61959C0016
OPINION OF MR ADVOCATE-GENERAL LAGRANGE
DELIVERED ON 26 NOVEMBER 1959 (
1
)
Mr President, Members of the Court,
The very complete written procedure and the very clear oral observations which you heard last week facilitate what I have to say in this case. I think I can omit even a summary history of the joint marketing organizations of the Ruhr which we are all beginning to know quite well.
Let us recall only that the present organization is to be traced to the agreements concluded between mining companies, agreements which were authorized by four decisions of the High Authority, Nos 5 to 8/56 published in the Journal Officiel of 13 March 1956, the first three relating to the joint selling by three separate agencies each embracing a certain number of undertakings and the last relating to certain establishments common to these three agencies. The period of validity of the agreements and authorization decisions was for the three years from 1 April 1956 to 31 March 1959. During this period certain amendments were made to the conditions of authorization: the main ones relate to the trading rules and long-term delivery contracts.
On 11 and 12 December 1958, the mining companies grouped together in the agencies requested that the authorization previously granted be extended for a year, that is to say until 31 March 1960. The High Authority ruled on these requests by Decison No 17/59 of 18 February 1959, which was published in the Journal Officiel of 7 March and was notified in a letter to each of the three agencies on 21 February. Since it was an individual decision, the publication, necessary for third parties did not suffice in respect of those to whom the decision was addressed; it still had to be notified in accordance with the provisions of the second paragraph of Article 15 of the Treaty.
This decision was in part attacked by the three agencies and by the undertakings of which they were formed. The claims are directed, as you know, on the one hand against certain provisions of the decision and on the other hand against certain ‘assertions’ (Feststellungen) contained either in the recitals to the decision or in the letters of notification of 21 February 1959.
What does this decision look like? It is very much in standard form and contains a title and three parts: citations, recitals and operative part. The title is as follows: ‘Decision on the extension of the authorizations for the marketing organizations of the Ruhr basin’. The citations relate to the previous decisions and to the requests for extension dated 11 and 12 December 1958.
In the recitals the High Authority begins by referring to the objective of the request for authorization. Then comes an all-important recital:
‘Whereas the various organizations created as a result of decisions of the High Authority for the sale of coal from the Ruhr have in practice frequently not complied with the authorizations granted; the authorizations have not led to the expected results since the three selling agencies have in particular not developed an independent marketing policy; on the contrary a uniform marketing system which is not in accordance with the provisions of the Treaty has been applied;
…’
Then the High Authority indicates the principles with which future rules for the sale of coal from the Ruhr must conform:
First principle:
‘The marketing structures for Ruhr coal to take the place of the present organizations must be based on independent decisions taken by the various mining companies, the High Authority laying down rules intended to prevent these decisions from leading once again in law or in practice to the establishment of a uniform system based on similar organizations;…’
Second principle:
‘The marketing structures must be as effective as possible to improve the functioning of the common market in coal and the competitive position of coal in the energy market; …'’
Third principle:
‘In so far as it is necessary for the continuity of employment or the maintenance of the income of workers, the High Authority will authorize such procedure and machinery as shall appear appropriate to it; for this purpose it shall undertake studies with the representatives of the government, workers and producers;…’
Then come two recitals justifying the necessity of not immediately terminating the system in force:
‘Whereas the present marketing difficulties of the coal industry do not allow the system at present in force to be immediately terminated;
Whereas in consequence an appropriate transitional period is necessary; for this reason it is proper to grant for one year the requests that the authorizations be extended; the High Authority reserves the right to extend this transitional period for a further year in respect of the selling agencies if the marketing and employment situation makes this necessary; on the other hand the transitional period cannot be extended in respect of the common office, the regulations committee and the common financial arrangements;…’
Then come the quite full recitals explaining the necessity of amending the authorizations/or the transitional period, in particular as regard the long-term contracts and the trading rules. Lastly, two recitals on checking end as follows: ‘It is finally necessary to study the implementing conditions of the abovementioned principles for the purpose of reorganizing the marketing of Ruhr coal’.
The operative part of the decision corresponds exactly to the recitals: Articles 1 and 12 extend the provisions of the previous decisions on joint selling and common establishments until 31 March 1960. Articles 2 to 11 contain new conditions immediately applicable to which long-term agreements and trading rules are subjected. Article 14 relates to checking and the study of the future system. Lastly, Article 15 provides that ‘The present decision shall enter into force on 1 April 1959 and expire on 31 March 1960’.
Such is the structure of this decision and I apologize for having analysed it in such detail: this appeared to me necessary by reason of the subject of the proceedings which relate basically to the legal nature of certain provisons contained either in the recitals or in certain articles of the operative part.
Let me place to one side the claims directed against Article 11 relating to the trading rules for the parties agree that these claims have lost their purpose by reasons of the fact that since the application was brought a new decision (36/59 of 17 June 1959) has taken the place of the contested decision on this point.
In fact it may be questioned whether legally the claims have ‘lost their purpose’, since the contested decision in so far as it relates to trading rules has not been ‘revoked with retroactive effect’ but simply ‘revoked’ as Article 3 confirms: ‘The present decision shall enter into force on 1 July 1959 and shall expire on 31 March 1960’. Thus the contested decision remains in force for the period from 1 April to 30 June 1959. It would be more correct in my opinion to interpret the claims of the applicants in this respect as being in the nature of a withdrawal to which it is proper to agree.
I must now consider the two other series of claims in the applications: (1) those which are directed against certain passages in the recitals to Decision 17/59 and the letter of 21 February 1959 (claims 1 to 6); and (2) those which are directed against the second sentence of Article 14 (2) of Decision 17/59 (claim 7).
I
Claims 1 to 6. Claims 1 and 2 need to be distinguished from claims 3 to 6. The first complain that the High Authority has decided in advance without having a request for an authorization and without any agreement having been concluded on this subject that the common establishments of the agencies cannot be authorized after 31 March 1960 nor the selling agencies themselves after 31 March 1961. Claims 3 to 6 object to the provisions which lay down, likewise in advance and in the absence of any agreement, the conditions which the future organization of the Ruhr coal marketing must satisfy to qualify for an authorization: this is dealt with in the fifth recital to decision 17/59 which begins at the foot of page 280 and by point 2 (a), (b), (c) of the letter of 21 February 1959 (
2
)
The whole question is whether the contested provisions must be recognized as being in the nature of a decision (or a recommendation) capable of being the subject of an application for annulment under Article 33. Let me observe first of all that the parties seem to agree on the legal position. This position is as follows: the High Authority can express itself by a decision involving legal effects only on the basis of the powers which Article 65 (2) of the Treaty confers on it and according to the procedure provided for therein. It is quite apparent, and the High Authority admits as much, that it can give a ruling in the context of these provisions only if a request for an authorization is made to it relating to one or several agreements which may be submitted to it to this end. It likewise recognizes that it can express itself on the matter only after taking account of the circumstances and the position existing at the time when the agreements must enter into force and not a year in advance.
This considerably restricts the scope of the action. It follows from this that if a decision is found to exist in the contested provisions it is obviously unlawful.
(1)
First of all it is illegal and mainly so for lack of competence: the High Authority cannot give a ruling on a request which has not been made to it or, what amounts to the same thing, it cannot, when a request is made relating to an agreement concluded for a certain period, rule in advance on the conditions of the possible authorization of agreements not yet concluded and relating to a subsequent period. Nor can it be a decision involving legal effect and binding on itself, establish in the guise of announcement of principle the scope of future authorizations. The only regulatory power which it has in the sphere of authorizations is that which is contained in Article 65 (3) concerning the kind of agreements, decisions or practices which have to be communicated to it: it is purely a formal power which does not allow the establishment of a kind of secondary legislation relating to the material conditions of the authorizations.
(2)
The decision, if such there be, is further alleged to be unlawful for insufficient statement of grounds. The true ground of this ‘anticipated refusal’ to accept in the future the continuance of the present organization is contained in the recital which I have just cited (the fourth recital on page 280, first column) where it is stated that the organizations ‘have in practice, frequently not complied with the authorizations granted; the authorizations have not led to the expected results, for the three selling agencies have in particular not developed an independent marketing policy; on the contrary a uniform marketing system which is not in accordance with the provisions of the Treaty has been applied’.
Such disapproval, the logical consequence of which could only be the refusal of authorization would certainly be insufficient both in law and in fact to justify legally such a refusal. It is true that the distinguished advocate of the High Authority observed in the oral pleadings that since the principle of Article 65 is that cartel agreements shall automatically be voiced although exceptions may be authorized, the High Authority should be concerned on the grounds of a decision taken under Article 65 (2) to justify the authorization when it considers that it should grant such authorization rather than to justify the refusal of an authorization or restrictive conditions attached to the grant of an authorization. But this is mainly true in the case of a first agreement made in a sphere where there has been none until then. In a case such as the present where there is an organization which has been functioning for a long time, which, subject to various conditions, has not ceased to be authorized and in respect of which only an extension is requested, it goes without saying that a refusal of an extension, based not on new circumstances but on the alleged disregard of conditions previously laid down and also on a certain change of attitude on the part of the High Authority with regard to the principles accepted until then (basically on a failure of an experiment which has been tried), substantial factual reasons must be given for such a refusal. It must not be forgotten that the grant of an authorization under Article 65 (2) is not discretionary: ‘However, the High Authority shall authorize’ agreements which fulfil the three requirements listed: the intentional use of the word ‘shall’ creates a right to authorization where (in the opinion of the High Authority, but obviously subject to the control of the Court with regard to its legality) the legal requirements are fulfilled. No doubt the High Authority may at any time revoke authorization which has been granted or amend the terms of it, but it must then find either that ‘as a result of a change in circumstances the agreement no longer meets these requirements’ or that ‘the actual results of the agreement or of the application thereof are contrary to the requirements or its authorization’. In this case also it must give reasons for its decision.
Incidentally, you know how lengthy are the grounds of the decisions usually given by the High Authority in this field both to justify the grant of authorizations and to justify their refusal or restrictive conditions to which they are subject.
(3)
Is the decision, subject always to the assumption that there is one, vitiated for infringement of the Treaty? The claim has formally been made.
On this point some arguments or rather some allegations have been made in the application. The High Authority has replied thereto, summarily, but nevertheless quite clearly, setting out the reasons why it considered that the present organizations of the Ruhr did not meet the conditions of the authorizations previously granted and did not meet the legal requirements of Article 65. The applicants no longer insist on this point in the reply and there was no mention of it in the oral procedure; it may be said that they refused to discuss the matter. Should this be regarded as an admission? I rather think that the applicants wish to reserve themselves in this respect for applications which they may bring in the future against new decisions not affording them satisfaction, which confirms that the present case is purely procedural, since the two parties agree on the legal issue, that is the limits and the conditions under which the High Authority may exercise its power of decision under Article 65 (2).
The conclusion is that the decision, if it is recognized as such, must be annulled for lack of competence and in addition, if this be thought necessary, for insufficient grounds, but not for infringement of the Treaty, since the Court, on the information at present on the file, does not have the necessary facts to give a ruling on a problem which is obviously very difficult as the High Authority has not yet succeeded in resolving it after trying for seven years.
Thus either, as the High Authority maintains, the contested passages in the recitals to the decision and in the letter of 21 February are not in the nature of a ‘decision’, do not have any legal effect and do not adversely affect the applicants, in which case the latter have no interest and cannot ask for annulment, or, as the applicants' claim, the provisions in question are in the nature of a decision adversely affecting then and therefore needing to be annulled. But in both cases the legal position will be the same: the future decisions of the High Authority are unfettered and may run counter to the views expressed in the recitals and the letter and for their part the applicants retain the unrestricted right to bring any future decisions before the Court if necessary even though such decisions may be in accord with the present views of the High Authority, which would then be readopted and no doubt developed and the parties would have unrestricted scope for discussion.
Having said this it is necessary nevertheless to offer one or other of the views. For my part I think that there is no decisive reason for regarding the contested passages as being in the nature of a decision (or recommendation) within the meaning of Article 14 of the Treaty. There would have to be such a reason, for the formal structure appears to support the view of the High Authority: Decision 17/59 is perfectly correct in form, containing, as we have seen, a title, citations, recitals and an operative part in articles. The recitals undoubtedly constitute a statement of the grounds. The letter of 21 February 1959 is, as I have said, a notification of the decision.
What is the objective of this decision? To give a ruling under Article 65 (2) on the requests for extension made by the applicants. How is the High Authority giving the ruling? The answer is contained in Articles 1 and 12: the provisions of previous authorizations relating to joint selling (Article 1) and common establishments (Article 12) shall be extended until 31 March 1960, which strictly means: the requests for extension are granted for the period requested. Nevertheless the conditions of the authorization are amended in certain respects: long-term contracts and trading rules. In this respect Articles 2 to 10 lay down in detail the new conditions which are to be applied immediately and to which the agreements must immediately conform.
The recitals may be divided into two distinct parts: the objective of the first is to justify the extension granted for a year in accordance with the requests, and of the second to justify the amendments made to the conditions of authorization. It is the first part which concerns us in the present case. What is the line of reasoning of the High Authority in this respect? It begins by criticizing the present system and it does so, as we have seen, in terms which would normally call for a simple refusal of authorization. Then after having pointed out in very general terms the principles to which, in its view, future rules should conform (the complete abolition of which it does not seem to contemplate), it adds that since the present difficulties of marketing in the coal industry do not allow the present system of marketing to be terminated immediately, ‘an appropriate transitional period’ during which this system must continue to be applied, is necessary. Of what duration must this period be? A year, with possible extension, for the selling agencies; a year, but no longer, for common establishments.
Conclusion: it is right to grant the requests for extension such as have been made: this is done, and done exclusively, in the operative part in Articles 1 and 12. No doubt it may be observed that although the requests of the companies and their agencies have been granted, it is for very different reasons from those which the latter must have had in mind when they concluded their agreements and made their requests for authorization. The unlawfulness of grounds may be alleged in an application for annulment brought against an administrative act. But in the present case the applicants are not asking for the annulment of Articles 1 and 12 of Decision 17/59, which in my opinion they would have been entitled to, for it may well have been in their interests to have an immediate judgment on the grounds relied on by the High Authority without waiting a year when the grounds would fall for readoption in a decision which might take effect immediately. If this course had been followed the High Authority would have been bound to take a new decision of authorization with retroactive effect in accordance with the judgment of the Court. But once again the applicants have not made such claims and they have, as we have seen, declined to enter into discussion of the unlawfulness of the grounds relied on: this is not a reason artificially to treat the grounds as being of the nature of a ‘decision’ which, on this ground alone, would be obviously unlawful.
The precedents relied on by the applicants, and in particular Case 8/55, are in no way relevant. No doubt the Court has on several occasions recognized the ‘decision’ within the meaning of Article 14 must not be judged only in formal terms, but an act qualified as a decision must appear as having or as being capable of having legal effects. In Case 8/55 the Court of the ECSC recognized a passage in a letter from the High Authority as being in the nature of a decision because in that passage the High Authority laid down a rule capable of being applied where appropriate: this provision was incorporated in a comprehensive decision which the Court recognized as having the character of a general decision having true legal effects and capable as a result of forming the basis of implementing measures.
This is not so in the present case as we have seen: Decision 17/59 is simply an individual decision of authorization.
The truth is that the High Authority has exercised two different powers concurrently in the present case: on the one hand it has exercised, as it should, the power of decision which is conferred on it by Article 65 (2) by ruling on the requests for authorization which were made to it and giving grounds, as it was legally obliged to do, for its decision which was favourable on the point with which we are concerned. But on the other hand it has sought at the same time to fulfil another task, which is not of a legal nature and in respect of which it has a duty to act ‘in close cooperation with the parties concerned’ according to the final words of Article 5 of the Treaty or to provide ‘guidance and assistance for the parties concerned’ as the second paragraph of the same article lays down. Such an attitude appears particularly desirable in the present case. It is not by simply considering on an administrative or legal basis the requests which are periodically submitted to it that the High Authority can claim to resolve this difficult problem of the marketing organizations of the Ruhr of which I have spoken. There is a need, which has existed from the beginning, for constant activity and close relations both with those concerned and with the governments.
It is therefore proper that, having considered the situation and come to the conclusion that the system authorized until then appeared to need restructuring completely, it should warn those concerned sufficiently in advance. If it had not done so at the time and a year later had decided simply to refuse any extension, it would rightly have laid itself open to the most severe criticism. On the contrary the effect of the attitude adopted was to make those concerned face their responsibilities. In view of Decision 17/59 they could either agree and begin to prepare new agreements in accordance with the principles laid down or run the risk of being refused any further extension unless they then brought the issue before the Court or on the other hand immediately entered into discussion with the High Authority with regard to the future conditions of the organization: for the High Authority the period of one year had no other objective.
No doubt it would have been more satisfactory for legal minds had these two very different prerogatives been exercised in their practical application in a more distinct manner. But I think it is the duty of the Court to clarify matters and to distinguish in the recitals to Decision 17/59 between what constitutes the statement of grounds of a decision taken by the High Authority in the exercise of a particular power and that which relates to the statement of policy, knowledge of which is moreover particularly useful for those concerned.
This is why, while recognizing that the contrary opinion is perfectly tenable, I propose that you should consider none of the passages cited in the recitals to Decision 17/59 as being in the nature of an actionable decision and that the claims made against these passaged are not admissible.
All that I have said with regard to the recitals applies in the same way to the letter of 21 February 1959.
II
My observations will be much more brief with regard to claim 7 in respect of the second sentence of Article 14 (12) of the decision.
In spite of all that has been written on this subject in the pleadings and said at the bar, I cannot see how the contested provision can adversely affect the applicants.
Let me remind you of the wording:
‘The High Authority will consider further whether and to what extent a revocation or an amendment of the authorizations extended by the present decision is necessary.’
This sentence is not criticized in the applications. Thus the applicants themselves admit that the High Authority is entitled to consider the question of a revocation or an amendment of the existing to consider authorizations, which comes well within the limits of its powers. And how will it go about this consideration? We are informed by the second sentence that:
‘The High Authority will instruct officials to make a report on this point (it is quite normal for the High Authority to ask its officials to make reports) and to study the particular aspects which have to be taken into account on a reorganization of the marketing of Ruhr coal.’
What unlawfulness is there in instructing these officials ‘to study particular aspects’ of the reorganization envisaged? Do not the applicants themselves (rightly) allege that the High Authority must take account of all the circumstances and not confine itself to abstract opinions?
It does not appear to me necessary in this case to consider the limits and the conditions for the exercise of the powers which the High Authority has under Articles 47 and 86 in particular. It is sufficient to observe, as appears obvious, that the contested provision does not enunciate any rule involving any legal effect either from a legislative or individual point of view: it is simply an internal measure which is brought to the knowledge of the public.
My opinion is:
—
that the applicants withdrawal of their claim in respect of Article 11 of the contested decision should be accepted;
—
that the other claims should be dismissed;
—
that the applicants should bear the costs of the action.
(
1
)	Translated from the French.
(
2
)	With regard to (a) I think I should draw your attention to a certain obscurity in the French translation of the original German, which itself is not very clearly drafted. I submit, in a personal capacity, of course, and as a working document the following, intentionally literal translation: ‘The High Authority believes that a uniform and overlapping marketing system (implicity contrary to the Treaty in the opinion of the High Authority) is unavoidable where certain large undertakings do not decide to sell their production independently’. This means not that this uniform system is necessary but on the contrary that it is to be condemned, and that the only means of avoiding it is for certain large undertakings to agree to resume their independence in the marketing of coal; this may lead to the belief that the High Authority will make the resumption of independence a condition of future authorization.