61973C0041(01)
OPINION OF MR ADVOCATE-GENERAL WARNER
DELIVERED ON 15 FEBRUARY 1977
My Lords
I need hardly remind Your Lordships of the contents of the Judgment of the Court in the ‘Sugar Cases’, Cases 40 etc./73 Suiker Unie and others v Commission [1975] ECR 1663. Your Lordships will remember that, by paragraph 3 (b) of the operative part of that Judgment, the Court reduced the fines that had been imposed by the Commission on some of the applicants. In each case the Court expressed the reduced fine in units of account and, in brackets, in the national currency of the Member State where the applicant concerned had its principal office. In so doing the Court applied the rate of conversion prescribed by Articles 10 and 27 of the Council's Financial Regulation of 25 April 1973‘applicable to the general budget of the European Communities’(73/91/ECSC/EEC-Euratom), i.e. the rate of conversion to be derived from the relationship between the weight of fine gold contained in a unit of account (0.88867088 grammes) and the weight of fine gold corresponding to that currency's parity as declared to the International Monetary Fund. We are all of course well aware, if only from the cases that have come before the Court about monetary compensatory amounts, that the rates of conversion thus established are now wholly unrealistic.
The applicants concerned were however advised that the Judgment of the Court should be interpreted, in the light of the relvant Community legislation, as meaning that the quantum of their reduced fines had been fixed in units of account and that their liability to pay those fines could be discharged by payment in the currency of any Member State, converted at the rate established by the Financial Regulation. Having received that advice, and the Italian lira being at the time the weakest Community currency, all those applicants (except one, which has not yet paid any part of its fine) chose, as they thought themselves entitled to do, to pay their fines in lire, converted at the rate prescribed by the Financial Regulation. The Commission has worked it out that, if they were entitled to do this, the French undertakings among the applicants thereby made a saving of 33 %, the Belgian undertaking made a saving of 35 %, the Dutch undertakings a saving of 40 %, and the German undertakings a saving of 43 %.
The Commission of course challenged their right to do any such thing. Most, or much, of the relevant correspondence has been produced to the Court. I do not think that any useful purpose would be served by my seeking to analyse that correspondence, though it does evince succinctly the issues between the applicants and the Commission. The upshot of it was that the Commission agreed that the problem should be resolved by means of an application to the Court, under Article 40 of the Statute of the Court and Article 102 of its Rules of Procedure, for interpretation of paragraph 3 (b) of the Judgment.
So the applicants in Cases 41, 43 and 44/73 made such an application, and it is that application that is now before Your Lordships. To be absolutely accurate, there are two applications, one in Case 41/73 and one in Cases 43 and 44/73, the original applicants in those two cases having now merged.
At the hearing the Commission raised, rather belatedly and very diffidently, a question as to the admissibility of the applications.
Its reason for doing so was that the foundation of the applicants' argument on the main issue is a submission that under the relevant provisions of Regulation No 17 the Commission had no power, and that hence the Court on appeal from it had no power, to fix the fines otherwise than in units of account. The Commission in its Decision had also quantified the fines both in units of account and in the national currency of each undertaking concerned, but, instead of putting the latter in brackets, had introduced it with the words ‘that is’. The Commission's formula was:
‘The following fines are imposed:
(a)
on the Raffinerie Tirlemontoise, a fine of 1500000 (one million five hundred thousand) u.a., that is FB 75000000 (seventy-five million);
(b)
on Sucres et Denrées, a fine of 1000000 (one million) u.a., that is FF 5554190 (five million five hundred and fifty-four thousand, one hundred and ninety);’ (OJ L 140 of 25. 5. 1973)
and so on. Thus, suggested the Commission, the objection that Regulation No 17 did not authorize the quantification of a fine in a national currency could have been taken in the actions brought to set aside that Decision themselves and ought not to be taken now in proceedings for interpretation of the Judgment given in those actions. Suppose, said the Commission, that the Court, instead of reducing the fines, had simply dismissed the actions: the point certainly could not be raised in proceedings such as these.
In my opinion, however, the real question raised by the present applications has nothing to do with the terms of the Commission's Decision. It is: what did the Court mean when, after quantifying each fine in units of account, it put in brackets the equivalent in national currency? No doubt, in order to answer that question, it is necessary to determine the extent of the Commission's and hence of the Court's powers, but that is but a step on the way to the answer to the real question. So I would reject the Commission's suggestion that these applications are inadmissible.
The relevant provisions of Regulation No 17 (OJ L 204 of 21. 2. 1962) are Articles 15 (2), 17 and 18.
Article 15 (2) is, so far as material, as follows:
‘The Commission may by decision impose on undertakings or associations of undertakings fines of from 1000 to 1000000 u.a., or a sum in excess thereof but not exceeding 10 % of the turnover in the preceding business year of each of the undertakings participating in the infringement where, either intentionally or negligently … they infringe Article 85 (1) or Article 86 of the Treaty…
In fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement.’
Article 17, which is headed ‘Review by the Court of Justice’, reads so far as material:
‘The Court of Justice shall have unlimited jurisdiction within the meaning of Article 172 of the Treaty to review decisions whereby the Commission has fixed a fine …; it may cancel, reduce or increase the fine… imposed.’
Article 18, which is headed ‘Unit of account’, is in these terms:
‘For the purposes of applying Articles 15 to 17 the unit of account shall be that adopted in drawing up the budget of the Community in accordance with Articles 207 and 209 of the Treaty.’
That unit of account is of course the unit of account defined by the Financial Regulation to which I have already referred.
Such are the provisions on the basis of which the applicants contend that neither the Commission nor the Court has power to fix fines in national currencies.
Of course if one focuses attention on the phrase ‘fines of from 1000 to 1000000 u. a.’ in Article 15 (2), and on that alone, one may easily reach that conclusion. But that phrase is immediately followed by the reference to a sum not exceeding 10 % of the turnover of any undertaking concerned, a sum which must necessarily be ascertained, in the first place at least, in the currency in which that undertaking's accounts are drawn up. A more important consideration, however, to my mind, is that, as is common ground, decisions of the Commission imposing fines are enforceable under Article 192 of the Treaty and judgments of the Court reducing or increasing them are enforceable under that Article as applied by Article 187. This means that such decisions and judgments are enforceable according to the rules of civil procedure in the Member State in the territory of which enforcement is carried out. Article 192 provides that the order for enforcement ‘shall be appended to the decision, without other formality than verification of the authenticity of the decision, by the national authority which the Government of each Member State shall designate for this purpose …’ and that ‘When these formalities have been completed on application by the party concerned, the latter may proceed to enforcement in accordance with the national law, by bringing the matter directly before the competent authority’. Although there are countries in the Community where execution can be levied on a judgment for an amount in foreign currency, e.g. England, Germany and Italy (see Miliangos v George Frank (Textiles) Ltd. [1976] A.C. 443 and Mann, The Legal Aspect of Money (3rd. Ed.) at p. 351) there is, I understand, no Member State where an obligation expressed in units of account can be enforced without further ado. So, to interpret Articles 15 (2), 17 and 18 of Regulation No 17 in the manner contended for by the applicants would be to defeat their purpose. The applicants indeed concede that a fine imposed under those provisions must for the purpose of any levy of execution be quantified in the currency of the country where execution is to be sought. What they say is that the true amount of the fine is its amount expressed in units of account and that it can be paid in the currency of any Member State converted at the rate prescribed by the Financial Regulation. They do not shrink from the conclusion that this may result in the effective amount of the fine being different according to whether it is paid ‘voluntarily’ or as the result of a levy of execution. In my view that cannot be right.
My opinion is that the reference to ‘fines of from 1000 to 1000000 u.a.’ in Article 15 (2) is to be interpreted as setting a minimum and a maximum applicable in certain cases, but not as precluding the Commission or the Court from fixing fines in terms of national currencies. It must be borne in mind that, at the time when Regulation No 17 was adopted, floating exchange rates were unknown. The parities of currencies inter se and the parity of each currency to the unit of account were fixed, so that, except in the rare event of the devaluation or revaluation of a currency, it could make no substantial difference whether an amount was expressed, or for that matter a minimum or a maximum was expressed, in units of account or in a national currency.
In support of their argument the applicants referred to the fact that Article 207 of the Treaty provides that the contributions of Member States to the budget revenue of the Community are to be made in their national currencies, and pointed to the absence of any corresponding provision applicable to undertakings on which fines are imposed; but in my opinion the two matters are too remote from each other to be comparable.
The applicants also referred to some answers given by the Commission to two questions put to it in the European Parliament, one in 1970 and the other in 1976, to some Technical Notes published by the Information Service of the Commission in 1974, and to the views of certain learned writers. Of those Notes and of the views of those writers, I can only say that in my opinion they were erroneous. As to the answers to the two Parliamentary Questions, it does not seem to me that, on analysis, they support the applicants' argument. They barely touch the point here at issue.
Lastly the applicants submitted that the adoption of the view put forward by the Commission would lead to discrimination in two respects.
First they said that it would lead to discrimination between undertakings in countries with weak currencies and those in countries with strong currencies. A fine of the same amount in units of account would for instance constitute a lighter burden for an Italian company than for a German one. The fallacy underlying this is, in my opinion, the assumption that it is appropriate for the Commission, or the Court, in fixing the amount of a fine to think only in units of account. On the contrary, that Institution must in my opinion look at the realities. It must first decide in which currency it will quantify the fine for the purposes of enforcement and then decide on the appropriate amount of it having regard to the true value of that currency. The conversion into units of account is necessary only, first, to check that the fine is within the limits set by Article 15 (2) and, second, in order to bring it into account in the budget of the Community.
The other form of discrimination that the applicants said would result was discrimination as between an undertaking established within the Community and one outside it. The fallacy underlying this, in my opinion, was the assumption that an undertaking established outside the Community would remain free to choose the currency in which it would pay the fine and to convert it into units of account at the parity prescribed by the Financial Regulation. There may of course be, in the case of an undertaking established outside the Community, difficulties of enforcement, but, otherwise, the position of such an undertaking is the same as that of an undertaking established in the Community. The Institution imposing the fine must still quantify it in the currency of a Member State for the purposes of enforcement. Presumably this will be the currency of the Member State where enforcement is, in the circumstances, likely to be least difficult. Thus in Cases 6 and 7/73 Commercial Solvents v Commission [1974] 1 ECR 223, at p. 258, the Court ordered that a fine imposed by the Commission jointly and severally on an American company and its Italian subsidiary ‘be reduced to 100000 u.a., namely Lit 62500000’.
There remains the question what, if I am right as to the law, the Court must be taken to have meant when, in paragraph 3 (b) of the Judgment in the ‘Sugar Cases’, it put the amount of each fine in national currency in brackets after its amount in units of account. In my opinion it can only have meant one thing, namely that that was to be the actual amount of the fine, for which, if need be, the Commission was to be entitled to levy execution. I can see nothing to preclude the Commission, if it thinks fit, from accepting payment in any other currency, but it cannot be bound to accept such payment at any rate of exchange other than the market rate current at the date of payment.
I therefore think that the question raised by the applications should be answered in the sense contended for by the Commission; and that, the Commission having asked for the costs of these applications, the applicants should be ordered to pay them.