17.

Another submission put forward by various undertakings, in support of their applications against the individual decisions imposing fines, amounts to an affirmation of the legality of the sales at prices below the compulsory minimum prices because they took place in circumstances of necessity or force majeure, or because they were justified by “legitimate self-protection”. Those three types of exonerating circumstances have been intermingled in some applications without sufficient clarification of their value in Community law and of the limits of their applicability. However, I think that an atempt at clarification is necessary prior to an investigation of the facts. In my recent opinion in Case 42/79, Milch-, Fett- und Eier-Kontor, delivered on 15 November 1979 before the First Chamber of this Court, I had occasion to deal at length with the concept of force majeure which has been elaborated in the case-law of the Court with reference to the agricultural regulations. I emphasized that that concept contains two elements: above all an objective element, namely the occurrence of an extraordinary event beyond the influence of the person concerned, and secondly a subjective element, consisting in everything possible having been done by the person concerned, acting with care, prudence and diligence, in order to avoid the occurrence of that event. But the case-law of the Court concerned specific provisions of secondary Community law, which it has applied sometimes directly, and on other occasions by analogy. The existence of a general principle, begetting a uniform concept of force majeure applicable to all sectors of Community law, has not been shown and I believe that it would be difficult to show (as I observed in my opinion of 18 January 1978 in Case 68/77, IFG [1978] ECR 371). In fact the judgment of this Court of 11 July 1968 in Case 4/68, Schwarzwaldmilch [1968] ECR 377 at p. 385, recognized that “as the concept of force majeure is not identical in the different branches of law and the various fields of application, the significance of this concept must be determined on the basis of the legal framework within which it is intended to take effect”. The judgment of 30 January 1974 in Case 158/73, Kampffmeyer [1974] ECR 101, reaffirmed the variable scope of the concept of force majeure, declaring that the precise meaning of that concept “has to be decided by reference to the legal context in which it is intended to operate”. Finally, the judgment of 14 February 1978 in Case 68/77, IFG [1978] ECR 353, recalled that the legal systems of the Member States provide for exemption from legal obligations on account of force majeure, but only “in certain contexts and legal relationships”. In my opinion, all this could lead to the adoption of a radical view to the effect that in the absence of an express provision, force majeure cannot be relied upon in Community law. But let us suppose that the notion to which I referred is understood to be generally applicable; it would in any case be clear that the event relied on as constituting circumstances of force majeure must occur beyond the area of influence of the person concerned and so must of itself be the cause of the conduct which, considered objectively, is contrary to the legal provision. In other words, that conduct must have been determined by an external force which left the person concerned no alternative course of action (classic examples: the non-delivery of a particular consignment of goods because the ship which was carrying it sank, or because it was destroyed by lightning). But in this case the persons concerned claim to have been compelled to sell at prices prohibited by Decision No 962/77 by a combination of circumstances, comprising the state of the market in the light of the conduct of other traders (in particular, dealers who were selling at uncontrolled prices, and even competing producers who had already infringed that decision), the consequent risk of a sharp decline in sales, and the foreseeability of the damage which would have resulted in respect of finance, production and employment. None of those circumstances may be described as an external force such as to determine of itself the conduct of the person concerned; the undertakings themselves knowingly chose to sell at lower prices, which other undertakings in a similar situation did not do (I refer to the small and medium-sized Italian undertakings which complied with the minimum prices scheme), albeit they did so considering themselves justified by grave considerations and obliged to act in that way in order to avoid disaster. Therefore I believe that the facts referred to by the applicants are not such as may be regarded as constituting force majeure; rather it is necessary to ascertain whether a state of necessity occurred, or whether the infringement of the minimum prices amounted to an act of legitimate self-protection. In this regard also, it is necessary to ask. whether Community law recognizes the two exonerating circumstances mentioned. The Commission has expressed a negative view (in the actions brought by the undertakings from Brescia; not in Cases 83 and 85/79, observing that the national legal systems accept legitimate self-protection and necessity for the purpose of safeguarding the essentials of life and of personal welfare, whilst in the Community legal order it is a question of protecting interests which are not comparable to those basic needs, because they are by nature proprietary interests. However, that argument neglects an interesting precedent in the case-law of the Court; the judgment of 12 July 1962 in Case 16/61, Acciaierie, Ferriere e Fondene di Modena v High Authority [1962] ECR 289, in which the Court did not exclude the possibility of reliance upon legitimate self-protection in Community law, stating: “Legitimate self-protection presupposes an action taken by a person which is essential to ward off a danger threatening him. The threat must be immediate, the danger imminent, and there must be no other lawful means of avoiding it”. On the basis of that consideration, the Court rejected the submission of the applicant company, which claimed to have acted in legitimate self-protection, charging prices lower than the list prices, because it had been confronted with the unfair conduct of certain competitors who succeeded in evading the control of the High Authority. In the cases with which the present opinion is concerned, although the undertakings in question also charged prices lower than the compulsory prices, and have pleaded that they were induced to do so by the conduct of other traders, none the less I do not think that it is appropriate to speak of legitimate self-protection, for at least two reasons: in the first place, because the danger caused by the lawfitl conduct of some traders (dealers, and undertakings in nonmember countries) was an important factor and therefore it was not just a question of reacting to the unlawful conduct of others, and secondly because the undertakings concerned have also referred to additional circumstances (for example, the applicant Stefana has insisted on the difficulty of obtaining essential finance, the applicant Maximilianshütte has referred to the inadequacy of the supervision exercised by the Commission). Consequently, in my opinion, the only type of exonerating factor which is capable — in the abstract — of justifying the line of conduct followed by the applicants, in view of the reasons which they state, is necessity. On the subject of necessity, the fundamental conditions which must exist are very similar to those referred to in the judgment, already cited, of 12 July 1962 with regard to legitimate self-protection: a grave and imminent danger which it is impossible to avoid otherwise than by acting in a manner which, objectively considered, is unlawful. A feature common to international law and to the laws of the Member States is that the gravity of the danger must be such as to threaten the existence of the person concerned, and that the conduct of the person under obligation must not have contributed to the creation of the dangerous situation. Moreover, it seems to me indisputable that extreme caution must be exercised in interpreting the concept, as recognition of the existence of a state of necessity is tantamount to exempting a person from compliance with particular obligations, which may be done only in exceptional cases. The applicant undertakings claim to have been forced to resist applying the minimum prices in order to avoid jeopardizing their existence; but I do not think that they have succeeded generally in proving either the imminence or the extreme gravity of the danger, or the absence of lawful means of avoiding it, at least in part. Rather, the information supplied by the applicants reveals a situation of considerable hardship and objective difficulty occasioned by Decision No 962/77. All the undertakings complain that they risked losing customers, and that they suffered heavy reductions in their sales owing to the reluctance of purchasers to pay higher prices and because the gaps in the system enabled those purchasers to continue to buy at advantageous prices from dealers and from producers in nonmember countries. The Italian undertakings have also pointed out that it was practically impossible to reduce their fixed costs by laying off a part of their labour force, in view of the employment crisis in Italy and the likelihood of strikes and social agitation in the event of redundancies. The German undertakings have stressed the competition faced by them from the Italian producers who had resolved to sell without complying with the minimum prices, and what they regard as the ineffectiveness of the control exercised by the Commission. Those circumstances confirm that Decision No 962/77 required considerable sacrifices of the more competitive undertakings; but they cannot be interpreted as a situation of imminent and unavoidable danger threatening the very existence of those undertakings. The arguments which may be relied on in support of my point of view fall into three main groups. In the first place, a certain reduction in the competitiveness of the undertakings able to produce at lower costs, and thus a reduction in the volume of their sales, were logical consequences of Decision No 962/77, since it sought — as I have noted several times — to bring about a redistribution of the market, in the sense of facilitating sales of the products of the less efficient undertakings. The risk of loss of certain customers was therefore foreseeable, the more so as the need to introduce a scheme of minimum prices had been under discussion for some time. The gaps in that system would have had to cause not only a reduction in sales but an imminent danger of extinction for the undertakings for it to be possible to speak of a state of necessity; but a danger of that type did not arise, and the applicants themselves have not claimed that such an acute crisis was reached. Secondly, I would point out that, even if the existence of the more competitive undertakings had been jeopardized by Decision No 962/77, there was no shortage of lawful means of attempting to remove the danger. The main difficulty for the Italian undertakings took the form of a reduction in their sales possibilities on the markets of other Community countries, but they retained the possibility of disposing of goods on the Italian market (since for local sales the producers were not placed at a disadvantage by the scheme of minimum prices), and on the markets of nonmember countries (where it seems that some undertakings did indeed make up for the contraction in sales within the Community). Further, alignment on the prices of producers from nonmember countries remained possible until March 1978, that is to say until the entry into force of Decision No 527/78. Therefore the existence of the applicant undertakings could not be said to have been threatened by a danger from which there was no escape. Thirdly, the case for a state of necessity would have required specific proof, relating to the situation of each undertaking; but the majority of those concerned have referred to arguments of a general nature. Even the information on the fall in production or in sales in 1977 supplied by some applicants (for example, Ferriera Valsabbia and Officine Laminatoi Sebino) cannot be interpreted as proof of a dangerous situation precipitated by Decision No 962/77, because there is no question of a reduction such as to jeopardize the survival of those undertakings. Besides, the causal link between the prices scheme and the fall in production or sales has not been proved in every case. In this regard, I will recall in particular the case of the Korf undertaking, the applicant in Case 85/79, which has claimed. — without being challenged by the Commission — that its market share fell in the third quarter of 1977 from the 12.3% attained in the previous quarter to 10.2%; the Commission sees in that phenomenon only the continuation of a previous tendency to lose ground against more competitive undertakings, and notes that it was precisely in the third quarter that Korf began to sell at prices below the minimum prices. In conclusion, I believe that it is not possible to accept that the conduct of the applicant undertakings was justified by an alleged state of necessity. An exception might be found in the case of the undertaking Antonio Stefana, the applicant in Case 226/78. At the time of the introduction of the rules on minimum prices that undertaking was in a particularly delicate financial situation, having contracted debts as a result of investment in industrial reorganization and being obliged to face the general credit difficulties which had arisen in Italy while the work was in progress. One month after the adoption of Decision No 962/77 it informed the Commission (by telex of 6 June 1977) that the actual market prices for reinforcement bars continued to be lower than the compulsory minimum prices and that observance of those minimum prices was causing it an appreciable reduction in sales. Indeed, from a monthly average of 6570 tonnes in the first four months of 1977, its sales had fallen to 3866 tonnes in May and to 2474 in June. By the end of June, Stefana's liabilities had risen from 1700 million Italian lire to almost 2000 million. Therefore, by a telex of 1 July 1977, it informed the Commission that in the face of the conduct of its competitors it considered itself obliged to sell at prices lower than those laid down; and in fact such sales, according to the information supplied by the Commission, commenced on 13 July 1977 and lasted until 5 September of the same year. Thus there are in that case factors which might persuade one to accept the defence of necessity in favour of the Stefana company: the danger took the form of a genuine risk of insolvency, given the size of the company's liabilities. However, I think that even in that case the imminence of that danger has not been proved, that moreover there remains doubt regarding the degree to which the financial situation of the company was a result of its lack of caution in investing, and that in any case there remained the possibility (which does not seem to have been explored) of seeking a solution to the difficulties experienced in one of the lawful ways referred to above. Similar considerations are valid as regards the undertaking Maximilianshütte, the applicant in Case 83/79. There is no doubt that that undertaking also suffered a severe fall in sales after the introduction of the minimum prices scheme. In the first quarter of 1977 it had held 29% of the market in Bavaria, wheras in the second quarter of the year its share fell to less than 20%. The Commission has observed that the market share in the first quarter of 1977 may not be taken as a point of reference, since it was abnormally high; that would seem to be confirmed by the fact that the percentage in the second half of the year remained more or less unchanged in 1978, although the company, according to the evidence of the defendant, had started to charge prices below the compulsory lower limit from 14 June 1977. A further objection raised by the Commission is that the reduction in sales was largely determined by factors other than the minimum prices scheme, amongst them the seasonal pattern of the market, which tends to be slack in the summer months. On the other hand, it is true that imports from Switzerland into the Federal Republic of concrete reinforcement bars sold at prices lower than those laid down increased considerably in the second half of 1977 (from 12000 tonnes in the April - June quarter, to 19000 in the following quarter); Maximilianshütte sees that as proof of insufficient control on the part of the Commission, of which the producers in Brescia had taken advantage in order to sell bars via Switzerland. In my opinion, although it is true that the gaps in the system aggravated the burden thereof to the detriment of undertakings capable of producing at low prices, it cannot be said that the Commission failed to exercise control; that is proved by the sanctions imposed upon numerous undertakings, of which only a section have challenged the decisions inflicting fines on them. Finally, I do not think that Maximilianshütte has proved that it had to face the imminent risk of insolvency or closure, or that it sought in vain for solutions other than the infringement of the provision on minimum prices in order to ensure its survival. Thus the negative conclusions reached with regard to the state of necessity apply generally to the applicants which have pleaded that exonerating ground in their defence. Rather, the arguments to which some undertakings have referred in order to justify their conduct will have to be borne in mind when I come to consider the question of varying the decisions imposing fines.