61959CJ0014_EN
Parties
Subject of the case
Grounds
Decision on costs
Endorsements
Operative part
Parties
IN CASE 14/59
SOCIETE DES FONDERIES DE PONT-A-MOUSSON, A LIMITED COMPANY HAVING ITS REGISTERED OFFICE AT PONT-A-MOUSSON ( MEURTHE-ET-MOSELLE ), REPRESENTED BY ITS CHAIRMAN, ANDRE GRANDPIERRE, ASSISTED BY MAURICE ALLEHAUT, ADVOCATE AT THE COUR D'APPEL, PARIS, BATONNIER, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF ALEX BONN, BATONNIER, 22 COTE D'EICH, APPLICANT,
V
HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, EMILE REUTER, ACTING AS AGENT, ASSISTED BY TONY BIEVER, AVOCAT-AVOUE IN LUXEMBOURG, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2 PLACE DE METZ, DEFENDANT,
Subject of the case
APPLICATION FOR THE ANNULMENT OF THE LETTER OF THE HIGH AUTHORITY TO THE APPLICANT OF 24 JANUARY 1959,
Grounds
P . 224
ADMISSIBILITY
THE DEFENDANT DOUBTS WHETHER THE LETTER AT ISSUE IS A DECISION; IN PARTICULAR IT CALLS ATTENTION TO THE FACT THAT IT IS NOT " AN ENFORCEABLE DECISION, SUCH AS IS USUALLY ADOPTED FOLLOWING A REFUSAL TO DISCHARGE A PECUNIARY OBLIGATION "; NEVERTHELESS, IT LEAVES THIS QUESTION OF ADMISSIBILITY " TO BE DETERMINATED BY THE COURT ".
IN THE APPLICANT'S VIEW THERE CAN BE NO DOUBT THAT THE LETTER AT ISSUE STATING THAT THE APPLICANT HAS TO PAY AMOUNTS WHICH IN ITS OPINION IT DOES NOT OWE IS A DECISION .
THE DISPUTED LETTER WAS IN REPLY TO A LETTER OF THE APPLICANT COMPANY OF 19 APRIL 1957 TO THE HIGH AUTHORITY IN WHICH THE APPLICANT REQUESTED THE LATTER TO EXEMPT FROM THE LEVY RELATING TO THE EQUALIZATION OF FERROUS SCRAP THE MOLTEN PIG IRON WHICH IT PRODUCES IN ITS BLAST FURNACES AND IMMEDIATELY TRANSFORMS INTO PIG IRON CASTINGS . THE RELEVANT PASSAGE OF THE DISPUTED LETTER IS THE SENTENCE WHICH READS AS FOLLOWS :
" CONSEQUENTLY, THE HIGH AUTHORITY DOES NOT SEE ITS WAY TO GRANTING YOUR REQUEST FOR EXEMPTION FROM THE SCRAP EQUALIZATION LEVY . "
AS THE ABOVEMENTIONED CORRESPONDENCE SHOWS, BY THAT STATEMENT THE DEFENDANT RESOLVED THE QUESTION WHETHER, IN PRINCIPLE, THE APPLICANT HAS TO PAY THE LEVY AND, IF SO, WHETHER IT CAN OR MUST BE EXEMPTED FROM PAYMENT .
BY SO DOING THE DEFENDANT INTENDED TO SETTLE A POINT OF LAW : IT EXPRESSLY AFFIRMED THE EXISTENCE OF A DUTY ON THE PART OF THE APPLICANT WHICH THE LATTER HAS DISPUTED .
FURTHER, THE ASSOCIATION OF SCRAP CONSUMERS IN ITS LETTER TO THE APPLICANT OF 12 FEBRUARY 1959 REFERRED TO THE LETTER AT ISSUE AND NOTIFIED THE APPLICANT THAT IT HAD BEEN INSTRUCTED BY THE HIGH AUTHORITY TO DEMAND PAYMENT FROM IT OF THE ARREARS OF CONTRIBUTIONS .
THIS FACT CONFIRMS THE APPLICANT'S ARGUMENT THAT THE LETTER AT ISSUE WAS FOLLOWED BY THE " FIRST STEP IN EXECUTION PROCEEDINGS " AND SHOWS THAT THE HIGH AUTHORITY ITSELF REGARDED THAT LETTER AS A DECISION .
P . 225
FOR THESE REASONS THE LETTER AT ISSUE IS A DECISION WITHIN THE MEANING OF ARTICLE 33 OF THE ECSC TREATY .
THIS DECISION IS INDIVIDUAL AND CONCERNS THE APPLICANT .
THEREFORE THE APPLICATION IS ADMISSIBLE .
SUBSTANCE
FIRST COMPLAINT : INFRINGEMENT OF ARTICLES 53, 80 AND 81 AND ALSO OF ANNEXES I AND II TO THE ECSC TREATY .
THE APPLICANT SUBMITS IN THE FIRST PLACE THAT AT ITS WORKS AT PONT-A-MOUSSON THE SCRAP USED IN THE MAKING OF MOLTEN PIG IRON INTENDED FOR THE PRODUCTION OF PRE-MELT CASTINGS MUST IMMEDIATELY BE EXEMPTED FROM EQUALIZATION BECAUSE, IN SO FAR AS THE APPLICANT PREPARES SUCH PIG IRON, IT IS NOT AN UNDERTAKING WITHIN THE MEANING OF ARTICLES 80 AND 81 OF THE TREATY .
IT IS TRUE THAT UNDER THE ABOVEMENTIONED PROVISIONS ONLY UNDERTAKINGS ENGAGED IN PRODUCTION IN THE COAL OR THE STEEL INDUSTRY ARE GOVERNED BY THE RULES OF THE TREATY AND THAT THE EXPRESSIONS " COAL " AND " STEEL " ONLY COVER THOSE PRODUCTS LISTED IN ANNEX I, ACCORDING TO PARAGRAPH ( 1 ) OF THE SAID ANNEX .
IT FOLLOWS, AS FAR AS THE FINANCIAL ARRANGEMENTS PROVIDED FOR IN ARTICLE 53 OF THE TREATY ARE CONCERNED, THAT AN UNDERTAKING CAN BE SUBJECT THERETO ONLY IN SO FAR AS IT IS ENGAGED IN SIMILAR PRODUCTION .
MOREOVER, THE GENERAL DECISIONS OF THE HIGH AUTHORITY MAKING SIMILAR ARRANGEMENTS ARE ALSO TO BE INTERPRETED IN THIS WAY SINCE, FOR THE PURPOSES OF DETERMINING THE NUMBER OF PERSONS TO WHOM THOSE DECISIONS ARE ADDRESSED, THEY SIMPLY REFER TO THE CONCEPT OF AN UNDERTAKING AS DEFINED IN ARTICLE 80 OF THE TREATY ( CF . FOR EXAMPLE, ARTICLE 2 OF DECISION NO 2/57 OF 26 JANUARY 1957 - JOURNAL OFFICIEL OF 28 JANUARY 1957, PP . 62-57 ).
IT IS CLEAR FROM NOTE 5 TO THE ABOVEMENTIONED ANNEX THAT THE FINISHED PRODUCTS MADE BY THE APPLICANT IN ITS WORKS AT PONT-A-MOUSSON, THAT IS TO SAY IRON CASTINGS, ARE OUTSIDE THE JURISDICTION OF THE TREATY, WHICH THE DEFENDANT DOES NOT DENY .
THEREFORE THE PROBLEM IS CONFINED TO THE QUESTION WHETHER THE APPLICANT IS NEVERTHELESS AN UNDERTAKING WITHIN THE MEANING OF ARTICLE 80 OF THE TREATY, HAVING REGARD TO THE FACT THAT FOR THE PRODUCTION OF THE SAID CASTINGS IT USES MOLTEN PIG IRON WHICH IT PRODUCES IN ITS OWN BLAST FURNACES .
P . 226
( A ) IN THIS CONNEXION IT IS APPROPRIATE TO CONSIDER IN THE FIRST PLACE WHETHER THE PIG IRON IN QUESTION IS ONE OF THE PRODUCTS INCLUDED WITHIN THE CONCEPT " FONTE DE FONDERIE ET AUTRES FONTES BRUTES " ( " FOUNDRY AND OTHER PIG IRON " ) UNDER REFERENCE NO 4200 OF ANNEX I .
THE APPLICANT ANSWERS THIS QUESTION IN THE NEGATIVE AND ASSERTS THAT " FONTE BRUTE " ( " PIG IRON " ) IS SOLELY INTENDED TO DESCRIBE SOLID PIG IRON; THE DEFENDANT DOES NOT ACCEPT THIS ASSERTION .
IT IS AN ESTABLISHED FACT THAT THE WORD " BRUT ", BOTH IN ITS ORDINARY MEANING AND MORE PARTICULARLY IN ITS MEANING IN IRON AND STEEL TERMINOLOGY, IS INTENDED TO DENOTE A MATERIAL IN THE CRUDE STATE WHICH HAS NOT, IN OTHER WORDS, YET UNDERGONE ANY TRANSFORMATION .
ALTHOUGH IT IS TRUE THAT THE PROCESS FOR PRODUCING PIG IRON IN A BLAST FURNACE, IN PARTICULAR FROM IRON ORES AND COKE, INVOLVES THE PRIMARY TRANSFORMATION OF THOSE RAW MATERIALS, IT IS EQUALLY TRUE THAT IT IS ONLY AFTER THE COMPLETION OF THAT PROCESS THAT THE MATERIAL COMMONLY KNOWN AS " PIG IRON " APPEARS FOR THE FIRST TIME . PIG IRON IN THE STATE IN WHICH IT LEAVES THE BLAST FURNACE AND AS LONG AS IT HAS NOT UNDERGONE FURTHER TRANSFORMATION OTHER THAN SIMPLE SOLIDIFICATION MUST THEREFORE BE " CRUDE " PIG IRON .
THIS FINDING IS CONFIRMED BY THE FACT THAT IN THE LANGUAGE USED IN THE TRADE " FONTE BRUTE " ( " PIG IRON " ) IS IN PARTICULAR CONTRASTED WITH " FONTE MOULEE " ( " CAST IRON " ), THAT IS TO SAY WITH PIG IRON AS THE MATERIAL OUT OF WHICH THOSE PRODUCTS CALLED " MOULAGES DE FONTE " ( " IRON CASTINGS " ) ARE MADE .
THE FOREGOING SHOWS THAT THE WORD " BRUT " IS INTENDED TO INDICATE A DISTINCTION QUITE DIFFERENT FROM THAT WHICH CAN BE DRAWN BETWEEN MOLTEN AND SOLID MATERIAL . IN THE CASE OF PIG IRON IT INCLUDES THE MATERIAL IN THE STATE IN WHICH IT LEAVES THE BLAST FURNACE, WHETHER IT HAS SOLIDIFIED OR NOT .
THEREFORE THE APPLICANT'S ARGUMENT THAT THE MOLTEN PIG IRON WHICH IT PRODUCES IN ITS BLAST FURNACES DOES NOT BELONG TO THE CATEGORY OF " FOUNDRY AND OTHER PIG IRON " MUST BE REJECTED .
( B ) HOWEVER, IT IS STILL NECESSARY TO DETERMINE THE QUESTION WHETHER, IN RELATION TO THE PIG IRON AT ISSUE, THE APPLICANT IS AN UNDERTAKING " ENGAGED IN PRODUCTION " WITHIN THE MEANING OF ARTICLE 80 OF THE ECSC TREATY, IN OTHER WORDS, THEREFORE, WHETHER THIS PIG IRON IS A " PRODUCT " WITHIN THE MEANING OF PARAGRAPH ( 1 ) OF ANNEX I .
THE ANSWER TO THIS QUESTION HAS TO BE CONSIDERED AS THE SAID PIG IRON USUALLY EXISTS ONLY FOR A SHORT PERIOD DURING THE PROCESS OF PRODUCING IRON CASTINGS, THE FINISHED PRODUCTS TO THE MANUFACTURE OF WHICH THE APPLICANT'S PRODUCTION PROGRAMME IS GEARED AND WHICH ARE THEMSELVES OUTSIDE THE JURISDICTION OF THE COMMUNITY .
P . 227
IF THE WORD " PRODUCTION " IS GIVEN ITS ORDINARY MEANING, THE SAID PIG IRON IS UNQUESTIONABLY " PRODUCED " BY THE APPLICANT .
THE ONLY QUESTION THEREFORE IS WHETHER THE AUTHORS OF THE TREATY INTENDED TO GIVE THE WORD " PRODUCTION " A MORE LIMITED APPLICATION IN LAW .
1 . SUCH A LIMITATION COULD FIRST OF ALL STEM FROM THE ARGUMENT THAT UNDER THE SYSTEM OF THE TREATY " PRODUCTION " WITHIN THE MEANING OF THE TREATY AND IN PARTICULAR OF ARTICLE 80 CONSISTS SOLELY IN THE MANUFACTURE OF GOODS FOR MARKETING .
AT FIRST SIGHT THIS ARGUMENT APPEARS TO BE SUPPORTED BY ARTICLE 1 OF THE TREATY, WHICH STATES THAT THE COMMUNITY IS " FOUNDED UPON A COMMON MARKET ". IN FACT THE ONLY CONCLUSION WHICH IT APPEARS POSSIBLE TO DRAW FROM THIS IS THAT, IN ORDER TO DELIMIT THE JURISDICTION OF THE COMMUNITY THE TREATY APPLIES ONLY TO PRODUCTS WHICH ARE IN A FIT STATE TO BE MARKETED .
NEVERTHELESS THE GENERAL PLAN OF ANNEX I SHOWS THAT THE ABOVEMENTIONED ARGUMENT WOULD BE IN CONTRADICTION WITH THE TREATY .
THE FACT IS THAT THAT ANNEX INCLUDES A VERY LARGE NUMBER OF PRODUCTS - FOR EXAMPLE " PIG IRON FOR STEELMAKING ", " LIQUID STEEL CAST OR NOT CAST INTO INGOTS ", " HOT FINISHED PRODUCTS OF ... STEEL ", AND SO ON - WHICH ARE KNOWN TO BE FREQUENTLY, IF NOT NORMALLY, FIRST MANUFACTURED AND THEN TRANSFORMED, IN FACTORIES OR WORKS WHICH ARE SEPARATE BUT DISPOSED OF UNDER THE SAME BUSINESS NAME, INTO PRODUCTS WHICH ARE TECHNICALLY OR ECONOMICALLY DIFFERENT AND WHICH ARE NOT THEREFORE OFFERED FOR SALE ON THE MARKET .
ACCORDINGLY THE ARGUMENT IN QUESTION WOULD LEAD TO THE EXCLUSION FROM THE JURISDICTION OF THE TREATY OF A LARGE IF NOT PREPONDERANT PART OF THE PRODUCTION OF THE GOODS LISTED IN ANNEX I, WHICH WOULD CLEARLY BE CONTRARY TO THE INTENTION OF THE AUTHORS OF THOSE PROVISIONS .
FURTHERMORE, THE SAID ARGUMENT WOULD MEAN THAT THE QUESTION WHETHER A PRODUCT WAS A COMMUNITY PRODUCT OR NOT WOULD DEPEND UPON THE LEGAL STRUCTURE OF THE PRODUCER UNDERTAKING; IN PARTICULAR, THE PRODUCTION OF LARGE INTEGRATED FACTORIES WOULD THEREBY BE EXCLUDED FROM THE JURISDICTION OF THE ECSC, WHICH WOULD CONFLICT WITH THE LETTER OF THE TREATY ( CF . BY WAY OF EXAMPLE THE FIRST PARAGRAPH OF NOTE 3 TO ANNEX I ) AS WELL AS ITS SPIRIT AND OBJECTIVE .
2 . IT IS NEVERTHELESS APPROPRIATE TO CONSIDER WHETHER THERE IS NOT ANOTHER REASON WHY THE CONCEPT " ENGAGED IN PRODUCTION " CONTAINED IN ARTICLE 80 DOES NOT EXCLUDE THE PRODUCTION OF THE PIG IRON IN QUESTION, NAMELY THAT THE SAID PIG IRON IS NOT SENT TO FACTORIES OTHER THAN THAT WHERE IT IS PRODUCED, BUT IS PRODUCED AND TRANSFORMED IN WORKS WHICH TOGETHER MAKE UP AN INTEGRATED TECHNICAL UNIT .
P . 228
IN THIS CONNEXION IT MAY BE ASSUMED THAT THE ECONOMIC AND TECHNICAL LINK BETWEEN THE APPLICANT'S BLAST FURNACES, ON THE ONE HAND, AND ITS FOUNDRIES, ON THE OTHER, IS EXTREMELY CLOSE, ESPECIALLY AS THE MOLTEN PIG IRON IS PRODUCED WITH DUE REGARD TO THE SPECIAL REQUIREMENTS OF THE FOUNDRY .
THE APPLICANT'S ARGUMENT THAT THE CLOSE PROXIMITY OF THESE DIFFERENT WORKS IS NOT THE RESULT OF A MORE OR LESS ACCIDENTAL JUXTAPOSITION, WHICH IS TEMPORARY AND LIKELY TO DISSOLVE AT ANY TIME, BUT REPRESENTS THE CHARACTERISTIC STRUCTURE OF THE PONT-A-MOUSSON WORKS FROM THE VERY BEGINNING, MAY ALSO BE CONCEDED .
NEVERTHELESS, THESE CONSIDERATIONS ALONE ARE NOT SUFFICIENT TO SETTLE THE PROBLEM AT ISSUE .
FOR THIS PURPOSE IT IS ABOVE ALL NECESSARY TO TAKE INTO CONSIDERATION THE FACT THAT THE AUTHORS OF ANNEX I INCLUDED IN THE LIST OF PRODUCTS COVERED BY THE ECSC THE CATEGORY " FOUNDRY AND OTHER PIG IRON ", WITHOUT EXCLUDING FROM THE JURISDICTION OF THE TREATY FOUNDRIES ENGAGED IN PRE-MELT, WHEREAS OTHER INDUSTRIES WERE EXPRESSLY EXCLUDED .
THERE APPEARS, THEREFORE, TO BE NO DOUBT THAT THE AUTHORS OF THE SAID ANNEX I INTENDED FOUNDRIES ENGAGED IN PRE-MELT TO BE SUBJECT TO THE SYSTEM OF THE TREATY IN OS FAR AS THEY PRODUCE MOLTEN FOUNDRY PIG IRON, SINCE THE LATTER, AS HAS BEEN DETERMINED ABOVE, BELONGS TO THE CATEGORY OF PIG IRON REFERRED TO UNDER REFERENCE NO 4200 OF ANNEX I .
ALTHOUGH SUCH A RESULT IMPLIES THAT AN INTERMEDIATE AND EVEN IN A WAY SHORT-LIVED PRODUCT IS GOVERNED BY THE COMMUNITY LAW, IT DOES NOT APPEAR TO BE IN ANY WAY CONTRARY TO COMMON SENSE OR TO THE BASIC PRINCIPLES OF THE TREATY .
IT MUST IN FACT BE BORNE IN MIND THAT, ALTHOUGH THE AUTHORS OF THE TREATY ADOPTED THE CRITERION OF PRODUCTION FOR THE PURPOSE OF DELIMITING THE LATTER'S FIELD OF APPLICATION RATIONE PERSONAE, THEY WERE NONE THE LESS AWARE OF THE FACT THAT, TO A GREAT EXTENT, THE PRODUCERS OF ONE COMMUNITY PRODUCT ARE AT ONE AND THE SAME TIME CONSUMERS OF ANOTHER PRODUCT, STEEL PRODUCERS FOR INSTANCE BEING AT THE SAME TIME CONSUMERS OF COAL .
THE ADVANTAGE OF THIS DUAL ROLE OCCUPIED BY CERTAIN PRODUCERS WAS THAT THEY COULD ALSO BE EFFECTIVELY SUBJECTED TO THE RULES RELATING TO THEIR FUNCTION AS CONSUMERS, WHICH REMEDIED TO A CERTAIN EXTENT THE DEFECTS OF PARTIAL INTEGRATION .
P . 229
FINALLY, THERE IS NO EVIDENCE THAT MOLTEN PIG IRON PRODUCED IN THE APPLICANT'S BLAST FURNACES CAN UNDER NO CIRCUMSTANCE BE USED FOR PURPOSES OTHER THAN ITS IMMEDIATE TRANSFORMATION INTO PIG IRON CASTINGS . IT IS ALWAYS POSSIBLE TO ALLOW IT TO BECOME SOLIDIFIED AND TO PUT IT ON THE MARKET IN THE FORM OF LUMPS OR BLOCKS, OR EVEN TO SELL IT IN ITS MOLTEN STATE . IN FACT THE APPLICANT USES THE SURPLUS PRODUCTION OF MOLTEN PIG IRON IN ITS OWN FOUNDRY ENGAGED IN MELT AND IT ACKNOWLEDGES THAT IT IS LIABLE TO PAY THE EQUALIZATION CONTRIBUTION ON THIS PART OF ITS PRODUCTION . THEREFORE THE MOLTEN PIG IRON IN QUESTION MAY BE REGARDED AS A SEPARATE PRODUCT WITHOUT ITS BEING NECESSARY TO EFFECT AN ARBITRARY AND PURELY NOTIONAL DISTINCTION WITHIN A SEQUENCE OF PRODUCTION OPERATIONS WHICH IN THEMSELVES FORM A SINGLE PROCESS .
FOR ALL THESE REASONS THERE ARE GROUNDS FOR THE FINDING THAT THE APPLICANT, IN ITS CAPACITY AS A PRODUCER OF PIG IRON, IS AN UNDERTAKING ENGAGED IN PRODUCTION IN THE STEEL INDUSTRY IN ACCORDANCE WITH THE COMBINED PROVISIONS OF ARTICLES 80 AND 81 OF THE TREATY AND OF ANNEX I THERETO . THE HIGH AUTHORITY WAS THEREFORE ENTITLED TO MAKE IT SUBJECT TO THE RULES OF A FINANCIAL ARRANGEMENT REFERRED TO IN ARTICLE 53 SUCH AS THE EQUALIZATION SCHEME IN QUESTION .
THE APPLICANT'S FIRST COMPLAINT IS THEREFORE UNFOUNDED .
SECOND COMPLAINT : INFRINGEMENT OF ARTICLES 2, 3, 4 AND 5 OF THE TREATY AND OF THE GENERAL PRINCIPLES OF COMMUNITY LAW .
THE DISCRIMINATION ALLEGED, AS WELL AS THE OTHER COMPLAINTS MADE BY THE APPLICANT, DO NOT STEM FROM A DECISION OF THE HIGH AUTHORITY WHICH IS INDIVIDUAL IN CHARACTER BUT ARISE OUT OF DECISION NO 2/57 ADOPTED, AS PROVIDED FOR IN ARTICLE 53 OF THE TREATY, WITH THE UNANIMOUS ASSENT OF THE COUNCIL .
IN THESE CIRCUMSTANCES IT IS ADVISABLE TO ASCERTAIN WHETHER THE HIGH AUTHORITY, WITHOUT CONTRAVENING THE SAID DECISION AND WITHOUT EXCEEDING ITS OWN POWERS, COULD GRANT THE EXEMPTION WHICH THE APPLICANT REQUESTED, IN VIEW OF THE FACT THAT DECISION NO 2/57 HAD PROVIDED FOR EXEMPTION ONLY IN THE CASE OF INTEGRATED STEEL FOUNDRIES AND NOT IN THAT OF FOUNDRIES ENGAGED IN PRE-MELT .
THIS QUESTION - WHICH RELATES BOTH TO THE DIFFERENCE IN THE SCOPE AND EFFECT OF GENERAL DECISIONS, ON THE ONE HAND, AND SUBSEQUENT INDIVIDUAL IMPLEMENTING DECISIONS, ON THE OTHER, AND ALSO TO THE SEPARATION BETWEEN THE POWERS VESTED IN THE HIGH AUTHORITY ALONE AND THOSE VESTED JOINTLY IN THE HIGH AUTHORITY AND THE COUNCIL - MUST BE CONSIDERED BY THE COURT ON ITS OWN INITIATIVE, EVEN THOUGH IT HAS NOT BEEN RAISED BY THE DEFENDANT .
P . 230
IN ITS SECOND SUBMISSION, THE APPLICANT COULD HAVE ATTACKED THE INDIVIDUAL DECISION AFFECTING IT ADOPTED BY THE HIGH AUTHORITY ONLY BY PLEADING THAT DECISION NO 2/57 WAS ILLEGAL .
IN FACT IT IS GENERAL DECISION NO 2/57, RATHER THAN THE INDIVIDUAL DECISION, WHICH THE APPLICANT COULD CLAIM HAD INFRINGED ITS RIGHTS BY OSTENSIBLY DISCRIMINATING AGAINST IT IN COMPARISON WITH COMPETING INDUSTRIES, ESPECIALLY INTEGRATED STEEL FOUNDRIES, OR ELSE BY CREATING A FINANCIAL CHARGE ADVERSELY AFFECTING IT .
THE APPLICANT HAS NOT EXPRESSLY SUBMITTED THAT DECISION NO 2/57 IS ILLEGAL AND IT COULD ONLY WITH DIFFICULTY BE ACCEPTED THAT SUCH A COMPLAINT HAS BEEN MADE BY IMPLICATION .
NEVERTHELESS, IT APPEARS TO BE INAPPROPRIATE TO ALLOW DOUBT AS TO THE LEGALITY OF DECISION NO 2/57 TO PERSIST, IN SO FAR AS THE ANSWER TO THIS QUESTION IS RELEVANT TO THESE PROCEEDINGS .
FOR THIS REASON THE COURT IS OF THE OPINION THAT IN ANY EVENT THE MERITS OF THE SECOND SUBMISSION MUST BE CONSIDERED .
THE APPLICANT CLAIMS THAT THE DEFENDANT INFRINGED ARTICLES 2, 3 ( IN PARTICULAR PARAGRAPH ( B )), 4 AND 5 OF THE TREATY AND ALSO THE GENERAL PRINCIPLES OF COMMUNITY LAW AND, MORE PARTICULARLY, THAT IT DISCRIMINATED AGAINST IT AND IMPOSED ON IT A PROHIBITED SPECIAL CHARGE AND THAT IT ADVERSELY AFFECTED ITS COMPETITIVE POSITION IN AN UNUSUAL AND ILLEGAL MANNER, ALL THESE COMPLAINTS BEING DERIVED FROM THE FACT THAT THE DEFENDANT DID NOT EXEMPT IT FROM EQUALIZATION WHEREAS ITS COMPETITORS ARE EXEMPT .
THE APPLICANT SUBMITS THAT IT COMPETES WITH FOUNDRIES ENGAGED IN MELT, WITH MANUFACTURERS OF TUBES OF ASBESTOS CEMENT, CONCRETE AND PLASTIC, WITH STEEL FOUNDRIES ( INTEGRATED OR INDEPENDENT ), TO THE EXTENT TO WHICH THEY PRODUCE STEEL CASTINGS, AND, FINALLY, WITH FOUNDRIES IN THIRD COUNTRIES . THE DEFENDANT ACCEPTS THESE FACTS, WITH THE EXCEPTION OF THE COMPETITION FROM STEEL FOUNDRIES, WHICH IT DISPUTES .
IT IS COMMON GROUND THAT NONE OF THESE ALLEGED COMPETITORS HAVE TO PAY EQUALIZATION, THE INTEGRATED STEEL FOUNDRIES BECAUSE THEY WERE EXEMPTED BY ARTICLE 10 ( D ) OF DECISION NO 2/57 AND THE REMAINING UNDERTAKINGS BECAUSE THEY ARE OUTSIDE THE JURISDICTION OF THE COMMUNITY .
1 . THE COMPLAINTS AS TO DISCRIMINATION AND INFRINGEMENT OF THE RIGHT OF ALL CONSUMERS TO EQUAL ACCESS TO SOURCES OF PRODUCTION
THE APPLICANT CLAIMS THAT THE DEFENDANT PRACTISED DISCRIMINATION, WHICH IS FORBIDDEN BY THE TREATY, AND FAILED TO FULFIL THE OBLIGATION SPECIFIED IN ARTICLE 3 ( B ) OF THE TREATY, NAMELY TO " ENSURE THAT ALL COMPARABLE PLACED CONSUMERS IN THE COMMON MARKET HAVE EQUAL ACCESS TO THE SOURCES OF PRODUCTION ".
P . 231
BOTH THESE COMPLAINTS - THE SECOND OF WHICH ALSO REFERS TO DISCRIMINATION IN THE BROADEST SENSE - HAVE THE SAME EFFECT . IN EACH CASE THE APPLICANT ACCUSES THE DEFENDANT OF NOT HAVING PLACED IT IN THE SAME SITUATION AS ITS COMPETITORS WHICH DO NOT HAVE TO PAY THE EQUALIZATION CONTRIBUTION AND OF HAVING THUS MADE ACCESS TO SCRAP A GREATER FINANCIAL BURDEN FOR IT THAN FOR ITS COMPETITORS .
DISCRIMINATION CONSISTING OF THE DISSIMILAR TREATMENT OF COMPARABLE SITUATIONS PRESUPPOSES THAT THERE IS A DUTY TO TREAT ALL INTERESTED PARTIES ON THE SAME FOOTING AND THE POSSIBILITY OF SO DOING . IN THIS CASE THE HIGH AUTHORITY COULD ONLY DISCRIMINATE IN THE MANNER ALLEGED BY THE APPLICANT IF IT WAS EMPOWERED AND BOUND EITHER TO MAKE THE LATTER'S COMPETITORS SUBJECT TO EQUALIZATION OR TO EXEMPT THE APPLICANT THEREFROM .
THE FIRST OF THOSE HYPOTHESES MUST BE RULED OUT IMMEDIATELY IN SO FAR AS FOUNDRIES ENGAGED IN MELT, INDEPENDENT STEEL FOUNDRIES, MANUFACTURERS OF TUBES OF ASBESTOS CEMENT, CONCRETE AND PLASTIC AND FOUNDRIES IN THIRD COUNTRIES ARE CONCERNED .
SUCH UNDERTAKINGS DO NOT FALL WITHIN THE SCOPE OF THE TREATY AND THE HIGH AUTHORITY ACCORDINGLY DOES NOT HAVE THE POWER TO LEVY ANY CHARGE ON THEM .
CONSEQUENTLY, THE FIRST HYPOTHESIS MAY BE EXAMINED ONLY IN RELATION TO THE QUESTION WHETHER THE HIGH AUTHORITY SHOULD ALSO HAVE SUBJECTED INTEGRATED STEEL FOUNDRIES TO EQUALIZATION .
IT IS CLEAR FROM THE APPLICANT'S STATEMENTS THAT IT HAS NO INTENTION OF CRITICIZING, EVEN AS AN ALTERNATIVE SUBMISSION, THE LEGAL BASIS OF THE EXEMPTION GRANTED TO INTEGRATED STEEL FOUNDRIES . CONSEQUENTLY, THE COURT CANNOT REVIEW THE LEGALITY OF THAT EXEMPTION, WITHOUT DISTORTING THE SCOPE WHICH THE APPLICANT INTENDED ITS ACTION TO HAVE .
IN THESE CIRCUMSTANCES THE PROBLEM IS SIMPLY WHETHER THE HIGH AUTHORITY, BECAUSE IT HAD EXEMPTED INTEGRATED STEEL FOUNDRIES, WAS BOUND ALSO, IN ORDER TO AVOID DISCRIMINATION, TO EXEMPT THE APPLICANT .
IN ORDER TO ANSWER THIS QUESTION IT IS UNNECESSARY TO CONSIDER WHETHER THE SAID EXEMPTION WAS LAWFUL .
IN FACT, ON THE ONE HAND, THE FACT THAT SUCH EXEMPTION WAS ILLEGAL WOULD NOT JUSTIFY THE GRANT OF A SIMILAR EXEMPTION TO FOUNDRIES ENGAGED IN PRE-MELT .
P . 232
ON THE OTHER HAND, THE FACT THAT THE SAID EXEMPTION WAS LAWFUL WOULD NOT OF ITSELF MAKE IT OBLIGATORY TO GRANT THE APPLICANT A SIMILAR EXEMPTION, SINCE THE LATTER'S SITUATION IN RELATION TO FOUNDRIES ENGAGED IN MELT IS NOT COMPARABLE TO THAT OF INTEGRATED STEEL FOUNDRIES IN RELATION TO INDEPENDENT STEEL FOUNDRIES .
THE HIGH AUTHORITY JUSTIFIED EXEMPTION IN THE CASE OF INTEGRATED STEEL FOUNDRIES ON THE GROUND THAT THE PRODUCTION PLANT AND RAW MATERIALS USED BY SUCH FOUNDRIES, ON THE ONE HAND, AND BY INDEPENDENT STEEL FOUNDRIES, ON THE OTHER, ARE THE SAME . THERE IS NO SUCH SIMILARITY BETWEEN THE APPLICANT, WHICH IS BOTH A PRODUCER AND A CONSUMER OF PIG IRON, AND FOUNDRIES ENGAGED IN MELT, WHICH DO NOT PRODUCE PIG IRON BUT MERELY CONSUME IT .
FOR THIS REASON FOUNDRIES ENGAGED IN MELT ARE INDIRECTLY SUBJECT TO EQUALIZATION IN OS FAR AS THEY USE PIG IRON MADE FROM SCRAP ON WHICH EQUALIZATION HAS HAD TO BE PAID . CONSEQUENTLY, TO EXEMPT THE APPLICANT, FAR FROM MERELY PLACING IT ON THE SAME FOOTING AS FOUNDRIES ENGAGED IN MELT, WOULD GIVE IT AN ADVANTAGE COMPARED WITH THE LATTER, SINCE IT WOULD ENABLE THE APPLICANT TO PRODUCE CASTINGS THE PRODUCTION COSTS OF WHICH WOULD NOT BEAR THE BURDEN OF EQUALIZATION IN ANY WAY WHATSOEVER .
ON THE OTHER HAND, A SIMILAR SITUATION DOES NOT EXIST IN THE RELATIONSHIP BETWEEN INTEGRATED AND INDEPENDENT STEEL FOUNDRIES .
IT IS CLEAR FROM THE FOREGOING THAT THE COMPLAINT AS TO DISCRIMINATION IS UNFOUNDED .
2 . THE COMPLAINT AS TO THE ADVERSE EFFECT ON COMPETITION
THE THIRD INDENT OF THE SECOND PARAGRAPH OF ARTICLE 5 OF THE ECSC TREATY PROVIDES THAT THE COMMUNITY MUST " ENSURE THE ESTABLISHMENT, MAINTENANCE AND OBSERVANCE OF NORMAL COMPETITIVE CONDITIONS AND EXERT DIRECT INFLUENCE UPON PRODUCTION OR UPON THE MARKET ONLY WHEN CIRCUMSTANCES SO REQUIRE ".
FURTHER, ARTICLE 3 PROVIDES, IN INITIO, THAT THE INSTITUTIONS OF THE COMMUNITY ARE TO EXERCISE THEIR POWERS ONLY " IN THE COMMON INTEREST ".
AS THE COURT CONFIRMED IN ITS JUDGMENT IN CASE 15/57 ( COMPAGNIE DES HAUTS FOURNEAUX DE CHASSE V HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY REC . VOL . IV, 1958, P . 190 ) THAT PROVISION FORBIDS THE HIGH AUTHORITY TO DISREGARD THE SPECIFIC INTERESTS OF THOSE SUBJECT TO ITS JURISDICTION AND TO ACT WITH SUCH INFLEXIBILITY THAT THOSE INTERESTS ARE ADVERSELY AFFECTED TO AN APPRECIABLY GREATER EXTENT THAN MIGHT REASONABLY BE EXPECTED .
IF THESE PRINCIPLES ARE APPLIED IN THE LIGHT OF ARTICLE 5 TO THE EFFECTS WHICH INTERVENTION BY THE HIGH AUTHORITY MAY HAVE ON THE COMPETITIVE POSITION OF THOSE CONCERNED THEY INDICATE THAT THE HIGH AUTHORITY WOULD EXCEED THE LIMITS OF ITS POWERS IF IT ADVERSELY AFFECTED THAT SITUATION MORE SERIOUSLY THAN WAS ESTABLISHED TO BE NECESSARY AFTER A THOROUGH EXAMINATION OF THE INTERESTS INVOLVED OR, IN ANY EVENT, IF IT HAD A SUBSTANTIAL ADVERSE EFFECT ON THAT POSITION; BUT, ON THE OTHER HAND, AS THE COURT ALSO HELD IN THE ABOVEMENTIONED JUDGMENT ( LOC . CIT ., P . 187 ), TO CLAIM THAT THE COMPETITIVE POSITION OF AN UNDERTAKING MUST NOT BE CHANGED AT ALL BY AN INTERVENTION BY THE HIGH AUTHORITY WOULD AMOUNT TO " AN UNREASONABLE STIPULATION ".
P . 233
( A ) HAVING REGARD TO THE ABOVEMENTIONED PRINCIPLES IT IS APPROPRIATE TO CONSIDER FIRST OF ALL WHETHER, AS A RESULT OF THE DECISION AT ISSUE AND THE GENERAL DECISIONS UPON WHICH IT IS BASED, THE APPLICANT'S COMPETITIVE POSITION HAS BEEN ADVERSELY AFFECTED TO A SUBSTANTIAL DEGREE . THIS WOULD ONLY BE THE CASE IF IT WERE ESTABLISHED THAT BY REASON OF THESE DECISIONS, THE EFFECTS OF WHICH THE APPLICANT HAS BEEN IN A POSITION TO ASSESS FOR SEVERAL YEARS, THE COMPETITIVE POSITION OF THE APPLICANT HAD IN FACT SUBSTANTIALLY WORSENED, FOR EXAMPLE, IF THE TOTAL VOLUME OF ITS SALES HAD NOTICEABLY FALLEN; BUT, ON THE OTHER HAND, IT IS NOT SUFFICIENT THAT, FOLLOWING THE INTERVENTION OF THE HIGH AUTHORITY, CERTAIN DISTORTIONS OF THE RESPECTIVE COST PRICES OF THE APPLICANT AND ITS COMPETITORS HAD OCCURRED .
THE APPLICANT, IN ORDER TO PERSUADE THE COURT TO ACKNOWLEDGE THAT ITS COMPETITIVE POSITION HAS BEEN ADVERSELY AFFECTED TO A SUBSTANTIAL DEGREE IN ACCORDANCE WITH THE PRECEDING ARGUMENTS, MERELY SUBMITTED AND OFFERED TO PROVE IN ITS APPLICATION THAT THE SHARE OF " PIG IRON " IN THE PIPING MARKET - COMPARED WITH THAT OF ASBESTOS CEMENT - " HAS IN FACT FALLEN SINCE THE INTRODUCTION OF EQUALIZATION ".
UNDER ARTICLE 29 ( 3 ) OF THE RULES OF PROCEDURE OF THE COURT OF JUSTICE OF THE ECSC, WHICH APPLIES IN THIS CASE, THE ORIGINAL APPLICATION MUST STATE " THE FACTS AND THE SUBMISSIONS ... AND THE NATURE OF THE EVIDENCE FOUNDED UPON IN SUPPORT OF THE APPLICATION ".
IT FOLLOWS THAT IN THIS CASE, IN ORDER TO PROVE THE SERIOUS NATURE OF THE ASSERTION IN QUESTION, THE APPLICATION SHOULD AT LEAST HAVE CONTAINED THE BASIC PARTICULARS, TOGETHER WITH FIGURES, SHOWING THE EXTENT TO WHICH THE SHARE OF PIG IRON IN THE PIPING MARKET HAS FALLEN AND THAT OF ASBESTOS CEMENT HAS INCREASED AND SHOWING THE CASUAL LINK BETWEEN THIS ALLEGED CHANGE IN THE MARKET SITUATION AND THE INTRODUCTION OF EQUALIZATION .
HOWEVER, THE APPLICANT DID NOT DO SO BUT MERELY MADE A SHORT AND QUITE GENERAL STATEMENT .
THEREFORE NEITHER THE CLAIM NOR THE EVIDENCE THAT THE DECISIONS AT ISSUE ADVERSELY AFFECTED THE APPLICANT'S COMPETITIVE POSITION TO A SUBSTANTIAL DEGREE ARE SUFFICIENT IN LAW .
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( B ) IT IS ALSO APPROPRIATE TO CONSIDER WHETHER THE MEASURES AT ISSUE DO NOT NEVERTHELESS INFRINGE THE TREATY BECAUSE THEY IN FACT HAD A MORE SERIOUS EFFECT ON THE COMPETITIVE POSITION OF THE APPLICANT THAN NECESSARY HAVING REGARD TO THE AIM AND PURPOSE OF THE SAID MEASURES .
THE ANSWER TO THIS QUESTION COULD BE IN THE AFFIRMATIVE ONLY IF IT WERE TO BE SHOWN THAT THE HIGH AUTHORITY COULD HAVE EXEMPTED THE APPLICANT FROM EQUALIZATION WITHOUT JEOPARDIZING THE FUNCTIONING OF THAT SCHEME .
EVEN IF IT WERE TRUE THAT THE EXEMPTION OF THE APPLICANT, CONSIDERED IN ISOLATION, WOULD NOT SERIOUSLY INTERFERE WITH THE EQUALIZATION ARRANGEMENTS, HAVING REGARD TO THE VERY SMALL AMOUNT OF SCRAP WHICH IT CONSUMES, THIS FACT WOULD NOT BE CONCLUSIVE . IN EFFECT, EXEMPTION OF THE APPLICANT WOULD INEVITABLY LEAD NOT ONLY TO THE EXEMPTION OF ALL OTHER FOUNDRIES IN THE COMMUNITY ENGAGED IN PRE-MELT BUT ALSO TO VALID APPLICATIONS FOR EXEMPTION BY OTHER UNDERTAKINGS WHICH CONSUME ONLY A RELATIVELY SMALL AMOUNT OF SCRAP . AS A RESULT THE PROPER FUNCTIONING OF THE EQUALIZATION SCHEME WOULD BE APPRECIABLY THREATENED .
CONSEQUENTLY, THE MEASURES AT ISSUE GO NO FURTHER THAN THEIR AIM AND PURPOSE REQUIRE .
IT IS CLEAR FROM THE FOREGOING THAT THE COMPLAINT AS TO THE ADVERSE EFFECT ON THE COMPETITIVE SITUATION MUST BE DISMISSED .
3 . THE COMPLAINT AS TO A SPECIAL CHARGE
THE APPLICANT ALSO CLAIMS THAT THE DECISION AT ISSUE RENDERED IT LIABLE TO PAY A PROHIBITED SPECIAL CHARGE .
HOWEVER, THE CHARGE TO WHICH THE APPLICANT OBJECTS CAN IN NO CIRCUMSTANCE BE REGARDED AS " SPECIAL ". ON THE CONTRARY, IT IS OF A GENERAL NATURE BECAUSE IN PRINCIPLE IT APPLIES TO ALL COMMUNITY UNDERTAKINGS CONSUMING FERROUS SCRAP . THIS COMPLAINT IS THEREFORE UNFOUNDED .
THE EFFECT OF ALL THE FOREGOING CONSIDERATIONS IS THAT THE APPLICANT'S SECOND SUBMISSION IS UNFOUNDED .
Decision on costs
UNDER ARTICLE 60 ( 1 ) OF THE RULES OF PROCEDURE OF THE COURT OF JUSTICE OF THE EUROPEAN COAL AND STEEL COMMUNITY THE UNSUCCESSFUL PARTY MUST BE ORDERED TO PAY THE COSTS .
IN THIS CASE THE APPLICANT HAS FAILED ON ALL THE HEADS OF ITS APPLICATION .
IT MUST THEREFORE BEAR THE COSTS OF THE PROCEEDINGS .
Endorsements
UPON READING THE PLEADINGS;
UPON HEARING THE REPORT OF THE JUDGE-RAPPORTEUR;
UPON HEARING THE PARTIES;
UPON HEARING THE OPINION OF THE ADVOCATE-GENERAL;
HAVING REGARD TO ARTICLES 3, 4, 5, 15, 31, 33, 53, 80 AND 81 OF THE TREATY ESTABLISHING THE EUROPEAN COAL AND STEEL COMMUNITY AND ALSO TO ANNEX I TO THE SAID TREATY;
HAVING REGARD TO THE PROTOCOL ON THE STATUTE OF THE COURT OF JUSTICE OF THE EUROPEAN COAL AND STEEL COMMUNITY;
HAVING REGARD TO THE RULES OF PROCEDURE OF THE COURT OF JUSTICE OF THE EUROPEAN COAL AND STEEL COMMUNITY, ESPECIALLY ARTICLES 29 ( 3 ) AND 60 ( 1 ),
Operative part
THE COURT
HEREBY :
1 . DISMISSES THE APPLICATION AS UNFOUNDED .
2 . ORDERS THE APPLICANT TO BEAR THE COSTS .