Judgment of the Court of 6 July 1971. - Kingdom of the Netherlands v Commission of the European Communities. - Aids to the iron and steel industry. - Case 59-70.



European Court reports 1971 Page 00639

Danish special edition Page 00157

Greek special edition Page 00883

Portuguese special edition Page 00235

Swedish special edition Page 00585

Finnish special edition Page 00587



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

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1 . PROCEDURE - FAILURE TO ACT ON THE PART OF THE COMMISSION - RAISING THE MATTER - OBSERVANCE OF REASONABLE PERIOD

( ECSC TREATY, ARTICLE 35 )

2 . ECSC - GENERAL PROVISIONS - OBLIGATIONS OF MEMBER STATES - INFRINGEMENT OF THE TREATY BY A MEMBER STATE - USE BY ANOTHER MEMBER STATE OF THE PROCEDURES LAID DOWN BY THE TREATY - LIMITATION IN TIME

( ECSC TREATY, ARTICLE 86 )

Summary

1 . IT FOLLOWS FROM THE COMMON PURPOSE OF ARTICLES 33 AND 35 THAT THE REQUIREMENTS OF LEGAL CERTAINTY AND OF THE CONTINUITY OF COMMUNITY ACTION UNDERLYING THE TIME-LIMITS FOR BRINGING PROCEEDINGS LAID DOWN IN ARTICLE 33 MUST ALSO BE TAKEN INTO ACCOUNT - HAVING REGARD TO THE SPECIAL DIFFICULTIES WHICH THE SILENCE OF THE COMPETENT AUTHORITIES MAY INVOLVE FOR THE INTERESTED PARTIES - IN THE EXERCISE OF THE RIGHTS CONFERRED BY ARTICLE 35 . WHERE THE COMMISSION FAILS TO ACT THE INTERESTED PARTIES ARE THEREFORE BOUND TO RAISE THE MATTER WITH THE COMMISSION WITHIN A REASONABLE PERIOD . THIS IS SO A FORTIORI ONCE IT IS CLEAR THAT THE COMMISSION HAS DECIDED TO TAKE NO ACTION .

2 . THE DUTY OF COOPERATION IMPOSED ON MEMBER STATES BY ARTICLES 86 MUST PROMPT A MEMBER STATE WHICH CONSIDERS THAT A MEASURE ADOPTED BY ANOTHER MEMBER STATE IS CONTRARY TO THE TREATY TO RESORT TO THE PROCEDURES OR MEANS OF LEGAL ACTION PLACED AT ITS DISPOSAL BY THE TREATY IN SUFFICIENT TIME TO ENSURE THAT EFFECTIVE INTERVENTION IS STILL POSSIBLE AND THAT THE POSITION OF THIRD PARTIES IS NOT NEEDLESSLY CALLED IN ISSUE .

Parties

IN CASE 59/70

GOVERNMENT OF THE KINGDOM OF THE NETHERLANDS, REPRESENTED BY PROFESSOR W . RIPHAGEN, LEGAL ADVISER AT THE MINISTRY FOR FOREIGN AFFAIRS AT THE HAGUE, ACTING AS AGENT, ASSISTED BY C . R . C . WIJCKERHELD BISDOM, ADVOCATE AT THE HOGE RAAD, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE NETHERLANDS EMBASSY, 8 RUE PIERRE-D' ASPELT, APPLICANT,

V

COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY ITS LEGAL ADVISERS, B . VAN DER ESCH AND E . ZIMMERMANN, ACTING AS AGENTS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF E . REUTER, LEGAL ADVISER OF THE COMMISSION, 4 BOULEVARD ROYAL, DEFENDANT,

Subject of the case

APPLICATION FOR THE ANNULMENT OF THE IMPLIED DECISION OF THE COMMISSION REFUSING TO ADOPT A REASONED DECISION WITHIN THE MEANING OF ARTICLE 88 OF THE ECSC TREATY IN RELATION TO THE GOVERNMENT OF THE FRENCH REPUBLIC, OR AT LEAST TO MAKE A RECOMMENDATION TO THAT GOVERNMENT UNDER ARTICLE 67;

Grounds

1 THE APPLICATION SEEKS THE ANNULMENT OF THE COMMISSION' S IMPLIED DECISION OF REFUSAL ARISING FROM ITS FAILURE TO COMPLY WITH THE REQUEST SUBMITTED BY THE NETHERLANDS GOVERNMENT ON 24 JUNE 1970 WHICH SOUGHT, PRIMARILY, A DECISION UNDER ARTICLE 88 OF THE ECSC TREATY DECLARING THAT BY GRANTING LOW-INTEREST LOANS TO THE FRENCH IRON AND STEEL INDUSTRY UNDER THE VTH PLAN FOR ECONOMIC AND SOCIAL DEVELOPMENT, THE FRENCH GOVERNMENT FAILED TO FULFIL ITS OBLIGATIONS UNDER THE SAID TREATY AND REQUESTING IT, IN THE ALTERNATIVE, TO MAKE A RECOMMENDATION TO THAT GOVERNMENT AS PROVIDED FOR IN ARTICLE 67 OF THE TREATY .

2 THE DEFENDANT CHALLENGES THE ADMISSIBILITY OF THE APPLICATION AND POINTS OUT THAT A LETTER DATED 4 DECEMBER 1968, COMMUNICATED TO THE APPLICANT ON 9 DECEMBER, INFORMED THE FRENCH GOVERNMENT OF THE GROUNDS ON WHICH IT CONSIDERED ARTICLE 4 ( C ) OF THE TREATY INAPPLICABLE AND TOOK THE VIEW THAT NO RECOMMENDATION UNDER ARTICLE 67 WAS NECESSARY .

3 IT CONTENDS THAT SINCE THE APPLICANT ALLOWED EIGHTEEN MONTHS TO ELAPSE BETWEEN THE DATE ON WHICH IT WAS INFORMED OF THE COMMISSION' S ATTITUDE AND THE DATE ON WHICH IT RAISED THE MATTER WITH THE COMMISSION, THE APPLICATION IS OUT OF TIME .

4 THE FRENCH GOVERNMENT INFORMED THE HIGH AUTHORITY IN SEPTEMBER 1966 OF ITS INTENTION TO ADOPT THE MEASURES SET OUT IN THE SAID PLAN IN FAVOUR OF THE IRON AND STEEL INDUSTRY .

5 AT THE MEETING OF THE COUNCIL ON 29 JUNE 1967 THE HIGH AUTHORITY INFORMED THE MEMBER STATES THAT ACCORDING TO ITS PRELIMINARY INVESTIGATION THE PROHIBITION IN ARTICLE 4 ( C ) WAS INAPPLICABLE AND THAT NO RECOMMENDATION UNDER ARTICLE 67 WAS NECESSARY .

6 BY A LETTER SIGNED BY ITS PRESIDENT AND DATED 4 DECEMBER 1968 THE DEFENDANT INFORMED THE FRENCH GOVERNMENT THAT, WHILST IN ITS VIEW ARTICLE 4 ( C ) OF THE TREATY PROHIBITS STATE AIDS WHICH CONFER A SPECIAL ADVANTAGE ON UNDERTAKINGS IN THE COAL AND STEEL SECTOR, ON THE BASIS OF ITS FINDINGS AND THE INFORMATION FURNISHED BY THAT GOVERNMENT THIS DID NOT APPLY TO THE LOANS IN QUESTION SINCE THE RATE OF INTEREST THEREON CONFERRED NO SPECIAL ADVANTAGE ON THE IRON AND STEEL SECTOR ALONE .

7 THE COMMISSION ALSO POINTED OUT THAT ON THE OTHER HAND THE MEASURES IN QUESTION WERE LIABLE TO HAVE REPERCUSSIONS ON CONDITIONS OF COMPETITION WITHIN THAT MEANING OF ARTICLE 67 ( 1 ) OF THE TREATY .

8 IN THE COMMISSION' S VIEW, HOWEVER, THESE MEASURES DID NOT FULFIL THE OTHER CONDITIONS LAID DOWN IN ARTICLE 67 ( 2 ) AND ( 3 ), SO THAT NO RECOMMENDATION WAS NECESSARY UNDER THAT ARTICLE .

9 ON 9 DECEMBER 1968 THE DEFENDANT INFORMED THE NETHERLANDS GOVERNMENT IN WRITING THAT AFTER AN EXAMINATION OF THE MEASURES ADOPTED BY THE FRENCH GOVERNMENT IN FAVOUR OF THE IRON AND STEEL INDUSTRY IT HAD INFORMED THAT GOVERNMENT OF THE VIEW WHICH IT TOOK OF THE MATTER .

10 THIS COMMUNICATION WAS ATTACHED TO THE LETTER OF 4 DECEMBER 1968 .

11 THE ADMISSIBILITY OF THE APPLICATION MUST BE CONSIDERED IN THE LIGHT OF THESE CIRCUMSTANCES .

12 ARTICLE 35, WHICH IS INTENDED TO EXTEND THE POWER TO REVIEW THE LEGALITY OF THE CONDUCT OF THE COMMISSION TO THOSE CASES WHERE THIS INSTITUTION REFRAINS FROM TAKING A DECISION OR FROM MAKING A RECOMMENDATION, AFFORDS AN OPPORTUNITY TO INSTITUTE PROCEEDINGS BEFORE THE COURT ON THE BASIS OF THE FICTION OF AN IMPLIED DECISION OF REFUSAL ARISING ON THE EXPIRY OF A PERIOD OF TWO MONTHS IN CASES WHERE THE COMMISSION IS REQUIRED OR EMPOWERED BY A PROVISION OF THE TREATY TO TAKE A DECISION OR MAKE A RECOMMENDATION BUT REFRAINS FROM DOING SO .

13 ON THE EXPIRY OF THIS PERIOD OF INACTION, THE INTERESTED PARTY HAS A FURTHER PERIOD OF ONE MONTH TO INSTITUTE PROCEEDINGS BEFORE THE COURT .

14 HOWEVER, THE TREATY DOES NOT PROVIDE FOR ANY SPECIFIC PERIODS FOR THE EXERCISE OF THE RIGHT TO RAISE THE MATTER WITH THE COMMISSION UNDER THE FIRST AND SECOND PARAGRAPHS OF ARTICLE 35 .

15 IT FOLLOWS, HOWEVER, FROM THE COMMON PURPOSE OF ARTICLES 33 AND 35 THAT THE REQUIREMENTS OF LEGAL CERTAINTY AND OF THE CONTINUITY OF COMMUNITY ACTION UNDERLYING THE TIME-LIMITS LAID DOWN FOR BRINGING PROCEEDINGS UNDER ARTICLE 33 MUST ALSO BE TAKEN INTO ACCOUNT - HAVING REGARD TO THE SPECIAL DIFFICULTIES WHICH THE SILENCE OF THE COMPETENT AUTHORITIES MAY INVOLVE FOR THE INTERESTED PARTIES - IN THE EXERCISE OF THE RIGHTS CONFERRED BY ARTICLE 35 .

16 THESE REQUIREMENTS MAY NOT LEAD TO SUCH CONTRADICTORY CONSEQUENCES AS THE DUTY TO ACT WITHIN A SHORT PERIOD IN THE FIRST CASE AND THE ABSENCE OF ANY LIMITATION IN TIME IN THE SECOND .

17 THIS VIEW FINDS SUPPORT IN THE SYSTEM OF TIME-LIMITS IN ARTICLE 35, WHICH ALLOWS THE COMMISSION TWO MONTHS IN WHICH TO DEFINE ITS POSITION, AND THE INTERESTED PARTY ONE MONTH IN WHICH TO INSTITUTE PROCEEDINGS BEFORE THE COURT .

18 THUS IT IS IMPLICIT IN THE SYSTEM OF ARTICLES 33 AND 35 THAT THE EXERCISE OF THE RIGHT TO RAISE THE MATTER WITH THE COMMISSION MAY NOT BE DELAYED INDEFINITELY .

19 IF THE INTERESTED PARTIES ARE THUS BOUND TO OBSERVE A REASONABLE TIME-LIMIT WHERE THE COMMISSION REMAINS SILENT, THIS IS SO A FORTIORI ONCE IT IS CLEAR THAT THE COMMISSION HAS DECIDED TO TAKE NO ACTION .

20 IN THE PRESENT CASE THE COMMUNICATION TO THE NETHERLANDS GOVERNMENT ON 9 DECEMBER 1968 OF THE LETTER ADDRESSED TO THE FRENCH GOVERNMENT ON THE 4 DECEMBER 1968 COULD LEAVE NO DOUBT AS TO THE COMMISSION' S ATTITUDE ON THE SUBSTANCE OF THE PROBLEM RAISED, ESPECIALLY SINCE, AT THE APPLICANT' S REQUEST, IT HAD BEEN DISCUSSED BY THE COUNCIL AND THE NETHERLANDS MINISTER FOR ECONOMIC AFFAIRS HAD AGAIN BROUGHT HIS GOVERNMENT' S ANXIETY TO THE NOTICE OF THE COMMISSION IN A LETTER DATED 5 APRIL 1968 .

21 FURTHERMORE, THE DUTY OF COOPERATION IMPOSED ON MEMBER STATES BY ARTICLE 86 MUST PROMPT A MEMBER STATE WHICH CONSIDERS A SYSTEM OF AIDS TO BE CONTRARY TO THE TREATY TO RESORT TO THE PROCEDURES OR MEANS OF LEGAL ACTION PLACED AT ITS DISPOSAL BY THE TREATY IN SUFFICIENT TIME TO ENSURE THAT EFFECTIVE INTERVENTION IS STILL POSSIBLE AND THAT THE POSITION OF THIRD PARTIES IS NOT NEEDLESSLY CALLED IN ISSUE .

22 IN VIEW OF THESE CIRCUMSTANCES, A PERIOD OF EIGHTEEN MONTHS BETWEEN THE COMMUNICATION OF 9 DECEMBER 1968 AND THE REQUEST ADDRESSED TO THE COMMISSION ON 24 JUNE 1970 IN ORDER TO INITIATE THE PROCEDURE PROVIDED FOR IN ARTICLE 35 CANNOT BE REGARDED AS REASONABLE AND WAS ALL THE MORE UNJUSTIFIABLE IN THAT THE CHARACTER OF THE COMMUNICATION OF 9 DECEMBER 1968 WAS IN NO WAY NEW OR UNEXPECTED .

23 THEREFORE ON 24 JUNE 1970 THE NETHERLANDS GOVERNMENT WAS NO LONGER IN A POSITION TO TAKE ADVANTAGE OF ARTICLE 35 OF THE TREATY .

24 THE APPLICATION MUST BE DISMISSED AS INADMISSIBLE .

Decision on costs

25 UNDER THE TERMS OF ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY MUST BE ORDERED TO PAY THE COSTS .

THE APPLICANT HAS FAILED IN ITS SUBMISSIONS .

Operative part

THE COURT

HEREBY :

1 . DISMISSES THE APPLICATION AS INADMISSIBLE;

2 . ORDERS THE APPLICANT TO PAY THE COSTS .