NoL35/6 OfficialJournaloftheEuropeanCommunities 10.2.76
II
(Actswhosepublicationisnotobligatory)
COMMISSION
COMMISSION DECISION
of29October1975
adoptinginterimmeasuresconcerningtheNationalCoalf)Board,National
SmokelessFuelsLimitedandtheNationalCarbonizingCompanyLimited
(OnlytheEnglishtextisauthentic)
(76/185/ECSC)
interaliaindustrialanddomestichardcokeat13
plants.NSFhasapproximately 84%ofthemarketfor
industrialanddomestichardcokeand88%ofthe
marketfordomestichardcokeintheUnited
Kingdom.THECOMMISSION OFTHEEUROPEAN
COMMUNITIES ,
HavingregardtotheTreatyestablishingtheEuropean
CoalandSteelCommunity,andinparticularArticle
66(7)thereof,
HavingregardtotheapplicationoftheNational
CarbonizingCompanyLimitedtotheEuropeanCourt
ofJusticeandtheorderofthePresidentoftheCourt
ofJusticeof22October1975,NCCbuysallthecoalitrequiresforcokeproduction
fromNCB.AsNSFisprice-leaderforindustrialand
domestichardcokeintheUnitedKingdom,NCCis
unabletosellitsidenticalproductsaboveNSF's
prices.
IInJuly1973NCBincreaseditspricesforcokingcoal
butNSFdidnotincreasethepricechargedfor
domesticcoke.Ifunaccompanied byothermeasures
thischangeinthepricestructurewouldhavereduced
themarginwithinwhichindependentcokeproducers
havetooperateintheUnitedKingdom.Thisdiffi­
cultywasavoidedbyNCBintroducingarebateequiva­
lentto100%oftheincreaseinthepriceofcoal.This
rebatewasgivenonlyoncoalusedtoproduce
domesticcokeforsaleintheUnitedKingdom.Whereas:
NationalCarbonizingCompanyLimited('NCC')of
Nottingham ,UnitedKingdom,isapubliclimited
companyproducinginteraliaindustrialand
domestichardcokeattwoplantsatBarnsleyand
Rotherham .
NCChasapproximately 7%ofthetotalhardcoke
marketintheUnitedKingdom.Thisincludes9%of
themarketfordomestichardcoke.
TheNationalCoalBoard('NCB')isapubliclyowned
enterprisehavingavirtualmonopolyofcoalproduc­
tionintheUnitedKingdomandabout95%ofthe
marketforcoalthere.Itswhollyownedsubsidiary,
NationalSmokelessFuelsLimited('NSF')producesTherewerefurtherpriceincreasesforcokingcoalon
1May1974,1November1974and1April1975
accompanied byincreasesinthepricesofindustrial
anddomesticcoke.Oneachoccasiontherebateon
coalfortheproductionofdomesticcokeforsalein
theUnitedKingdomwasalteredbutthefullamount
oftheselatercoalpriceincreaseswasnotrebated.
Othercostsofcokeproductionwerealsoincreasing.

10.2.76 OfficialJournaloftheEuropeanCommunities NoL35/7
Asaresult,intheperiodfromJuly1973toApril
1975thepriceofcokingcoalincreasedby£4-40per
ton.Thepriceofcoaltomakeonetonofcoke
increasedthereforeby£6-29.Atthesametimethe
costsofproductionforNCCincreasedby£410per
tonofcoke.Thetotalincreaseofthecostsforoneton
ofcokewastherefore£10-39.Thepriceofcokewas
increasedby£6*70withinthesameperiod.
Byletterdated21July1975totheCommission ,
NCCmadeinteraliathefollowingcomplaints :
1.thatthefactthatNCBchargeddifferentpricesfor
coalfordomesticcokeproductiondependingon
whetherthecokewastobesoldintheUnited
KingdomornotwasaviolationoftheECSC
TreatyandinparticularArticle60,
2.thatthepriceschargedbyNCBandNSFrespec­
tivelyforcoalfordomesticcokeproductionand
fordomesticcokeconstitutedinthecircumstances
aviolationofArticles60and66(7)ECSCTreaty,
insubstanceonthegroundsthatthemargin
betweenthesetwopriceshadbecomeinsufficient
toallowdomesticcokeproducerstooperate
economically .
InitsletterNCCstatedthatifnosolutioncouldbe
arrivedat,NCC'stwoplantswouldhavetobeclosed.
NCCalsostatedthattheUKGovernment hadnot
givenanyassistance.
TheservicesoftheCommission firstcontactedNCB
on23July1975.On12September1975theservices
oftheCommissionwrotetoNCCsayingthatthe
grantoftherebateonlyinrespectofdomesticcoke
soldintheUnitedKingdomwascontrarytothe
ECSCTreatyandthat,followingtheinterventionof
theCommission ,NCBhadundertakentogivethe
rebateimmediatelyinrespectofalldomesticcoke
destinedforsaleintheCommunity .
On15October1975theservicesoftheCommission
informedNCCorallyoftheprovisionalconclusions
theyhadreachedinrespectoftheircomplaintonthe
basisoftheinformationthenavailable.
Theconclusionswerethat,thoughNCB/NSFhada
dominantpositionintheUKforbothcoalandcoke,
therehadbeennoviolationoftheECSCTreatyby
NCBorNSF.
Byletterandtelexdated16October1975theservices
oftheCommissioninformedNCCinwritingofthe
outcomeoftheconsiderationtheyhadgiventothe
issues.
InthislettertheservicesoftheCommissionaccepted
thatanundertakingwhichisinadominantpositionasregardstheproductionofarawmaterial(inthis
casecokingcoal)andthereforeabletocontrolits
pricetoindependentmanufacturers ofderivatives(in
thiscase,coke)andwhichisitselfproducingthesame
derivativesincompetitionwiththesemanufacturers ,
mayabuseitsdominantpositionifitactsinsucha
wayastoeliminatethecompetitionfromthesemanu­
facturersinthemarketforthederivatives .Fromthis
generalprincipletheservicesoftheCommission
deducedthattheenterpriseinadominantposition
mayhaveanobligationtoarrangeitspricessoasto
allowareasonablyefficientmanufacturerofthederiva­
tivesamarginsufficienttoenableittosurviveinthe
longterm.
However,onthebasisofthefactsavailabletothem
theservicesoftheCommission concludedthat
NCB/NSF,whilesubjecttothisobligation,appeared
nottohaveactedcontrarytoit.Itisagainstthis
conclusionthatNCChassoughtrelieffromtheCourt
ofJusticeoftheEuropeanCommunities .
On16October1975NCCappliedtotheCourtof
JusticeunderArticle35oftheECSCTreatyclaiming
thattheCommissionhadactedimproperlyinfailing
toadoptmeasuresputtinganendtoviolationsofthe
TreatybyinteraliaNCB.NCCsimultaneously
appliedtotheCourtofinterimmeasuresenabling
NCCtoproducedomesticcoke'onaneconomic
basis'.
On22OctoberthePresidentoftheCourtofJustice
madeanorderrulingthat:
'itisfortheCommission totakethemeasuresof
conservationwhichitconsidersstrictlynecessary,
andsubjecttoallappropriateguarantees,forthe
purposeofkeepinginoperationthetwoNCC
plantsthreatenedwithclosureandonlyforthe
shortesttimewhichitconsiderstobenecessary
forthecompletionoftheproceedingsinthemain
action'.
ThisordermakesitclearthattheCommission has
powerundertheECSCTreatytoadoptinterim
measureseveniftheservicesoftheCommission do
notconsiderthat,onthebasisofthefactsknownto
them,aviolationoftheTreatyhasbeencommitted.
Theordermakesitclearthattheprerequisitesfor
interimmeasuresinthematterarefulfilled.What
remainstobelaiddownarethenatureandthescope
ofthesemeasures,includinganadequateguarantee.
Forthispurposeahearingwasheldon24October,at
whichNCCandNCB/NSFwererepresented.Interim
measuresandthequestionoftheguaranteewere
discussed.

NoL35/8 OfficialJournaloftheEuropeanCommunities 10.2.76
II
Thepurposeofinterimmeasuresinthepresent
instanceistoensurethesurvivalofNCCasaninde­
pendentcokeproducerpendingtheoutcomeofthe
casebeforetheCourt.
InviewofthelossesbeingincurredbyNCCthis
survivalcanonlybeensuredbyorderingNCBto
foregotemporarilysuchpartofthepriceofcoking
coalsuppliedtoNCCaswillallowthelattertobreak
evenforthelikelydurationofthecase,whichinview
oftheurgencyofthemattercanbeestimatedat12
weeks.Itcould,forexample,bebybankguarantee,bythe
depositofcashinablockedbankaccount,arecog­
nizeddebtowedbyNCBtoNCC,oraguaranteebya
thirdpartyofunquestionable solvencyandliquidity.
Theguaranteemustbesecureandadequatein
amount,shouldbesimpleandensurereasonably
convenientandpromptrepaymentinareasonably
liquidform.TheCommissionwouldnothowever
opposeanyformofguaranteeacceptabletoNCB.
ThepricereductionappliesonlytocoalsoldtoNCC
fortheproductionofdomesticcoke.Sincethebenefit
toNCCissubjecttorepaymentandsincethe
guaranteewillapplyonlytoit,thereductionneednot
begiventootherenterprisesbuyingcoalfromNCB
fordomestichardcokeproduction .Anylegalrights
whichtheseenterprisesmayhavecanbeconsidered
onanappropriateoccasion.
Thepricereductiondoesnotapplytocoalformaking
productsotherthandomestichardcoke.Astheprice
reductionissubjecttorepaymentandistobegiven
onlyforarelativelyshortperiod,nosignificantdistor­
tionofcompetitionisexpected.AccordingtostatementsmadebyNCCtothe
Commission ,areductionofthepriceofcokingcoal
suppliedbyNCBtoNCCby£2*79pertononthe
quantitiesneededfortheperiodmentionedwould
achievethisresult.ThetotalsumwhichNCBwould
thusforgotemporarilywouldamounttoapproxi­
mately£280000,excludinginterest.
EitherpartymayreapplytotheCommissionifany
seriousdoubtordifficultyarisesintheapplicationof
anypartofthisDecision.Inviewofthetemporarynatureoftheinterim
measuresandthecorrelationbetweenthepricereduc­
tionorderedandtheamounttobeguaranteed,no
detailedexaminationoftheamountofthepricereduc­
tionrequestedbyNCCneedatpresentbeunder­
taken.
Ill
AstotheguaranteetobegivenbyNCC,theCommis­
sionhastoconsiderthepossibilitythatthedisappear­
anceofoneofthefewremainingcompetitorsofan
enterpriseinadominantpositionistheresultoffinan­
cial,industrialorcommercialfactorspeculiartothat
competitor,e.g.itsindustrialandcommercialcompeti­
tivenessanditsfinancialstrength.Forthisreasonthe
enterpriseinadominantpositionmustbegivena
guaranteeofsuchnatureandscopeastoensurethat
theultimatecostoftheinterimmeasureswillnotbe
bornebyitifithascommittednoviolationofthe
Treaty.TheorderoftheCourtinsiststhatinterimmeasures
beadopted'onlyfortheshortesttimewhichit
considerstobenecessaryforthecompletionofthe
proceedingsinthemainaction'.Astheinterim
measuresinvolvesubstantialcostwhichmustulti­
matelybeborneeitherbyNCCorbyNCB,itis
necessarytoensurethateverythingisdoneto
minimizethetimerequiredtocompletetheproceed­
ingsinthemainaction.Tothiseffectanysupplemen­
taryinformationneededtoidentifyandclarifythe
issuesbeforetheCourtshouldbemadeavailableas
quicklyaspossible.
Itisthereforeappropriatethatalltheinformation
whichtheindependentprofessionaladvisersofNCC
andNSFmayreasonablyrequiretoconsiderthese
issuesshouldbemadeavailabletothem.Allinforma­
tionsomadeavailablemustalsobemadeavailableto
theCommission ,asthedefendantbeforetheCourt,
withoutprejudicetotheCommission'srightstoask
fortheproductionoffurtherinformationifthecase
sorequiresandsubjecttothepowersoftheCourt
undertherulesofprocedure.Themostappropriatewaytoachievethisistorequire
theclaimantfirmtoguaranteefullyandeffectively
theimmediatepaymentofanysumswhichtheenter­
priseinadominantpositionhashadtoforegoasa
resultoftheinterimmeasuresbutwhichthefinal
outcomeofthecasebeforetheCourtshowstobedue
toit.
Anadequateandappropriateguaranteeofrepayment
couldtakevariousforms,asdoesthesecuritygivenin
similarcircumstances incasesbeforenationalcourts.

10.2.76 OfficialJournaloftheEuropeanCommunities NoL35/9
amountinquestion.Anyotherformofguarantee
shallrequiretheapprovaloftheNationalCoalBoard.
Article3
IftheNationalCarbonizingCompanyLimitedshall
giveaguaranteefortherepaymentoflessthan
£280000plusinterest,theobligationsofthe
NationalCoalBoardshallbeproportionately reduced.Theprofessionaladvisersareobligednottodiscloseto
anyemployeeorofficeroftheirrespectiveclients,any
businesssecretsoftheothercompanyorcompanies,
inaccordancewithnormalpracticewheninformation
isexchangedinsuchcircumstances ona'professional
advisersonly'basiswhichisfamiliarintheUnited
Kingdom.
TheCommissiontherefore,inordertolimitthecost
oftheinterimmeasuresandtoensurethattheyare
notrendereduselessbydelay,andtoavoidfurther
difficultiesduetoth£delaysinobtaininginformation
whichhavealreadyoccurred,ordersthepartiesto
exchangetheinformationinquestionasanecessary
partoftheinterimmeasuresofprotection.Thissolu­
tionalsoavoidstheriskofdelayduetotheCommis­
sionhavingtoavoiddisclosingtoonepartywhat
anotherpartymightregardasitsbusinesssecrets,in
thecourseoftheprocedurebeforetheCourt,Article4
Theamount,ifany,toberepaidbytheNational
CarbonizingCompanyLimitedtotheNationalCoal
Boardshallbegovernedbythefinaldecisionbythe
institutionsoftheCommunityonthequestion
whether,andifsotowhatextent,thepricingpolicyof
theNationalCoalBoardandNationalSmokeless
FuelsLimitedconstitutesaviolationoftheTreaty.
Article5HASADOPTEDTHISDECISION :
Article1TheNationalCarbonizingCompanyLimited,the
NationalCoalBoardandNationalSmokelessFuels
Limitedshallimmediatelymakeavailabletotheinde­
pendentprofessionaladvisersoftheothers,andtothe
Commission ,allfinancialandotherinformation
reasonablyrequiredforthepurposeofthecasebefore
theCourt.TheNationalCoalBoardshallreducetheeffective
priceofcoalsuppliedtotheNationalCarbonizing
CompanyLimitedandusedfortheproductionof
domestichardcoketobesoldforusewithinthe
Community,by£2-79pertonwitheffectfrom22
October1975.Thisobligationshallendon15
January1976andshallbelimitedto£280000,on
whichinterestshallrunat12%compounded .Article6
Article2ThisDecisionisaddressedtotheNationalCoal
Board,London,NationalSmokelessFuelsLimited,
Harrow,Middlesexa..dtheNationalCarbonizing
CompanyLimited,Mansfield,Notts.
DoneatBrussels,29October1975.
FortheCommissionTheobligationsoftheNationalCoalBoardunder
Article1shallbeconditionalupontheNational
CarbonizingCompanyLimitedhavingprovideda
guaranteefortheimmediaterepaymenttothe
NationalCoalBoardoftheamountcorresponding to
thetotalpricereductionsunderArticle1plusinterest.
Theguaranteeshalltaketheformofanunconditional
undertakingbyathirdpartyofunquestionable
solvencyandliquidityfortherepaymentoftheThePresident
Francois-Xavier ORTOLI