Judgment of the Court of 3 March 1982. - Alpha Steel Ltd. v Commission of the European Communities. - System of production quotas for steel. - Case 14/81.



European Court reports 1982 Page 00749

Spanish special edition Page 00153



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

1 . PROCEDURE - DECISION REPLACING CONTESTED DECISION WHILE ACTION IN PROGRESS - NEW FACTOR - AMENDMENT OF PLEADINGS

2 . MEASURES ADOPTED BY THE INSTITUTIONS - WITHDRAWAL OF UNLAWFUL MEASURES - CONDITIONS

3 . ECSC - PRODUCTION - QUOTA SYSTEM - CONCOMITANT ADOPTION OF MEASURES CONCERNING IMPORTS FROM NON-MEMBER COUNTRIES - COMMISSION ' S POWER OF APPRAISAL

( ECSC TREATY , ART . 58 ( 1 ))

4 . MEASURES ADOPTED BY THE INSTITUTIONS - DECISIONS - DUTY TO STATE REASONS - LIMITS

5 . ECSC - PRODUCTION - QUOTA SYSTEM - ESTABLISHED ON AN EQUITABLE BASIS - COMMISSION ' S FREEDOM OF CHOICE - TAKING INTO ACCOUNT OF UNDERTAKINGS ' ACTUAL PRODUCTION - PERMISSIBILITY - PRODUCTION CAPACITY OF UNDERTAKINGS - EXCLUSION JUSTIFIED

6 . ECSC - PRODUCTION - QUOTA SYSTEM - PURPOSE - TO COMPENSATE FOR DISTORTIONS OF COMPETITION ATTRIBUTABLE TO STATE SUBSIDIES - NO

( ECSC TREATY , ART . 58 )

7 . ECSC - PRODUCTION - SYSTEM OF PRODUCTION QUOTAS FOR STEEL - ESTABLISHED ON AN EQUITABLE BASIS - CHOICE OF A PARTICULAR PERIOD OF REFERENCE - DISCRIMINATION AGAINST CERTAIN UNDERTAKINGS - NONE - APPLICATION OF RELIEF CLAUSE IN CASES OF HARDSHIP

( ECSC TREATY , ART . 58 ; DECISION NO 2794/80 , ART . 14 )

8 . ECSC - PRODUCTION - SYSTEM OF PRODUCTION QUOTAS FOR STEEL - ESTABLISHED ON AN EQUITABLE BASIS - TAKING INTO ACCOUNT OF UNDERTAKINGS ' REFERENCE PRODUCTION - GROUNDS FOR ADJUSTMENT - PARTICIPATION IN A VOLUNTARY DELIVERY PROGRAMME - NOT A SANCTION AGAINST OTHER UNDERTAKINGS

( DECISION NO 2794/80 , ART . 4 ( 3 ))

9 . ECSC - PRODUCTION - SYSTEM OF PRODUCTION QUOTAS FOR STEEL - ESTABLISHED ON AN EQUITABLE BASIS - TAKING INTO ACCOUNT OF UNDERTAKINGS ' REFERENCE PRODUCTION - GROUNDS FOR ADJUSTMENT - PARTICIPATION IN A VOLUNTARY DELIVERY PROGRAMME - PRINCIPLE THAT LEGITIMATE EXPECTATIONS MUST BE PROTECTED - BREACH - NONE

( DECISION NO 2794/80 , ART . 4 ( 3 ))

Summary

1 . AN INDIVIDUAL DECISION WHICH REPLACES A PREVIOUS DECISION HAVING THE SAME SUBJECT-MATTER WHILE AN ACTION IS IN PROGRESS MUST BE REGARDED AS A NEW FACTOR WHICH ALLOWS THE APPLICANT TO AMEND HIS PLEADINGS . IT WOULD NOT BE IN THE INTERESTS OF THE DUE ADMINISTRATION OF JUSTICE AND THE REQUIREMENTS OF PROCEDURAL ECONOMY TO OBLIGE THE APPLICANT TO MAKE A FRESH APPLICATION TO THE COURT . MOREOVER , IT WOULD BE INEQUITABLE IF THE INSTITUTION WERE ABLE , IN ORDER TO COUNTER CRITICISMS OF A DECISION CONTAINED IN AN APPLICATION TO THE COURT , TO AMEND THE CONTESTED DECISION OR TO SUBSTITUTE ANOTHER FOR IT AND TO RELY IN THE PROCEEDINGS ON SUCH AN AMENDMENT OR SUBSTITUTION IN ORDER TO DEPRIVE THE OTHER PARTY OF THE OPPORTUNITY OF EXTENDING HIS ORIGINAL PLEADINGS TO THE LATER DECISION OR OF SUBMITTING SUPPLEMENTARY PLEADINGS DIRECTED AGAINST THAT DECISION .

2 . THE WITHDRAWAL OF AN UNLAWFUL MEASURE IS PERMISSIBLE , PROVIDED THAT THE WITHDRAWAL OCCURS WITHIN A REASONABLE TIME AND PROVIDED THAT THE INSTITUTION FROM WHICH IT ORIGINATES HAS SUFFICIENT REGARD TO HOW FAR PERSONS TO WHOM THE MEASURE WAS ADDRESSED MIGHT HAVE BEEN LED TO RELY ON THE LAWFULNESS THEREOF .

3 . UNDER THE TERMS OF ARTICLE 58 ( 1 ) OF THE ECSC TREATY THE COMMISSION HAS POWER TO TAKE ' ' TO THE NECESSARY EXTENT ' ' THE MEASURES PROVIDED FOR IN ARTICLE 74 AT THE SAME TIME AS ANY MEASURE TAKEN ON THE BASIS OF ARTICLE 58 . THE APPRAISAL OF THE NECESSITY OF TAKING SUCH MEASURES IS A MATTER FOR THE COMMISSION , SUBJECT TO THE COURT ' S POWER TO REVIEW THE LAWFULNESS OF THE COMMISSION ' S EXERCISE OF ITS DISCRETION .

4 . ALTHOUGH THE COMMISSION HAS A DUTY TO SET OUT , IN A CONCISE BUT CLEAR AND RELEVANT MANNER , THE PRINCIPAL ISSUES OF LAW AND FACT UPON WHICH ITS DECISIONS ARE BASED , SO THAT THE REASONING WHICH LED IT TO ADOPT THEM MAY BE UNDERSTOOD , IT IS NOT REQUIRED TO DISCUSS ALL THE OBJECTIONS WHICH MIGHT BE RAISED AGAINST ITS DECISIONS ; NOR MAY IT BE REQUIRED TO INDICATE ITS REASONS FOR NOT ADOPTING MEASURES OTHER THAN THOSE CONTAINED IN THE DECISIONS , WHERE THE ADOPTION OF THOSE OTHER MEASURES WAS A MATTER FOR ITS DISCRETION .

5 . ARTICLE 58 ( 2 ) OF THE TREATY DOES NOT RESTRICT THE COMMISSION ' S FREEDOM TO CHOOSE THE BASIS UPON WHICH THE QUOTAS MAY BE EQUITABLY DETERMINED IN A GIVEN ECONOMIC SITUATION . THERE ARE NO REASONABLE GROUNDS FOR DENYING THAT THE COMMISSION ' S CHOICE OF THE CRITERION BASED ON UNDERTAKINGS ' ACTUAL PRODUCTION MAY CONSTITUTE AN ' ' EQUITABLE BASIS ' ' WITHIN THE MEANING OF ARTICLE 58 ( 2 ). INDEED , THAT CRITERION , AS ADJUSTED BY ARTICLE 4 OF DECISION NO 2794/80 , CONSTITUTES , IN THE FIRST PLACE , AN OBJECTIVE BASIS OF ASSESSMENT WHICH AVOIDS THE UNCERTAINTIES INHERENT IN DETERMINING A FACTOR WHICH IS PARTLY CONJECTURAL , SUCH AS PRODUCTION CAPACITY ; SECONDLY , IT ENABLES TOTAL PRODUCTION TO BE REDUCED WITHOUT ALTERING THE POSITIONS OF THE UNDERTAKINGS ON THE MARKET AS BETWEEN EACH OTHER .

6 . ARTICLE 58 IS NOT DESIGNED TO COMPENSATE FOR DISTORTIONS OF COMPETITION ATTRIBUTABLE TO STATE SUBSIDIES , FOR WHICH THE COMMISSION HAS OTHER MEANS OF ACTION AT ITS DISPOSAL .

7 . THE FACT THAT UNDERTAKINGS WERE ALLOWED TO HAVE QUOTAS CALCULATED ON THE BASIS OF THEIR BEST PERFORMANCE DURING THE PERIOD OF REFERENCE FIXED BY DECISION NO 2794/80 DOES NOT AMOUNT TO DISCRIMINATION AGAINST UNDERTAKINGS WHOSE RECENT EQUIPMENT WAS NOT FULLY IN OPERATION WHEN THAT PERIOD BEGAN . IF THE QUOTAS THUS ALLOCATED TO THEM GIVE RISE TO DIFFICULTY , SUCH UNDERTAKINGS MAY SUBMIT A REQUEST TO THE COMMISSION FOR AN ADJUSTMENT PURSUANT TO ARTICLE 14 OF THE GENERAL DECISION . THAT ARTICLE IS SPECIFICALLY DESIGNED TO PROVIDE RELIEF ; ITS USEFULNESS AND VALUE ARE UNDENIABLE AND IT ENABLES THE EFFECTS OF OTHER PROVISIONS OF THE GENERAL DECISION TO BE ADJUSTED AS AND WHEN APPROPRIATE .

8 . ARTICLE 4 ( 3 ) OF DECISION NO 2794/80 WAS DESIGNED TO TAKE ACCOUNT OF THE POSITION OF CERTAIN UNDERTAKINGS WHICH HAD BEEN PLACED AT A PARTICULAR DISADVANTAGE OWING TO THEIR PARTICIPATION IN A VOLUNTARY DELIVERY PROGRAMME . THAT IN NO WAY CONSTITUTES A SANCTION AGAINST OTHER UNDERTAKINGS AND THE PROVISION MAY NOT THEREFORE BE CONSIDERED TO BE IN BREACH OF THE PRINCIPLE OF NULLA POENA SINE LEGE .

9 . ARTICLE 4 ( 3 ) OF DECISION NO 2794/80 DID NOT OFFEND AGAINST THE PRINCIPLE OF THE PROTECTION OF LEGITIMATE EXPECTATION , FOR THE UNDERTAKINGS WHICH DID NOT PARTICIPATE IN VOLUNTARY DELIVERY PROGRAMMES COULD NOT REASONABLY EXPECT TO CONTINUE TO ENJOY , AFTER THE INTRODUCTION OF A QUOTA SYSTEM , THE COMPETITIVE ADVANTAGE WHICH THEY HAD HAD OVER UNDERTAKINGS WHICH DID PARTICIPATE IN SUCH PROGRAMMES .

Parties

IN CASE 14/81

ALPHA STEEL LTD , WHOSE REGISTERED OFFICE IS AT 2 RAYMOND BUILDINGS , GRAY ' S INN , LONDON , REPRESENTED BY ANDRE ELVINGER , OF THE LUXEMBOURG BAR , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF THE SAID ANDRE ELVINGER , 15 COTE D ' EICH ,

APPLICANT ,

V

COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY ITS LEGAL ADVISER , MICHEL VAN ACKERE , ASSISTED BY FRANK BENYON , A MEMBER OF ITS LEGAL DEPARTMENT , WITH AN ADDRESS FOR SERVICE AT THE OFFICE OF ORESTE MONTALTO , A MEMBER OF ITS LEGAL DEPARTMENT , JEAN MONNET BUILDING , KIRCHBERG ,

DEFENDANT ,

Subject of the case

APPLICATION FOR A DECLARATION THAT AN INDIVIDUAL DECISION OF THE COMMISSION CONCERNING THE FIXING OF PRODUCTION QUOTAS FOR CERTAIN STEEL PRODUCTS IS VOID ( ARTICLE 33 OF THE ECSC TREATY ),

Grounds

1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 29 JANUARY 1981 ALPHA STEEL LTD , A COMPANY INCORPORATED UNDER ENGLISH LAW , BROUGHT AN ACTION UNDER THE SECOND PARAGRAPH OF ARTICLE 33 OF THE ECSC TREATY FOR A DECLARATION THAT THE COMMISSION ' S INDIVIDUAL DECISION OF 19 DECEMBER 1980 FIXING THE APPLICANT ' S PRODUCTION QUOTAS FOR THE FIRST QUARTER OF 1981 PURSUANT TO COMMISSION DECISION NO 2794/80/ECSC OF 31 OCTOBER 1980 ESTABLISHING A SYSTEM OF STEEL PRODUCTION QUOTAS ( OFFICIAL JOURNAL 1980 , L 291 , P . 1 ) IS VOID .

2 DECISION NO 2794/80/ECSC , THE GENERAL DECISION , PROVIDES IN ARTICLE 4 ( 1 ) AND ( 2 ) THAT THE QUOTAS ARE TO BE DETERMINED BY APPLICATION OF AN ABATEMENT RATE , FIXED FOR ALL STEEL UNDERTAKINGS WITHIN THE COMMUNITY , TO THE REFERENCE PRODUCTION CALCULATED FOR EACH UNDERTAKING IN THE MANNER LAID DOWN BY THAT DECISION . THE REFERENCE PRODUCTION MAY , HOWEVER , BE INCREASED IN CERTAIN CIRCUMSTANCES WHEN THE CONDITIONS LAID DOWN IN ARTICLE 4 ( 3 ), ( 4 ) AND ( 5 ) ARE SATISFIED .

3 THE INDIVIDUAL DECISION OF 19 DECEMBER 1980 GAVE CERTAIN FIGURES AS THE REFERENCE PRODUCTION AND INDICATED THAT THE FIGURES HAD BEEN ADJUSTED PURSUANT TO ARTICLE 4 WITHOUT STATING THAT THE PROVISION IN QUESTION WAS ARTICLE 4 ( 3 ), AS BECAME APPARENT SUBSEQUENTLY .

4 BY ANOTHER INDIVIDUAL DECISION , DATED 24 FEBRUARY 1981 , THAT IS TO SAY , AFTER THESE PROCEEDINGS HAD BEEN COMMENCED , THE COMMISSION WITHDREW THE CONTESTED DECISION CLAIMING THAT IT HAD BEEN IN ERROR IN APPLYING ARTICLE 4 ( 3 ) TO THE APPLICANT ' S CASE WITH THE RESULT THAT THE REFERENCE PRODUCTION HAD BEEN FIXED AT TOO HIGH A LEVEL . IN THE NEW DECISION THE REFERENCE PRODUCTION IS FIXED AT A LEVEL WHICH IS NOT DISPUTED BY THE APPLICANT . IT GRANTS THE APPLICANT RELIEF UNDER ARTICLE 14 OF THE GENERAL DECISION WHICH PERMITS EACH UNDERTAKING ' S QUOTAS TO BE ADJUSTED IF IT APPEARS THAT THE RESTRICTIONS ON PRODUCTION OR DELIVERY ENTAIL EXCEPTIONAL DIFFICULTIES FOR THAT UNDERTAKING . IN FIXING THE PRODUCTION QUOTAS , THEREFORE , THE COMMISSION DID NOT APPLY THE RATE OF ABATEMENT TO THE REFERENCE PRODUCTION , WITH THE RESULT THAT THE QUOTA IS EQUAL TO THAT PRODUCTION . THE QUOTAS FIXED IN THAT WAY ARE NEVERTHELESS LOWER THAN THOSE FIXED IN THE DECISION OF 19 DECEMBER 1980 .

5 ORIGINALLY THE APPLICATION WAS DIRECTED AGAINST THE DECISION OF 19 DECEMBER 1980 , AND SOUGHT THE ANNULMENT OF THAT DECISION ON THREE GROUNDS , THE FIRST OF WHICH WAS THAT THE FIGURES GIVEN BY THE COMMISSION AS THE REFERENCE PRODUCTION DID NOT CORRESPOND TO THE REAL PRODUCTION FIGURES . THEY HAD BEEN INCREASED , BUT IT WAS IMPOSSIBLE FOR THE APPLICANT TO DETERMINE IN WHAT WAY THE ADJUSTMENT HAD BEEN EFFECTED .

6 AFTER THE COMMISSION HAD ADOPTED ITS DECISION OF 24 FEBRUARY 1981 THE APPLICANT ADDED A SUPPLEMENT TO ITS REPLY , AMENDING ITS CONCLUSIONS TO REQUEST THAT THE DECISION OF 19 DECEMBER 1980 AS AMENDED ON 24 FEBRUARY 1981 BE ANNULLED . THE APPLICANT ABANDONED THE FIRST GROUND OF ITS APPLICATION BASED ON THE INACCURACY OF THE FIGURES GIVEN IN THE DECISION OF 19 DECEMBER 1980 .

WHETHER THE CASE NEED PROCEED TO JUDGMENT

7 THE COMMISSION MAINTAINS IN LIMINE THAT THE INDIVIDUAL DECISION OF 19 DECEMBER 1980 WAS ' ' ANNULLED ' ' AND NOT MERELY AMENDED BY THE INDIVIDUAL DECISION OF 24 FEBRUARY 1981 . SINCE THE APPLICANT HAS FAILED TO LODGE A FRESH APPLICATION DIRECTED AGAINST THE LATTER DECISION THE COMMISSION IS OF THE OPINION THAT THE CASE NEED NOT PROCEED TO JUDGMENT .

8 THAT SUBMISSION CANNOT BE ACCEPTED . THE DECISION OF 24 FEBRUARY 1981 WHICH REPLACED , WHILE THIS ACTION WAS IN PROGRESS , A PREVIOUS DECISION HAVING THE SAME SUBJECT-MATTER , NAMELY THE FIXING OF A QUOTA FOR THE SAME PERIOD , MUST BE REGARDED AS A NEW FACTOR WHICH ALLOWS THE APPLICANT TO AMEND ITS PLEADINGS . IT WOULD NOT BE IN THE INTERESTS OF THE DUE ADMINISTRATION OF JUSTICE AND THE REQUIREMENTS OF PROCEDURAL ECONOMY TO OBLIGE THE APPLICANT TO MAKE A FRESH APPLICATION TO THE COURT . MOREOVER , IT WOULD BE INEQUITABLE IF THE COMMISSION WERE ABLE , IN ORDER TO COUNTER CRITICISMS OF A DECISION CONTAINED IN AN APPLICATION TO THE COURT , TO AMEND THE CONTESTED DECISION OR TO SUBSTITUTE ANOTHER FOR IT AND TO RELY IN THE PROCEEDINGS ON SUCH AN AMENDMENT OR SUBSTITUTION IN ORDER TO DEPRIVE THE OTHER PARTY OF THE OPPORTUNITY OF EXTENDING HIS ORIGINAL PLEADINGS TO THE LATER DECISION OR OF SUBMITTING SUPPLEMENTARY PLEADINGS DIRECTED AGAINST THAT DECISION .

SUBSTANCE

THE SUBMISSION DIRECTED AGAINST THE NEW DECISION OF 24 FEBRUARY 1981

9 RELYING ON THE ADMINISTRATIVE LAW OF CERTAIN MEMBER STATES THE APPLICANT MAINTAINS , FIRST , THAT THE COMMISSION MAY NOT WITHDRAW A DECISION WHICH IS THE SUBJECT OF AN ACTION OR , AT THE VERY LEAST , MAY NOT REPLACE SUCH A DECISION WITH ANOTHER DECISION EVEN MORE DETRIMENTAL TO THE INTERESTS OF THE APPLICANT .

10 THE COURT HAS HELD , IN ITS JUDGMENTS OF 12 JULY 1957 ( JOINED CASES 7/56 AND 3 TO 7/57 ALGERA AND OTHERS ( 1957-58 ) ECR 39 , AT P . 56 ), 12 JULY 1962 ( CASE 14/61 HOOGOVENS ( 1962 ) ECR 253 , AT P . 272 ) AND 13 JULY 1965 ( CASE 111/63 LEMMERZ-WERKE ( 1965 ) ECR 677 , AT P . 690 ), THAT THE WITHDRAWAL OF AN UNLAWFUL MEASURE IS PERMISSIBLE , PROVIDED THAT THE WITHDRAWAL OCCURS WITHIN A REASONABLE TIME AND PROVIDED THAT THE COMMISSION HAS HAD SUFFICIENT REGARD TO HOW FAR THE APPLICANT MIGHT HAVE BEEN LED TO RELY ON THE LAWFULNESS OF THE MEASURE .

11 IN THIS CASE THE APPLICANT CANNOT BE SAID TO HAVE RELIED UPON THE LAWFULNESS OF THE DECISION , SINCE IT LODGED AN APPLICATION FOR ITS ANNULMENT . IT WAS ALSO AWARE THAT THE COMMISSION CONSIDERED THAT THE APPLICANT WAS NOT ENTITLED TO RELIEF UNDER THE PROVISIONS OF ARTICLE 4 ( 3 ) OF DECISION NO 2794/80/ECSC , FOR IN ITS PLEADINGS IT REFERS TO CORRESPONDENCE EXCHANGED ON THAT POINT BETWEEN ITSELF AND THE COMMISSION , WHICH IT KNEW TO BE IN ERROR .

12 THE DELAY ON THE PART OF THE COMMISSION IN RECTIFYING THE MISTAKE MAY BE ATTRIBUTED , AT LEAST IN PART , TO THE FACT THAT IT HAD TO PROCESS INFORMATION CONCERNING A LARGE NUMBER OF UNDERTAKINGS . THE APPLICANT HAS NOT SHOWN IN WHAT MANNER IT WAS ADVERSELY AFFECTED BY THE TIME WHICH WAS ALLOWED TO ELAPSE BEFORE 24 FEBRUARY 1981 . IN THE LIGHT OF ALL THE ABOVE CIRCUMSTANCES IT WOULD APPEAR THAT THE DECISION OF 19 DECEMBER 1980 WAS WITHDRAWN WITHIN A REASONABLE TIME . THIS SUBMISSION MUST THEREFORE BE REJECTED .

SECOND SUBMISSION : DECISION NO 2794/80/ECSC IS UNLAWFUL

13 IT FOLLOWS FROM THE ABOVE CONSIDERATIONS THAT THE CLAIM THAT THE DECISION WITHDRAWN WAS UNLAWFUL MUST BE REGARDED AS ALSO BEING DIRECTED AGAINST THE DECISION OF 24 FEBRUARY 1981 .

( A ) INADEQUATE STATEMENT OF REASONS AND INFRINGEMENT OF ARTICLE 58 ( 1 ) AND ARTICLE 74 OF THE ECSC TREATY

14 THE APPLICANT ' S SUBMISSION THAT THE DECISIONS ARE UNLAWFUL IS BASED , FIRST , ON THE ARGUMENT THAT THE COMMISSION OUGHT TO HAVE CONSIDERED WHETHER IT WAS NECESSARY TO TAKE ACTION IN THE FIELD OF COMMERCIAL POLICY UNDER ARTICLE 74 OF THE ECSC TREATY WHEN IT WAS EXAMINING THE POSSIBILITY OF INTRODUCING A QUOTA SYSTEM . IT IS ARGUED THAT A REFERENCE TO ITS CONSIDERATION OF THIS POINT OUGHT TO HAVE BEEN INCLUDED IN THE PREAMBLE TO ITS DECISION AND THAT THE ABSENCE THEREOF AMOUNTS TO A FAILURE TO FULFIL THE OBLIGATION TO STATE REASONS . FURTHERMORE , THERE WAS , ACCORDING TO THE APPLICANT , UNDENIABLY A NEED FOR MEASURES TO BE ADOPTED IN THE FIELD OF IMPORTS AND THE FAILURE TO ADOPT THEM WHEN PRODUCTION QUOTAS WERE INTRODUCED IS SAID TO CONSTITUTE AN INFRINGEMENT OF ARTICLES 58 AND 74 OF THE ECSC TREATY .

15 UNDER THE TERMS OF ARTICLE 58 OF THE ECSC TREATY THE COMMISSION HAS POWER TO TAKE ' ' TO THE NECESSARY EXTENT ' ' THE MEASURES PROVIDED FOR IN ARTICLE 74 AT THE SAME TIME AS ANY MEASURE TAKEN ON THE BASIS OF ARTICLE 58 . THE APPRAISAL OF THE NECESSITY OF TAKING SUCH MEASURES IS A MATTER FOR THE COMMISSION , SUBJECT TO THE COURT ' S POWER TO REVIEW THE LAWFULNESS OF THE COMMISSION ' S EXERCISE OF ITS DISCRETION .

16 IN THIS CONNECTION IT MUST BE EMPHASIZED THAT THE APPLICANT HAS NOT ADDUCED ANY EVIDENCE IN SUPPORT OF ITS SUBMISSION THAT THE COMMISSION MISUSED ITS DISCRETION . ON THE CONTRARY , EVEN BEFORE THE INTRODUCTION OF THE QUOTA SYSTEM , THE COMMISSION TOOK STEPS TO CONTROL THE LEVEL OF PRICES AND THE QUANTITY OF IMPORTS OF STEEL PRODUCTS FROM NON-MEMBER COUNTRIES . IN PARTICULAR , IT FIXED BASIC PRICES , CONCLUDED ARRANGEMENTS WITH NON-MEMBER COUNTRIES AND TOOK SUPERVISORY ACTION . AT THE TIME OF THE ADOPTION OF DECISION NO 2794/80/ECSC IT FURTHER INTENSIFIED THAT SUPERVISION AND REVIEWED THE BASIC PRICES . MOREOVER , ACCORDING TO THE FIGURES SUPPLIED BY THE COMMISSION THE LEVEL OF IMPORTS FELL BETWEEN 1977 AND 1979 AND THAT TENDENCY CONTINUED BEFORE AND AFTER THE INTRODUCTION OF THE QUOTA SYSTEM .

17 THEREFORE THE COMMISSION CANNOT BE ACCUSED OF NOT HAVING MADE SUFFICIENT EFFORTS TO COMBAT IMPORTS FROM NON-MEMBER COUNTRIES , PARTICULARLY AS IT MUST BE BORNE IN MIND THAT IN ITS NEGOTIATIONS WITH NON-MEMBER COUNTRIES THE COMMISSION FACES CONSIDERABLE DIFFICULTIES AS A RESULT OF THE FACT THAT THE COMMUNITY IS A NET EXPORTER OF STEEL AND THAT IT IS COMPELLED TO ENSURE THE CONTINUANCE OF COMMUNITY EXPORTS AT THE SAME TIME AS IT MUST ATTEMPT TO LIMIT IMPORTS INTO THE COMMUNITY ; IN THE CIRCUMSTANCES IT HAD REASON TO FEAR THAT BY TAKING NON-NEGOTIATED RESTRICTIVE DECISIONS WITH REGARD TO NON-MEMBER COUNTRIES IT MIGHT PROVOKE RETALIATORY MEASURES ON THEIR PART WHICH WOULD BE DETRIMENTAL TO THE GENERAL INTEREST .

18 AS FAR AS THE STATEMENT OF REASONS FOR DECISION NO 2794/80/ECSC IS CONCERNED , THE COMMISSION HAS A DUTY TO SET OUT , IN A CONCISE BUT CLEAR AND RELEVANT MANNER , THE PRINCIPAL ISSUES OF LAW AND FACT UPON WHICH THE DECISION IS BASED , SO THAT THE REASONING WHICH LED THE COMMISSION TO ITS DECISION MAY BE UNDERSTOOD ( JUDGMENT OF 4 JULY 1963 , CASE 24/62 FEDERAL REPUBLIC OF GERMANY V COMMISSION ( 1963 ) ECR 63 ). HOWEVER , THE COMMISSION IS NOT REQUIRED TO DISCUSS ALL THE OBJECTIONS WHICH MIGHT BE RAISED AGAINST THE DECISION ( JUDGMENT OF 20 MARCH 1957 , CASE 2/56 GEITLING V HIGH AUTHORITY ( 1957-58 ) ECR 3 ). NOR MAY IT BE REQUIRED TO INDICATE ITS REASONS FOR NOT ADOPTING MEASURES OTHER THAN THOSE CONTAINED IN THE DECISION , WHERE THE ADOPTION OF THOSE OTHER MEASURES WAS A MATTER FOR ITS DISCRETION .

19 IT WAS NOT , THEREFORE , NECESSARY FOR THE COMMISSION TO INCLUDE IN THE PREAMBLE TO ITS DECISION A STATEMENT TO THE EFFECT THAT IT HAD CONSIDERED THE POSSIBILITY OF ADOPTING THE MEASURES IN ARTICLE 74 OF THE ECSC TREATY . IT FOLLOWS THAT THE SUBMISSION CONCERNING THE INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT IS UNFOUNDED .

( B ) INFRINGEMENT OF ARTICLE 58 ( 2 ) OF THE ECSC TREATY

20 THE APPLICANT SUBMITS THAT THE GENERAL DECISION IS INCOMPATIBLE WITH ARTICLE 58 ( 2 ) OF THE ECSC TREATY , WHICH REQUIRES THAT QUOTAS BE ESTABLISHED ' ' ON AN EQUITABLE BASIS ' ' . THE DECISION IS CONTESTED ON THREE GROUNDS , WHICH MUST BE CONSIDERED INDIVIDUALLY .

21 THE APPLICANT COMPLAINS THAT THE REFERENCE PERIOD USED IN THE GENERAL DECISION RUNS FROM JULY 1977 TO JUNE 1980 , A FACT WHICH PLACES AT A DISADVANTAGE UNDERTAKINGS WHICH HAD ONLY JUST STARTED PRODUCTION DURING THE PERIOD IN QUESTION OR WHOSE CAPACITY WAS ONLY IN PARTIAL USE DURING THAT PERIOD . IN ADDITION , THE METHOD OF CALCULATION BASED ON ACTUAL PRODUCTION IS SAID TO CONFER AN ADVANTAGE ON UNDERTAKINGS WHICH HAVE OVER-PRODUCED IN THE PAST . IT WOULD HAVE BEEN MORE EQUITABLE , ACCORDING TO THE APPLICANT , TO DETERMINE QUOTAS ON THE BASIS OF THE UNDERTAKINGS ' PRODUCTION CAPACITY .

22 THAT SUBMISSION IS UNFOUNDED . IT SHOULD BE OBSERVED THAT ARTICLE 58 ( 2 ) OF THE TREATY DOES NOT RESTRICT THE COMMISSION ' S FREEDOM TO CHOOSE THE BASIS UPON WHICH THE QUOTAS MAY BE EQUITABLY DETERMINED IN A GIVEN ECONOMIC SITUATION . IT FOLLOWS FROM THE EXPLANATIONS GIVEN DURING THESE PROCEEDINGS THAT THERE ARE NO REASONABLE GROUNDS FOR DENYING THAT THE COMMISSION ' S CHOICE OF THE CRITERION BASED ON UNDERTAKINGS ' ACTUAL PRODUCTION MAY CONSTITUTE AN ' ' EQUITABLE BASIS ' ' WITHIN THE MEANING OF ARTICLE 58 ( 2 ). INDEED , THAT CRITERION , AS ADJUSTED BY ARTICLE 4 OF DECISION NO 2794/80 , CONSTITUTES , IN THE FIRST PLACE , AN OBJECTIVE BASIS OF ASSESSMENT WHICH AVOIDS THE UNCERTAINTIES INHERENT IN DETERMINING A FACTOR WHICH IS PARTLY CONJECTURAL , SUCH AS PRODUCTION CAPACITY ; SECONDLY , IT ENABLES TOTAL PRODUCTION TO BE REDUCED WITHOUT ALTERING THE POSITIONS OF THE UNDERTAKINGS ON THE MARKET AS BETWEEN EACH OTHER .

23 THE APPLICANT MAINTAINS THAT IT WOULD BE REASONABLE TO ADJUST THE RESPECTIVE MARKET POSITIONS OF UNDERTAKINGS SUBSIDIZED BY THE STATE , WITH A HIGH RATE OF UTILIZATION , OUTMODED PLANT AND A LARGE WORKFORCE , AND OTHER UNDERTAKINGS WHICH STRIVE TO BE EFFICIENT . IT IS NOT NECESSARY TO RULE ON THE VALIDITY OF THAT ARGUMENT SINCE ARTICLE 58 IN NOT DESIGNED TO COMPENSATE FOR DISTORTIONS OF COMPETITION ATTRIBUTABLE TO STATE SUBSIDIES , FOR WHICH THE COMMISSION HAS OTHER MEANS OF ACTION AT ITS DISPOSAL .

24 SIMILARLY , THE COMMISSION ' S ADOPTION OF THE PERIOD BETWEEN JULY 1977 AND JUNE 1980 AS THE REFERENCE PERIOD IS NOT OPEN TO REPROACH . THE FACT THAT UNDERTAKINGS WERE ALLOWED TO HAVE QUOTAS CALCULATED ON THE BASIS OF THEIR BEST PERFORMANCE DURING THAT PERIOD DOES NOT AMOUNT TO DISCRIMINATION AGAINST UNDERTAKINGS WHOSE RECENT EQUIPMENT WAS NOT FULLY IN OPERATION IN JULY 1977 . IF THE QUOTAS THUS ALLOCATED TO THEM GIVE RISE TO DIFFICULTY , SUCH UNDERTAKINGS MAY SUBMIT A REQUEST TO THE COMMISSION FOR AN ADJUSTMENT PURSUANT TO ARTICLE 14 OF THE GENERAL DECISION . THAT ARTICLE WAS SPECIFICALLY DESIGNED TO PROVIDE RELIEF ; ITS USEFULNESS AND VALUE ARE UNDENIABLE AND IT ENABLES THE EFFECTS OF OTHER PROVISIONS OF THE GENERAL DECISION TO BE ADJUSTED AS AND WHEN APPROPRIATE .

25 FINALLY , THE APPLICANT DIRECTS SPECIAL CRITICISM AT THE PROVISIONS OF ARTICLE 4 ( 3 ) OF DECISION NO 2794/ECSC ; IT CLAIMS THAT THEY WERE INTENDED TO BENEFIT A PARTICULAR UNDERTAKING AND THAT THEY DISCRIMINATE AGAINST NEW UNDERTAKINGS WHOSE PRODUCTION PROGRAMME COULD NOT BE CALCULATED ON THE BASIS OF 1974 .

26 THAT CLAIM IS UNFOUNDED . DIFFERENT TREATMENT DOES NOT AMOUNT TO DISCRIMINATION IF IT IS APPLIED TO A DIFFERENT SITUATION WHICH PROVIDES OBJECTIVE JUSTIFICATION FOR THE DIFFERENT TREATMENT .

27 IN THIS INSTANCE ARTICLE 4 ( 3 ) OF THE GENERAL DECISION WAS DESIGNED TO TAKE ACCOUNT OF THE POSITION OF CERTAIN UNDERTAKINGS WHICH HAD BEEN PLACED AT A PARTICULAR DISADVANTAGE OWING TO THEIR VOLUNTARY PARTICIPATION IN DELIVERY PROGRAMMES . THE DELIVERY PROGRAMMES FOR SUCH UNDERTAKINGS WERE BASED ON THEIR ACTUAL PRODUCTION AND DID NOT TAKE INTO ACCOUNT EQUIPMENT WHICH WAS NOT YET ON STREAM , WHEREAS THE DELIVERY PROGRAMMES OF OTHER UNDERTAKINGS WHOSE PLANT WAS PUT INTO OPERATION LATER WERE BASED ON PRODUCTION CAPACITY .

( C ) BREACH OF THE PRINCIPLE NULLA POENA SINE LEGE AND THE PRINCIPLE OF THE PROTECTION OF LEGITIMATE EXPECTATION

28 THE APPLICANT TAKES EXCEPTION TO THE FACT THAT THE BENEFIT OF ARTICLE 4 ( 3 ) OF THE GENERAL DECISION IN RESTRICTED TO UNDERTAKINGS WHICH PARTICIPATED IN A VOLUNTARY DELIVERY PROGRAMME . IT ARGUES THAT THE EFFECT OF THAT IS TO CONFER EX POST FACTO A BINDING CHARACTER ON MEASURES WHICH WERE NOT BINDING , THEREBY BREACHING THE PRINCIPLE OF NULLA POENA SINE LEGE AND THE PRINCIPLE OF THE PROTECTION OF LEGITIMATE EXPECTATION . THE APPLICANT HAS THE SAME OBJECTION TO MAKE WITH REGARD TO ARTICLE 4 ( 4 ), THE BENEFIT OF WHICH IS RESTRICTED TO UNDERTAKINGS WHICH HAVE NOT DISREGARDED A NEGATIVE OPINION FROM THE COMMISSION REGARDING INVESTMENT .

29 THIS SUBMISSION MUST BE REJECTED . ARTICLE 4 ( 3 ) OF DECISION NO 2794/80/ECSC IS DESIGNED TO COMPENSATE FOR THE DISADVANTAGES INCURRED BY THE UNDERTAKINGS TO WHICH IT APPLIES . THAT IN NO WAY CONSTITUTES A SANCTION AGAINST OTHER UNDERTAKINGS AND THE PROVISION MAY NOT THEREFORE BE CONSIDERED TO BE IN BREACH OF THE PRINCIPLE OF NULLA POENE SINE LEGE .

30 NOR HAS THE COMMISSION OFFENDED AGAINST THE PRINCIPLE OF THE PROTECTION OF LEGITIMATE EXPECTATION . THE UNDERTAKINGS WHICH DID NOT PARTICIPATE IN VOLUNTARY DELIVERY PROGRAMMES COULD NOT REASONABLY EXPECT TO CONTINUE TO ENJOY , AFTER THE INTRODUCTION OF A QUOTA SYSTEM , THE COMPETITIVE ADVANTAGE WHICH THEY HAD HAD OVER UNDERTAKINGS WHICH DID PARTICIPATE IN SUCH PROGRAMMES .

31 AS FAR AS ARTICLE 4 ( 4 ) OF THE GENERAL DECISION IS CONCERNED , THE SUBMISSION IS UNTENABLE BECAUSE THE APPLICANT DOES NOT CLAIM , AND COULD NOT CLAIM , THAT IT WAS ENTITLED TO AN ADJUSTMENT OF ITS QUOTA THEREUNDER .

THIRD SUBMISSION : THE INDIVIDUAL DECISION IS NULL AND VOID BECAUSE IT INFRINGES THE GENERAL DECISION , DECISION NO 2794/80/ECSC

32 THE APPLICANT MAINTAINS THAT THE COMMISSION OUGHT TO HAVE ALLOWED IT RELIEF UNDER ARTICLE 4 ( 3 ) OF DECISION NO 2794/80/ECSC , WHICH REQUIRES THE UNDERTAKING TO HAVE PARTICIPATED FROM JULY 1977 TO JUNE 1980 IN THE COMMISSION ' S DELIVERY PROGRAMMES AND THE PROGRAMME FOR THE UNDERTAKING TO HAVE BEEN FIXED WITH 1974 AS A BASIS . ACCORDING TO THE APPLICANT , IF THAT PROVISION IS TO HAVE ANY MEANING , THE DELIVERY PROGRAMMES FOR UNDERTAKINGS WHOSE FACILITIES WERE NOT , OR WERE ONLY PARTIALLY , IN OPERATION IN 1974 MUST BE DEEMED TO HAVE BEEN FIXED WITH THAT YEAR AS A BASIS BECAUSE THEIR PROGRAMMES WERE ESTABLISHED BY REFERENCE TO THE GENERAL SITUATION IN THAT SECTOR OF THE INDUSTRY FOR THAT YEAR .

33 IF THAT ARGUMENT WERE ALLOWED TO STAND THE RESULT WOULD BE , NOT AN INTERPRETATION , BUT A REVISION OF A TEXT WHICH IS CLEAR AND UNAMBIGUOUS . EVEN IF THE ARGUMENT WERE ACCEPTED , THE APPLICANT WOULD NOT IN ANY CASE SATISFY ALL THE CONDITIONS LAID DOWN IN ARTICLE 4 ( 3 ), WHICH REQUIRES NOT MERELY THAT THE UNDERTAKING ' S DELIVERY PROGRAMME SHOULD HAVE BEEN CALCULATED WITH 1974 AS A BASIS BUT ALSO THAT THE UNDERTAKING SHOULD HAVE TAKEN PART IN THE DELIVERY PROGRAMMES FROM JULY 1977 TO JUNE 1980 ; IN FACT THE APPLICANT PARTICIPATED IN DELIVERY PROGRAMMES ONLY FROM THE THIRD QUARTER OF 1978 . CONSEQUENTLY THE COMMISSION APPLIED THE RELEVANT PROVISION CORRECTLY WHEN IT REFUSED THE APPLICANT THE ADJUSTMENT PROVIDED FOR IN ARTICLE 4 ( 3 ) OF THE GENERAL DECISION .

34 THE APPLICANT ALSO CONSIDERS THAT THE COMMISSION OUGHT TO HAVE APPLIED ARTICLE 14 OF THE GENERAL DECISION ON THE BASIS OF PRODUCTION CAPACITY , RATHER THAN ACTUAL PRODUCTION , AND THAT IT OUGHT TO HAVE ALLOWED IT A LARGER QUOTA . IN FACT BY ITS DECISION OF 24 FEBRUARY 1981 THE COMMISSION GRANTED AN INCREASE IN THE QUOTA FOR THE FIRST QUARTER OF 1981 . HAVING REGARD TO THE APPLICANT ' S RATE OF UTILIZATION OF ITS PRODUCTION CAPACITY , IT REDUCED THE ABATEMENT RATE TO ZERO SO THAT THE QUOTA WAS THE SAME AS THE REFERENCE PRODUCTION , BUT IT TOOK THE VIEW THAT THE ADJUSTMENTS PROVIDED FOR IN ARTICLE 14 SHOULD NOT , AS A MATTER OF PRINCIPLE , RESULT IN QUOTAS IN EXCESS OF PREVIOUS PRODUCTION AND ACCORDINGLY IT CONSIDERED THAT IT WAS UNABLE TO INCREASE THE APPLICANT ' S QUOTA ANY FURTHER .

35 FROM THE INFORMATION SUPPLIED BY THE COMMISSION IT APPEARS THAT THE APPLICANT USED ONLY A PART OF ITS QUOTA FOR THE FIRST QUARTER OF 1981 . AT THE HEARING THE APPLICANT ARGUED THAT THE QUOTAS ALLOCATED WOULD HAVE AN INFLUENCE LATER ON OWING TO THE NEW SYSTEM OF QUOTAS DECIDED UPON BY THE COMMISSION FOR THE PERIOD AFTER JUNE 1981 , SINCE THE QUOTAS WERE TO BE CALCULATED IN PART ON THE BASIS OF THE QUOTAS ALLOCATED UNDER THE OLD SYSTEM . IT THEREFORE HAD AN INTEREST IN RETAINING THE RIGHT TO AS HIGH A QUOTA AS POSSIBLE IN ORDER TO BE ABLE TO TAKE ADVANTAGE OF ANY IMPROVEMENT IN THE STATE OF THE MARKET .

36 IF IN THE FUTURE THE MARKET SITUATION ENABLES THE APPLICANT TO PRODUCE AND SELL STEEL PRODUCTS IN GREATER QUANTITIES IT WILL BE OPEN TO IT TO SUBMIT TO THE COMMISSION A REQUEST FOR AN ADJUSTMENT UNDER THE RULES IN FORCE AND IT WILL THEN BE FOR THE COMMISSION TO TAKE A DECISION ON THAT REQUEST IN THE LIGHT OF ALL THE FACTS AT ITS DISPOSAL , INCLUDING THE APPLICANT ' S UTILIZATION OF ITS PRODUCTION CAPACITY . IN THE CIRCUMSTANCES , AND AS FAR AS THE PERIOD AT ISSUE IS CONCERNED , THE COMMISSION ' S REFUSAL TO ALLOW THE APPLICANT A LARGER QUOTA DOES NOT ADVERSELY AFFECT THE APPLICANT .

37 FURTHERMORE , BY VIRTUE OF ARTICLE 14 OF THE GENERAL DECISION QUOTAS MAY BE ADJUSTED IF THE RESTRICTIONS IMPOSED CAUSE AN UNDERTAKING EXCEPTIONAL DIFFICULTY . IN THE PRESENT INSTANCE THE FACT THAT THE APPLICANT ' S ACTUAL PRODUCTION WAS VERY LOW THROUGHOUT THE PERIOD IN QUESTION INDICATES THAT THE DIFFICULTIES IN WHICH THE APPLICANT FINDS ITSELF AT PRESENT ARE IN NO WAY ATTRIBUTABLE TO THE RESTRICTIONS IMPOSED BY THE QUOTA SYSTEM . IT MUST BE ADDED THAT THE AIM OF ARTICLE 14 IS NOT TO ENABLE UNDERTAKINGS TO HAVE THEIR QUOTAS FOR THE FUTURE CALCULATED ON A FICTITIOUS BASIS .

38 ACCORDINGLY , THIS SUBMISSION MUST BE REJECTED .

Decision on costs

COSTS

39 ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE PROVIDES THAT THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS .

40 HOWEVER , ARTICLE 69 ( 3 ) PROVIDES THAT THE COURT MAY ORDER EVEN A SUCCESSFUL PARTY TO PAY COSTS WHICH THE COURT CONSIDERS THAT PARTY TO HAVE UNREASONABLY CAUSED THE OPPOSITE PARTY TO INCUR .

41 THE COMMISSION CONCEDED THAT THE FIRST OF THE APPLICANT ' S SUBMISSIONS WAS WELL FOUNDED BY ADOPTING THE INDIVIDUAL DECISION OF 24 FEBRUARY 1981 WHILE THE PROCEEDINGS BEFORE THE COURT WERE IN PROGRESS .

42 IT WOULD APPEAR EQUITABLE , THEREFORE , FOR THE COMMISSION TO PAY THAT PART OF THE APPLICANT ' S COSTS WHICH MIGHT HAVE BEEN AVOIDED IF THE COMMISSION HAD GIVEN A PROPER STATEMENT OF THE REASONS ON WHICH ITS FIRST DECISION WAS BASED .

Operative part

ON THOSE GROUNDS ,

THE COURT

HEREBY :

1 . DISMISSES THE APPLICATION .

2.ORDERS THE COMMISSION TO PAY ONE-THIRD OF THE APPLICANT ' S COSTS AND , FOR THE REMAINDER , ORDERS THE PARTIES TO BEAR THEIR OWN COSTS .