solution must be applied in this case to the Commission' s implied refusal to apply Article 15B(4) of Decision No 234/84 and of Decision No 3485/85 with regard to the imbalance in traditional patterns of trade established for 1985 and 1986 respectively, which was essentially acknowledged by the Commission. (31) Article 15B(4), quoted in section 2, requires the Commission, if it justifiably takes the view that there is an imbalance in traditional patterns of trade, to consult the Member States concerned and to request the undertakings in question formally to give a commitment in writing that they will correct the imbalance during the following quarter. There is no indication that in this respect the Commission adopted, for 1985 and 1986, an attitude different from that adopted in 1984, a year for which the Court, in the Assider judgment had on 9 April 1987 declared void the Commission' implied decision refusing to apply Article 15B(4). With regard also to the refusals to apply that article for 1985 and 1986, which were not expressly declared void, it is appropriate for the Court to determine therefore in this case whether those refusals involved a fault on the part of the Commission and whether they caused the applicants direct and special harm within the meaning of the first paragraph of Article 34 of the ECSC Treaty.
I must, however, point out that the Commission, which has in the meantime entered an appeal against the judgment of the Court of First Instance in the Peine-Salzgitter case, is contesting the analogy drawn by that Court between Article 176 of the EEC Treaty, which was applied in the Asteris judgment, and Article 34 of the ECSC Treaty which is at issue in the Peine-Salzgitter judgment, and in this case too, on the grounds, inter alia, that that analogy is valid only for the second sentence of the first paragraph of Article 34 and not for the third sentence. This is not the place to go into that line of argument, the more so as I shall subsequently draw the conclusion that, even if the applicants cannot rely on Article 34 of the ECSC Treaty, they may still base their action for damages on the first paragraph of Article 40 of the ECSC Treaty. The Court has therefore in any case jurisdiction to consider, in this case, whether the Commission has committed a fault in connection with the failure to apply Article 15B(4) for 1985 and 1986.
2.4 Legal basis for the action for damages relating to Community measures not declared void (and not comparable to measures declared void) (first paragraph of Article 40 of the ECSC Treaty)
18. What is at issue here is the injury which the applicants claim was caused to them, on the one hand by the implied refusal to apply Article 15(5) of Decision No 234/84 conferring on the Commission the power to reduce delivery quotas as regards the imbalance in the traditional patterns of trade established in 1984 and 1985 and, on the other hand by the granting during the period from 1984 to 1986 of additional delivery quotas under the second subparagraph of Article 10(1) of Decisions Nos 234/84 and 3485/85 without regard to the principle of conformity with traditional patterns of trade. For the purpose of reparation for this injury the applicants rely on the first paragraph of Article 40 of the ECSC Treaty in view of the fact that this claim involves Commission decisions which the Court has not declared void and which in addition are not comparable to a decision which has been declared void.
With regard to the refusal to apply Article 15B(5), I should nevertheless like to state that this refusal is closely linked to the refusal to apply Article 15B(4), discussed above. In fact, by refusing to apply Article 15B(4) (that is, by not requesting the undertakings responsible for the imbalance in the traditional patterns of trade to give a commitment in writing to correct the imbalance), the Commission made it impossible even to consider the measures provided for in Article 15B(5) for the reduction of delivery quotas, regard being had to the condition laid down for the application of that provision (see section 2 for the text). Notwithstanding that close connection, it could not however be maintained that for the application of Article 34 a refusal to apply Article 15B(5) must be assimilated to a refusal (declared void or analogous to a refusal declared void) to apply Article 15B(4). According to the wording of that provision, the adoption of a measure under Article 15B(5) pre-supposes that the Commission possesses an independent power which, according to the Court in the Assider judgment, "gives the Commission a wide discretion". (32) It certainly cannot therefore be assumed that a decision to apply Article 15B(5) arises automatically out of a refusal relating to Article 15B(4).
19. In so far as the actions for damages brought by the applicants are based on the first paragraph of Article 40 of the ECSC Treaty, the question arises whether that article actually lends itself to such an action in relation to Commission decisions which have not been declared void (and which are not comparable to decisions declared void). In that respect the Commission contends that Article 34 of the ECSC Treaty deals exhaustively and restrictively with the Community' s extra-contractual liability under the ECSC Treaty where the cause of the harm results from a decision, a recommendation or an implied decision of refusal by the Commission and that an action for damages under the first paragraph of Article 40 is excluded in such cases. The applicants deny that.
Both the applicants and the Commission refer to case-law in seeking the Court' s support for their point of view. Nevertheless it seems to me that none of the judgments referred to by the parties (Vloeberghs, (33) Fives Lille Cail, (34) Meroni, (35) and Usinor (36)) settled the question of the "exclusive effect" of Article 34 of the ECSC Treaty. (37)
Contrary to the Commission, I think that an action for damages under the first paragraph of Article 40 may be brought to make good an injury which has been caused by a decision, recommendation or an implied decision of refusal not declared void by the Court. (38) Contrary to the Commission' s contention, the saving clause contained in the first paragraph of Article 40 regarding the provisions of the first paragraph of Article 34 relates solely to the harm caused by the measures declared void, which are mentioned therein. With regard to measures which have not been declared void (except for measures assimilated to those declared void) that saving clause does not apply and the provisions of the first paragraph of Article 40 - of which it may be stated that in ECSC matters it contains the common rules of law as regards liability of the Community (39) - is applicable in its entirety.
20. The restrictive interpretation of the possibility of proceedings envisaged in the first paragraph of Article 40 would moreover conflict with the fundamental requirement, consistently expressed in the Court' s case-law in various fields, of appropriate protection by the courts. (40) Moreover, such a restrictive interpretation would frequently have the effect of making impossible reparation for an injury caused by decisions or recommendations or by implied decisions. In fact, the time for making an application to have a measure declared void under Article 33 or, as the case may be, under Article 35 of the ECSC Treaty is very short (one month), whereas the harm arising from an act or omission will often not become apparent until after that brief period has passed. In addition there are circumstances in which an action to have a measure declared void makes little or no sense, because the decision concerned has already been fully implemented. Finally, undertakings and groups of undertakings may bring an application for a declaration that a general decision or recommendation or a failure to act is void only when, according to the second paragraph of Article 33, the measure concerned involves a misuse of powers affecting them.
The same tendency, designed to ensure adequate protection of the courts for those subject to the jurisdiction, may be seen in the Court' s case-law on the admissibility of an action for damages based on the second paragraph of Article 215 of the EEC Treaty, in which the Court indicates in particular that an action for damages is not in principle conditional upon a prior declaration that the act causing the damage is void. In its judgment in Case 175/84 Krohn v Commission [1986] ECR 753 relating to an illegal decision attributable to the Commission, against which Krohn had not brought an action for a declaration that it was void, the Court summarized its previous case-law as follows:
"As the Court has pointed out above, the action provided for by Article 178 and the second paragraph of Article 215 of the Treaty was introduced as an autonomous form of action with a particular purpose to fulfil. It differs from an action for annulment in particular in that its purpose is not to set aside a specific measure but to repair the damage caused by an institution". (41)
Thus the Court clearly declared admissible an action for the reparation of damage caused by a measure which had not been declared void. With regard to the first paragraph of Article 40 of the ECSC Treaty the Court also accepted as long ago as 14 July 1961 in the Vloeberghs judgment that an action for damages is an independent remedy. (42) It may therefore be assumed that the Court would also accept the admissibility of an action based on the first paragraph of Article 40 regarding damage caused by decisions, recommendations or implied refusals which have not been declared void.
21. That does not mean that there are no limits to the admissibility of an action for damages resulting from a measure which has not been declared void. It follows from the case-law of the Court relating to the second paragraph of Article 215 of the EEC Treaty, and more particularly from the Krohn judgment, previously cited, that an action for damages may not be diverted from its purpose and in particular cannot be used as a substitute for an action to have a measure declared void. That would be the position for example in a case in which:
"an application for compensation is brought for the payment of an amount precisely equal to the duty which the applicant was required to pay under an individual decision, so that the application seeks in fact the withdrawal of that individual decision. At all events, such considerations are foreign to this case". (43)
Such considerations are equally foreign to the case now before the Court.
In my view there is also one exception to the principle of the independence of the two remedies where the action for damages claims reparation for damage which the applicant who has suffered it may avoid if he brings a further action to have the measure declared void or even in the case of injury which he might have limited or avoided if he had at the proper time brought an action to have it declared void and cannot offer a valid excuse for having failed to do so. In fact such a failure to act is of such a nature as to break the causal link between the fault of the Community authority and the injury (or a portion of the injury).
3. Has the Commission committed a fault within the meaning of the first paragraph of Article 34 or a wrongful act or omission within the meaning of the first paragraph of Article 40 of the ECSC Treaty or both?
22. If the Court agrees with me and accepts the admissibility of the actions brought by the applicants, it will first need to consider whether in this case the Commission has committed a fault within the meaning of the first paragraph of Article 34, that is, "a fault of such a nature as to render the Community liable", or "a wrongful act or omission" within the meaning of the first paragraph of Article 40, or both.
More particularly the Court will need to consider whether the implied decision declared void as regards 1984 and the implied decisions assimilated to decisions declared void as regards 1985 and 1986, refusing to apply Article 15B(4) of Decision No 234/84 or Decision No 3485/85, represent on the Commission' s part a fault within the meaning of the first paragraph of Article 34 and whether the implied decision refusing to apply Article 15B(5) of Decision No 234/84 as regards 1984 and 1985 and the decision granting additional delivery quotas for products intended for the production of small welded tubes during the period from 1984 to 1986, based on Article 10(1) of Decisions Nos 234/84 and 3485/85 represent a wrongful act or omission on the part of the Commission within the meaning of the first paragraph of Article 40.
3.1 The concept of fault in the first paragraph of Article 34 and of wrongful act or omission in the first paragraph of Article 40 of the ECSC Treaty
23. Hitherto the Court has not made any decision as to the meaning of the concept of fault occurring in the first paragraph of Article 34. It is however clear that a declaration that a measure is void or the finding of a failure to act for one of the reasons mentioned in the provisions of Article 33, combined with those of Article 35, of the ECSC Treaty does not by itself involve the liability of the Community. In fact it is clear from the first paragraph of Article 34 that a declaration that a measure is void cannot give rise to damages except where the decision, recommendation or implied refusal declared void involves "a fault of such a nature as to render the Community liable". It is also clear that the concept of fault in the first paragraph of Article 34 and the concept of "wrongful act or omission on the part of the Community" in the first paragraph of Article 40 have the same meaning. (44) Moreover, there is nothing to indicate that the intention in the ECSC Treaty was to introduce two different concepts of fault. The first paragraph of Article 34 simply contains special rules of procedure in the event of a declaration that a measure is void but in my view does not extend to diverging, as regards the concept of fault, from the general rules for liability in Article 40.
24. The case-law of the Court is rather sparse also as regards the concept of wrongful act or omission in Article 40, though it does contain a few useful pointers. Thus in the Meroni judgment, previously cited, the Court stated:
"Although the delay of 411 days in notifying the rate applicable to December 1958 can be regarded as excessive, it must nevertheless be admitted that this single exception is not itself sufficiently serious to justify the inference that there has been a wrongful act or omission"; (45)
and
"Finally, as a general observation, it must be said that, to the extent to which previous errors or defects ... may have called for certain corrections, those errors and defects do not amount ipso facto to a wrongful act or omission.
They may just as well be for example the result of difficulty of solution of intricate legal problems or of the carelessness of the undertakings themselves which are subject to the High Authority' s administration.
In any case the applicants have not specifically demonstrated that there have been inexcusable mistakes". (46)
Moreover, in the Fives Lille Cail judgment, also previously cited, the Court took the view that:
"the High Authority ... gravely neglected the duties of supervision required by a normal standard of care, and it is this shortcoming which gives rise to its liability". (47)
25. This is not to proper place to make a comparison, as regards the concept of fault, between the rules for liability in the second paragraph of Article 215 of the EEC Treaty and those in the first paragraph of Article 34 and the first paragraph of Article 40 of the ECSC Treaty. I shall simply observe that it may be seen from the much more copious case-law relating to the second paragraph of Article 215 that where a Community authority is vested with a wide discretion for the purpose of carrying out a given policy - which will almost always, though by no means exclusively, be the case in the field of legislative measures (48) - the Community cannot be rendered liable as a result of an illegal act "unless the institution concerned has manifestly and gravely disregarded the limits on the exercise of its powers", (49) that is to say, when it has acted in a manner inappropriate to any authority acting in a reasonable manner.
In relation to the exercise of discretionary powers, Article 215 of the EEC Treaty and Articles 34 and 40 of the ECSC Treaty, understood in this way, are based on an analogous concept of illegality, that is, an illegality which, regard being had to the discretion available to the Community institution concerned for the exercise of a given power and to the complex economic and legal context in which such powers must frequently be exercised, is of such a nature that it must be regarded as a manifest and serious disregard of the limits imposed on the exercise of the power of discretion available to the institution.
3.2 Do the implied refusals to apply Article 15B(4) of Decision No 234/84 or of Decision No 3485/85 constitute a fault within the meaning of the first paragraph of Article 34 of the ECSC Treaty?
26. The implied refusal to apply Article 15B(4) of Decisions Nos 234/84 and 3485/85 (formally (50)) was based on the restrictive interpretation already referred to (in section 3) which, during the period from 1984 to 1986, the Commission thought it should give to Article 15B and on which the Court relied in the EISA order made on 28 March 1984 in refusing the interim measure requested. In the Assider judgment, delivered on 9 April 1987, however, the Court stated that that interpretation was incorrect, at least as far as Article 15B(4) of Decision 234/84 was concerned. Retrospectively considered, therefore, the implied decisions of refusal relating to 1984, 1985 and 1986 must certainly be regarded as illegal.
Contrary to the applicants, however, I do not think that this retrospectively established illegality can be regarded as a fault of such a nature as to render the Community liable. In fact, because of the doubts which arose at an early stage as to the compatibility of Article 15B with the ECSC Treaty, the application of that article raised a difficult legal problem for the Commission, which it thought it might resolve by interpreting Article 15B restrictively. The Court' s order in the EISA case, which was made on 28 March 1984 and therefore precedes the first decision of refusal adopted with regard to 1984, confirmed the Commission' s view that the restrictive interpretation of Article 15B which it advocated was not unacceptable. The subsequent decisions of refusal, relating to 1985 and 1986, follow the same line. However, that did not prevent the Commission, as I have previously mentioned (footnote 50) from trying - though in vain - to correct the imbalances recorded by way of consultation with the undertakings concerned, on whose collaboration it was in any case dependent.
In the light of the legal uncertainty to which I have referred and having regard to the informal efforts made by the Commission and to the economic framework of the crisis in the steel sector, which was in itself difficult to control, I think that, in the circumstances of the case, the implied refusals to apply Article 15B(4) cannot be regarded as constituting a manifest and grave disregard of the limits on the exercise of the powers conferred on the Commission.
3.3 Does the implied refusal to apply Article 15B(5) of Decision No 234/84 constitute a wrongful act or omission within the meaning of the first paragraph of Article 40 of the ECSC Treaty?
27. If the Court agrees with the assessment I have made, it will be appropriate, in my view, to accept also that the implied refusal to apply Article 15B(5) of Decision No 234/84 - Decision No 3485/85 no longer contained any similar provision (see section 7 above) - cannot be regarded in these cases as a wrongful act or omission within the meaning, this time, of the first paragraph of Article 40.
Under Article 15B(5) the Commission simply had the power to reduce the quotas of the steel undertakings responsible for the imbalance in the traditional patterns of trade if they refused to commit themselves, at the Commission' s (formal) request, to correct the imbalance or if they had given the commitment and then not honoured it. If we admit, as I think we must, that the fact that the Commission did not address a formal request to the undertakings was not, at the material time (that is, after the EISA order made on 28 March 1984 and before the Assider judgment, delivered on 9 April 1987), a fault of such a nature as to render the Community liable (see the previous section), the failure to apply Article 15B(5) cannot constitute a fault either. In fact, in the absence of a formal request (which I am assuming was not a fault) it was impossible for Article 15B(5) to be applied and the Commission could not, without committing a misuse of powers, impose upon the undertakings concerned the reduction in delivery quotas envisaged in Article 15B(5). (51)
3.4 Does the decision to grant additional quotas under the second subparagraph of Article 10(1) of Decisions Nos 234/84 and 3485/85 constitute a wrongful act or omission within the meaning of the first paragraph of Article 40 of the ECSC Treaty?
28. As I have already mentioned (in section 8), Article 10(1) provides for the possibility for steel undertakings to increase their production and delivery quotas by a certain amount for hot-rolled products (coming under category Ia) intended for the production of small welded tubes (first subparagraph). This possibility amounts to a right for the steel undertakings, it being understood that they must provide proof that the semi-finished products have actually been used for the production of small welded tubes (end of the first subparagraph). In addition the Commission may grant additional quotas "on a duly substantiated request" by an undertaking, and may make it conditional on the production of a report drawn up by a firm of auditors certifying the actual receipt of the semi-finished products by the tube-manufacturing customer and their actual use for the production of small welded tubes (second subparagraph).
During the period from 1984 to 1986, the Commission thus granted additional quotas to steel undertakings in competition with the applicants. At that time the Commission thought that the principle of conformity with traditional patterns of trade applied also to that category of semi-finished products and that any additional imbalance in these patterns which the allocation of additional quotas might entail would have to be corrected by the undertakings receiving the additional quotas. As I have already mentioned (in section 9), this point of view met with the opposition in particular of the Benelux Member States and their steel undertakings, which made it impossible for the Commission to apply the principle. In view particularly of the doubts which had arisen in the meantime as to the legal validity of the system provided for by Article 15B, the Commission proceeded to allocate additional quotas without ensuring that the traditional patterns were respected. The question now arises whether, in so acting, it committed a wrongful act or omission within the meaning of the first paragraph of Article 40 of the ECSC Treaty.
29. In my view that question should be answered in the negative. When, after attempting in good faith to ensure compliance also with the principle of conformity with traditional patterns of trade in the sector of the semi-finished products in question, the Commission found that that was not possible because certain Member States and undertakings failed to cooperate, it was undoubtedly in a position to refrain from using the power available to it under the second subparagraph of Article 10(1). To use it would have meant that undertakings which had customers for those products and which had asked for additional quotas would have been unable to supply such customers except by making a parallel correction as regards other products (which they were refusing to do).
I can understand that the Commission did not wish to reach that point. In implementing a crisis plan in the steel sector, for which it was dependent on the collaboration of the Member States and their steel undertakings, the Commission could not take the risk of antagonizing them on a contentious and legally debatable point such as the applicability of the principle of traditional patterns of trade to the said semi-finished products. As regards the latter point, it must be stated at least that the Commission' s view, as set out in the 12-point memorandum, in favour of the application of that principle, finds little to support it in Decision No 234/84 or Decision No 3485/85; in this respect I may observe that, "apart from the exceptional instance", an incorrect interpretation of a legal provision does not, according to the Court, in itself constitute a wrongful act. (52) Moreover it is clear that the intention in those decisions was to bring about a freer system which would have diverged less from the normal trade and market conditions for those products, that the terms of the second subparagraph of Article 10(1) for the purpose of applying the power thereby conferred contain no reference to the principle of conformity with traditional patterns of trade and that in Article 15A(2) of the decisions in question, in which the benefit of the quota adjustments referred to in other articles is refused to undertakings which have not complied with the quota system, there is no reference to the second subparagraph of Article 10(1).
In that respect also, therefore, I think that in the circumstances of this case the fact that the Commission exercised its powers under the second subparagraph of Article 10(1) without keeping strictly to compliance with the principle of traditional patterns of trade cannot be regarded as manifest and grave misconduct on the part of the Commission, constituting a wrongful act or omission within the meaning of the first paragraph of Article 40 of the ECSC Treaty.
4. The injury and the causal link
30. If, contrary to what I have suggested above, the Court were to take the view that the Commission did commit a manifest and grave fault either by refusing to apply Article 15B(4) or (5) or both, or by granting, in pursuance of the second subparagraph of Article 10(1), additional quotas to competing undertakings, the question then arises whether such faults caused the applicants harm causally related to the said faults. I shall therefore now examine this question in the alternative. I take as my starting point the fact that, under the first paragraph of Article 34 of the ECSC Treaty - and this point seems to me to apply equally to the first paragraph of Article 40 - the harm suffered must be "special", that is, that it must specifically affect an identified or identifiable group of persons. (53) The harm must also be real and certain (not merely hypothetical). (54) Moreover, as required by the first paragraph of Article 34 and, in my opinion, the first paragraph of Article 40 also, the harm must be "directly" caused by the alleged fault of the Commission, which means immediately, without any other intervening factor. It is for the applicants to adduce proof of such harm and of such a causal link. (55)
4.1 The existence of damage
31. I think it would be hard to contest that the actions of the Commission, which I am assuming to be manifestly and gravely wrongful, are of such a nature as to cause the applicants damage which is both real and special. As regards the implied decisions of refusal, that emerges from paragraph 16 of the Assider judgment (56) (regarding the year 1984, but equally valid as regards 1985 and 1986), in which the Court stated:
"... the Commission acknowledged that the statistics produced by the Italian authorities were correct and that traditional deliveries had been altered to a significant extent within the meaning of Article 15B(1); that it established that those alterations, which were to the detriment of Italian producers, had not been offset by other alterations in their favour..."
With regard to the allocation of additional quotas under Article 10(1) (for which, in the hypothetical case I am now considering of fault on the Commission' s part, it is assumed that the products intended for the production of small welded tubes were also subject to the principle of compliance with the principle of conformity with the traditional patterns of trade), the Commission itself admitted, in the record of a meeting held on 8 January 1988 with the representatives of the Italian Permanent Representation that:
"After considering the effects on the market, they (that is, the Commission' s officers) are in a position to state that the damage suffered by the undertakings Finsider and Falck is of the order of roughly 200 000 tonnes per annum and is limited to category Ia, products intended for the production of small tubes". (57)
It may also be observed in this respect that Finsider-Italsider and Falck were the only Italian producers of steel products in categories Ia, Ib and II, that is, the products in question in this case, so that in any case the damage suffered affects only a restricted and definable group of undertakings.
4.2 Absence of a causal link
32. According to the applicants there is a causal link between the harm which the imbalance in the traditional patterns of trade caused them during the years 1984 to 1986 and the supposedly wrongful conduct of the Commission, which did not prevent that imbalance and indeed encouraged it.
The Commission denies the existence of such a causal link. In the first place it states that, even if, in pursuance of Article 15B(4), it had formally requested the steel undertakings concerned to correct the imbalance, that would not necessarily have restored the traditional patterns in view of the fact that the steel undertakings were not obliged (as may be seen from Article 15B(5), the next paragraph,) to accede to the Commission' s request. If they refused to do so, or if they did not honour any commitment they had made, the Commission certainly had the power (until 1 January 1986) under Article 15B(5) to require a reduction of deliveries but, the Commission states, it was not certain that it would actually have used that power in view of the wide discretion available to it. (58)
One must agree with the Commission that, if the applicants wish to claim that they have discharged the burden of proof, they must show that the harm they have suffered - which, according to them, consisted in their inability, as a result of the Commission' s wrongful decisions, to deliver the quantities which competing Community undertakings sold over and above their traditional delivery quantities - is the direct or immediate consequence of the Commission' s fault. If it appears that that harm would have occurred even in the absence of a fault on the Commission' s part - because the undertakings refused to comply with the Commission' s request to restore the traditional patterns or because the Commission rightly thought that the quotas should nevertheless not be reduced, or for both such reasons - then the harm is not, at first sight, linked to the fault.
However, I do not think that the Commission' s arguments on this point are altogether conclusive, since, by acting in a supposedly wrongful manner (in this case, by not making a formal request to the undertakings and not imposing on them, when necessary, a reduction of quotas but, on the contrary, by granting them additional quotas), the Commission excluded from the start all possibility or chance of a compulsory restoration of traditional patterns to the advantage of the applicants. It would be possible to regard the loss of such a chance as more than purely hypothetical damage caused by the action or inaction of the Commission.
33. However, the Commission contends that even if it had reduced the delivery quotas of the undertakings responsible for the imbalance in the traditional patterns, or even if it had refused to grant to those undertakings additional quotas for products intended for the manufacture of small welded tubes, Finsider-Italsider' s and Falck' s share of the market would still have been reduced. Apart from the fact that a reduction of delivery quotas is no guarantee that the undertakings responsible for the imbalance in the traditional patterns would actually have reduced their exports to Italy, (59) the Commission states that the probable effect of a reduction of imports intended for Italy from other Member States would not have been an increase in Finsider-Italsider' s and Falck' s deliveries on the Italian market, but an increase in imports into Italy from third countries. (60) Although the applicants deny that by reference to the rules, which they claim are strict, on imports from third countries, (61) it may in fact be seen from the data supplied by the Commission that imports into Italy of steel products from the countries of Eastern Europe alone were able, as a result of agreements concluded by the Community with those countries, to grow by 300 000 tonnes between 1984 and 1986 and that the Commission was unable to do anything about it. The possibility of an increase in imports into Italy from other third countries was even greater. (62) In fact a considerable part of the quotas for imports into Italy allocated to the countries with which the Community had concluded agreements remained unused. In view of the fact that, apart from a few exceptions, the applicants had always refused during the period from 1984 to 1986 to adapt their prices to the lower prices of their competitors outside the Community, it was moreover obvious that in the event of a reduction of imports from other Member States, imposed by the Commission, Italian purchasers of steel products would obtain supplies from producers outside the Community rather than from the applicants.
34. An assessment of the existence of a direct causal link between the (assumed) faults of the Commission and the harm caused to the applicants must be made in concreto, that is, with regard to the actual circumstances which would in all probability have existed if there had been no fault, as compared with the situation assuming there had been a fault. So it is not only a question of whether, in the absence of fault on the Commission' s part, there would have been a reduction in the deliveries of competing undertakings, or at least whether there would have been a possibility of such a reduction, (see section 32 above), but in addition whether the applicants could have taken advantage of such a reduction, or the possibility thereof, to increase their own deliveries. If the applicants, on whom the burden of proof rests, cannot manage to make it seem probable that they - and not third country undertakings, as the Commission asserts - would have been able to take advantage of the reduction (or chance of reduction) in quantities or of the absence of allocation of additional quotas to competing Community undertakings, they have not sufficiently demonstrated that there is, in concreto, a direct causal link between the harm they have suffered and the Commission' s assumed fault.
35. The fact that the applicants would not, in all probability, have succeeded in profiting from the said reduction or the said non-allocation of quotas may also be seen, according to the Commission, from the fact that the applicants, above all Finsider-Italsider, were to a large extent themselves responsible for their loss of market share. (63) In this respect the Commission refers to the damning report "Review of Finsider' s 1982-1986 Operational Performance in reaching 1984-1986 Objectives", drawn up by McKinsey & Company at the request of the Italian Government and the Commission, and to its decision of 23 December 1988 "concerning aid that the Italian Government proposes to grant to the public steel sector", in which it states in particular:
"In spite of these major structural changes the viability target was not attained during the following years by Finsider, which, by contrast to its main competitors in other Member States, continued to accumulate losses and had difficulties in maintaining its market position.
An expert investigation (McKinsey report) into the reasons underlying this failure by Finsider to attain viability established that it had been mainly caused by an industrial and commercial structure still insufficiently competitive, by delays in the implementation of investments and by insufficiently rigorous management." (64)
The applicants state that Finsider-Italsider' s problems of economic efficiency are irrelevant and claim that the loss of their market share on the Italian market was not attributable to their own conduct but to the very low prices of deliveries on the Italian market by the steel undertakings of other Member States (in breach of the pricing rules). Although the infringement by steel undertakings of other Member States of the minimum price rules may perhaps partially explain the loss of the applicants' market share, that is certainly not the case for products intended for the manufacture of small welded tubes (in which much of the imbalance in traditional patterns of trade occurred), as there were no minimum prices for those products. Moreover, the applicants' poor economic efficiency is incontestably an important factor, which emphasizes to an even greater extent the improbability of the applicants' being able to profit, in concreto, from the reduction in their Community competitors' existing quotas or the non-allocation of additional quotas to those competitors.
36. It seems to me, having regard to the factors considered in sections 33 to 35, that the applicants have not succeeded in sufficiently demonstrating that there was a direct causal link between the injury they claim to have suffered as a result of the imbalance in traditional patterns of trade and the alleged faults of the Commission.
5. Conclusion
37. Having regard to the foregoing considerations, I propose that the Court declare the actions for damages brought by Finsider-Italsider and Falck under Articles 34 and 40 of the ECSC Treaty to be admissible but unfounded. In view of the discretion enjoyed by the Commission and regard being had to the complex economic and legal context in which the Commission had to exercise the powers conferred on it, there are not grounds for stating that it was guilty of manifest and grave disregard of the limits imposed on the exercise of its powers. Accordingly, in the circumstances of this case, the Commission cannot be charged with a fault or a wrongful act or omission within the meaning of the first paragraph of Article 34 or of the first paragraph of Article 40, as the case may be. Alternatively, the applicants have not succeeded in demonstrating sufficiently the existence of a direct causal link between the alleged faults and the harm suffered.
(*) Original language: Dutch.
(1) - Commission Decision of 31 January 1984 on the extension of the system of monitoring and production quotas for certain products of undertakings in the steel industry (OJ 1984 L 29, p. 1).
(2) - Commission Decision of 27 November 1985 on the extension of the system of monitoring and production quotas for certain products of undertakings in the steel industry (OJ 1985 L 340, p. 5).
(3) - With regard to the ratio legis of Article 15B of Commission Decision No 234/84/ECSC of 31 January 1984, see Recital 9 to that decision, Monitoring of traditional patterns of trade (Article 15B), which referred to the Council meeting of 22 December 1983. See also the report for the hearing in Case 45/84R EISA v Commission [1984] ECR 1759, at pp. 1761 and 1762.
(4) - See the report for the hearing in Case 45/84R EISA v Commission, (previously cited in footnote 3), at p. 1762.
(5) - Order in Case 45/84R, EISA v Commission [1984] ECR 1759 paragraph 13.
(6) - Ibid., paragraphs 12 to 14.
(7) - Ibid., paragraph 8.
(8) - Ibid., paragraph 14.
(9) - By letter of 18 February 1985, Assider, the Italian steel industry federation, also asked for the application of the measures provided for in Article 15B of Commission Decision No 234/84, basing its request on data relating to the first, second and third quarters of 1984.
(10) - See the letter of 21 December 1984 (Annex 5 to the applications) as regards the data relating to the first three quarters of 1984 and the letter of 20 March 1985 (Annex 9 to the applications) as regards the data relating to the fourth quarter of 1984.
(11) - Judgment in Joined Cases 167 and 212/85 Assider v Commission [1987] ECR 1701.
(12) - Ibid., paragraph 17.
(13) - Ibid., paragraph 19. In fact, according to the Court, the measure provided for by Article 15B(4) is not in the nature of a penalty and consequently is not conditional on a finding that the undertakings responsible for the imbalance in the traditional patterns of trade have committed any infringement.
(14) - In paragraph 10 the Court stated: It must be pointed out that, although in their requests to the Commission the applicants sought to obtain the implementation of Article 15B of the aforesaid ECSC decision without giving further details, it is clear both from the applications themselves and from the proceedings before the Court that Assider, like the Italian Government, seeks only the annulment of the Commission' s implied decision refusing to apply paragraph 4 of the article in question .
(15) - See the letters of 29 May, 7 August and 30 November 1985, 6 March, 31 March, 7 August and 1 December 1986 and 13 March 1987 (Annexes 11 to 18 to the applications).
(16) - See the letters of 9 January and 10 June 1986 and 11 November 1987 (Annexes 19 to 22 to the applications).
(17) - The imbalance in the traditional patterns of trade during 1984, 1985 and 1986 may be clearly seen from a summary table drawn up by the Italian authorities on the basis of data published by the Commission (see page 11 of the applications). The increase in deliveries of steel products in categories Ia and II by the steel undertakings of other Member States was 7.3% in 1984, 8.4% in 1985 and 12.2% in 1986. The increase in deliveries of steel products in category Ib reached 5.2% in 1984, 3.9% in 1985 and 2.8% in 1986. In view of this increase in the deliveries by foreign steel undertakings, there was an equivalent reduction in deliveries by the Italian producers.
(18) - See Article 1(4) of Commission Decision No 3746/86/ECSC of 5 December 1986 OJ 1986 L 348, p. 1).
(19) - See paragraph 18 of the judgment in Joined Cases 167 and 212/85, previously cited in footnote 11.
(20) - See Annexes 3, 6, 8, 9, 12, 13, 15, 16, 22 and 29 to the defences. It may be seen from a memorandum of 25 June 1984 that the Commission thought that Article 15B applied also to products intended for the production of small welded tubes (Annex 3 to the defences).
(21) - See Annex 12 to the defences.
(22) - See, for example, the Commission letter of 6 February 1985 to Cockerill Sambre SA, Annex 16 to the defences.
(23) - See, on this subject, the internal memorandum (of 13 December 1985) sent to the Commissioner responsible, stating:
On the other hand it is open to you to encourage the undertakings to come to an agreement with regard to observance of the rules on traditional patterns of trade which we worked out in the context of Article 15B of the quota system. Our system is certainly at the limit of legality. Article 15B is certainly not a hard and fast feature of the system of quotas. The Court left open the question whether Article 15B is compatible with Article 58 of the ECSC Treaty .
(See Annex 29 to the defences, p. 1, point 2).
See also a memorandum (of 3 January 1985) from the Commission' s Legal Department to the Director General responsible in which it was stated that the application of Article 10(1) as envisaged in the 12-point memorandum would quickly give rise to applications to the Court (Annex 14 to the defences).
(24) - See p. 23 of the rejoinders.
(25) - For further details on this subject see the Opinion of Judge Biancarelli of 30 January 1991 in Case T-120/89 Stahlwerke Peine-Salzgitter AG v Commission [1991] ECR II-279, at section IIA 3.
(26) - Union Sidérurgique du Nord et de l' Est de la France (USINOR) v Commission [1986] ECR 1777: As regards the application for damages, this must also be declared inadmissible having regard to the wording of Article 34 of the ECSC Treaty, which allows such an application to be brought only after the decision which allegedly caused the damage has been declared void and after it has been established that the High Authority does not intend to take the steps needed to redress the illegality found to exist .
(27) - See that judgment, cited in footnote 11, at paragraph 20 of the grounds of judgment.
(28) - See also, in this sense, in a similar case, the judgment of the Court of First Instance in Case T-120/89 Peine-Salzgitter v Commission [1991] ECR II-279 at paragraphs 66 to 69 and the Opinion of Judge Biancarelli in that case, previously cited in footnote 25, at paragraph II A 4.
(29) - Previously cited in footnote 28; paragraphs 41 to 49, and in particular paragraph 47.
(30) - Asteris v Commission [1988] ECR 2181 at paragraphs 30 and 31.
(31) - See section 7 above and footnotes 16 and 17.
(32) - See paragraph 15 of the judgment, previously cited in footnote 11.
(33) - Joined Cases 9 and 12/60 Vloeberghs v High Authority [1961] ECR 197, at p. 213. That case involved an applicant under Article 40 who did not even have the status of an undertaking within the meaning of Article 80 of the ECSC Treaty and could not therefore bring an action to have a measure declared void (Article 33) or for failure to act (Article 35) or, therefore, for damages under Article 34. The Court was therefore not called upon to decide as to the relationship between Articles 34 and 40.
(34) - Joined Cases 19 and 21/60 and 2 and 3/61 Société Fives Lille Cail v High Authority [1961] ECR 281, at p. 296. It is clear that, by the statement that the grounds of the actions for damages are independent of those of the applications for annulment the Court merely wished to indicate that the fact that the application to have the decisions declared void had been declared inadmissible did not, in that case, have any effect on the admissibility of the action for damages under Article 40 because that action was based on other grounds.
(35) - Joined Cases 14, 16, 17, 20, 24, 26 and 27/60 and 1/61 Meroni & Co. v High Authority [1961] ECR 161, at p. 166. In these cases the Commission does not directly rely on the Meroni judgment. However, it quotes a passage from Mr Advocate General Lagrange' s Opinion in Case 36/62 Aciéries du Temple v High Authority [1963] ECR 289 referring to the relevant points in the Meroni judgment. In my view it is open to doubt whether it is possible to see in these points, considered in their context, a confirmation of the Commission' s point of view.
(36) - Joined Cases 81 and 119/85, previously cited in footnote 26. That judgment concerned an action under Article 33 for a declaration that an ECSC decision was void, combined with an action for damages under Article 34. No question with regard to Article 40 of the ECSC Treaty arose in that case.
(37) - For a discussion of academic writings, in which views are divided, on this question, see Judge Biancarelli' s Opinion in Case T-120/89 Peine-Salzgitter, previously cited in footnote 25, at paragraphs IIB 1(c) and IIB 2(a).
(38) - After considering the question in depth, Judge Biancarelli came to the same conclusion in his Opinion previously cited in footnote 25. However, he added that in the event of the application in such a case of Article 40, the provisions of the first paragraph of Article 34 of the ECSC Treaty nevertheless remain applicable (section IIB 2(c)(2) of his Opinion). I cannot agree with his views on this point. In fact I think that the reference in Article 40 to the first paragraph of Article 34 should not be so understood. In my view that reference merely draws attention to the fact that, in the event of a decision' s being declared void, the special rules of Article 34 apply.
(39) - See also Judge Biancarelli' s Opinion, previously cited in footnote 25, at section IIB 2(c)(1) and the references made therein inter alia to Mr Advocate General Lagrange' s Opinion in Meroni and the Opinion of Mr Advocate General Roemer in Vloeberghs.
(40) - See, for example the judgments in Case 53/85 AKZO Chemie v Commission [1986] ECR 1965, at paragraph 29 et seq.; in Case 294/83 Les Verts v Parliament [1986] ECR 1357, at paragraph 23; and in Case 222/86 UNECTEF v Heylens [1987] ECR 4097, at paragraph 14. For a previous judgment, see Case 6/60 Humblet v Belgium [1960] ECR 559, in which the Court declared that: In case of doubt, a provision establishing guarantees for the protection of rights cannot be interpreted in a restrictive manner to the detriment of the individual concerned .
(41) - Paragraph 32 of the grounds of judgment.
(42) - See the judgment, previously cited in footnote 33, at p. 213.
(43) - See paragraph 33 of the Krohn judgment, previously cited in footnote 41.
(44) - See in this respect inter alia Lagrange: The non-contractual liability of the Community in the ECSC and in the EEC, 3 CML-Rev. (1966), p. 10, at p. 27; Bebr, G., The non-contractual liability of the European Coal and Steel Community, in Schermers, Henkels and Mead, Non-contractual liability of the European Communities, Leiden, 1988, p. 39, at p. 44; and the Opinion, mentioned in footnote 25 above, of Judge Biancarelli in Case T-120/89, Peine-Salzgitter, at point IIIA.
(45) - See the judgment cited in footnote 35, at p. 168 (emphasis added).
(46) - Ibid., p. 171 (emphasis added).
(47) - See the judgment previously cited in footnote 34, at p. 297 (emphasis added).
(48) - See the Peine-Salzgitter judgment, previously cited in footnote 28, at paragraph 86 et seq.. The position is obviously different in situations in which the authority has very precisely defined powers ( compétence liée or limited delegation of powers), as is frequently the position in staff cases.
(49) - See, for example, the judgment in Joined Cases 83 and 94/76, 4, 15 and 40/77 HNL v Council and Commission [1978] ECR 1209, at paragraph 6.
(50) - I say formally because the Commission states that it applied that provision informally in the sense that, without addressing a formal request to the steel undertakings concerned, it consulted them as to the way in which they could correct the imbalance in the traditional patterns of trade. It appeared from that consultation that the undertakings were not prepared to commit themselves to such a correction, whereupon the Commission decided not to address to them the formal request envisaged in Article 15B(4).
(51) - See also in this respect the Opinion of Mr Advocate General Mischo, delivered on 10 February 1987, in which reference is also made, at p. 1721, to the close link between paragraphs (4) and (5) of Article 15B.
(52) - Judgment in Joined Cases 19, 20, 25 and 30/69 Richez-Parise v Commission [1970] ECR 325 at paragraph 36.
(53) - According to the judgment of the Court of First Instance in the Peine-Salzgitter judgment, the adjective special relates to the importance of the harm as well as to the fact that there is only a restricted and definable number of those suffering injury: see paragraph 131 of that judgment, previously cited in footnote 28.
(54) - See, for example, the judgments in Case 26/74 Roquette v Commission [1976] ECR 677 at paragraph 21 et seq., and in Joined Cases 197 to 200, 243, 245 and 247/80 Ludwigshafener Walzmuehle v Council and Commission [1981] ECR 3211 at paragraph 50.
(55) - See, for example, the judgments in Joined Cases 9 and 12/60 Vloeberghs, previously cited in footnote 33, at pp. 216 and 217; in Case 36/62, Aciéries du Temple v High Authority [1963] ECR 289 at p. 296; in Joined Cases 64 and 113/76, 167 and 239/78 and 27, 28 and 45/79 Dumortier Frères v Council [1979] ECR 3091 at paragraph 21; and the more recent Walzmuehle case, previously cited in footnote 54, at paragraph 51 et seq..
(56) - Previously cited in footnote 11.
(57) - See Annex 30 to the defences, p. 1. It may be observed that the applicants claim that the damage is greater, but that the important feature of this statement by the Commission is the fact that the existence of damage was accepted, whilst the Commission states, wrongly in my view, that that report does not amount to recognition of the existence of damage but simply reproduces the figures produced by the applicants.
(58) - See the Assider judgment, previously cited in footnote 11, at paragraph 15.
(59) - See, in this sense, Mr Advocate General Mischo' s Opinion prior to the Assider judgment (pp. 1723 and 1724), in which he nevertheless emphasizes that a reduction in quotas would have amounted to a fairly strong encouragement for the undertakings in question to restore the traditional patterns.
(60) - See the rejoinder in the Finsider-Italsider case, p. 61 et seq., and the rejoinder in the Falck case, p. 60 et seq..
(61) - See the rejoinders, p. 47.
(62) - See the rejoinder in the Finsider-Italsider case, p. 63, and the rejoinder in the Falck case, pp. 61 and 62.
(63) - See the rejoinder in the Finsider-Italsider case, pp. 71 and 72.
(64) - See the second and third paragraphs of Part I of the recitals (OJ 1989 L 86, p. 76).