Judgment of the Court of 26 June 1958. - Syndicat de la sidérurgie du Centre-Midi v High Authority of the European Coal and Steel Community. - Case 12-57.



European Court reports

French edition Page 00473

Dutch edition Page 00511

German edition Page 00499

Italian edition Page 00457

English special edition Page 00375

Danish special edition Page 00121

Greek special edition Page 00291

Portuguese special edition Page 00285



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

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1 . PROCEDURE - APPLICATION FOR ANNULMENT - GENERAL DECISION - ASSOCIATION OF UNDERTAKINGS AS APPLICANT - CAPACITY TO INSTITUTE PROCEEDINGS BEFORE THE COURT OF JUSTICE

2 . PROCEDURE - APPLICATION FOR ANNULMENT - GENERAL DECISION - ASSOCIATION OF UNDERTAKINGS AS APPLICANT - MISUSE OF POWERS - ADMISSIBILITY

3 . FINANCIAL ARRANGEMENTS - INDIRECT MEANS OF ACTION

4 . FUNDAMENTAL OBJECTIVES OF THE COMMUNITY

( A ) DUTIES OF THE HIGH AUTHORITY - IMPLEMENTATION OF ARTICLES 2 TO 5

( B ) RECONCILIATION OF THE VARIOUS OBJECTIVES OF ARTICLE 3

( C ) COMBINATION OF VARIOUS OBJECTIVES - COMMON INTEREST

5 . FINANCIAL ARRANGEMENTS - SYSTEM OF ALLOCATION - DIRECT ACTION ON PRODUCTION

6 . INFLUENCE ON INVESTMENTS - FINANCIAL ARRANGEMENTS - INDIRECT ACTION REGARDING INVESTMENTS

7 . SPECIAL CHARGE - FINANCIAL ARRANGEMENTS - ALLOCATION OF CHARGES ON THE BASIS OF OBJECTIVE AND LAWFUL CRITERIA

8 . FINANCIAL CHARGE IMPOSED UPON UNDERTAKINGS - FINANCIAL ARRANGEMENTS - SUCH ARRANGEMENTS NOT TO BE RESTRICTIVE

Summary

( CF . PARAGRAPH 1, SUMMARY IN CASE 8/57 OF 21 JUNE 1958 ):

1 .

AN ASSOCIATION OF UNDERTAKINGS HAS CAPACITY TO INSTITUTE PROCEEDINGS BEFORE THE COURT OF JUSTICE AGAINST A GENERAL DECISION IF THAT DECISION IS CAPABLE OF AFFECTING CERTAIN INTERESTS, EVEN THOUGH PERHAPS DIVERGENT, WHICH HAVE BEEN ENTRUSTED TO IT

( TREATY, SECOND PARAGRAPH OF ARTICLE 33, ARTICLES 48 AND 80 ).

*/ 657J0008 /*.

( CF . PARAGRAPH 2, SUMMARY IN CASE 8/57 OF 21 JUNE 1958 ):

2 .

PROCEEDINGS INSTITUTED BY AN ASSOCIATION OF UNDERTAKINGS ARE ADMISSIBLE IF THE ASSOCIATION FORMALLY ALLEGES THAT ON ONE OR MORE OCCASIONS A MISUSE OF POWERS AFFECTING ITS MEMBERS HAS BEEN COMMITTED, IF IT PRODUCES A RELEVANT STATEMENT OF THE REASONS LEADING IT TO BELIEVE THAT THERE HAS BEEN A MISUSE OF POWERS ON ONE OR MORE OCCASIONS AND IF THE PURPOSE OF THE ARGUMENTS UPON WHICH IT RELIES IS TO OBTAIN A DECLARATION THAT, WHEN THE HIGH AUTHORITY ADOPTED THE CONTESTED PROVISIONS, IT EXERCISED THE POWERS CONFERRED UPON IT BY THE TREATY FOR PURPOSES OTHER THAN THOSE FOR WHICH THEY WERE CONFERRED UPON IT

( TREATY, SECOND PARAGRAPH OF ARTICLE 33 ).

*/ 657J0008 /*.

( CF . PARAGRAPH 3, SUMMARY IN CASE 8/57 OF 21 JUNE 1958 ):

3 .

THE FINANCIAL ARRANGEMENTS REFERRED TO IN ARTICLE 53 ARE ARRANGEMENTS BASED ON THE TRANSFER OF RESOURCES, IN PARTICULAR ARRANGEMENTS IN THE NATURE OF EQUALIZATION OR COMPENSATION . THEY CONSTITUTE " INDIRECT " INTERVENTION PROCEDURES, WITHIN THE MEANING OF ARTICLE 57 OF THE TREATY, AS DISTINCT FROM THE DIRECT MEANS OF ACTION SUCH AS THE ESTABLISHMENT OF PRODUCTION QUOTAS ( ARTICLE 58 ) OR THE ALLOCATION OF RESOURCES

( ARTICLE 59 ) ( TREATY, ARTICLES 53 AND 57 ).

*/ 657J0008 /*.

( CF . PARAGRAPH 4 ( A ), SUMMARY IN CASE 8/57 OF 21 JUNE 1958 ):

4 . ( A )

THE EXPRESS REFERENCE MADE TO ARTICLE 3 IN ARTICLE 53 DOES NOT RELEASE THE HIGH AUTHORITY FROM ITS DUTY TO OBSERVE THE OTHER ARTICLES OF THE TREATY AND IN PARTICULAR ARTICLES 2, 4 AND 5 . ARTICLES 2 TO 5 MUST ALWAYS BE OBSERVED BECAUSE THEY ESTABLISH THE FUNDAMENTAL OBJECTIVES OF THE COMMUNITY . THOSE PROVISIONS ARE EQUALLY BINDING AND MUST BE READ TOGETHER IF THEY ARE TO BE PROPERLY APPLIED

( TREATY, ARTICLES 2, 3, 4, 5 AND 53 ).

*/ 657J0008 /*.

( CF . PARAGRAPH 4 ( B ), SUMMARY IN CASE 8/57 OF 21 JUNE 1958 ):

( B )

THE PROVISIONS OF ARTICLES 2 TO 5 CAN STAND BY THEMSELVES AND ACCORDINGLY, IN SO FAR AS THEY HAVE NOT BEEN ADOPTED IN ANY OTHER PROVISION OF THE TREATY, THEY ARE DIRECTLY APPLICABLE . IF THEY HAVE BEEN ADOPTED OR ARE GOVERNED BY OTHER PROVISIONS OF THE TREATY WORDS RELATING TO THE SAME PROVISION MUST BE CONSIDERED AS A WHOLE AND APPLIED TOGETHER . IN PRACTICE IT WILL ALWAYS BE NECESSARY TO RECONCILE TO A CERTAIN DEGREE THE VARIOUS OBJECTIVES OF ARTICLE 3 SINCE IT IS CLEARLY IMPOSSIBLE TO ATTAIN THEM ALL FULLY AND SIMULTANEOUSLY AS THOSE OBJECTIVES CONSTITUTE GENERAL PRINCIPLES WHICH MUST BE OBSERVED AND HARMONIZED AS FAR AS POSSIBLE

( TREATY, ARTICLES 2, 3, 4 AND 53 ).

*/ 657J0008 /*.

( CF . PARAGRAPH 4 ( C ), SUMMARY IN CASE 9/57 OF 26 JUNE 1958 ):

( C )

PROTECTION OF THE COMMON INTEREST DOES NOT RULE OUT, IF THE CIRCUMSTANCES SO REQUIRE, THE INCLUSION IN A MEASURE COMBINING THE PURSUIT OF THE VARIOUS OBJECTIVES LAID DOWN IN ARTICLE 3 OF THE TREATY OF ALL MEASURES OF A SELECTIVE OR GRADUAL NATURE COMPATIBLE WITH THE PRINCIPLE OF EQUALITY AND NECESSARY FOR CARRYING OUT THE TASKS LAID DOWN IN THE SAID ARTICLE . CONSEQUENTLY AN INDIRECT MEANS OF ACTION ON PRODUCTION CANNOT BE CONSIDERED AS INCOMPATIBLE WITH THE PROTECTION OF THE COMMON INTEREST ON THE PRETEXT THAT IT INVOLVES DIFFERENT TREATMENT

( TREATY, FIRST PARAGRAPH OF ARTICLE 3 ).

*/ 657J0009 /*.

( CF . PARAGRAPH 6, SUMMARY IN CASE 8/57 OF 21 JUNE 1958 ):

5 .

SINCE THE PROCEDURES FOR WHICH PROVISION IS MADE IN ARTICLE 59 AND ANNEX II TO THE TREATY CONSIST EXCLUSIVELY IN ESTABLISHING CONSUMPTION PRIORITIES AND ALLOCATING RESOURCES THEY ARE DIRECTLY AND SOLELY OF A QUANTITATIVE NATURE AND ARE THEREBY DISTINCT FROM ALL INDIRECT ACTION ON PRODUCTION BY MEANS OF PRICES WITHOUT RESTRICTION OF THE VOLUME OF PURCHASES, LIKE THE ACTION EFFECTED BY A FINANCIAL ARRANGEMENT ESTABLISHED IN ACCORDANCE WITH ARTICLE 53 ( B )

( TREATY, ARTICLES 53 ( B ) AND 59 AND ANNEX II ).

*/ 657J0008 /*.

( CF . PARAGRAPH 7, SUMMARY IN CASE 8/57 OF 21 JUNE 1958 ):

6 .

THE PROVISIONS OF ARTICLE 54 IN NO WAY IMPEDE THE ADOPTION OF MEASURES IN ACCORDANCE WITH THE PROVISIONS OF ARTICLES 3, 5, 53 ( B ), 57 AND 59 OF THE TREATY, TAKEN TOGETHER, THE APPLICATION OF WHICH MAY INFLUENCE INVESTMENTS PLANNED BY UNDERTAKINGS . IN PARTICULAR THE FINANCIAL ARRANGEMENTS REFERRED TO IN ARTICLE 53 ( B ), WHICH THE HIGH AUTHORITY IS ENTITLED TO USE AS AN INDIRECT MEANS OF ACTION ON PRODUCTION, ENTAIL BY THEIR NATURE RESULTS CAPABLE OF AFFECTING THE PLANS OF UNDERTAKINGS, SUCH AS, FOR EXAMPLE, THEIR INVESTMENT PLANS

( TREATY, ARTICLES 53 ( B ) AND 54 ).

*/ 657J0008 /*.

7 . A SPECIAL CHARGE WITHIN THE MEANING OF ARTICLE 4 ( C ) DOES NOT OBTAIN WHEN THE HIGH AUTHORITY, IN MAKING A FINANCIAL ARRANGEMENT OF THE KIND PROVIDED FOR IN ARTICLE 53 ( B ), IMPOSES HIGHER CONTRIBUTIONS UPON CERTAIN UNDERTAKINGS THAN UPON OTHERS SINCE THIS UNEQUAL ALLOCATION OF CHARGES IS BASED UPON OBJECTIVELY-ESTABLISHED CRITERIA WHICH ARE JUSTIFIED BY THE OBJECTIVES WHICH ARE PROPERLY PURSUED UNDER THE SAID ARRANGEMENT

( TREATY, ARTICLES 4 ( C ) AND 53 ( B )).

8 . ALTHOUGH ECONOMIC CIRCUMSTANCES JUSTIFY MEASURES CONCERNING THE FINANCIAL CHARGE IMPOSED UPON UNDERTAKINGS THOSE MEASURES MUST NOT BE MORE RESTRICTIVE THAN IS NECESSARY FOR THE PURPOSE OF THE FINANCIAL ARRANGEMENT

( ARTICLES 53 ( B ) AND 65 ( 2 ) ( B )).

Parties

IN CASE 12/57

BETWEEN

SYNDICAT DE LA SIDERURGIE DU CENTRE-MIDI, A TRADE ASSOCIATION GOVERNED BY FRENCH LAW, HAVING ITS HEAD OFFICE IN PARIS, REPRESENTED BY ITS PRESIDENT, HENRI VICAIRE, ASSISTED BY HENRI LEVEQUE, ADVOCATE AT THE COUR DE PARIS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF GEORGES REUTER, 1 RUE DE L'ARSENAL, APPLICANT,

AND

HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, GERARD OLIVIER, ACTING AS AGENT, ASSISTED BY ANDRE DE LAUBADERE, PROFESSOR IN THE FACULTY OF LAW, PARIS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES AT 2 PLACE DE METZ, DEFENDANT,

Subject of the case

APPLICATION FOR THE ANNULMENT OF ARTICLES 6 ( 3 ), 8 AND 9 OF DECISION NO 2/57 OF THE HIGH AUTHORITY OF 26 JANUARY 1957, PUBLISHED IN THE JOURNAL OFFICIEL NO 4 OF 28 JANUARY 1957, AND CONSEQUENTLY, OF ARTICLES 3 ( 1 ), 4 ( 3 ), 5, 6 ( 1 ) AND ( 2 ) AND 7 THEREOF,

Grounds

P . 382

A - ADMISSIBILITY

ACCORDING TO THE APPLICANT'S STATUTES IT CONSTITUTES A PRIVATE ASSOCIATION GOVERNED BY FRENCH LAW HAVING AS ITS OBJECTIVE THE FURTHERANCE AND DEFENCE OF THE GENERAL INTERESTS OF IRON AND STEEL PRODUCERS; IT IS COMMON GROUND THAT THE CONTESTED PROVISIONS OF GENERAL DECISION NO 2/57 ARE CAPABLE OF AFFECTING CERTAIN INTERESTS, EVEN THOUGH PERHAPS DIVERGENT, ENTRUSTED TO THE APPLICANT . THE APPLICANT ACCORDINGLY HAS CAPACITY TO INSTITUTE PROCEEDINGS BEFORE THE COURT OF JUSTICE IN ACCORDANCE WITH THE PROVISIONS OF ARTICLES 33, 48 AND 80 OF THE TREATY .

THE APPLICANT FORMALLY ALLEGES THAT ITS MEMBERS HAVE BEEN AFFECTED BY MISUSE OF POWERS ON ONE OR MORE OCCASIONS; IT PRODUCES A RELEVANT STATEMENT OF THE REASONS LEADING IT TO BELIEVE THAT THERE HAS BEEN A MISUSE OF POWERS ON ONE OR MORE OCCASIONS . THE PURPOSE OF THE ARGUMENTS UPON WHICH IT RELIES IS IN FACT TO OBTAIN A DECLARATION THAT, WHEN THE HIGH AUTHORITY ADOPTED THE CONTESTED PROVISIONS, IT EXERCISED THE POWERS CONFERRED UPON IT UNDER ARTICLE 53 ( B ) OF THE TREATY FOR PURPOSES OTHER THAN THOSE FOR WHICH THEY WERE CONFERRED UPON IT, BOTH THROUGH SERIOUS DISREGARD FOR CERTAIN OF THE OBJECTIVES REFERRED TO IN ARTICLE 3, AND THROUGH THE CLEAR INTENTION OF ATTAINING OBJECTIVES SPECIFICALLY GOVERNED BY ARTICLES 54 AND 59 WHILST AVOIDING THE SPECIAL PROCEDURES PRESCRIBED IN THE SAID ARTICLES .

CONSEQUENTLY THE APPLICATION IS ADMISSIBLE .

B - SUBSTANCE

THE HIGH AUTHORITY HAS SELECTED ARTICLE 53 AS THE LEGAL BASIS OF THE SCHEME FOR THE EQUALIZATION OF FERROUS SCRAP WHICH IT HAS ESTABLISHED . THAT ARTICLE PERMITS IT TO INTERVENE IN CONNEXION WITH THE TASKS ASSIGNED TO IT UNDER THE TREATY, IN PARTICULAR UNDER ARTICLE 3 THEREOF .

P . 383

ARTICLE 53 APPEARS IN CHAPTER II, ENTITLED " FINANCIAL PROVISIONS ". THE OTHER ARTICLES OF THIS CHAPTER RELATE TO THE USE OF FUNDS WHICH THE HIGH AUTHORITY OBTAINS THROUGH LEVIES ON PRODUCTION OR BY LOANS . IT MAY ACCORDINGLY BE CONSIDERED THAT THE FINANCIAL ARRANGEMENTS REFERRED TO IN ARTICLE 53 ARE ARRANGEMENTS BASED ON THE TRANSFER OF RESOURCES, IN PARTICULAR ARRANGEMENTS IN THE NATURE OF EQUALIZATION OR COMPENSATION . THIS INTERPRETATION IS CONFIRMED BY THE LAST PARAGRAPH OF ARTICLE 62 WHICH PROVIDES THAT CERTAIN EQUALIZATION PAYMENTS " MAY ... BE INSTITUTED AS PROVIDED IN ARTICLE 53 ".

THE EQUALIZATION ARRANGEMENTS DO NOT DIRECTLY AFFECT PRICES BUT RATHER THE FACTORS CONTRIBUTING TO THE FORMATION OF PRICES . IN THIS WAY THOSE FACTORS, WITHOUT PREVENTING PRICES FROM BEING FREELY FIXED, MODIFY THE LEVEL AT WHICH THEY ARE FIXED . THE FINANCIAL ARRANGEMENTS PROVIDED FOR IN ARTICLE 53 AFFECT BY SUCH ALTERATIONS IN THE LEVEL OF PRICES THE OTHER CHARACTERISTIC FEATURES OF THE STATE OF THE MARKET AND IN PARTICULAR THE SUPPLY OF AND DEMAND FOR THE RELEVANT PRODUCTS . THESE ARRANGEMENTS THUS CONSTITUTE POWERFUL AND EFFECTIVE INTERVENTION PROCEDURES AT THE DISPOSAL OF THE HIGH AUTHORITY, BUT ARE NEVERTHELESS " INDIRECT " WITHIN THE MEANING OF ARTICLE 57 OF THE TREATY AS DISTINCT FROM THE DIRECT MEANS OF ACTION THROUGH ESTABLISHMENT OF PRODUCTION QUOTAS ( ARTICLE 58 ) OR THE ALLOCATION OF RESOURCES ( ARTICLE 59 ).

THE HIGH AUTHORITY, BY USING THE FINANCIAL ARRANGEMENTS PROVIDED FOR IN ARTICLE 53, IS IN A POSITION TO EXERCISE A BROAD INFLUENCE ON THE MARKET IN COAL AND STEEL WHILST IT MUST BE BORNE IN MIND THAT ARTICLE 53 RESTRICTS THE APPLICATION OF SUCH ARRANGEMENTS TO THE PROCEDURES " NECESSARY FOR THE PERFORMANCE OF THE TASKS SET OUT IN ARTICLE 3 AND COMPATIBLE WITH THIS TREATY, AND IN PARTICULAR WITH ARTICLE 65 ". THE EXPRESS REFERENCE MADE TO ARTICLE 3 DOES NOT RELEASE THE HIGH AUTHORITY FROM ITS DUTY TO OBSERVE THE OTHER ARTICLES OF THE TREATY AND IN PARTICULAR ARTICLES 2, 4 AND 5 WHICH, TOGETHER WITH ARTICLE 3, MUST ALWAYS BE OBSERVED BECAUSE THEY ESTABLISH THE FUNDAMENTAL OBJECTIVES OF THE COMMUNITY . THOSE PROVISIONS ARE BINDING AND MUST BE READ TOGETHER IF THEY ARE TO BE PROPERLY APPLIED . THESE PROVISIONS CAN STAND BY THEMSELVES AND ACCORDINGLY, IN SO FAR AS THEY HAVE NOT BEEN ADOPTED IN ANY OTHER PROVISION OF THE TREATY, THEY ARE DIRECTLY APPLICABLE . IF THEY HAVE BEEN ADOPTED OR ARE GOVERNED BY OTHER PROVISIONS OF THE TREATY WORDS RELATING TO THE SAME PROVISION MUST BE CONSIDERED AS A WHOLE AND APPLIED TOGETHER . IN PRACTICE IT WILL ALWAYS BE NECESSARY TO RECONCILE TO A CERTAIN DEGREE THE VARIOUS OBJECTIVES OF ARTICLE 3 SINCE IT IS CLEARLY IMPOSSIBLE TO ATTAIN THEM ALL FULLY AND SIMULTANEOUSLY AS THOSE OBJECTIVES CONSTITUTE GENERAL PRINCIPLES WHICH MUST BE OBSERVED AND HARMONIZED AS FAR AS POSSIBLE; ON THE OTHER HAND SUCH FINANCIAL ARRANGEMENTS MUST BE INSTITUTED WITHOUT INFRINGING THE PROVISIONS OF ARTICLE 58 AND OF CHAPTER 5 OF TITLE III OF THE TREATY .

DECISIONS PRIOR TO DECISION NO 2/57 WERE CONCERNED TO EQUALIZE THE PRICES OF IMPORTED FERROUS SCRAP AND DOMESTIC SCRAP . DECISION NO 2/57 CONTINUES THIS SYSTEM BUT ADJUSTS IT AND SUPPLEMENTS IT WITH NEW PROVISIONS INTENDED TO AFFECT AT THE SAME TIME THE PRICE OF FERROUS SCRAP AND THE TOTAL VOLUME OF PURCHASES IN ORDER TO ENCOURAGE UNDERTAKINGS TO EFFECT ECONOMIES IN FERROUS SCRAP IN THE INTERESTS OF A REGULAR SUPPLY TO THE MARKET .

P . 384

IF THE DEMAND HAD OVER AN EXTENDED PERIOD EXCEEDED THE SUPPLY OF SCRAP IT COULD HAVE LED TO A " SERIOUS SHORTAGE " FOR WHICH THE PROCEDURES LAID DOWN IN ARTICLE 59 ARE APPROPRIATE . IF THE HIGH AUTHORITY WISHED TO AVOID FOLLOWING THOSE PROCEDURES - AND THE PROVISIONS OF ARTICLE 57 REQUIRE IT TO ENDEAVOUR AS FAR AS POSSIBLE TO REFRAIN FROM DOING SO - IT COULD NOT AVOID THE NEED AND THE DUTY TO APPLY THE PROCEDURE PRESCRIBED IN ARTICLE 53 ( B ), SUBJECT TO OBSERVANCE OF THE CONDITIONS FOR ITS APPLICATION .

1 . THE COMPLAINT OF MISUSE OF POWERS WITH REGARD TO ARTICLES 3 AND 53 OF THE TREATY, THAT IS TO SAY, THAT THE CONTESTED PROVISIONS PURSUE OBJECTIVES WHICH ARE CONTRARY TO THE OBJECTIVES IN ARTICLES 3 AND 53

( A ) PURSUANT TO ARTICLE 53 ( B ) OF THE TREATY THE HIGH AUTHORITY MAY, WITH THE UNANIMOUS ASSENT OF THE COUNCIL, ITSELF MAKE ANY FINANCIAL ARRANGEMENTS WHICH IT RECOGNIZES TO BE NECESSARY FOR THE PERFORMANCE OF THE TASKS SET OUT IN ARTICLE 3 . THE EXERCISE OF THE POWERS THUS CONFERRED UPON THE HIGH AUTHORITY IS SUBJECT TO THE CONDITIONS SET OUT IN ARTICLES 2 TO 5 CONCERNING THE ESTABLISHMENT, ADMINISTRATION AND GUIDANCE OF THE COMMON MARKET .

PURSUANT TO ARTICLE 2 OF THE TREATY THE COMMUNITY HAS AS ITS TASK TO CONTRIBUTE TO ECONOMIC EXPANSION, GROWTH OF EMPLOYMENT AND A RISING STANDARD OF LIVING IN THE MEMBER STATES . THE MEANS PRESCRIBED FOR THE ATTAINMENT OF THOSE OBJECTIVES CONSISTS IN THE ESTABLISHMENT OF A COMMON MARKET ON THE CONDITIONS LAID DOWN IN ARTICLE 4 CONCERNING THE ABOLITION OF OBSTACLES TO TRADE . PURSUANT TO ARTICLE 2 THE COMMUNITY IS OBLIGED PROGRESSIVELY TO BRING ABOUT CONDITIONS WHICH WILL OF THEMSELVES ENSURE THE MOST RATIONAL DISTRIBUTION OF PRODUCTION AT THE HIGHEST POSSIBLE LEVEL OF PRODUCTIVITY WHILE SAFEGUARDING CONTINUITY OF EMPLOYMENT AND TAKING CARE NOT TO PROVOKE FUNDAMENTAL AND PERSISTENT DISTURBANCES IN THE ECONOMIES OF MEMBER STATES .

TO THOSE ENDS THE COMMUNITY MUST ENSURE ON THE MARKET THE ESTABLISHMENT, MAINTENANCE AND OBSERVANCE OF NORMAL CONDITIONS OF COMPETITION AND, SUBJECT TO OBSERVANCE OF THE PRIORITIES LAID DOWN BY ARTICLE 57 OF THE TREATY IN RELATION TO ITS MEANS OF ACTION, IT MUST, IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 5, " EXERT DIRECT INFLUENCE UPON PRODUCTION OR UPON THE MARKET ONLY WHEN CIRCUMSTANCES SO REQUIRE ".

IN PURSUING THE OBJECTIVES LAID DOWN IN ARTICLE 3 OF THE TREATY THE HIGH AUTHORITY MUST PERMANENTLY RECONCILE ANY CONFLICTS BETWEEN THOSE OBJECTIVES CONSIDERED INDIVIDUALLY AND, WHEN SUCH RECONCILIATION PROVES UNATTAINABLE, MUST GRANT SUCH TEMPORARY PRIORITY TO ONE OR OTHER OF THEM AS APPEARS NECESSARY HAVING REGARD TO THE ECONOMIC FACTS OR CIRCUMSTANCES IN THE LIGHT OF WHICH, IN CARRYING OUT THE TASKS ENTRUSTED TO IT UNDER ARTICLE 8 OF THE TREATY, IT ADOPTS ITS DECISIONS .

PURSUANT TO THE PROVISIONS OF ARTICLE 57 OF THE TREATY IN THE SPHERE OF PRODUCTION, THE HIGH AUTHORITY IS REQUIRED TO GIVE PREFERENCE TO THE INDIRECT MEANS OF ACTION AT ITS DISPOSAL, IN PARTICULAR TO INTERVENTION IN REGARD TO PRICES . AS HAS PREVIOUSLY BEEN STATED, SUCH MEANS OF ACTION MUST BE REGARDED AS INCLUDING THE FINANCIAL ARRANGEMENTS PROVIDED FOR IN ARTICLE 53 SINCE THEY INFLUENCE PRICES IN PARTICULAR THROUGH COMPENSATION FOR AND CORRECTION OF FACTORS WHICH CONTRIBUTE TO THEIR FORMATION . SINCE THOSE ARRANGEMENTS CONTRIBUTE TO THE FORMATION OF PRICES THEY ALTER THE PRICE-LEVEL ON THE MARKET AND THEREBY INFLUENCE THE EFFECTS WHICH THE PRICE-LEVEL PRODUCES ON THE DIRECTION OF PRODUCTION, AND THUS ON THE STRUCTURE OF THE MEANS OF PRODUCTION . SUCH ARRANGEMENTS THUS PROVIDE THE HIGH AUTHORITY WITH THE MEANS TO MODIFY THE EFFECTS OF " NORMAL COMPETITIVE CONDITIONS " WHILST ENSURING, IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 5 OF THE TREATY, THE MAINTENANCE AND OBSERVANCE OF THESE CONDITIONS . BY MAKING APPROPRIATE USE OF THIS POWERFUL MEANS OF INTERVENTION THE HIGH AUTHORITY IS LARGELY CAPABLE, PROVIDED THAT THE CIRCUMSTANCES REQUIRE IT, OF BRINGING ABOUT THE REQUIRED RECONCILIATION BETWEEN THE OBJECTIVES LISTED IN ARTICLE 3 OF THE TREATY IN CARRYING OUT THE TASK WITH WHICH IT IS ENTRUSTED UNDER THE TREATY .

P . 385

THE POWERS WHICH HAVE THUS BEEN CONFERRED ON THE HIGH AUTHORITY ARE HOWEVER LIMITED BY THE SPECIFIC PROVISIONS SET OUT IN TITLE III OF THE TREATY . IN PARTICULAR THESE POWERS WOULD BE USED FOR AN OBJECTIVE OTHER THAN THEIR LEGAL PURPOSE IF IT APPEARED THAT THE HIGH AUTHORITY HAD APPLIED THEM WITH THE EXCLUSIVE, OR AT ANY RATE THE DECISIVE, PURPOSE OF EVADING A PROCEDURE ESPECIALLY PRESCRIBED BY THE TREATY IN ORDER TO DEAL WITH THE CIRCUMSTANCES WITH WHICH IT IS REQUIRED TO COPE .

AT THE TIME WHEN THE CONTESTED DECISIONS WERE ADOPTED THE MARKET IN FERROUS SCRAP WAS WIDELY RECOGNIZED AS BEING CHARACTERIZED BY A SEVERE SHORTAGE OF COMMUNITY SUPPLIES, BY MOUNTING DIFFICULTIES IN IMPORTS AND BY LARGE-SCALE AND RAPID INCREASES IN THE PRICE OF FOREIGN SCRAP . THIS SITUATION ARISING FROM THOSE ECONOMIC FACTS AND CIRCUMSTANCES CANNOT IN ANY EVENT BE REGARDED AS PRIMA FACIE EXCLUDING INTERVENTION BY THE HIGH AUTHORITY TO COUNTER THE CONSEQUENCES AT VARIANCE WITH THE REQUIREMENTS OF ARTICLE 3 OF THE TREATY WHICH THIS SITUATION MIGHT HAVE INVOLVED . FURTHERMORE THE HIGH AUTHORITY'S APPRAISAL OF THE SITUATION IN THE LIGHT OF WHICH THE CONTESTED PROVISIONS WERE ADOPTED DOES NOT BY ITSELF SHOW THAT THE AUTHORS OF THE SAID MEASURES WERE INSPIRED BY AN UNLAWFUL MOTIVE .

ACCORDINGLY THE COURT DOES NOT CONSIDER THAT THE CIRCUMSTANCES WERE SUCH AS TO RULE OUT, AT THAT TIME, ACTION BY THE HIGH AUTHORITY ON THE MARKET IN FERROUS SCRAP WITH A VIEW TO AFFECTING INDIRECTLY MEANS OF PRODUCTION USING SCRAP .

( B ) THE PURPOSE OF THE PROVISIONS CONTESTED IN THE PRESENT APPLICATION WAS TO MAKE THE CONTRIBUTION FOR THE EQUALIZATION OF THE PRICES OF IMPORTED FERROUS SCRAP PROGRESSIVELY SELECTIVE BY INCREASING THE RATE APPLICABLE TO THE CONSUMPTION OF BOUGHT SCRAP ABOVE A GIVEN REFERENCE LEVEL AND BY GRADUATING THE CHARGES THEREBY IMPOSED IN TERMS OF A SPECIFIC INPUT COEFFICIENT FOR FERROUS SCRAP IN THE INSTALLATIONS AND THE MANUFACTURING PROCESSES REQUIRING SCRAP .

FURTHERMORE THE SAID PROVISIONS CONTAIN A SET OF TRANSITIONAL MEASURES INTENDED TO PERMIT UNDERTAKINGS TO ADAPT THEMSELVES PROGRESSIVELY TO THE CONDITIONS THEREBY CREATED FOR THEM, IN PARTICULAR THE CHOICE BY EACH UNDERTAKING OF ITS OWN REFERENCE PERIOD, THE PERIOD OF SIX MONTHS DURING WHICH PAYMENT OF THE CONTRIBUTION AT THE SUPPLEMENTARY RATE IS SUSPENDED, THE GRADUATED NATURE OF THE RATE, THE ALLOCATION OF A REFERENCE CONSUMPTION AND A SPECIFIC INPUT REFERENCE FOR PLANT WHICH BEGAN OPERATIONS DURING THE YEAR FOLLOWING THE ENTRY INTO FORCE OF THE DECISION TOGETHER WITH THE ALLOCATION OF A SPECIFIC INPUT REFERENCE WITHOUT A TIME-LIMIT FOR ALL PLANT BEGINNING OPERATIONS AFTER THE EXPIRY OF THIS LATTER PERIOD . THROUGH THOSE MEASURES THE HIGH AUTHORITY PROVIDED THE SCHEME FOR THE EQUALIZATION OF THE PRICES OF IMPORTED FERROUS SCRAP, WHICH IT HAD PREVIOUSLY ESTABLISHED, WITH CONDITIONS INTENDED TO PREVENT A FALL IN THE PRICE OF FERROUS SCRAP RESULTING FROM EQUALIZATION FROM ENCOURAGING PRODUCERS IN THE COMMON MARKET TO INCREASE THEIR CONSUMPTION OF SCRAP .

THUS DEFINED THE DECISIVE AIM OF THE CONTESTED PROVISIONS CONSTITUTES LAWFUL INDIRECT ACTION, WITHIN THE MEANING OF ARTICLE 57, APPLIED TO THE MARKET IN FERROUS SCRAP IN ORDER TO ENSURE, BEARING IN MIND THE FACTS AND CIRCUMSTANCES THEN OBSERVED, REGULAR SUPPLIES TO THE COMMON MARKET . THE SAID AIMS ARE THUS IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 3 ( A ) AND THE LATTER PART OF ( D ), THE SECOND PARAGRAPH OF ARTICLE 2 AND THE THIRD SUBPARAGRAPH OF THE SECOND PARAGRAPH OF ARTICLE 5 OF THE TREATY .

( C ) PURSUANT TO THE BEGINNING OF ARTICLE 3, WHEN THE INSTITUTIONS OF THE COMMUNITY CARRY OUT THE TASKS DEFINED IN THE SAID ARTICLE THEY MUST ACT IN THE COMMON INTEREST . THE CONCEPT OF THE COMMON INTEREST REFERRED TO IN ARTICLE 3, FAR FROM BEING RESTRICTED TO THE SUM OF INDIVIDUAL INTERESTS OF UNDERTAKINGS OR OF CATEGORIES OF UNDERTAKINGS SUBJECT TO THE JURISDICTION OF THE COMMUNITY, CONSIDERABLY EXCEEDS THE SCOPE OF SUCH INTERESTS AND IS DEFINED IN RELATION TO THE GENERAL AIMS CLEARLY LAID DOWN IN ARTICLE 2 .

CONSEQUENTLY THE PROTECTION OF THE COMMON INTEREST DOES NOT RULE OUT, IF THE CIRCUMSTANCES SO REQUIRE, THAT MEASURES COMBINING THE PURSUIT OF THE VARIOUS OBJECTIVES DESCRIBED IN ARTICLE 3 OF THE TREATY SHOULD INCLUDE ALL SELECTIVE AND GRADUAL MEASURES COMPATIBLE WITH THE PRINCIPLE OF EQUALITY AND NECESSARY TO CARRY OUT THE TASKS LAID DOWN IN THAT ARTICLE . CONSEQUENTLY AN INDIRECT MEANS OF ACTION ON PRODUCTION CANNOT BE CONSIDERED AS INCOMPATIBLE WITH THE PROTECTION OF THE COMMON INTEREST ON THE PRETEXT THAT IT INVOLVES DIFFERENT TREATMENT .

( D ) NEVERTHELESS CONSIDERATION MUST BE GIVEN TO THE QUESTION WHETHER THE MEASURES TAKEN ARE COMPATIBLE WITH THE RULES IN ARTICLE 3 ( B ), THE BEGINNING OF SUBPARAGRAPH ( D ) AND SUBPARAGRAPH ( G ) AND THE APPLICANT ALLEGES THAT THE HIGH AUTHORITY'S ADOPTION OF THE SAID MEASURES CONSTITUTES SERIOUS DISREGARD OF THESE OBJECTIVES .

PURSUANT TO ARTICLE 3 ( B ) OF THE TREATY THE INSTITUTIONS OF THE COMMUNITY ARE REQUIRED, WITHIN THE LIMITS OF THEIR RESPECTIVE POWERS, TO ENSURE IN THE COMMON INTEREST THAT ALL COMPARABLY-PLACED CONSUMERS IN THE COMMON MARKET HAVE EQUAL ACCESS TO THE SOURCES OF PRODUCTION; THIS PROVISION CONSTITUTES A NECESSARY OBJECTIVE FOR THE ACTION OF THE HIGH AUTHORITY IN THE EXERCISE OF THE POWERS CONFERRED UPON IT BY THE TREATY . FAILURE TO OBSERVE THE PRINCIPLE OF THE EQUALITY OF TREATMENT OF CONSUMERS IN THE MATTER OF ECONOMIC RULES, AS THAT PRINCIPLE HAS BEEN DESCRIBED ABOVE, MAY CONSTITUTE MISUSE OF POWERS AFFECTING THE PERSONS OR CLASSES OF PERSONS DELIBERATELY SACRIFICED .

P . 387

PURSUANT TO A PRINCIPLE GENERALLY ACCEPTED IN THE LEGAL SYSTEMS OF THE MEMBER STATES, EQUALITY OF TREATMENT IN THE MATTER OF ECONOMIC RULES DOES NOT PREVENT DIFFERENT PRICES BEING FIXED IN ACCORDANCE WITH THE PARTICULAR SITUATION OF CONSUMERS OR OF CATEGORIES OF CONSUMERS PROVIDED THAT THE DIFFERENCES IN TREATMENT CORRESPOND TO A DIFFERENCE IN THE SITUATIONS OF SUCH PERSONS . IF THERE IS NO OBJECTIVELY-ESTABLISHED BASIS DISTINCTIONS IN TREATMENT ARE ARBITRARY, DISCRIMINATORY AND ILLEGAL . IT CANNOT BE ALLEGED THAT ECONOMIC RULES ARE UNFAIR, ON THE PRETEXT THAT THEY INVOLVE DIFFERENT CONSEQUENCES OR DISPARATE DISADVANTAGES FOR THE PERSONS CONCERNED WHEN THIS IS CLEARLY THE RESULT OF THEIR DIFFERENT OPERATING CONDITIONS .

THE SUPPLEMENTARY RATE ESTABLISHED UNDER ARTICLE 3 ( 1 ) ( B ) OF THE CONTESTED DECISION APPLIES GENERALLY AND ENTIRELY TO ANY CONSUMPTION OF BOUGHT SCRAP IN EXCESS OF THAT RELATING TO A REFERENCE PERIOD . THE DISCRETION CONFERRED UPON THE UNDERTAKINGS SUBJECT TO THE SCHEME THEMSELVES TO SELECT, WITHIN SPECIALLY PRESCRIBED TEMPORAL LIMITS, THE PERIOD MOST FAVOURABLE TO THEM DOES NOT, HOWEVER, MEAN THAT THE CRITERION USED FOR DISTINGUISHING BETWEEN THEM THUS LOSES ITS OBJECTIVE NATURE, WITHOUT WHICH IT WOULD APPEAR ARBITRARY . INDEED THE FACTUAL DIFFERENCES WHICH THIS SITUATION ENTAILS FOR UNDERTAKINGS STEM FROM THEIR DISSIMILAR OPERATING CONDITIONS AND NOT FROM ANY LEGAL INEQUALITY INHERENT IN THE DECISION .

THE GRADUATION OF THE CONTESTED SUPPLEMENTARY RATE LAID DOWN BY THE PROVISIONS OF ARTICLE 8 IS BASED EXCLUSIVELY ON THE SUCCESSIVE PERIODS FOR THE APPLICATION OF DECISION NO 2/57 . THE GRADUATION IS THUS GENERAL AND ABSOLUTE, OBJECTIVELY BASED UPON THE WISH PROGRESSIVELY TO PROVIDE ENCOURAGEMENT, BY INFLUENCING PRICES, TO STEEL UNDERTAKINGS CONSUMING FERROUS SCRAP TO ECONOMIZE IN USING IT SO AS TO AVOID ITS UNCONSIDERED EXHAUSTION .

THE REFUNDS OF THE PROPORTION OF THE EQUALIZATION CONTRIBUTION CALCULATED AT THE SUPPLEMENTARY RATE, WHICH WERE ESTABLISHED PURSUANT TO ARTICLE 9 OF THE DISPUTED DECISION, ARE GRANTED ON A PURELY OBJECTIVE BASIS, THE REDUCTION OF THE SPECIFIC INPUT COEFFICIENT OF FERROUS SCRAP FOR EACH TYPE OF PLANT AND MANUFACTURING PROCESS USING THAT MATERIAL . THE VARYING EFFECTS WHICH THE APPLICATION OF THAT ARTICLE PRODUCES ON THE PERSONS CONCERNED, BY REASON OF VARYING OPERATING CONDITIONS AND TECHNICAL PROBLEMS WHICH, FOR CERTAIN CATEGORIES OF PLANT, MAY REDUCE OR EVEN EXCLUDE ENTITLEMENT TO REFUNDS CANNOT RENDER THE RULE INEQUITABLE IN LAW - WHICH IS EXCLUDED BY THE NATURE OF THE CRITERION ADOPTED .

( E ) PURSUANT TO ARTICLE 3 ( D ) AND ( G ) OF THE TREATY THE INSTITUTIONS OF THE COMMUNITY, AND PARTICULARLY THE HIGH AUTHORITY IN EXERCISING THE POWERS CONFERRED UPON IT BY ARTICLE 53 ( B ), ARE REQUIRED TO ENSURE THE MAINTENANCE OF CONDITIONS WHICH WILL ENCOURAGE UNDERTAKINGS TO EXPAND AND IMPROVE THEIR PRODUCTION POTENTIAL AND PROMOTE THE ORDERLY EXPANSION AND MODERNIZATION OF PRODUCTION AND THE IMPROVEMENT OF QUALITY . THE HIGH AUTHORITY REFERS TO THOSE LEGAL OBJECTIVES AT THE BEGINNING OF THE DISPUTED DECISION, THE STATED AIM OF WHICH IS TO ENSURE REGULAR SUPPLIES TO THE MARKET IN FERROUS SCRAP AND TO ENCOURAGE UNDERTAKINGS TO SAVE FERROUS SCRAP WITHOUT, HOWEVER, MAKING IT MORE DIFFICULT TO INCREASE OUTPUT CAPACITY .

P . 388

THE APPLICANT ASSOCIATION COMPLAINS THAT THE HIGH AUTHORITY HAS SERIOUSLY DISREGARDED THE OBJECTIVES THUS REFERRED TO BY HAMPERING, THROUGH THE CONTESTED PROVISIONS, THE DEVELOPMENT OF CERTAIN METHODS OF PRODUCTION . IT MUST BE CONSIDERED WHETHER THE PROVISIONS INDICATE, IN THIS RESPECT, AN UNLAWFUL MOTIVE OR A SERIOUS LACK OF CARE AMOUNTING TO FAILURE TO OBSERVE THE PURPOSE OF THE LAW AND WHETHER IN THIS RESPECT PRIORITY WAS PERHAPS ACCORDED TO CERTAIN LAWFUL AIMS AT THE EXPENSE OF CERTAIN OTHERS TO AN EXTENT WHICH IS UNJUSTIFIED BY THE CIRCUMSTANCES .

THE ATTAINMENT OF THE OBJECTIVES REFERRED TO IN ARTICLE 3 ( D ) AND ( G ) OF THE TREATY CANNOT BE PURSUED IN ISOLATION FROM AND WITHOUT REGARD TO THE OTHER OBJECTIVES LAID DOWN IN THE SAID ARTICLE . THE ATTAINMENT OF ORDERLY EXPANSION AND THE MODERNIZATION OF PRODUCTION MAY LAWFULLY BE SOUGHT WITHIN THE FRAMEWORK OF A GENERAL ACTION ON THE BASIS OF RECONCILING THE OBJECTIVES OF ARTICLE 3, IF NECESSARY GRANTING SUCH PRIORITY TO ONE OR OTHER OF THEM AS APPEARS NECESSARY HAVING REGARD TO THE SITUATION ARISING FROM THE ECONOMIC FACTS OR CIRCUMSTANCES OBSERVED AT THE TIME OF THE INTERVENTION .

( F ) FURTHERMORE THE OBJECTIVES LAID DOWN IN ARTICLE 3 OF THE TREATY MUST BE APPRAISED AS A WHOLE AND PURSUED EXCLUSIVELY IN THE COMMON INTEREST .

CONSEQUENTLY, AS HAS BEEN STATED, PURSUIT OF THE OBJECTIVES PRESCRIBED IN ARTICLE 3 DOES NOT RULE OUT SELECTIVE MEASURES BASED IN PARTICULAR UPON THE NATURE OF THE MEANS OF PRODUCTION TO BE DEVELOPED OR CREATED IF IT APPEARS THAT ECONOMIC CIRCUMSTANCES AND THE REASONABLY FORESEEABLE TREND OF MARKET CONDITIONS CALL FOR SUCH MEASURES . THIS IS CERTAINLY SO WHEN THERE ARE DANGERS OF A SERIOUS SHORTAGE OF ONE OF THE BASIC RAW MATERIALS FOR THE STEEL INDUSTRY OR IF IT APPEARS NECESSARY TO ADOPT A POLICY OF USING RESOURCES RATIONALLY IN ORDER TO AVOID THEIR UNCONSIDERED EXHAUSTION . THE DISTINCTIONS WHICH MAY CONSEQUENTLY PROVE NECESSARY TO MAINTAIN CONDITIONS WHICH WILL ENCOURAGE UNDERTAKINGS TO EXPAND AND IMPROVE THEIR PRODUCTION POTENTIAL AND TO PROMOTE ITS REGULAR DEVELOPMENT NEVERTHELESS MUST BE BASED UPON PURELY OBJECTIVE CRITERIA IN ACCORDANCE WITH THE PRINCIPLE OF EQUALITY LAID DOWN IN THE TREATY .

THE PROVISIONS OF ARTICLE 6 OF THE CONTESTED DECISION ARE INTENDED PROGRESSIVELY TO ENCOURAGE STEEL UNDERTAKINGS TO USE SCRAP AS RATIONALLY AS POSSIBLE . TO ATTAIN THIS THE PROVISIONS ALTER THE COST OF FINANCING THE EQUALIZATION OF THE PRICES OF IMPORTED FERROUS SCRAP BOTH IN TERMS OF THE NATURE OF THE PLANT AND MANUFACTURING PROCESSES AND THE DATE WHEN OPERATIONS WERE COMMENCED, THROUGH THE COMBINED ACTION OF REFERENCE CONSUMPTION AND REFUNDS GRANTED IN RESPECT OF RELATIVE ECONOMIES IN SCRAP . THE GRADUATED INCREASE IN THE COST OF FERROUS SCRAP AND THE SELECTIVE INFLUENCE THEREOF ON THE COST PRICE OF STEEL PRODUCTS VARY IN TERMS OF OBJECTIVELY DETERMINED QUANTITATIVE AND QUALITATIVE CRITERIA . CONSEQUENTLY THE CONTESTED MEASURES CONSTITUTE WITH REGARD TO THE PRINCIPLE OF NON-DISCRIMINATION, PROVISIONS ENCOURAGING UNDERTAKINGS TO DEVELOP NEW CAPACITIES CONSIDERED COMPATIBLE WITH REGULAR SUPPLIES OF SCRAP FOR THE STEEL INDUSTRY AND THE ORDERLY EXPANSION OF PRODUCTION . THE PROVISIONS OF ARTICLES 6 AND 8 OF THE CONTESTED DECISION THUS CONSTITUTE A BODY OF PROGRESSIVE RULES WITHOUT WHICH THE FINANCIAL ARRANGEMENT ESTABLISHED BY THE SAID DECISION WOULD FORFEIT ITS CHARACTER OF AN INDIRECT MEANS OF ACTION IN RELATION TO PRODUCTION THEREBY RENDERING IT UNLAWFUL WITH RESPECT TO THE PROVISIONS OF ARTICLES 5 AND 57 .

P . 389

( G ) THE " INDIRECT MEANS OF ACTION " IN RELATION TO PRODUCTION PRESCRIBED IN ARTICLE 57 ARE TO BE DISTINGUISHED FROM THE " DIRECT INFLUENCE " REFERRED TO IN THE THIRD SUBPARAGRAPH OF THE SECOND PARAGRAPH OF ARTICLE 5 NOT BY THE AIMS PURSUED BUT BY THE METHODS APPROPRIATE TO ATTAIN THEM . INDIRECT MEANS OF ACTION, BY AFFECTING, ESPECIALLY AS A RESULT OF THE FINANCIAL ARRANGEMENTS UNDER ARTICLE 53, CERTAIN OF THE FACTORS WHICH PLAY A PART IN FORMING PRICES, CREATE CONDITIONS WHICH ENCOURAGE UNDERTAKINGS FREELY AND WILLINGLY TO CHOOSE THE BEHAVIOUR DESIRED BY THE HIGH AUTHORITY FOR THE ACCOMPLISHMENT OF THE TASKS WITH WHICH IT IS CHARGED UNDER THE TREATY . ON THE OTHER HAND DIRECT INFLUENCE, SUCH AS THE ALLOCATION OF RESOURCES FOR WHICH PROVISION IS MADE IN ARTICLE 59, IS NOT CONCERNED WITH HOW PRODUCERS WOULD BEHAVE IF THEY ACTED FREELY BUT DIRECTLY PRESCRIBES, ON PAIN OF FINES, AS IS STATED IN ARTICLE 59 ( 7 ), THE BEHAVIOUR WHICH THE HIGH AUTHORITY CONSIDERS NECESSARY WITH REGARD TO THE SITUATION WITH WHICH THE TREATY REQUIRES IT TO COPE .

THE TWO PROCEDURES, INDIRECT AND DIRECT, ARE INTENDED TO MODIFY THE STRUCTURES TO WHICH, UNLESS MODIFIED BY INTERVENTION, INDIVIDUAL BEHAVIOUR WOULD GIVE RISE . THE PROCEDURES THUS BOTH CONSTITUTE PROCEDURES FOR ECONOMIC INTERVENTION BUT THE FORMER CREATE THE RIGHT CONDITIONS TO ENCOURAGE PRODUCERS FREELY TO ADOPT THE BEHAVIOUR WHICH THE COMMON INTEREST, REFERRED TO IN ARTICLE 3, REQUIRES OF THEM WHILST THE LATTER IMPOSE UPON UNDERTAKINGS IN THE SAME COMMON INTEREST BEHAVIOUR OTHER THAN THAT WHICH THEY WOULD BE PROMPTED TO ADOPT BY THE ACTUAL CIRCUMSTANCES .

THE INDIRECT MEANS OF ACTION ARE IDENTICAL IN THEIR EFFECTS AND IN THE POWER OF INTERVENTION WHICH THEY CONFER BUT MAKE IT POSSIBLE FOR ALL THOSE PARTICIPATING IN THE MARKET TO RETAIN THEIR FREEDOM OF DECISION WHILST DIRECT INFLUENCE REQUIRES THE LIMITATION, IF NOT THE ABOLITION, OF SUCH FREEDOM .

ALL THE PROVISIONS OF ARTICLE 6 OF DECISION NO 2/57 ARE INTENDED TO MAKE IT POSSIBLE FOR ESTABLISHED SITUATIONS TO CONTINUE AND TO AVOID THE IMMEDIATE AND HARSH RESORT TO MEASURES FOR THE ALLOCATION OF RESOURCES PROVIDED FOR IN ARTICLE 59, IN PREFERENCE TO WHICH ARTICLE 57 PRESCRIBES INDIRECT MEANS OF ACTION . THE PROVISIONS IN PARTICULAR WITH REGARD TO " REFERENCE CONSUMPTION OF BOUGHT SCRAP " , " SPECIFIC INPUT REFERENCES " , THE PERIOD OF EXEMPTION FROM CONTRIBUTIONS AT THE SUPPLEMENTARY RATE AND THE GRADUATED NATURE OF THAT RATE ARE STEPS IN ACCORDANCE WITH THE WISH TO RESPECT THAT PREFERENCE .

WITH REGARD TO " NEW PLANT " IT IS TRUE THAT, SUBJECT TO THE REFUNDS FOR WHICH IT MAY QUALIFY INASMUCH AS ARTICLE 6, AT THE END, GRANTS A " NOTIONAL SPECIFIC INPUT REFERENCE " , THE PRICE OF FERROUS SCRAP WITH WHICH THEY ARE CHARGED WILL IN PRINCIPLE BE HIGHER . THE SAME IS TRUE OF " SOLID-CHARGED ELECTRIC FURNACES " IN RESPECT OF WHICH IT CAN SCARCELY BE ANTICIPATED THAT TECHNICAL DEVELOPMENTS WILL BRING ABOUT A NOTABLE REDUCTION IN THEIR SPECIFIC INPUT OF FERROUS SCRAP .

P . 390

NEVERTHELESS THOSE FINDINGS DO NOT AFFECT THE LAWFULNESS OF THE SYSTEM . IN FACT THE LACK OF SUPPLIES AND THE INCREASE IN THE PRICE OF FERROUS SCRAP REQUIRED THE HIGH AUTHORITY AT ONE AND THE SAME TIME TO ENCOURAGE UNDERTAKINGS TO REDUCE THEIR CONSUMPTION OF FERROUS SCRAP AND TO PREVENT THE PRICE OF COMMUNITY SCRAP FROM BEING FIXED AT THE LEVEL OF THAT OF IMPORTED SCRAP . IT WAS THUS NECESSARY TO PROVIDE THE EQUALIZATION SCHEME WITH A SUPPLEMENTARY CONTRIBUTION TO COUNTER THE INCENTIVE TO INCREASED CONSUMPTION OF FERROUS SCRAP WHICH MIGHT HAVE RESULTED FROM THE FALL IN THE PRICE BROUGHT ABOUT BY EQUALIZATION .

ALTHOUGH THE HIGH AUTHORITY WISHED AT THE SAME TIME TO " PROMOTE A POLICY OF USING NATURAL RESOURCES RATIONALLY AND OF AVOIDING THEIR UNCONSIDERED EXHAUSTION " , AN OBJECTIVE LAID DOWN IN ARTICLE 3 ( D ) OF THE TREATY, IT ALSO HAD TO TAKE INTO ACCOUNT THE CONDITIONS APPROPRIATE TO VARIOUS CATEGORIES OF CONSUMERS AND THUS MODIFY THE APPLICATION OF THE SUPPLEMENTARY CONTRIBUTION IMPOSED ON THE LATTER IN ACCORDANCE WITH THE VARIATIONS IN THEIR CONSUMPTION OF FERROUS SCRAP . THIS MODIFICATION ENTAILED THE GRADUAL ELIMINATION OF THE EFFECTS OF EQUALIZATION, OR EVEN IN CERTAIN CASES THEIR ABOLITION .

THE CONTESTED SCHEME WAS THUS INTENDED ABOVE ALL TO ENSURE A REGULAR SUPPLY TO THE MARKET AND TO PROMOTE A POLICY OF USING RESOURCES RATIONALLY . NEVERTHELESS THERE ARE NO GROUNDS FOR ASSERTING THAT, BY ACCORDING TEMPORARY PRIORITY TO CERTAIN OF THE AIMS SET OUT IN ARTICLE 3, AND CONSEQUENTLY ONLY PARTIALLY RECONCILING ALL OF THE AIMS SET OUT THEREIN, THE HIGH AUTHORITY USED THE POWERS GIVEN IT UNDER THE TREATY FOR PURPOSES OTHER THAN THOSE FOR WHICH THEY WERE CONFERRED .

SINCE MISUSE OF POWERS HAS NOT BEEN ESTABLISHED THIS COMPLAINT MUST BE REJECTED .

2 . THE COMPLAINT OF MISUSE OF POWERS IN THAT THE CONTESTED PROVISIONS ARE INTENDED TO EFFECT AN ALLOCATION

THE FINANCIAL ARRANGEMENT IN THE CONTESTED PROVISIONS DOES NOT CONSTITUTE, WITH REGARD EITHER TO ITS FORM OR TO ITS EFFECTS, THE SYSTEM OF ALLOCATION PRESCRIBED IN ARTICLE 59 AND IN ANNEX II . IN CERTAIN ECONOMIC CIRCUMSTANCES AND SUBJECT TO CERTAIN PROCEDURES, THOSE MEASURES AUTHORIZE THE ALLOCATION IN TONNAGES OF RAW MATERIAL RESOURCES TO THE VARIOUS CATEGORIES OF POSSIBLE CONSUMERS . THE PROCEDURES THUS PROVIDED FOR CONSIST EXCLUSIVELY IN ESTABLISHING CONSUMPTION PRIORITIES AND ALLOCATING RESOURCES . SUCH ACTIVITIES ARE DIRECTLY AND SOLELY OF A QUANTITATIVE NATURE AND ARE THEREBY DISTINCT FROM ALL INDIRECT ACTION ON PRODUCTION BY MEANS OF PRICES WITHOUT RESCTRICTION OF THE VOLUME OF PURCHASES . ARTICLE 58 ITSELF, UPON WHICH THE APPLICANT RELIES, CONCERNS THE ESTABLISHMENT OF A SYSTEM OF PRODUCTION QUOTAS OR THE REGULATION OF THE LEVEL OF ACTIVITY OF UNDERTAKINGS BY APPROPRIATE LEVIES ON TONNAGES EXCEEDING A REFERENCE LEVEL SET BY A GENERAL DECISION . IT IS FURTHER NECESSARY TO NOTE THE DIFFERENCE BETWEEN THE MEASURES PRESCRIBED IN CASES OF MANIFEST CRISIS ( ARTICLE 58 ) WHERE THE DOMINANT IDEA CONCERNS DIRECT LEVIES ON TONNAGES, AND THE MEASURES PRESCRIBED IN CASES OF SERIOUS SHORTAGE ( ARTICLE 59 ), WHERE THE CONCEPT OF DIRECT ALLOCATION OF AVAILABLE RESOURCES PREDOMINATES .

P . 391

ACCORDINGLY THE FINANCIAL ARRANGEMENT CONTAINED IN THE CONTESTED PROVISIONS DOES NOT CONSTITUTE A SYSTEM OF ALLOCATION WHICH MAY BE TREATED AS EQUIVALENT IN ITS ESSENTIAL CHARACTERISTICS TO THE ARRANGEMENT UNDER ARTICLE 59 AND ANNEX II .

THE ESTABLISHMENT OF THE SUPPLEMENTARY CONTRIBUTION AND THE REFUSAL OF A REFERENCE CONSUMPTION FOR PLANT AND MANUFACTURING PROCESSES PUT INTO OPERATION AFTER 31 JANUARY 1958 DO NOT HAVE SUCH COMPELLING FORCE THAT THEY AMOUNT IN PRACTICE TO A SYSTEM OF ALLOCATION . THEY RATHER CONSTITUTE MEANS OF INTERVENTION INHERENT IN THE FINANCIAL ARRANGEMENT ITSELF WHICH NECESSARILY, BY ITS VERY NATURE, AFFECTS THE FIELD OF COMPETITION AND PRODUCTION . NONE OF THE ARGUMENTS PUT FORWARD CONSTITUTES SUFFICIENT PROOF IN LAW THAT IN THIS RESPECT THE SYSTEM MAY BE TREATED AS EQUIVALENT TO THE ALLOCATION FOR WHICH PROVISION IS MADE IN ARTICLE 59 AND ANNEX II .

IN THE CONTESTED MEASURES THE HIGH AUTHORITY WAS CONCERNED TO DEAL WITH A SITUATION MARKED BY EXTREME SCARCITY OF FERROUS SCRAP; IN APPLYING FOR THIS PURPOSE THE POWERS CONFERRED UPON IT UNDER ARTICLE 53 ( B ) OF THE TREATY IT WAS ACTING IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 59 WHICH PROVIDE THAT RECOURSE SHALL ONLY BE HAD TO THE SPECIAL PROCEDURE OF QUANTITATIVE ALLOCATION, EVEN IF A CASE OF SERIOUS SHORTAGE HAS BEEN DULY FOUND, IF THE MEANS OF ACTION PROVIDED FOR IN ARTICLE 57, AMONGST WHICH THE FINANCIAL ARRANGEMENTS REFERRED TO IN ARTICLE 53 MUST BE CLASSIFIED, DO NOT PERMIT SUFFICIENTLY EFFECTIVE ACTION .

FURTHERMORE, WHILST THE CONTESTED PROVISIONS ARE INTENDED PROGRESSIVELY TO INCREASE THE COST OF FERROUS SCRAP IN PROPORTION TO THE QUANTITIES CONSUMED AND TO GRADUATE THAT COST SO THAT IT VARIES IN TERMS OF THE TYPE OF PLANT AND MANUFACTURING PROCESSES USING SCRAP, THE APPLICANT HAS FAILED TO ESTABLISH THAT THE FINANCIAL BURDEN WHICH THIS ENTAILS FOR THE RELEVANT UNDERTAKINGS IS DETERMINED IN SUCH A WAY THAT THE ARRANGEMENT COMPLAINED OF MUST BE CONSIDERED AS EQUIVALENT TO A DIRECT AND SPECIFIC ARRANGEMENT FOR QUANTITATIVE ALLOCATION OR FOR REGULATING THE LEVEL OF THEIR ACTIVITY .

FURTHERMORE, ALTHOUGH THE SYSTEM SET UP DOES NOT CONSTITUTE A SYSTEM OF ALLOCATION, EVEN ON THE VIEW THAT SUCH A SYSTEM MIGHT DISPLAY CERTAIN CHARACTERISTICS OF INDIRECT ALLOCATION IT WOULD BE NECESSARY TO PROVE THAT THE OBJECTIVE OF THE CONTESTED DECISIONS WAS TO ATTAIN THIS ALLOCATION BY MEANS OF ARTICLE 53 ( B ), THROUGH THE EXPEDIENT OF A FINANCIAL ARRANGEMENT AND CONTRARY TO THE STATED OBJECTIVE OF EFFECTING ECONOMIES IN FERROUS SCRAP AND ENSURING A REGULAR SUPPLY OF SCRAP TO THE MARKET, OR ELSE, TO PROVE THAT THE HIGH AUTHORITY HAD BEEN MOTIVATED BY A WISH TO EVADE ARTICLE 59 OR THAT, THROUGH A SERIOUS MISCONCEPTION IT HAD FAILED TO RECOGNIZE THAT THE CONTESTED ARRANGEMENT AMOUNTED TO AN ARRANGEMENT UNDER ARTICLE 59 .

SINCE THIS HAS NOT BEEN SUFFICIENTLY PROVED IN LAW MISUSE OF POWERS HAS NOT BEEN ESTABLISHED .

P . 392

3 . THE COMPLAINT OF MISUSE OF POWERS IN THAT THE CONTESTED PROVISIONS ARE INTENDED TO PROHIBIT CERTAIN INVESTMENTS

ARTICLE 54 OF THE TREATY CONFERS UPON THE HIGH AUTHORITY CERTAIN POWERS IN CO-ORDINATING INVESTMENT PROGRAMMES AND IN PROVIDING FINANCIAL ASSISTANCE IN CARRYING OUT THESE PROGRAMMES . THOSE POWERS MUST BE EXERCISED WITHIN THE FRAMEWORK OF THE GENERAL OBJECTIVES LAID DOWN IN ARTICLE 46 . WITHIN SUCH LIMITS THE POWERS ARE APPLIED BY THE PUBLICATION OF PROGRAMMES OF GENERAL GUIDANCE IN ACCORDANCE WITH THE COMMON INTEREST AND BY FORMULATING INDIVIDUAL OPINIONS ON THE PLANS SUBMITTED TO IT BY THE UNDERTAKINGS .

THE ABOVEMENTIONED PROVISIONS IN NO WAY IMPEDE THE ADOPTION OF MEASURES IN ACCORDANCE WITH THE PROVISIONS OF ARTICLES 3, 5, 53 ( B ), 57 AND 59 OF THE TREATY, TAKEN TOGETHER, THE APPLICATION OF WHICH MAY INFLUENCE INVESTMENTS PLANNED BY UNDERTAKINGS . IN PARTICULAR THE RULES CONCERNING PRICES LAID DOWN IN ARTICLE 61 OF THE TREATY AND, ABOVE ALL, THE FINANCIAL ARRANGEMENTS REFERRED TO IN ARTICLE 53 ( B ), WHICH THE HIGH AUTHORITY IS ENTITLED TO USE AN INDIRECT MEANS OF ACTION ON PRODUCTION, ENTAIL BY THEIR NATURE RESULTS CAPABLE OF AFFECTING THE PLANS OF PRODUCERS, AND IN PARTICULAR THEIR INVESTMENT PLANS . IT IS CONSEQUENTLY IMPOSSIBLE TO COMPLAIN THAT THE CONTESTED PROVISIONS, WHICH ARE IN ACCORDANCE WITH THE PROVISIONS OF ARTICLES 3 AND 53 ( B ) READ TOGETHER, ARE VITIATED BY MISUSE OF POWERS WITH REGARD TO ARTICLE 54 . THE APPLICANT HAS COMPLETELY FAILED TO ESTABLISH THAT THE HIGH AUTHORITY'S SOLE, OR AT ANY RATE PRINCIPAL, PURPOSE IN HAVING RESOURCE TO THE CONTESTED PROVISIONS WAS TO EVADE THE SPECIFIC PROCEDURES PRESCRIBED IN THE SAID ARTICLE .

CONSEQUENTLY THE COMPLAINT OF MISUSE OF POWERS WITH REGARD TO ARTICLE 54 MUST BE DISMISSED .

4 . THE COMPLAINT OF MISUSE OF POWERS WITH REGARD TO ARTICLE 4 ( C ) OF THE TREATY IN THAT THE HIGH AUTHORITY HAS IMPOSED UPON CERTAIN UNDERTAKINGS A SPECIAL CHARGE WHICH IS PROHIBITED BY THE SAID ARTICLE .

THE APPLICANT IS MISTAKEN IN RELYING UPON THE PROVISIONS OF ARTICLE 4 ( C ) OF THE TREATY, WHICH PROHIBIT SUBSIDIES OR AIDS GRANTED BY STATES OR SPECIAL CHARGES IMPOSED BY STATES IN ANY FORM WHATSOEVER .

IT IS IRRELEVANT IN THE PRESENT CASE TO SETTLE THE QUESTION WHETHER THE HIGH AUTHORITY IS ALSO PROHIBITED FROM IMPOSING SPECIAL CHARGES . IN ANY CASE THERE CAN INDEED BE NO SPECIAL CHARGE WITHIN THE MEANING OF THE SAID ARTICLE WHEN THE HIGH AUTHORITY, IN MAKING A FINANCIAL ARRANGEMENT OF THE KIND PROVIDED FOR IN ARTICLE 53 ( B ), IMPOSES HIGHER CONTRIBUTIONS UPON CERTAIN UNDERTAKINGS THAN UPON OTHERS SINCE THIS UNEQUAL ALLOCATION OF CHARGES IS BASED UPON OBJECTIVELY-ESTABLISHED CRITERIA WHICH ARE JUSTIFIED BY THE OBJECTIVES WHICH ARE PROPERLY PURSUED UNDER THE SAID ARRANGEMENT .

ACCORDINGLY THE COMPLAINT OF MISUSE OF POWERS WITH REGARD TO ARTICLE 4 ( C ) OF THE TREATY MUST BE REJECTED .

P . 393

5 . THE COMPLAINT OF MISUSE OF POWERS WITH REGARD TO ARTICLE 4 ( B ) OF THE TREATY IN THAT THE HIGH AUTHORITY HAS ESTABLISHED AN UNFAIR SYSTEM FOR THE UNDERTAKINGS SINCE REFUNDS ARE NOT AVAILABLE ON THE SAME TERMS TO EVERY UNDERTAKING AND IN RESPECT OF ALL KINDS OF PLANT

IT HAS BEEN ESTABLISHED THAT THE PROVISIONS COMPLAINED OF ARE BASED UPON A CRITERION WHICH IS OBJECTIVELY ADAPTED TO THE PURSUIT OF THE PROPER AIM OF THE HIGH AUTHORITY . ACCORDINGLY, SUCH A SYSTEM CANNOT BE DESCRIBED AS UNLAWFUL NOR CAN IT BE STATED THAT IT DISTORTS COMPETITION BY PLACING CERTAIN UNDERTAKINGS AT A DISADVANTAGE IN RELATION TO OTHERS .

CONSEQUENTLY THE COMPLAINT BASED ON THE ESTABLISHMENT OF AN UNFAIR SYSTEM WITH REGARD TO THE UNDERTAKINGS MUST BE REJECTED .

6 . THE COMPLAINT OF MISUSE OF POWERS WITH REGARD TO ARTICLE 65 OF THE TREATY IN THAT BY ESTABLISHING THE SYSTEM AMOUNTING ALMOST TO A PROHIBITION WITH REGARD TO PLANT AND MANUFACTURING PROCESSES PUT INTO OPERATION AFTER 31 JANUARY 1958 THE HIGH AUTHORITY ENACTED MEASURES WHICH WERE MORE RESTRICTIVE THAN THEIR PURPOSE REQUIRED

IT HAS BEEN ESTABLISHED ABOVE THAT THE ECONOMIC CIRCUMSTANCES OBSERVED AT THE TIME OF THE HIGH AUTHORITY'S INTERVENTION ON THE MARKET IN FERROUS SCRAP JUSTIFIED THE ENACTMENT OF THE MEASURES COMPLAINED OF WITH REGARD TO THE FINANCIAL BURDEN OF EQUALIZATION AND THAT, IN PARTICULAR, THESE MEASURES MIGHT PROPERLY INCLUDE THE ESTABLISHMENT OF A PROGRESSIVE RATE AND THE ALLOCATION OF THE FINANCIAL CHARGE IN TERMS BOTH OF TONNAGES CONSUMED, OF PERIODS OF CONSUMPTION AND OF THE NATURE OF THE PLANT .

ACCORDINGLY THOSE MEASURES ARE NOT MORE RESTRICTIVE THAN IS NECESSARY FOR THE PURPOSE OF THE FINANCIAL ARRANGEMENT SO THAT, EVEN IF ARTICLE 62 ( 2 ) APPLIED TO THEM, THE CONDITION WHICH IT REQUIRES WOULD BE FULFILLED .

ACCORDINGLY THE COMPLAINT BASED ON FAILURE TO OBSERVE ARTICLE 65 IS IRRELEVANT .

7 . THE COMPLAINT OF MISUSE OF POWERS WITH REGARD TO ARTICLE 3 ( E ) OF THE TREATY IN THAT THE CONTESTED PROVISIONS GIVE RISE TO ACUTE AND WIDE-SPREAD SOCIAL PROBLEMS WHICH MUST INEVITABLY CONTINUE IF THE SAID PROVISIONS ARE APPLIED

THE APPLICANT HAS NOT FURNISHED FURTHER DETAILS OF THIS COMPLAINT IN THE COURSE OF THE PROCEEDINGS NOR HAS IT SUPPLIED ANY PROOF OF ITS ALLEGATION .

CONSEQUENTLY THE COMPLAINT BASED ON MISUSE OF POWERS WITH REGARD TO ARTICLE 3 ( E ) OF THE TREATY MUST BE REJECTED .

Decision on costs

UNDER ARTICLE 60 OF THE RULES OF PROCEDURE OF THE COURT THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO BEAR THE COSTS . IN THE PRESENT CASE THE APPLICANT HAS BEEN UNSUCCESSFUL WITH REGARD TO THE SUBSTANCE OF THE CASE AND THE DEFENDANT HAS BEEN UNSUCCESSFUL AS REGARDS ADMISSIBILITY . IN ACCORDANCE WITH THE SECOND PARAGRAPH OF THE SAID ARTICLE THE APPLICANT MUST THUS BE ORDERED TO BEAR FOUR FIFTHS OF THE COSTS OF THE PROCEEDINGS AND THE DEFENDANT TO BEAR ONE FIFTH .

Operative part

THE COURT

HEREBY :

DECLARES THAT THE APPLICATION IS ADMISSIBLE BUT UNFOUNDED AND CONSEQUENTLY DISMISSES THE APPLICATION FOR THE ANNULMENT OF THE PROVISIONS CONTAINED IN ARTICLES 3 ( 1 ) ( B ), 4 ( 3 ), 5, 6, 8 AND 9 OF DECISION NO 2/57 OF THE HIGH AUTHORITY DATED 26 JANUARY 1957;

ORDERS THE APPLICANT TO BEAR FOUR FIFTHS OF THE COSTS OF THE PROCEEDINGS AND THE DEFENDANT TO BEAR ONE FIFTH THEREOF .