61957C0018(00)
OPINION OF MR ADVOCATE-GENERAL ROEMER (
1
)
Summary Page
Page
A — Facts
I — Particulars of the action
II — Applicant's status and its representation in the action
III — The history and content of the contested decisions
IV — Conclusions of parties
V — General view of the submissions and arguments of the parties
B — Legal discussions
I — Admissibility of the application
1. Regularity of the bringing of the action: necessity for an advocate
2. Applicant's capacity; representation of the applicant
3. Right of trading undertakings to bring actions
4. The contesting of several decisions in one action
5. Merits of the action; the legal interest of the applicant
II — Nature of the contested decisions
1. Decisions Nos 16 to 18/57
2. Decision No 19/57
III — Mention of the claims in the statement of claim
IV — Consideration of the submissions
1. Decisions Nos 16 to 18/57
(a) Misuse of powers
Pursuit of the objectives of Article 65
Disregard of the special position of existing wholesalers
Disregard of coal tonnages
Disregard of the possibility of making deliveries direct to industrial consumers
(b) The plaintiffs remaining submissions
2. Decision No 19/57
(a) Interpretation of the conclusions
(b) Misuse of powers and infringement of the Treaty as a result of the restriction of admission to the Oberrheinische Kohlenunion
(c) Infringement of the provision on competition
(d) Infringement of German constitutional law
(e) Infringement of an essential procedural requirement
C — Conclusion
Mr President,
Members of the Court,
Today I have the honour as Advocate-General to deliver my opinion in the case which the firm I. Nold KG, coal wholesalers in Darmstadt, brought on 26 September 1957 against the High Authority of the European Coal and Steel Community.
After the submissions by the parties' representatives in the oral proceedings on 19 November both I and the Court asked questions with the objective of receiving additional information on the matters submitted. The parties' representatives have supplied this information in their pleadings dated 26 and 28 November 1958 and sufficiently answered the questions raised. This additional information is not disputed by the parties. It is to be regarded as part of the oral procedure. The parties have now concluded their observations and the proceedings continue with the delivery of the opinion by the Advocate-General. I have to do this, in accordance with the duty enshrined in the Treaties of the European Communities, with complete impartiality and independence in open court. This opinion concludes the oral procedure.
The action has as its objective a declaration of nullity of the Decisions Nos 16/57, 17/57, 18/57 and 19/57 of the High Authority taken on 26 July 1957 and published in the Journal Officiel of 1 August 1957, pp. 319 et seq. Decisions Nos 16 to 18/57 approve tonnages as a basis for admission as wholesalers to the Ruhr coal marketing companies Geitling, Mausegatt and Präsident. Decision No 19/57 approves an association of coal wholesalers for the purpose of joint buying for the south German market (OKU, Bettag, Puton and Company, Mannheim).
In the course of the proceedings the applicant has applied for a suspension of operation of the contested Decisions Nos 16 to 19/57. The Court acceded to this application in an order dated 4 December 1957 in so far as it ordered:
‘Until final judgment application of Decisions Nos 16 to 18/57 of 26 July 1957 is suspended in so far as the commercial rules provided for in these decisions deprive the applicant of the status of first-hand wholesaler. Costs are reserved.’
Before I turn to consideration of the actual facts I think it appropriate to make some observations on the status of the applicant. The applicant's legal status at the time the action was brought, that is on 26 September 1957, appears from the extract from the Trade Register of the Amtsgericht Darmstadt of 15 October 1957. At the time Nold was a limited partnership without a personally liable partner. The retirement of the last personally liable partner was recorded in the register in January 1957. At the time the action was brought there were three partners who were all members of the Nold family.
Erich Nold who had not been connected with the company since 1953 appeared for the firm the name of which carried no mention that it was in liquidation. On 24 September 1957 he signed the authority to act in favour of Klibansky, Müller and Thomas, Rechtsanwälte, simply as ‘Nold’ without a forename or other additional description. As a later extract of the Trade Register of 26 October 1957 shows, it was not until 26 October 1957 that Erich Nold became a personally liable partner of the limited partnership. In the course of the proceedings the applicant's counsel submitted that Erich Nold was orally given power of attorney to manage the business and bring the action by the partners of the limited partnership. Identical written declarations were produced dated 13 March 1958 from two partners of the firm and the guardian of the other to which I refer.
Further, counsel has produced a handwritten declaration by Erich Nold dated 12 November 1957 in which it is stated:
‘I, the undersigned, Erich Nold, responsible partner of the firm I. Nold, Darmstadt, hereby declare that I confirm all acts and declarations which have previously been made by me in Case 18/57 and others against the High Authority and authorize Mr Thomas, Rechtsanwalt, to continue to represent me.’
Before it is possible to consider the action certain further observations are necessary on the applicant's representation in the proceedings.
The statement of claim dated 26 September 1957, to which is annexed the authority to act dated 24 September 1957, is signed by Joseph Klibansky, Rechtsanwalt. The Chamber of Advocates in the district of the Oberlandsgericht Frankfurt am Main had suspended him from practice. The Rechtsanwalt Thomas appeared for the applicant in the oral procedure of 12 November 1957 on the application for an interim measure and in all subsequent proceedings.
After these preliminary observations on the applicant's status and its representation before the Court it is necessary to set out essential parts of the actual content of the contested decisions. Since the decisions are connected with earlier decisions of the High Authority authorizing the joint sale of coal in the Ruhr, the latest Decisions Nos 16 to 18/57 contested here cannot be considered independently of the earlier Decisions (Nos 5 to 7/56 and 10 to 12/57) relating to the same matter.
Before the Common Market was established the mining companies of the Ruhr were associated in the Gemeinschaftsorganisation Ruhrkohle GmbH for the purpose of the joint sale of coal. As a result of several years' negotiations by the High Authority with the Ruhr mining industry the Ruhr coal marketing was reorganized in the spring of 1956. Three similar joint selling agencies were formed, Geitling, Mausegatt and Präsident. Decisions Nos 5 to 7/56 of the High Authority of 15 February 1956 (JO, 1956, p. 29 et seq.) authorized on their application the mining companies associated in these agencies to undertake the joint selling of coal and to bring in commercial rules in which the conditions for the direct supply of industrial customers and wholesalers are laid down. In addition the decisions contained certain conditions and made reservations for supervision by the High Authority. With regard to the supply of industrial customers the following was provided:
Transactions with industrial consumers which had not consumed in the previous coal-marketing year more than 30000 metric tons of coal, coke and briquettes shall be in the hands of wholesalers.
Transactions with such industrial consumers which, although exceeding 30000 metric tons of the said types of coal in the 1955/56 marketing year, have heretofore been supplied by the coal wholesale trade shall continue in the hands of the said coal wholesale trade until 31 March 1958.
The High Authority reserves the right to decide whether industrial consumers of more than 30000 metric tons of the said types of coal may be refused delivery through the trade in spite of wishing to be so supplied.
The direct supply of wholesalers was subject to tonnage criteria depending on the sale of Community coal within the Community, the sale of Community coal in a marketing area and Ruhr coal of a joint selling agency in a marketing area.
The decisions contained transitional provisions according to which wholesalers who during the 1955/56 coal-marketing year were supplied as first-hand wholesalers but who did not satisfy the new tonnage criteria could continue as first-hand wholesalers until the end of the 1956/57 coal-marketing year, that is, until 31 March 1957.
Finally the decisions provided for a review of the tonnage criteria for all wholesalers if after the transitional period, that is, after 1 April 1957, it should be shown in any area that more than 10 % of the wholesalers operating in the 1955/56 coal-marketing year no longer satisfied the conditions of the commercial rules.
In the grounds of these decisions reference was made to the necessity of joint selling having regard to the numerous kinds of coal and the different demand and also having regard to the danger of social tensions as a result of a slackening of demand or the danger of unequal distribution in the event of excessive demand. The introduction of the commercial rules was based on the consideration that limiting direct supply to wholesalers with a corresponding turnover and corresponding trade organization would improve the sale.
The transitional provisions for the so-called existing wholesalers who did not fulfil the tonnage criteria were extended by Decisions Nos 10 to 12/57 of the High Authority of 1 April 1957 (JO, 1957, p. 159 et seq.) until 30 June 1957‘in order’, as it is stated, ‘to give the mining companies concerned the opportunity to amend the existing rules on admission as first-hand wholesalers on the basis of experience obtained during the past coal-marketing year with the objective of avoiding a reduction in the number of admitted wholesalers as far as possible and to adjust the existing rules more appropriately to the requirements of the market’.
By the contested Decisions Nos 16 to 18/57, adopted on 26 July 1957, the High Authority authorized new commercial rules on the basis of lower tonnage criteria. The condition for the supply of first-hand wholesalers was now:
(a)
Sales in the Common Market in the previous coal-marketing year of 60000 metric tons (previously 75000 metric tons) of coal, coke, briquettes, brown briquettes, semi-coke derived from brown coal or bituminous coal from the Community as well as gas coke;
(b)
Sales of 30000 metric tons (previously 40000 metric tons of the said kinds of coal from districts of the Community in the marketing area of the dealer in the previous coal-marketing year;
(c)
Sales of 9000 metric tons (previously 12500 metric tons) of coal, coke and briquettes of a marketing company in the marketing district of the dealer in the previous coal-merketing year.
The authorization contained one other provision which I should like to cite verbatim;
‘The dealer must give evidence of fulfilling the normal trade conditions customarily required to be fulfilled by a wholesaler (e.g. credit worthiness, sufficient security, establishment in the marketing district, storage capabilities, knowledge of the market and goods, large range of customers and a wide range of sales).’
These decisions too contained a review clause which would have allowed the High Authority to amend the tonnage criteria if at the end of the 1957/58 coal-marketing year it had been shown that the number of wholesalers in a marketing district had decreased by more than 10 % as a result of the tonnage limitations.
The decisions entered into force on 1 August 1957 and, according to Article 15(1), were to apply until 31 March 1959 save for certain provisions for which a shorter period of validity was prescribed. Article 15(2) of these decisions repealed with effect from 31 July 1957 Articles 7, 8 and 9 of Decisions Nos 5 to 7/56 in which, inter alia, the former higher tonnage criteria for first-hand wholesalers were specified. Decisions Nos 10 to 12/57 extending the time were not mentioned in the said article. Accordingly Article 15(2) must be interpreted as follows in the system of the decisions: as from 31 July 1957 Articles 7, 8 and 9 of Decision No 5/56 (or 6/56, or 7/56) shall no longer apply in so far as they have not already ceased to apply by effluxion of the time prescribed for them. I should observe that article 9(3) of Decisions Nos 5/56, 6/56 and 7/56 had already ceased to apply as a result of Decisions Nos 10/57, 11/57 and 12/57.
Simultaneously with Decisions Nos 15 to 18/57 there was adopted Decision No 19/57 which is also contested by the applicant and for an understanding of which I refer to the recommendation of the High Authority of 11 July 1953 (published in the JO, 1953, p. 154). Decision No 19/57 authorized the establishment of a limited partnership for the joint purchase of fuel from certain districts of the Community for sale in southern Germany (the so-called ‘OKU’). Members of this company are wholesalers and also for a certain period mining companies and their marketing organizations.
Every wholesaler who fulfils the conditions of the marketing organizations for obtaining supplies directly is entitled to be a member of this company. This decision entered into force on 1 August 1957 and is valid until 31 March 1959. It was adopted on the ground that a great part of the German requirement is transported on the Rhine and its tributaries and that difficulties of supply arising from the varying transport possibilities on the upper Rhine could be avoided only if purchases and transport plans of the large marketing organizations could be coordinated. I refer to the decision for particulars of the considerations.
On the basis of Decisions Nos 16 to 18/57 the three Ruhr coal-marketing companies sent the applicant letters almost identically worded dated 19 and 21 September 1957 in which it was stated that as from 1 October 1957 the applicant could no longer be considered as a first-hand wholesaler and that the deliveries in August and September would be regarded as being in a transitional period.
As a result of this communication the applicant brought an application for annulment. Details of the conclusions and the various amendments thereto have been given by the Judge-Rapporteur. I shall confine myself to stating the claims as finally amended.
First it is claimed that the Court should:
‘Annul Decisions Nos 16/57, 17/57, 18/57 and 19/57 of the High Authority of 26 July 1957;
Alternatively
Declare that Decisions Nos 16/57, 17/57, 18/57 and 19/57 are null and void or not applicable in so far as they relate to wholesalers who were receiving supplies as first-hand wholesalers before the decisions were adopted.’
The defendant contends that the Court should:
‘Dismiss the application made by the applicant as inadmissible or in any event as unfounded.’
The parties claim that the costs should be borne by the opposite party.
After this summary of the subject-matter of the present action I shall now outline the submissions and arguments of the parties. In view of the very comprehensive report by the Judge-Rapporteur I shall confine myself here to a summary of the submissions and arguments without going at the moment into details. There will be an opportunity for this in the legal discussion.
I.
The following objections are made to Decisions Nos 16 to 18/57, which are in almost identical terms:
(a)
Infringement of the Treaty by disregard of the prohibition on discrimination and the rules of competition;
(b)
Infringement of German constitutional law;
(c)
Misuse of powers because important economic factors and the effects of the commercial rules are disregarded;
(d)
Insufficient grounds for the decisions.
II.
Decision No 19/57 is objected to on the grounds that it is discriminatory and establishes a monopoly and further the same submissions apply as are made in the statement of claim against Decisions Nos 16 to 18/57.
The submissions of the High Authority may be summarized as follows:
The High Authority objects
1. To the admissibility of the application
(a)
Because the applicant's counsel who signed the statement of claim was prohibited from practising;
(b)
Because the applicant at the time the action was brought was a limited partnership in liquidation.
2.
The High Authority considers the applicant's submissions inadmissible and unfounded because
(a)
Neither Decision No 16/57 nor Decision No 19/57 affects the applicant;
(b)
Only a submission of misuse of powers is admissible against general decisions;
(c)
This submission and the submission of insufficient grounds have been made too late;
(d)
The Court may not review the compatibility of the decisions with national constitutional law;
(e)
The various submissions with regard to the applicant's turnover and the number of wholesalers in the applicant's district are not well founded.
After thus setting out the subject-matter of the action I shall now discuss the law in relation thereto. I regret to say that procedural questions take up a large part of the discussion.
Admissibility of the action
In the first place under this head it will be necessary to consider whether the statement of claim satisfies the requirements of the Statute and Rules of Procedure of the Court.
As I said, the statement of claim is signed by a German advocate, who, although of the Bar of the Landgericht Frankfurt am Main, was suspended from practice by the competent Chamber of Advocates. Article 20 of the Statute and Article 29 of the Rules of Procedure of the Court of Justice are of interest in this connexion.
The principle of the necessity of a lawyer is quite clear from the second paragraph of the Statute of the Court of Justice. I shall not consider here how far this principle altogether extends. The question may accordingly remain open whether the persons mentioned in the second paragraph of Article 20 can undertake procedural measures. In the present case all that is in question is the regularity of the statement of claim, that is how the words ‘where appropriate’ (le cas échéant) in Article 29(1) of the Rules of Procedure of the Court should be interpreted.
I am convinced that there is only one reasonable interpretation of this. Article 20 of the Statute of the Court of Justice provides a general necessity for a lawyer without limiting it to a particular part of the proceedings. Accordingly ‘where appropriate’ in Article 29(1) of the Rules of Procedure can only mean: in proceedings in which it is necessary to have a lawyer the statement of claim must be signed by a lawyer.
From this observation the further question arises with regard to the conditions which the lawyer who signs must fulfil. Article 20 of the Statute of the Court of Justice refers only to being entitled to practise before a court of a Member State. It may therefore be said that the procedural law of the Community refers to the national law where the question arises as to the personal conditions which lawyers must satisfy in order to undertake procedural measures. With regard to the suspension of the applicant's advocate at the time the action was brought this means that we have to consider whether according to the law applicable in the district in which this advocate is admitted suspension from practice makes the legal acts of this advocate invalid.
The law on advocates in the district of the Oberlandsgericht Frankfurt am Main is quite clear: the suspension from practice pronounced by the Chamber of Advocates is a measure relating to the law of status; it is an internal order of the Chamber in respect of the advocate, disregard of which entails disciplinary consequences but does not have an effect beyond making procedural acts of the advocate effected contrary to the prohibition invalid. This is expressly stated in Article 107 of the Anwaltsordnung of Hesse of 18 October 1948 (Gesetz- und Verordnungsblatt für das Land Hessen, 1948, No 24).
In the present case therefore the suspension from practice of the applicant's advocate is no objection to the validity of the bringing of the action. This does not mean that the Court is not empowered to reject an advocate against whom disciplinary measures have been taken of the kind referred to in the first paragraph of Article 106 of the Hessian Rechtsanwaltsordnung.
Council for the applicant must produce an authority to act duly given by the party whom he represents. There thus arises a further question of admissibility in connexion with the status of the applicant because at the time the action was brought there was no personally liable member of the limited partnership. This is a question of legal capacity, which in the absence of special provisions of Community law must be decided according to the national law, which here is German law since it is a German company.
The provisions of the German Handlesgesetzbuch (Commercial Code) together with case-law and the views of German legal writers permit the following observations:
The same rules apply to the dissolution of a limited partnership as to the dissolution of an unlimited trading company. The limited partnership is thus dissolved by operation of law when a member retires (Article 131, Handlesgesetzbuch). If the retiring member is the personally liable member of the partnership then the partnership can continue with the remaining partners only where at the same time either a new personally liable member enters or one of the members becomes personally liable (see Weipert, RGR-Kommentar zum HGB, 2nd edition, explanatory note 32 to Article 177). In our case after the retirement of the only personally liable member in January 1957 no new personally liable member entered the partnership. The partnership at this time necessarily went into liquidation.
According to German commercial law a distinction must be made between the commencement of dissolution and its completion. The dissolution of the company does not cause its complete disappearance in the eyes of the law and in the economic sphere. The partnership only changes its status which is related to its new objective: the so-called trading company becomes a company in liquidation which is required to realize the existing assets for creditors and members. The company in liquidation is therefore not without capacity in law and as a party to proceedings; its capacity in law and as a party to proceedings is, however, limited to the purposes of liquidation. This appears from Article 156 of the Handelsgesetzbuch which also applies to limited partnerships and which, with regard to the legal relationships of the company in liquidation to third parties, refers to the general provisions limited to the purposes of liquidation.
From this finding the question must therefore arise whether the present action comes within the sphere of the legal and trading capacity of the limited partnership in liquidation so described or, in other words, whether even a company in liquidation has an interest in the answer to the questions raised.
I have to answer this question in the affirmative. I would like to stress here, however, that I do not consider it necessary to consider in detail all the theoretical niceties of German law relating to this question. There is something else that is decisive and particularly important in the present proceedings: the applicant has continued to trade even after entering into liquidation, as if nothing had happened, and this is not challenged, for the partners obviously intended to continue the undertaking unchanged after the entry of a new personally liable member. The business of the applicant as an economic unit and an element of the total economy was not affected, so far as it appears, by the legal event described. The applicant continued as previously to participate in the economy of its area in a manner relevant for the European Coal and Steel Community. In the same way as with a company in formation which begins to trade before it is completely formed and in the same way as with a de facto company which trades although it is legally defective, the economic viewpoint must have importance here. The economic function of the partnership in the distribution of products is the same as if it were not in liquidation.
The applicant's legal capacity, although limited to the purposes of liquidation, was sufficient, in my view, to bring the action at the time it was introduced. On this question German writers and case-law are very liberal in the interpretation of the concept ‘for the purpose of winding-up’. If a reasonable winding-up requires, even new transactions are possible. In view of this it is possible to say that even for a partnership in liquidation it is relevant whether it can carry out its winding-up transactions, which may include uncompleted contracts of supply, as a first-or second-hand wholesaler. I therefore take the view that the special status of the applicant at the time the action was brought (the subsequent regularization of the partnership's position in accordance with the requirements of the applicable German law is irrelevant here since it occurred after expiry of the period for bringing the action) has not affected its capacity to bring the present action.
This does not fully conclude the issues relating to the applicant's status.
The High Authority has mentioned the fact that Erich Nold who has appeared for the applicant was not a member of the partnership when the action was brought and became a personally liable member only after expiry of the period for bringing the action. Against this the applicant has maintained that Erich Nold was generally empowered by the members of the partnership to carry on the business and to bring the action.
With regard to the representation of the partnership in liquidation it must first be observed that the partnership was not without a representative even after the only personally liable member retired in 1957. The legal representatives of the partnership in liquidation are its liquidators. Article 146 of the Handelsgesetzbuch, to which Article 161, II, refers, states that ‘The liquidation shall take place with all the member as liquidators provided that no other person is so appointed by resolution of the members or by the articles of association.’ Accordingly the liquidators, that is the legal representatives of the partnership, were all the remaining members. Since a Prokura (general power of attorney) is extinguished when the partnership goes into liquidation or remains valid as a Handlungsvollmacht (power of attorney to carry on business) only with the consent of the remaining members, it is a question with regard to all legal matters on liquidation only of the wishes of the liquidators. The liquidators are free to assign their powers to others outside the partnership. It was accordingly legally possible to empower Erich Nold, an outsider, to manage the business and to bring proceedings. The applicant seeks to show that this in fact happened by documents produced in the course of the proceedings in which the members and a guardian of a member declared that there was an oral authority given to Erich Nold at the time. Written declarations of this kind can scarcely be regarded as evidence either by witnesses or as documentary evidence. But together with the disputed fact that the alleged agent and subsequent personally liable member of the partnership continually negotiated and concluded agreements with the joint selling agencies during the transitional period as the firm's manager, a certain value may be attached to these documents. It may thus be assumed that Erich Nold was in fact empowered by the members to manage the business and bring actions. German law does not lay down any special form for a power of this nature. Since no leave of the court is required for a guardian of a member to give authority, there is thus no cause to doubt the validity of the power. This issue thus also seems to me to be settled in favour of the admissibility of the action. Further, Mr Nold, who had previously legally acted as the agent of third parties in the business of coal wholesalers, has subsequently become a personally liable member and thus a manager of the same undertaking and has declared that he approves all previous acts undertaken in the name of the applicant. It may be observed that in German civil administrative procedure such an authorization has a retroactive effect with the result that the acts are considered a posteriori as taking place within the relevant period (cf. Rosenberg, Lehrbuch des Zivilprozessrechts, 5th edition, p. 166; Eyermann-Fröhler, Kommentar zum Verwaltungsgerichtgesetz, p. 188; Klinger, Kommentar zur VO, No 165, p. 299). It seems that this possibility is also not unknown in French administrative proceedings (cf. Odent, Contentieux administratif, Part I, p. 340 et seq.).
It remains to be mentioned that the transformation of the company in liquidation into a trading company has no effect on the further course of the action. This causes no change in the legal identity of the now regularized company with the company in liquidation. There is no change in the parties thereby.
The discussion of the admissibility of the action must include some observations on the right of action of trading undertakings under the Treaty. I can, however, limit myself here to referring to the application for suspension of operation of the contested decisions. In the order which the Court then made it stated how the right of action of trading undertakings is limited in connexion with Articles 65 and 66 of the Treaty. There is nothing to add to that here for the further course of the action has not shown that the applicant's business is confined to domestic sales and sales to small businesses.
I can also save myself observations on the fact that the applicant has contested several independent decisions of the High Authority in one action. The Court has already had many opportunities of ruling on the admissibility of such an action (e.g. in Cases 1/54 and 3/54).
There is no further cause for objections and observations on the admissibility of the action.
I therefore turn to the question of the merits of the applicant's claims and whether the applicant has a legal interest in these proceedings. The parties have opposite views on this matter.
The High Authority says that the applicant is not affected by Decisions Nos 16 to 18/57 in which new lower tonnages were authorized as a condition for acceptance as wholesaler at first hand, for the applicant would not have been accepted as a firsthand wholesaler even if these decisions had not been adopted. Actually the applicant was affected only by the repeal of the transitional rules on existing wholesalers which were adopted in Decisions Nos 5 to 7/56 of 31 March 1957 and Decisions Nos 10 to 12/57 of 30 June 1957.
Neither, in the High Authority's view, does Decision No 19/57 adversely affect the applicant for it authorized the same conditions for acceptance into the Oberrheinische Kohlenunion as for recognition as a firsthand wholesaler.
Some of the questions referred to have already been considered by the Court in the application for an interim measure. The view was then rejected that on the suspension of operation of the contested decisions the previous higher tonnages were again to be applied. In the present stage of the proceedings the question has another scope: it must be considered whether by the abolition of the contested decisions, with the consequences arising for the High Authority under the Treaty, the applicant's position would not be improved but made even worse because the former higher tonnages would again be the criterion. To anticipate the result of this inquiry let me say at once that I consider this conclusion false. This view would mean leaving out of consideration the fact that already on the expiry of the 1956/57 coal-marketing year the High Authority observed that the previous tonnage rules had led to too great a reduction in the number of wholesalers and that for this reason they had to be made less demanding. For this reason the transitional rules for existing wholesalers were extended by Decisions Nos 10 to 12/57 of 30 June 1957.
It must be asked on the contrary what steps the High Authority had to take under Article 34 of the Treaty in order to draw the necessary consequences from a judgment of annulment? There is only one reasonable answer to this: the High Authority would have had to lower the criteria to an appropriate level. The old tonnages ought not again to be applied because their authorization was revoked when the new tonnages were authorized and only the new authorization and not the revocation of the old is the subject of the action for annulment. If, however, it is considered that the authorization of the new tonnages is so bound up with the revocation of the old that the new authorization cannot be revoked without the revocation of the old tonnages being annulled, then the High Authority would be bound to prevent the re-application of the old tonnages by appropriate measures, for in the nature of things the finding that the new less onerous tonnages are void ipso facto involves a similar finding in respect of the former more onerous criteria.
In this light there can therefore be no question that the application should be dismissed because the annulment of the contested decisions could not improve the applicant's position. Another related question, it is true, is whether the applicant must be said to have no legal interest because, even when the contested decisions are annulled, the tonnages could never be expected to be fixed to cover the applicant's turnover as known to us. This question will be discussed in a later context in connexion with consideration of the tonnages themselves.
The same considerations are relevant in connexion with Decision No 19/57. I shall return to this later. Here I shall limit myself to saying that it seems to me impossible to deny the applicant a legal interest in having this decision annulled because the applicant is concerned in this connexion only with the limitation of the concept of wholesaler which has been adopted in other decisions. In the oral procedure the applicant made it clear in answer to my question that the decision is contested because there are tonnage criteria at all for admission to the Oberrheinische Kohlenunion or at least because they are fixed at the same level as for recognition as a first-hand wholesaler. In this case, however, there is a legal interest in the annulment of Decision No 19/57, for what is not yet achieved with an amendment of the tonnage limits for recognition as a first-hand wholesaler is possible with the annulment of the Decision No 19/57: the abolition of any limitation on admission to the Oberrheinische Kohlenunion or the grant of the right of admission even to dealers who do not fulfil the conditions for wholesalers.
I therefore consider it, on this issue also, not possible to declare the action inadmissible for lack of a legal interest.
Finally with regard to the questions of admissibility we must consider which submissions are relevant in the present case and whether the admissible grounds of action have been pleaded in time.
The Treaty distinguishes the admissible submissions according to whether they relate to general or individual decisions. Neither in Article 33 nor Article 15 nor elsewhere does the Treaty legally define a general or individual decision in the system of the Treaty. The Treaty leaves it to the case-law of the Court to find an appropriate and valid definition.
I dealt with the question briefly in my opinion in the application for suspension of operation. It is my intention to go further and more deeply into this matter in the section on procedure with which we are now concerned. The starting point is the observation that it is not the superficial form but the nature of the decision, namely the substance and the actual effects of the decision, which is the criterion.
The abstract theoretical definition of a general decision has been attempted several times in proceedings before this Court. According to this, we. speak of a general decision where a rule laid down by the High Authority does not relate to certain particular persons or a limited group of persons but to all members of a particular class within the Common Market or a part of this market which comes under a special system or where the factual elements of a decision are expressed in such an abstract manner that the legal effects of the decision affect everyone who fulfils the conditions at the time the decision is adopted or subsequently. Since it seems to me appropriate to consider Decisions Nos 16 to 18/57 separately from Decision No 19/57, the question first arises whether Decisions Nos 16 to 18/57 satisfy the abovementioned definition. First of all it is an important factor that it is a question, in the context of cartel law, of the authorization of commercial rules which three joint selling agencies should apply in their dealings with their customers.
It cannot be denied that this authorization of the High Authority contains individual factors. It was adopted on the application of a number of mining companies and it gives these companies the power to regulate their sales in a particular manner. On no account, however, can it be limited solely to this aspect. The commercial rules are not unilateral but as their name implies are intended to regulate the relations between two undertakings at any given time. They necessarily cover in advance, and not only indirectly and by chance, the sellers, on the one hand, and the purchasers on the other. In the sphere of truly private law they would be classed among general business relations, that is, rules adopted by private participants of the economic scene but yet similar to laws in the manner of their formulation and generality. In the sphere of Community law such commercial rules are part of a general organization of the market and belong to public economic law. For this reason their applicability is subject to a sovereign act of authorization on the part of the High Authority. So far as the sellers in question are concerned, that is to say in fact, the mining companies behind the joint selling agencies, it cannot be disputed that as already mentioned there is a certain individual factor. From the purchasers' point of view however it is another matter: all the coal wholesalers in the market of the whole Community are concerned here. It is no doubt possible to determine which of them are affected at the time the decisions enter into force. This circumstance could be regarded as an individual factor although it is clear that the number of those affected, I do not say prejudiced because this characteristic cannot be decisive, is very large having regard to the significance of the Ruhr coal for the whole territory of the Community, which rather gives cause to classify the decisions as the reverse.
There is also this: that the commercial rules are not intended to be applied once during a coal-marketing year but to regulate the selling conditions in the coal market of the Ruhr for years. It is thus quite conceivable that the circle of admitted wholesalers may vary after a year of the application of these rules by new members joining and others leaving. The possibility of this development in one direction or another has been taken into account in drafting the decisions (cf. Articles 4 and 8 of Decisions Nos 16 to 18/57). It can therefore certainly not be specified at the time the authorization is given who will be affected by the decisions during the whole time they are to apply. For this reason a general formula was used of the kind used in abstract rules of law. For the same reason the decisions were published in the Journal Officiel and the date they were to enter into force was specified.
All these indications taken together compel me to the conclusion that the general nature of Decisions Nos 16 to 18/57 is preponderant. The fact that the rules are in the form of an authorization resulting from an application by certain mining companies cannot be decisive but what is decisive is the fact that the intended legal effects of the decisions apply to a very large and indeterminate number of persons over a long period of time. I think that this classification is the one more likely to meet the purpose and objective of the distinction between individual and general decisions, having regard to the limitation on the right of action.
How should Decision No 19/57 be considered in so far as it is not a question of the authorization of dealers to associate in the Oberrheinische Kohlenunion but the authorization of the conditions for admission to the Oberrheinische Kohlenunion? At first sight the legal position seems to be the same here. The authorization is addressed to a specifically determined group of trading undertakings; however it is further intended for others interested in admission. Their category was probably likewise able to be determined at the time the decision was adopted but not for the whole period for which the decision applies. On the contrary, it is worded as are abstract rules of law: everyone who fulfils the tonnage conditions shall be entitled to admission. The fact that this rule is contained in a private statute which was the subject of authorization is not of crucial significance. It is only the authorization which makes the statute legally binding. Ultimately it is the decision of the High Authority which is the legislative factor.
It should not however be overlooked that there are peculiarities in Decision No 19/57 which could lead to a different legal assessment of it from that of Decisions Nos 16 to 18/57. The decision is concerned with only a partial organization of the coal wholesale trade in southern Germany, that is, a relatively small area of the Common Market. Although the number of those who come into account as entitled to participate during the two years for which the decision is in force is not able to be precisely determined for reasons which are associated with the definition of the concept of wholesaler and although it is possible that certain traders are excluded because they no longer fulfil the tonnage requirements and that other dealers join, it will however very likely alter only within quite narrow limits, because it is in the nature of things that in one single sales area there is only a certain number of wholesalers. The entire rules of admission will therefore in all likelihood be of practical importance to only a few coal wholesalers whose existence and competitive importance in the particular market are apparent or ascertainable at any time. It seems to me very questionable whether, having regard to the fact that the number of those affected is always apparent, there may be said to be a general decision in spite of the use of general expressions for its legal form. The function of this concept in limiting the right of action leads rather to the conclusion that Decision No 19/57 is an individual one. As will be apparent later, however, this question is ultimately not of decisive importance for the present decision in this case.
After the nature of the contested Decisions Nos 16 to 18/57, on the one hand, and Decision No 19/57, on the other, has been defined, the grounds of the action may without difficulty be found to be admissible. As appears from the Treaty and as the Court has already stressed on several occasions, the only submission to be made by undertakings against general decisions is that there is a misuse of powers affecting them; against individual decisions, on the other hand, there are all the grounds of action mentioned in Article 33 of the Treaty.
With regard to Decisions Nos 16 to 18/57 the question now arises whether the applicant has duly made the submission of misuse of powers in time. The express allegation of misuse of powers, that is, designation of this claim as such, was made for the first time in the applicant's pleading of 11 November 1957 which was lodged at the Registry of the Court on 12 November 1957. This was the reply to the defendant's answer which was limited to the procedural part of the issues. The period for bringing the action had already expired at this point for the contested decisions were published on 10 August 1957 in the Journal Officiel. According to the third paragraph of Article 33 of the Treaty they should have been contested within one month following the day on which the period began to run or, for applicants resident in Germany, an additional three days (cf. Article 85(2) of the Rules of Procedure), that is, since the period for bringing the action began to run pursuant to Article 85(1) of the Rules of Procedure fifteen days after publication of the Journal Officiel on 27 September 1957 at the latest.
The question is therefore: do the Rules of Procedure of the Court permit the introduction of grounds of claim without the use of the special legal terminology referred to in Article 33 by setting out the legally significant allegations of fact whose relationship to the claim permits a conclusion free from doubt of the ground adopted by the applicant?
I am of the opinion that there is no generally valid answer; each case must be considered on its merits and subject to the Court's discretion. This consideration leads us to the concrete preliminary question: what does the applicant say in this connexion in its statement of claim? It alleges that as a result of the system of distribution it was not possible for it to extend its turnover at will; objectively it was impossible to achieve the tonnage limits laid down. It says further, and I quote from page 5 of the statement of claim:
‘There can be no doubt that the rules which have been sought for some years are intended to exclude a large percentage of the wholesale firms operating heretofore’ and subsequently ‘the minimum tonnage requirement … deals not only almost 50 % of all wholesale businesses a death blow…’; moreover it claims that the High Authority has acted wrongly in authorizing the commercial rules.
There is no difficulty in properly bringing these parts of the claim within the classes of claims provided for by the Treaty; the claim of misuse of powers can straightaway be seen from the factual submissions. The applicant completes the legal classification in the reply by further developing the facts and arguments which are intended to justify its claim.
The applicant also makes a submission of discrimination in the statement of claim and in all subsequent statements and considers that in law the submission of discrimination includes in all cases misuse of powers and that it is sufficient to allege discrimination in order to have misuse of powers considered. The view is untenable that discrimination is always a more comprehensive general concept in relation to that of ‘misuse of powers affecting them’. It may, however, be said that the fact that the applicant has neglected to make a classification in accordance with the Rules of Procedure or in this respect perhaps has made a wrong classification in its statement of claim cannot lead to the action being dismissed as inadmissible.
If this view is adopted then the conclusion must be reached that the submission of misuse of powers was duly made in good time. The applicant has also logically alleged, as Article 33 of the Treaty requires, that its undertaking was the victim and object of a misuse of powers on the part of the High Authority in that for a long time it was intended that it and similar undertakings should not be allowed to continue as firsthand wholesalers and that the decisions which have these effects have been adopted at an inappropriate moment having regard to the economic structure of the market. In so far as Decisions Nos 16 to 18/57 are concerned, I therefore have no objection to the admissibility of the action.
The said questions do not arise in respect of Decision No 19/57 if the view is adopted that it is an individual decision. The question of admissibility arises only in respect of the submission of insufficient grounds but I shall deal with this later.
Substance
Coming now to consider the substance of the action I would like first to deal with the similarly worded Decisions Nos 16 to 18/57 and then Decision No 19/57.
On the basis of my argument that the contested Decisions Nos 16 to 18/57 are of a general nature in relation to the applicant they are to be considered only from the point of view of misuse of powers.
At this point I would like to stress that the decisions can be seen only in connexion with Decisions Nos 5 to 7/56 which are of the same nature and are more comprehensive as regards their subject matter. Further, Decisions Nos 10 to 12/57, the validity of which was limited to the period from 1 April to 30 June 1957, should not be overlooked.
The Court of Justice has already several times had to consider the interpretation of the concept of ‘misuse of powers’. It has laid down a definition which is basically as follows: there is a misuse of powers where the High Authority uses its powers for a purpose other than that laid down by law or where a decision is adopted as a result of a serious lack of foresight or circumspection amounting to a disregard of the legal purpose and purposes are pursued other than those for which the powers were given (cf. Judgment in Case 8/55).
I am not intending to discuss here whether this definition of the concept is sufficiently exhaustive. I shall content myself with applying this criterion and if necessary considering whether a wider interpretation of the concept would lead to a different result. Let me however mention that our concept of misuse of powers is not identical with the German concept.
The decisions of the High Authority are based on Article 65 of the Treaty. The High Authority rightly assumes that commercial rules which provide for various commercial stages of trade turnover mean a sharing of customers and markets within the meaning of this article. Such commercial rules can therefore be authorized only if they fulfil the conditions described in Article 65, namely
‘(a)
… such joint… -selling will make for a substantial improvement in the production or distribution of those products;
(b)
the agreement in question is essential in order to achieve these results and is not more restrictive than is necessary for that purpose; and
(c)
the agreement is not liable to give the undertakings concerned the power to determine the prices, or to control or restrict the production or marketing, of a substantial part of the products in question within the common Market, or to shield them against effective competition from other undertakings within the Common Market.’
In this provision authorization is made subject to a number of conditions, the majority of which do not specify the permitted objective of the authorization but negatively state the circumstances in which authorization is to be refused.
Only subparagraph (a) specifies a criterion which may be said to describe an objective which may be pursued subject to authorization, that is to say, an objective laid down by law within the meaning of the previously described definition of misuse of powers.
The other criteria mentioned are conditions which must be fulfilled so that the authorization is not contrary to the Treaty, that is, not an infringement of the Treaty giving rise to an action for annulment.
The objective laid down in Article 65 is in fact mentioned in the recitals in the preambles to Decisions Nos 16 to 18/57. It is stated:
‘… the tonnages may be authorized only to the extent to which account is taken of the general principles for the introduction of such rules, namely:
admission is based on objective and nondiscriminatory criteria; it leads to a substantial improvement in production …’
This observation is obviously not sufficient. It is necessary to inquire whether the said objective has in fact been pursued or whether it could be achieved at all. If this question is answered in the negative, then there is shown to be a misuse of powers (whether in relation to the applicant is another question) either because another objective has been pursued or because the objective impossibility of achieving the legal objective results in the decision being necessarily limited to effects which do not justify its adoption. The objective pursuit of another objective, expressed in another way, represents a misuse of powers where the authority responsible overlooked this consequence as a result of serious lack of foresight.
How does the present case appear in this light? It is undisputed that in the applicant's marketing area only three of 76 dealers have lost the status of wholesalers as a result of the contested commercial rules. In view of this fact the applicant asks the question whether there can really be said to be an improvement in production. The exclusion of three wholesalers with limited turnover appears to have a minimal and insubstantial effect on rationalization as sought.
If consideration of the facts were limited to this point of view I would be inclined to consider the applicant right. It would, however, be a mistake to go no further than this isolated observation; the commercial rules must be looked at in connexion with the authorization of the joint selling, which was done by Decisions Nos 5 to 7/56 and was not contested. It can scarcely be disputed that the authorization of the joint selling in view of the diversity of the mining undertakings with their different working and promotion conditions and the number of different codes is in accord with Article 65 and is likely to make for a substantial improvement in the production and distribution of coal. I would mention here that this accords with a basic aim of the Community expressed in Article 2 of the Treaty: ‘The Community shall progressively bring about conditions which will of themselves ensure the most rational distribution of production at the highest possible level of productivity …’. If it is assumed that the principle of the joint sale of Ruhr coal by free marketing companies is proper (I have no cause to go into this question further in the present action) there then arises the disputable requirement to regulate the conduct of the sale in such a manner as to exclude arbitrary measures on the part of the joint selling agencies. In other words the commercial rules were not introduced to continue the old coal-marketing practices but were required for a proper regulation of the coal market, for without such an organization the joint selling agencies would have been free to stipulate and alter their conditions of sale as they pleased.
If the necessary close relationship between joint sale and the introduction of the commercial rules is recognized, then it is apparent that it suffices if the authorization of the joint sale accords with the objectives of Article 65. It would not be correct to require that this necessary accessory on its own should also fulfil these conditions. It suffices if the commercial rules together with the joint sale contribute to achieving the objective mentioned in Article 65.
Now I have tried in this manner to show how the accent is to be placed in the context of the general rules, it may be observed that there cannot be said to be a misuse of powers because the commercial rules on their own do not bring about a substantial improvement in coal distribution.
However, consideration of this submission is not yet complete.
If the view is accepted that there is no objection on principle to the existence of commercial rules (I believe the applicant shares this view), then all that remains to ask is in what manner the commercial rules should be organized so that they give no cause for the submission of a misuse of powers.
No one will object to the commercial rules providing for categories of wholesalers and the distinction being based on turnover, which is obvious in making an economic assessment. The division of the customers and the limitation of direct supply to wholesalers with a certain volume of trade seek the rationalization effect referred to in Article 65.
It can remain open whether it would be difficult to do this if the limits for first-hand supply were reduced by some thousands of metric tons below the figures in the contested commercial rules. This is a question of economic expedience which the Court of Justice cannot consider as a matter of course. But this is not the question in the present action. In its earlier Decisions Nos 5 to 7/56 and in the contested decisions the High Authority has, in the form of a review clause, already marked out the limits within which it considers alterations in the tonnages necessary and sufficient. According to these provisions the figures should be amended so that no more than 10 % of the dealers already admitted should be excluded with the result that there is still a sufficient number of dealers remaining to ensure competition.
The applicant is concerned with something quite different and all its submissions must be seen in this light. It takes the view that the tonnages should be fixed at a level which always includes the turnover of the existing wholesalers or that special rules should be made for existing wholesalers.
We have thus reached the central issue of this action.
If the first argument is considered in relation to its consequences the following picture emerges. If the High Authority based its authorization on the smallest existing wholesaler, then fixed criteria for a long period would not be possible; it would be necessary every year to have a new limitation based on the lowest current turnover. Apart from the fact that in this way there would be an element of uncertainty and unpredictability in the commercial rules which would not permit more certain provisions, there would also be the danger that as a result of falling turnover sometimes by this wholesaler and sometimes by that the class of first-hand wholesalers ultimately admitted would increase so much that there could no longer be talk of rationalizing distribution within the meaning of Articles 2 and 65 of the Treaty. No one can base a submission of misuse of powers on the fact that the High Authority has not required the introduction of such rules when giving authorization. On the contrary such rules would so conflict with economic sense that they could not be maintained.
A glance at the applicant's unchallenged turnover figures supplied by the High Authority and the applicant shows that the fears described are not unfounded. Such a glance leads to yet another conclusion already hinted at when considering admissibility. Even if for any reason the conclusion were reached that fixing the tonnages at the contested level was inadmissible—the present action is concerned only with its level and not its basic admissibility—the level could never be reduced to such an extent as to embrace the applicant's turnover. The Court of Justice can reach this finding, although it is an assessment of economic questions, because the solution mentioned is clearly outside the bonds of economically reasonable possibilities. If this were the only criticism which the applicant has against the said decisions, it would have to be said that the applicant has no legal interest in the proceedings since there was no prospect that a change in the commercial rules would improve its legal position.
What the applicant says, however, can be understood differently, as I have mentioned. It is conceivable that the applicant complains of the fact that existing wholesalers and new wholesalers are judged by the same criterion, that is, that there are no special rules for existing wholesalers as in previous decisions. The question may be asked whether this objection comes under the concept of misuse of powers or is rather an infringement of the Treaty. I shall not discuss this question further but assume that ‘a serious lack of foresight’ is alleged which is equivalent to a misuse of powers. I stress expressly, however, that I am not seeking to settle this problem conclusively here because I think that the objection is not well founded, however it is put. I shall also not consider in detail whether the position of existing wholesalers would have made it necessary to make their special position permanent. The applicant alleges that there is a right to continue to receive supplies as a first-hand wholesaler if someone has arranged his undertaking for years on the basis of this manner of trade. I cannot find such a right in the sense of a subjective entitlement, unless it be where long-term contracts of supply have been concluded which remain outstanding. However, there are principles which compel suppliers to treat their customers equally and give the latter a legally protected interest by reason of the prohibition on discrimination. In addition, every legal system recognizes principles of good faith which prevent a seller from introducing a sudden change in the trade relations with his customers to which the latter cannot adjust themselves in a short time. Such fundamental principles must certainly be observed in drawing up and authorizing commercial rules. Decisions Nos 5 to 7/56 thus contain transitional rules for existing wholesalers which shows that the High Authority has not overlooked the special position of those undertakings. The transitional rules originally intended to last for a year were extended for a further three months by Decisions Nos 10 to 12/57 in order to give the joint selling agencies an opportunity to work out new commercial rules valid for all dealers without exception and taking into account the experience acquired for them. It may properly be asked (I shall not go into these questions of economic necessity and expedience) whether the time-limits in the transitional rules were appropriate. It is clear that Decision Nos 5 to 7/56 or Decisions Nos 10 to 12/57, the lawfulness of which cannot be considered in the present action, set time-limits on the transitional rules and specify that after a transitional period the same rules should apply to all dealers. I mention here especially a paragraph in Article 9 of Decisions Nos 5 to 7/56 where it is stated:
‘The agreement of the mining companies (No II, 2 of the commercial rules) to retain the transitional rules until the joint selling agency has made a sufficient delivery of fuel during a whole coal-marketing year is not authorized.’
The question of the appropriateness of the transitional rules cannot therefore be considered further in the present proceedings, the subject-matter of this action is merely the examination of whether the level of the general tonnage limitations represents a misuse of powers and not whether there should have been further special rules for existing wholesalers.
The applicant cannot be heard to say that it would not have been possible for it to bring an action for annulment of those decisions, namely Decisions Nos 5 to 7/56 and 10 to 12/57, because it would not have been considered to have had a legal interest in view of the transitional rules. It was reasonable for it to contemplate that the review clause of the old Decisions Nos 5 to 7/56 would never have led to a reduction of the tonnages to the level of its own turnover. Since, on the other hand, the limitation on the transitional rules was expressly fixed, they could certainly foresee the end of their status as wholesalers. They could and ought then to have tried to arrange for the special rules for existing wholesalers to be made more generous. However, since it brought no proceedings and did not even comment to the High Authority, as undertakings, dealers and consumers are entitled to do at any time under Article 46 of the Treaty, and since, moreover, the association within the meaning of Article 48 of the Treaty to which the applicant belonged was heard by the High Authority with regard to the intended decisions, the High Authority could certainly, on the sure legal basis of the transitional rules which had legally entered into force and affected the applicant, proceed to the present organization of the market the essential element of which is composed of the commercial rules. With regard to the facts I should like, moreover, to refer to the well-known annual general reports of the High Authority and in particular to the reports for 1955/56 and 1956/57.
In this respect as well, no misuse of powers can be discerned in the adoption of the contested decisions.
The applicant's turnover has already been mentioned. The applicant has explained in the course of the proceedings that as a result of the system of distribution it was not possible for it to increase its turnover at will. If, moreover, it is borne in mind that the applicant elsewhere explains the decline in its turnover as due to the reconstruction of its firm, that is, a subjective factor, the claim is that the High Authority has not taken into account in authorizing the criteria that their fulfilment in many cases was objectively not possible.
This submission may also be considered from the viewpoint of misuse of powers, even if reservations could be had on the basis of the previous definition by the Court of Justice; the view may be taken that the High Authority in adopting its decisions has not taken account of significant circumstances which, had it done so, would have caused it to fix the criteria at another level.
If this submission is considered, then it is seen that at the time in question there was only one kind of legal quantitative criterion, namely the delivery plans for which the High Authority had given authorization to the joint selling agancies and details of whose functioning and objective are given by Decision No 8/56 which is no longer impeachable and the Rapport Annuel 1956/57, p. 141, Nos 131 et seq. Any other obstacle as the result of the quantitative system, such as a refusal by the joint selling agencies to make deliveries in spite of not being authorized to impose any such limitation and in spite of other customers' obtaining more supplies, is a factual circumstance which cannot be considered in a legal assessment of the general commercial rules. All that is important in considering the commercial rules is what was permissible in respect of all dealers on the basis of the economic and legal conditions during the reference period.
Again, in this connexion, if the applicant's turnover is considered then it is apparent that no reduction in its turnover can be attributed to the said supply plans. The supply plans apply only as from the 1956/57 coal-marketing year, that is, not for the period which was the criterion for the turnover figures of the commercial rules. Moreover they provided only the following: for the 1956/57 coal-marketing year supplies to all industrial consumers were reduced by 10 % in relation to the average during the years 1953 to 1956; supplies to domestic consumers, on the other hand, went up some 5 %.
There can be no question, therefore, that the applicant's reduction in turnover was caused by any quantitative system imposed by law, to which the High Authority should have had regard in its decisions. This conclusion is also supported by a comparison with the turnover trend in the other coal-trading undertakings in the applicant's area, particulars of which have been collected by the High Authority and passed to the Court and the applicant in the last few days. This comparison shows that only a few dealers have experienced a similar trend to that of the applicant. There cannot be said to be any general decline. Some dealers have in part even considerably increased their turnover. There is no trace in this table of the consequences of the general quantitative system. Therefore it cannot be said that the High Authority has been guilty of a misuse of powers because it has not taken into account the alleged quantitative system.
Should the applicant in fact have been treated very differently in comparison with its competitors without an objectively justifiable reason, it could raise this fact in an action before a German court against the undertaking causing the obstacle. The conduct of a producer would in fact be inequitable if he were to cite the commercial rules against the wholesaler while himself unlawfully having made it impossible to fulfil the criteria contained therein.
The applicant finally alleges that the fulfilment of the tonnages is impossible for it because industrial consumers had and still have the possibility of obtaining supplies direct from the joint selling agencies, thus circumventing the wholesale trade where their coal consumption is at a particular level.
If the applicant intended thereby to question the lawfulness of the decisions of the High Authority which afforded this possibility, then it must be countered that such a discussion is not possible in the present action because the period for challenging the said decisions (Nos 5 to 7/56) has expired. However, the applicant apparently does not have this objective. It alleges on the contrary that this fact was wrongly not taken into account in laying down the tonnages and that this constitutes a misuse of powers. The applicant's submission could be valid if it were shown that the fact cited by it had in many cases made it impossible to achieve the tonnages. It is clear, however, that only three have been excluded by reason of the commercial rules from the status of firsthand wholesalers in the circle of wholesalers in the applicant's area. This shows that the direct supply of industrial consumers has not had the effects on the wholesale trade alleged by the applicant. If this fact is important only to the applicant and a small number of traders but, as regards the commercial rules, does not materially affect the majority of wholesalers, that is, the general structure of the wholesale trade, then its disregard by the High Authority cannot be grounds for a submission of a misuse of powers.
If the other submission made by the applicant against Decisions Nos 16 to 18/57 (infringement of the prohibition of discrimination, infringement of the rules on competition, disregard of national constitutional law and infringement of an essential procedural requirement) are examined, then it is clear that we are concerned here with claims which can scarcely be brought under the concept of misuse of powers. In so far as they represent grounds of action at all within the meaning of the Treaty (the parties have conflicting views with regard to the infringement of national law), they must be considered from the point of view of infringement of the Treaty. If the argument that the contested decisions are of a general nature is accepted, then there is nothing for the Court to examine. I have so far been concerned only with Decisions Nos 16 to 18/57. I now turn to Decision No 19/57, which is also contested, basically with the same arguments as used against Decisions Nos 16 to 18/57.
Before we open the inquiry it is perhaps appropriate once again to make clear what is being objected to. The applicant itself has stressed that the association of wholesalers for the purpose of joint purchase does not appear open to objection but only the conditions for admission and membership as authorized by the High Authority. We thus need concern ourselves only with this part of the decision.
It should be recalled briefly that the only condition for admission, so far as we are concerned here, is that the undertaking in question is allowed to obtain supplies of coal at first hand according to the conditions of the joint selling agencies. On this basis the claim may be interpreted in many ways: either the applicant objects that admission has been made dependent on any condition at all or it objects to the terms of the condition which requires that admission be open only to first-hand wholesalers or it is objecting to the fact that the status of wholesaler and consequently admission is subject to the conditions which have already been mentioned several times.
If the applicant intends the third alternative then, as already mentioned, the action would have to be dismissed for lack of legal interest. Decision No 19/57 does not define who is a wholesaler with a right to direct supply but reference is made tacitly to other decisions. No action, however, can be brought against the decision on the basis of an objection to something which it does not contain.
If this interpretation of the claim does not therefore appear reasonable because it would lead to its inadmissibility, there remain only the other interpretations. The applicant objects either to conditions being made at all for entry to the Oberrheinische Kohlenunion or that they were the same and not less onerous than those for the supply of coal at first hand.
If this interpretation of the claim is considered more closely then the following arises: in the applicant's view purchase through the Oberrheinische Kohlenunion must be open to every dealer without limitation or less onerous conditions should be fixed for supplies through the Oberrheinische Kohlenunion than at present by reference to the definition of firsthand wholesalers. Since, however, the Oberrheinische Kohlenunion is nothing other than an association of wholesalers for the purpose of the joint purchase of coal, who can obtain supplies direct from the joint selling agencies of the Ruhr, this would be a backdoor way of obtaining direct supplies without complying with the tonnage conditions. By admission into the Oberrheinische Kohlenunion wholesalers operating in southern Germany could thus obtain advantages which they would not have with direct supplies from the Ruhr since they did not fulfil the tonnage criteria. However, the applicant cannot base a claim on the fact that such a possibility was not given but that the same conditions were laid down for joint purchase as for individual purchasers through wholesalers. It would on the contrary have been an unjustified infringement of the general commercial rules, that is, a discrimination against other dealers, if such a rule had been introduced.
If the applicant means that special rules should have been made here for existing wholesalers, then the answer is that it was sufficient for Decision No 19/57 to refer to the limitation of the class of wholesalers made elsewhere, namely in Decisions Nos 16 to 18/57. If an exception had been made there for existing wholesalers, then admission to the Oberrheinische Kohlenunion would have been open to them without its being necessary to amend anything in Decision No 19/57. The fact, however, that the general decisions of admission Nos 16 to 18/57 do not provide a special position for existing wholesalers leads us back to the question already mentioned of the insufficiency of the transitional rules which, as stated, are not the subject of this action.
I can deal briefly with the question of the infringement of the rules of competition. It was the policy of the High Authority in all the decisions in question to guarantee a sufficient number of wholesalers to ensure competition. This is the objective of the review clauses in Decisions Nos 16 to 18/57 to prevent the number of wholesalers from being reduced in a sales area by more than 10 %. In the applicant's area the position is that 73 out of 76 remain as first-hand wholesalers. Internal competition is thus ensured between these wholesalers. There is no reason, however, for external competition, that is competition with secondhand wholesalers, to be completely excluded. It may no doubt be difficult but cannot be regarded as impossible, given favourable local conditions, for a second-hand wholesaler to climb into the first category by extending his custom and increasing his volume of trade. Even if the term ‘competition’ means more than ‘internal competition’, the limitation for the right of admission to the Oberrheinische Kohlenunion cannot be regarded as an infringement of the principles of competition.
In view of these observations it is not necessary to go further into the claims of misuse of powers and infringement of the Treaty which the applicant alleges has resulted in discrimination against it.
With regard to the infringement of the national constitutional law the following must be said. The Treaty establishing the European Coal and Steel Community states in Article 3:
‘The institutions of the Community shall, within the limits of their respective powers …
(a)
ensure an orderly supply …’;
in Article 5:
‘The Community shall carry out its task in accordance with this Treaty, with a limited measure of intervention’;
and in Article 8:
‘It shall be the duty of the High Authority to ensure that the objectives set out in this Treaty are attained in accordance with the provisions thereof.’
From this it follows that the High Authority in fulfilling its tasks has to be guided by the conditions laid down in the Treaty. This view is confirmed by the wording of the provisions in Article 34:
‘… the High Authority shall, using the powers conferred upon it by this Treaty, take steps …’;
in Article 35:
‘Wherever the High Authority is required by this Treaty, or by rules laid down for the implementation thereof…
The same shall apply if the High Authority where empowered by this Treaty, or by rules laid down for the implementation thereof…’;
and in Articles 36 and 37 which I will not quote to you here.
Article 31 states that ‘The Court shall ensure that in the interpretation and application of this Treaty, and of the rules laid down for the implementation thereof, the law is observed.’ It thus examines whether the institutions of the Community have observed the Treaty. The same arises from the exhaustive enumeration of the grounds of action in Article 33. If a decision of the High Authority can be contested only in this way, then the responsible authority does not have to have regard to other than the said conditions.
Finally the third paragraph of Article 40 should be mentioned in this connexion where it is stated:
‘All other disputes between the Community and persons other than its servants to which the provisions of this Treaty or the rules laid down for the implementation thereof do not apply shall be brought before national courts or tribunals.’
From this it also follows a contrario that the Court has jurisdiction only to examine legal acts on the basis of Community law and that it is not required to find infringements of national law. This does not exclude having regard to fundamental legal principles which are also to be found in the provisions of national constitutions when considering a misuse of powers. The constitutional provisions referred to by the applicant may be considered from this point of view. It is true that there is then no difference in the result. As far as the principle of equality is concerned the same observations are appropriate as in respect of the submission of discrimination. With regard to the other claims, namely infringement of proprietary rights, of the trading undertaking and the rules on the protection of medium and small-scale businesses, it should be said that they pertained to that part of the action concerned with the time-limits on the transitional rules or the lack of special rules for existing wholesalers. I can refrain from further observations in this connexion. From this point of view no new factors arise to affect the judgment.
There still remains in respect of Decision No 19/57 the submission of insufficient grounds. I need not spend much time here in discussing the question of its inadmissibility as a result of its being raised belatedly (contrary to the submission of misuse of powers, it is not once hinted at in the statement of claim). Let me cite the judgment of the Court in Case 9/55, Rec. 1955-1956, p. 364. The fact that the submission is also not well founded in relation to Decision No 19/57 is shown by a glance at the recital of the facts. The Court has already recognized in a number of cases the principle that a decision must state in the recitals the circumstances on which it is based and which are capable of review by the Court. If the contested decision is considered against this criterion there will be a positive judgment. It contains a sufficient explanation for the authorization of the association for the purpose of joint purchase. Since for the concept of wholesalers entitled to participate reference is made to other decisions and it is not independently defined, there is no necessity here to give reasons for limiting participants to first-hand wholesalers.
I therefore come to the conclusion that both the main claim and the alternative claim are unfounded and propose:
that they be rejected as unfounded;
that the interim order of 3 December 1957 be rescinded;
that the applicant bear the costs of the action,
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1
)	Translated from the German.