Judgment of the Court of 12 July 1962. - Acciaierie Ferriere e Fonderie di Modena v High Authority of the European Coal and Steel Community. - Case 16-61.



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Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

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1 . PECUNIARY SANCTIONS AND PERIODIC PENALTY PAYMENTS - PROCEDURE - APPEAL - LEGAL ARGUMENTS NOT SUBMITTED AT THE ADMINISTRATIVE PROCEEDINGS - ADMISSIBILITY

( ECSC TREATY, ARTICLE 36 )

2 . PRICE - PUBLICITY - ALIGNMENT - A POSTERIORI ALIGNMENT - INADMISSIBILITY

( ECSC TREATY, ARTICLE 60 ( 2 ) ( B ))

3 . ECSC TREATY - INFRINGEMENT - DEFENCE OF LEGITIMATE SELF-PROTECTION AMOUNTING TO JUSTIFICATION - CONCEPT

4 . DISCRIMINATION - CONCEPT OF COMPARABILITY

( ECSC TREATY, ARTICLES 3 ( B ) AND 4 ( B ))

5 . PENALTIES - FINE - AMOUNT - MITIGATING CIRCUMSTANCES - JUSTIFIED REFUSAL

Summary

1 . IN AN APPEAL AGAINST A PECUNIARY SANCTION OR A PERIODIC PENALTY PAYMENT A LEGAL ARGUMENT CANNOT BE DISMISSED FOR THE SOLE REASON THAT IT WAS NOT PRESENTED AT THE TIME OF THE ADMINISTRATIVE PROCEEDINGS . TO EXCLUDE AN ARGUMENT ON THIS BASIS WHICH IS IN ANY EVENT INCOMPATIBLE WITH THE PURELY PRELIMINARY NATURE OF THE PROCEDURE LAID DOWN BY ARTICLE 36 OF THE TREATY, WOULD UNDULY RESTRICT THE APPLICANT'S RIGHTS OF DEFENCE .

2 . THE RIGHT TO AN ALIGNMENT WITHIN THE MEANING OF ARTICLE 60 ( 2 ) ( B ) OF THE ECSC TREATY CONSTITUTES AN EXCEPTION TO THE PRINCIPLE OF LIST PRICES, BUT IT MUST NOT DIVEST THAT PRINCIPLE OF ALL EFFECT THROUGH THE EXCLUSION OF PUBLICITY BY MEANS OF ALIGNMENTS CARRIED OUT A POSTERIORI . AN ALIGNMENT WHICH, EVEN THOUGH CALCULATED CORRECTLY, IS MADE SOLELY IN ORDER TO JUSTIFY A POSTERIORI AN ABATEMENT OF LIST PRICES, CONTRAVENES THE GENERAL SCHEME OF THE TREATY AND ARTICLE 60 ( 2 ) ( B ) IN PARTICULAR .

3 . A DEFENCE OF LEGITIMATE SELF-PROTECTION CAPABLE OF JUSTIFYING AN INFRINGEMENT OF THE TREATY PRESUPPOSES AN ACTION TAKEN BY A PERSON WHICH IS ESSENTIAL IN ORDER 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 .

4 . THE CONCEPT OF COMPARABILITY WITHIN THE MEANING OF THE ECSC TREATY IS OBJECTIVE IN NATURE AND DOES NOT PERMIT PURELY SUBJECTIVE FACTORS TO BE TAKEN INTO CONSIDERATION . THE PROHIBITION OF DISCRIMINATION WOULD OTHERWISE LOSE ITS EFFECT .

5 . AN UNDERTAKING CANNOT ESCAPE FROM THE STRICT OBLIGATION TO COMPLY WITH THE RULES OF THE TREATY ON THE GROUNDS THAT OTHER UNDERTAKINGS EMPLOY SIMILAR ILLEGAL DEVICES OR THAT IT IS IN A DIFFICULT SITUATION WHEN FOR THE TIME BEING THERE IS AN UNFAVOURABLE ECONOMIC STATE OF AFFAIRS . THE HIGH AUTHORITY IS JUSTIFIED IN REFUSING TO FIND THAT THESE ARE MITIGATING CIRCUMSTANCES .

Parties

IN CASE 16/61

ACCIAIERIE FERRIERE E FONDERIE DI MODENA, A COMPANY LIMITED BY SHARES, HAVING ITS REGISTERED OFFICE AT 5 TORRE DI PIAZZA VALESCA, MILAN, REPRESENTED BY ITS MANAGING DIRECTOR, ALCESTE GIACOMAZZI, ASSISTED BY PROFESSOR PIETRO GASPARRI OF THE UNIVERSITY OF PERUGIA, ADVOCATE AT THE CORTE DI CASSAZIONE AT ROME, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF CAMILLE WAGNER, 31 RUE DES ROSES, APPLICANT,

V

HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, PROFESSOR GIULIO PASETTI, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES AT 2 PLACE DE METZ, DEFENDANT,

Subject of the case

APPLICATION FOR ANULMENT, OR ALTERNATIVELY, VARIATION OF AN INDIVIDUAL DECISION OF THE HIGH AUTHORITY OF 21 JUNE 1961 IMPOSING A PECUNIARY SANCTION ON THE APPLICANT FOR INFRINGEMENTS OF ARTICLE 60 OF THE TREATY ESTABLISHING THE EUROPEAN COAL AND STEEL COMMUNITY AND OF THE DECISIONS OF THE HIGH AUTHORITY IMPLEMENTING THE SAID ARTICLE .

Grounds

P . 300

AS TO THE ADMISSIBILITY OF THE ACTION, THE DEFENDANT HAS NOT EXPRESSED ANY OBJECTION, AND NO GROUNDS EXIST FOR THE COURT TO RAISE THE MATTER OF ITS OWN MOTION .

THE APPLICATION SEEKS THE ANNULMENT OR, ALTERNATIVELY, THE VARIATION OF A PECUNIARY SANCTION IMPOSED BY THE HIGH AUTHORITY UPON S . A . MODENA FOR HAVING CONTRAVENED THE PROVISIONS OF ARTICLE 60 OF THE TREATY TOGETHER WITH THE IMPLEMENTING DECISIONS N.S 30 AND 31/53 AND 1 AND 2/54 BY GRANTING TO CERTAIN OF ITS CUSTOMERS REDUCTIONS ON ITS LIST PRICES AND CONDITIONS OF SALE, THEREBY INFRINGING THE SAID PROVISIONS .

THESE INFRINGEMENTS WERE SET OUT IN THE CONTESTED DECISION BY CHARGES UNDER FOUR SEPARATE HEADS RELATING TO SPECIFIC CASES ASCERTAINED BY THE INSPECTORS OF THE HIGH AUTHORITY .

BEFORE CONSIDERING WHETHER THESE CHARGES ARE WELL FOUNDED, IT SHOULD BE NOTED THAT EVER SINCE THE ADMINISTRATIVE PROCEEDINGS DURING WHICH THE APPLICANT SUBMITTED ITS COMMENTS AND WHICH, PURSUANT TO ARTICLE 36 OF THE TREATY, PRECEDED THE CONTESTED DECISION, THE APPLICANT HAS ACKNOWLEDGED THE TRUTH OF THE FACTS UPON WHICH THESE CHARGES ARE BASED .

THE MINUTES OF THE RELEVANT DISCUSSION BETWEEN THE HIGH AUTHORITY AND THE APPLICANT WERE PRODUCED AT THE HEARING AND THE COURT IS ENTITLED TO DRAW FROM THEM SUCH CONCLUSIONS AS IT SEES FIT .

ON THE BASIS OF THESE FINDINGS IT IS IN ORDER TO PROCEED TO AN EXAMINATION OF THE CHARGES AGAINST MODENA .

P . 301

I - THE FIRST CHARGE

( REDUCTIONS IN FAVOUR OF SIDERCOMIT )

1 . IT IS ALLEGED, AND MOREOVER NOT DISPUTED IN THE CASE AT ISSUE, THAT ON THE ONE HAND THE PAYMENT FOR GOODS SUPPLIED, FOR WHICH THE APPLICANT INVOICED SIDERCOMIT, WAS ENTERED IN MODENA'S ACCOUNTS AT ITS LIST PRICE AND THAT THE ACCOUNTS SHOW THAT PRICE AS HAVING BEEN PAID IN FULL BY SIDERCOMIT, AND THAT ON THE OTHER HAND THIS WAS NOT THE TRUTH OF THE MATTER, SINCE PART OF THE PRICE WAS PAID, ON BEHALF OF SIDERCOMIT, BY A THIRD PARTY, A SUBSTANTIAL SHAREHOLDER AND MANAGING DIRECTOR OF MODENA, ALLEGEDLY BY WAY OF A DONATION FOR THE BENEFIT OF SIDERCOMIT WITH THE SOLE AIM OF ENABLING A CONTRACT TO BE CONCLUDED WITH SUCH AN IMPORTANT CUSTOMER .

ACCORDING TO THE EXPLANATIONS FURNISHED BY THE APPLICANT IT WAS SIDERCOMIT WHICH BENEFITED FROM THIS GENEROSITY AND TACITLY ACCEPTED IT .

HOWEVER IT ALSO FOLLOWS FROM THE SAME EXPLANATIONS THAT SIDERCOMIT, WHILE CONSENTING TO THE LIST PRICE BEING FORMALLY INVOICED, HAD IN FACT ONLY AGREED TO CONCLUDE THE SAID CONTRACTS AT PRICES BELOW THOSE SHOWN IN MODENA'S LIST, SINCE IT CONSIDERED THE LATTER PRICES TO BE HIGHER THAN CURRENT MARKET PRICES .

IN THE CASE AT ISSUE IT IS ESTABLISHED THAT THE PARTIES WERE AGREED THAT IT WAS NOT THE AMOUNT APPEARING IN THE INVOICES AND IN MODENA'S ACCOUNTS, BUT A LESSER SUM THE PAYMENT OF WHICH WOULD DISCHARGE THE BUYER AND HENCE CONSTITUTE THE CONTRACT PRICE . THIS SUM, IN FACT AND IN LAW, CONSTITUTED THE 'PRICE CHARGED' WITHIN THE MEANING OF ARTICLE 60 OF THE TREATY .

AN AGREED DIMINUTION IN PRICE AS AGAINST THE LIST PRICE, GRANTED BY A SELLER TO A BUYER, CONSTITUTES A REDUCTION .

A DONATION MADE BY A PERSON WHO IS NOT A PARTY TO THE CONTRACT OF SALE IS INDEPENDENT OF AND EXTRANEOUS TO THAT AGREEMENT IF, AS IN THE PRESENT CASE, THE ALLEGED DONOR IS IN FACT ACTING AS AN INTERMEDIARY SOLELY FOR THE BENEFIT OF THE SELLER .

IN ANY CASE, THE FACT THAT THE APPLICANT HAD LITTLE FAITH IN THE LEGALITY OF ITS CONDUCT IS AMPLY DEMONSTRATED BY ITS ATTEMPT TO CONCEAL THE SCHEME BY MEANS OF AN ACCOUNTING DEVICE DESIGNED TO DECEIVE THE INSPECTORS BY MAKING IT APPEAR THAT THERE WAS ONE PAYMENT ONLY AND THAT THIS WAS MADE BY SIDERCOMIT .

THIS SUBMISSION IS THEREFORE UNFOUNDED .

P . 302

2 . AS A SUBSIDIARY POINT MODENA ACCUSES THE HIGH AUTHORITY OF FAILING TO APPRECIATE THE FACT THAT S . A . SIDERCOMIT, THE COMMERCIAL AGENCY OF THE STATE STEEL INDUSTRY, IS A BUYER WHICH IS NOT COMPARABLE WITH ITS USUAL CUSTOMERS AND THAT IT WAS NOT ILLEGAL IN ITS CASE TO GRANT PREFERENTIAL TREATMENT, SINCE THE PROHIBITION ON REDUCTIONS APPLIED ONLY TO COMPARABLE TRANSACTIONS .

HOWEVER, S . A . SIDERCOMIT IS FORMED AS A COMPANY GOVERNED LIKE ANY OTHER BY THE GENERAL LAW APPLICABLE TO COMPANIES AND THE ITALIAN STATE, BY DEMONSTRATING THAT IT HAS A PREDOMINANT INFLUENCE OVER SIDERCOMIT THOUGH THE AGENCY OF FINSIDER, IS IN THE EVENT ACTING JURE GESTIONIS AND THIS MAKES IT SUBJECT TO THE GENERAL LAW OF THE COMMUNITY .

THIS SUBMISSION IS THEREFORE UNFOUNDED .

3 . AS A FURTHER SUBSIDIARY POINT MODENA CONTENDS THAT IN ANY EVENT THE AMOUNT ACTUALLY PAID BY SIDERCOMIT FALLS WITHIN THE LIMITS OF ITS LIST PRICES, WHEN REDUCED TO THEIR EQUIVALENT AT OTHER POINTS WHICH SECURE THE BUYER THE MOST ADVANTAGEOUS DELIVERED TERMS; THAT IN FACT THE AMOUNTS PAID BY SIDERCOMIT ALONE ARE STILL ABOVE THE MINIMUM PRICE WHICH COULD HAVE BEEN APPLIED TO IT ON THE BASIS OF THE PRICE LIST OF THE COMPANY KNOWN AS 'ACCIAIERIE, FERRIERE, TRAFILERIE CRAVETTO' WHICH IT QUOTES AS AN EXAMPLE; AND THAT BY FAILING TO TAKE ACCOUNT OF THIS POSSIBILITY OF ALIGNMENT THE HIGH AUTHORITY HAS BEEN GUILTY OF A MISUSE OF POWER AND CONTRAVENED THE LAW .

( A ) THIS LEGAL ARGUMENT CANNOT BE DISMISSED, AS THE HIGH AUTHORITY SUGGESTS, ON THE GROUNDS THAT IT WAS NOT PUT FORWARD AT THE TIME OF THE ADMINISTRATIVE PROCEEDINGS . TO EXCLUDE THE ARGUMENT ON THIS BASIS, WHICH IS IN ANY EVENT INCOMPATIBLE WITH THE PURELY PRELIMINARY NATURE OF THE PROCEDURE LAID DOWN BY ARTICLE 36, WOULD UNDULY RESTRICT THE APPLICANT'S RIGHTS OF DEFENCE .

( B ) HOWEVER THIS SUBMISSION IS UNFOUNDED IN LAW .

IN THE MATTER OF PRICES THE ECSC TREATY IS IN FACT BASED ON TWO ESSENTIAL PRINCIPLES : PUBLICITY AND, ARISING OUT OF THIS, NON - DISCRIMINATION . FOR THIS REASON ARTICLE 60 ( 2 ) ( A ), IN PARTICULAR, PROVIDES THAT PRICE LISTS AND CONDITIONS OF SALE MUST BE MADE PUBLIC . THE RIGHT TO ALIGN QUOTATIONS CONSTITUTES AN EXCEPTION TO THE PRINCIPLE OF LIST PRICES, BUT IT MUST NOT DIVEST THAT PRINCIPLE OF ALL EFFECT THROUGH THE EXCLUSION OF PUBLICITY BY MEANS OF ALIGNMENTS CARRIED OUT A POSTERIORI .

ARTICLE 60 ( 2 ) ( B ) OF THE TREATY PROVIDES THAT IT IS THE QUOTATION MADE TO THE CUSTOMER WHICH MUST BE ALIGNED ON A PRICE LIST BASED ON ANOTHER POINT AND THUS CONSTITUTE A QUOTATION FALLING WITHIN THE EXCEPTION BY TAKING INTO CONSIDERATION A SPECIFIC QUOTATION GIVEN TO A BUYER BY ANOTHER SELLER . THIS QUOTATION MUST SPECIFY, IN ACCORDANCE WITH A CORRECT ALIGNMENT ON KNOWN AND VERIFIABLE FACTORS, THE CONDITIONS WHICH WILL APPLY UPON THE CONCLUSION OF A CONTRACT AND MAKE IMPOSSIBLE ANY SUBSEQUENT AMENDMENT OF SUCH A CONTRACT ESPECIALLY BY WAY OF A HIDDEN PRICE REDUCTION AT THE TIME OF PERFORMANCE . AN ALIGNMENT MADE SOLELY FOR THE PURPOSE OF JUSTIFYING EX POST FACTO A REDUCTION OF LIST PRICES, EVEN THOUGH CALCULATED IN COMPLIANCE WITH THE STRICT RULES LAID DOWN FOR THIS PURPOSE ( WHICH IN FACT IS NOT SO IN THE PRESENT CASE ), THUS CONSTITUTES A CONTRAVENTION OF THE GENERAL SCHEME OF THE TREATY AND OF ARTICLE 60 ( 2 ) ( B ) IN PARTICULAR . THE APPLICANT COULD NOT HAVE BEEN UNAWARE OF THESE PRINCIPLES TO WHICH, AS LONG AGO AS 12 DECEMBER 1956, THE HIGH AUTHORITY HAD DRAWN ATTENTION IN ITS CIRCULAR N . 2 .

P . 303

4 . LASTLY, THE APPLICANT SUBMITS THAT THE DECISION OF THE HIGH AUTHORITY DID NOT FULLY EVALUATE THE FACTS AND CONSTITUTED A PATENT INJUSTICE TANTAMOUNT TO A MISUSE OF POWER IN THE FORM OF AN UNREASONABLE ACT, IN THAT THE HIGH AUTHORITY DID NOT TAKE ACCOUNT IN ITS DECISION OF THE SPECIAL CIRCUMSTANCES OF THE CASE . THESE SHOULD HAVE BEEN TAKEN INTO CONSIDERATION EITHER AS GROUNDS OF JUSTIFICATION OR AS MITIGATING FACTORS .

WITH REGARD TO THE OBJECTIVE FEATURES OF THE SITUATION, THE APPLICANT QUOTES THE SHORT - TERM ECONOMIC DIFFICULTIES ON THE ITALIAN MARKET AND CLAIMS THAT IT COULD ONLY HAVE OVERCOME THESE BY CONTRAVENING THE PROVISIONS OF THE TREATY . IT MAINTAINS THAT, AS A RESULT OF UNFAIR PRACTICES BY CERTAIN OF ITS COMPETITORS WHICH SUCCEEDED IN ESCAPING THE NOTICE OF THE HIGH AUTHORITY, IT FOUND ITSELF IN A SITUATION WHERE SELF-PROTECTION WAS JUSTIFIED IN LAW .

LEGITIMATE SELF-PROTECTION PRESUPPOSES AN ACTION TAKEN BY A PERSON WHICH IS ESSENTIAL IN ORDER 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 . NONE OF THESE REQUIREMENTS IS TO BE FOUND IN THE PRESENT CASE . IT HAS NOT BEEN PROVED, AND NO ATTEMPT HAS BEEN MADE TO PROVE, THAT S . A . MODENA WAS THREATENED BY IMMINENT DANGER OR THAT ONLY BY CONTRAVENING COMMUNITY LAW COULD IT HAVE OVERCOME THE SHORT-TERM ECONOMIC DIFFICULTIES WHICH ARE INSEPARABLE FROM ALL INDUSTRIAL ACTIVITY AT ONE TIME OR ANOTHER .

ACCORDINGLY IT IS NOT POSSIBLE FROM THE FOREGOING TO FIND ANY GROUNDS OF JUSTIFICATION .

P . 304

II - THE SECOND CHARGE

( REDUCTIONS ALLOWED ON PAYMENTS BY BILLS OF EXCHANGE )

1 . ACCORDING TO THE DECISION, THE APPLICANT ACCEPTED PAYMENTS BY BILLS OF EXCHANGE WITH VARYING MATURITY DATES AND CORRECTLY APPLIED THE INCREASES FOR DEFERRED PAYMENT LAID DOWN IN ITS PRICE LIST . AS REGARDS THE AMOUNTS OF THE BILLS, IT CREDITED ITS CUSTOMERS WITH 'THE NET AMOUNT OF THE DISCOUNTED BILL', THE DIFFERENCE BETWEEN THIS SUM AND THE AMOUNT OF THE INVOICE BEING ENTERED IN ITS BOOKS AS A BALANCE DUE UNDER THE HEADING OF DISCOUNT CHARGES .

2 . WITH REGARD TO THIS CHARGE THE APPLICANT SUBMITS, AS IT HAD ALREADY DONE IN THE ADMINISTRATIVE PROCEEDINGS, THAT LIQUIDITY PROBLEMS CAUSED IT TO ISSUE, IMMEDIATELY UPON THE DISPATCH OF THE GOODS AND BEFORE THE PRICES WERE INVOICED, BILLS FOR 'ESTIMATED' AMOUNTS WHICH WERE LESS THAN THEY SHOULD HAVE BEEN IN RELATION TO THE VALUE OF THE CONSIGNMENTS, SO THAT THE SUMS IT ACTUALLY RECEIVED BY MEANS OF THESE BILLS WERE LESS THAN THE ACTUAL AMOUNTS DUE FROM THE CUSTOMERS ACCORDING TO THE CORRECT INVOICES WHICH WERE PREPARED AFTER THE ISSUE OF THE BILLS . IT PROVED TO BE IMPOSSIBLE TO RECOVER THE BALANCES DUE TO MODENA, THUS ESTABLISHED EX POST FACTO . THE CUSTOMERS ADHERED TO THE ORIGINAL SUMS SHOWN ON THE BILLS, AND IT WAS DIFFICULT TO GO BACK ON THESE FIGURES OWING TO THE SENSITIVITY OF CUSTOMER REACTION . FURTHERMORE, THE ISSUE OF SUPPLEMENTARY BILLS MIGHT HAVE DAMAGED ITS CREDIT WITH THE BANK . IN ANY EVENT IN VIEW OF THE REFUSAL BY CUSTOMERS TO PAY THE BALANCES, THE APPLICANT WOULD HAVE HAD TO INCUR LEGAL EXPENSES OUT OF ALL PROPORTION TO THE AMOUNTS TO BE RECOVERED .

IT WAS THIS DIFFERENCE, ACCORDING TO MODENA, WHICH WAS ENTERED IN ITS BOOKS UNDER THE HEADING 'DISCOUNT ON INVOICE', AN ACCOUNTING PROCEDURE WHICH, IT MAINTAINS, FOLLOWS AN EXISTING ITALIAN BUSINESS PRACTICE BY BRINGING UNDER ONE HEAD DEBTS WHICH ARE BEYOND RECOVERY .

THE APPLICANT'S ARGUMENT HOWEVER IS CONTRADICTED BY THE FACTS . NO PROOF HAS BEEN GIVEN OR TENDERED IN SUPPORT OF THE CONTENTION THAT SUPPLEMENTARY BILLS WOULD NOT HAVE BEEN DULY HONOURED BY CUSTOMERS WHO HAD BEEN MADE FULLY AWARE OF THE EXTENT OF THEIR LIABILITY BY CORRECT INVOICES ISSUED ON THE BASIS OF A PRICE LIST WITH WHICH THEY WERE FAMILIAR . MOREOVER, THE APPLICANT HAS NOT PROVIDED ANY PROOF THAT IT ISSUED ANY SUPPLEMENTARY BILLS, SERVED ANY FORMAL REQUESTS FOR PAYMENT, OR EXERCISED ANY DILIGENCE WHATEVER IN ORDER TO RECOVER THE SUMS DUE TO IT .

LASTLY, THE LETTER FROM AN ADVOCATE STATING THAT THE LEGAL EXPENSES OF RECOVERING SMALL SUMS BEAR NO RELATION TO THE INTERESTS CONCERNED AMOUNTS TO NO MORE THAN A GENERAL ASSERTION AND GIVES NO DETAIL RELEVANT TO THE PRESENT CASE . MOREOVER, IT WOULD HAVE BEEN POSSIBLE TO RECORD QUITE UNAMBIGUOUSLY, BY BOOKS OF ACCOUNT WHICH CORRESPONDED WITH THE FACTS, THE PRECISE REASONS FOR REMITTING DEBTS DUE FROM CUSTOMERS .

P . 305

THE APPLICANT'S ARGUMENT IS THEREFORE UNFOUNDED .

3 . THE APPLICANT CONTENDS AS A FURTHER SUBSIDIARY POINT THAT, QUITE APART FROM THE UNPAID SUMS ALLEGED TO HAVE BEEN WRITTEN OFF AS DISCOUNTS ON INVOICES, THE AMOUNTS ACTUALLY PAID BY ITS CUSTOMERS IN RESPECT OF THE CONSIGNMENTS TO WHICH THE PRESENT CHARGE REFERS ARE STILL HIGHER THAN PRICES CORRECTLY ALIGNED ON THE PRICE LISTS OF COMPETING FIRMS, AMONG WHICH IT CITES 'LAVORAZIONE METALLI VARI' OF BRESCIA . FOR THE REASONS MORE FULLY SET OUT ABOVE IN RELATION TO THE FIRST CHARGE, THE APPLICANT MUST FAIL IN THIS SUBMISSION SINCE THE ALIGNMENT WAS MADE AFTER THE QUOTATIONS WERE ISSUED FOR THE CONTRACTS IN QUESTION .

III - THE THIRD CHARGE

( EXEMPTION FROM TRANSPORT COSTS )

1 . THE APPLICANT DOES NOT IN FACT DISPUTE THAT, CONTRARY TO THE PROVISIONS OF ITS PRICE LIST, IT TOOK OVER THE TRANSPORT COSTS RELATING TO THE CONTRACTS REFERRED TO IN THE CONTESTED DECISION .

2 . IN THIS CASE TOO IT RELIES A POSTERIORI ON A CORRECT ALIGNMENT ON PRICE LISTS OF COMPETING UNDERTAKINGS . ON THE BASIS OF THESE LISTS ITS OWN PRICES WERE NOT BELOW THE MINIMUM PRICES PERMITTED BY ITS ALIGNMENTS .

THIS SUBMISSION HAS NO BASIS IN LAW FOR THE REASONS SET OUT IN RESPECT OF THE SAME SUBMISSION MADE WITH REGARD TO THE FIRST CHARGE .

IV - THE FOURTH CHARGE

( ALLOWANCE GRANTED TO ORSI )

1 . ALTHOUGH IT DOES NOT DISPUTE THE TRUTH OF THE FACTS SET OUT IN THE DECISION AND WHICH THE HIGH AUTHORITY PURPOSES TO PROHIBIT, ON THE GROUNDS THAT THEY CONSIST OF REDUCTIONS OF LIST PRICES IN CONTRAVENTION OF ARTICLE 60 OF THE TREATY, THE APPLICANT CONTENDS THAT THE SUBSTANTIAL REDUCTIONS WHICH IT GRANTED TO ITS DEPOSITARY ORSI DID NOT CONTRAVENE THESE PROVISIONS AND COULD NOT CONSTITUTE ILLEGAL REDUCTIONS .

P . 306

2 . IN THE FIRST PLACE IT CONTENDS THAT ITS TRANSACTIONS WITH ORSI WERE CONCERNED WITH A BUYER WHICH WAS NOT COMPARABLE WITH ITS OTHER CUSTOMERS BECAUSE OF THE PERSONAL CONNEXIONS BETWEEN THE SHAREHOLDERS OF THE TWO FIRMS WHICH DERIVED THEIR ORIGINS FROM A SINGLE FAMILY BUSINESS AS THE RESULT OF THE DISTRIBUTION OF AN ESTATE .

THIS CONTENTION MUST BE REJECTED . THE CONCEPT OF COMPARABILITY REFERRED TO BY THE TREATY IS OBJECTIVE IN NATURE AND DOES NOT PERMIT PURELY SUBJECTIVE FACTORS TO BE TAKEN INTO CONSIDERATION, SUCH AS FAMILY TIES WHICH MAY EXIST BETWEEN THE PARTIES . THE PROHIBITION OF DISCRIMINATION WOULD OTHERWISE LOSE ITS EFFECT .

3 . SECONDLY, THE APPLICANT STATES THAT THE PRESENT CASE IS NOT CONCERNED WITH REAL REDUCTIONS, BUT RATHER WITH A RELEASE OF DEBTS WHICH WERE IN FACT IRRECOVERABLE, SINCE ORSI WAS IN A VERY PRECARIOUS FINANCIAL POSITION . OWING TO THE FAMILY RELATIONSHIPS BETWEEN THE OWNERS OF THE ORDINARY SHARES IN MODENA AND THE OWNERS OF ORSI, THE ONLY MEANS OF ASSISTING THE LATTER WITHOUT UNDERTAKING PERSONAL LIABILITY WITH REGARD TO OTHER CREDITORS WAS TO WRITE OFF THE DEBTS WHICH ORSI OWED TO THE APPLICANT . MOREOVER THIS WAS JUSTIFIED OBJECTIVELY BY THE REMOTE PROSPECTS OF RECOVERING THESE DEBTS AND THE FUTILITY OF INCURRING IRRECOVERABLE COSTS OF ENFORCEMENT PROCEEDINGS AFTER ESTABLISHING THAT ORSI WAS INSOLVENT BY PROTESTING THE BILLS DRAWN UPON IT .

THE NOTICES OF PROTEST PRODUCED IN THE PROCEEDINGS ARE SUFFICIENT PROOF THAT ORSI'S CREDIT WAS VERY PRECARIOUS . BILLS TO THE VALUE OF 8 131 580 LIRE, ALL DRAWN BY MODENA, HAD BEEN PROTESTED FOR NON - PAYMENT . THE PUBLICITY GIVEN TO ORSI'S INDEBTEDNESS AS A RESULT OF THE NOTICES IS ENOUGH TO DISPEL THE SUSPICION OF CONNIVANCE WITH THE APPLICANT . A BALANCE OF OUTSTANDING DEBTS AMOUNTING TO 4 258 998 LIRE, WHICH MAY IN THE CIRCUMSTANCES BE REGARDED AS IRRECOVERABLE, REMAINED OUTSTANDING .

IT IS CLEAR FROM THESE CONSIDERATIONS THAT THIS IS NOT A GENUINE CASE OF MODENA'S GRANTING REDUCTIONS BUT RATHER OF A TOTAL WAIVER OF ORSI'S DEBIT BALANCE . THIS STATE OF AFFAIRS CONSTITUTES A REMISSION OF DEBT AND NOT A REDUCTION, WHICH PRESUPPOSES AN ALLOWANCE GRANTED ON THE OCCASION OF AND IN RESPECT OF SPECIFIC CONTRACTS .

ACCORDINGLY THIS CONTRAVENTION HAS NOT BEEN SUFFICIENTLY PROVED .

V - THE AMOUNT OF THE FINE

1 . THERE ARE NO GROUNDS FOR CONSIDERING WHETHER THE AGGRAVATING CIRCUMSTANCES ENVISAGED BY ARTICLE 47 OF THE TREATY EXISTED IN THE PRESENT CASE . THIS HIGH AUTHORITY MADE NO REFERENCE IN ITS DECISION TO THIS PROVISION AND MOREOVER DID NOT APPLY THE INCREASED PENALTIES PROVIDED FOR THEREIN . ALTHOUGH IT DECLARED THAT, AS REGARDS THE FIRST CHARGE, FALSE INFORMATION HAD KNOWINGLY BEEN ENTERED IN THE APPLICANT'S BOOKS OF ACCOUNT, THE HIGH AUTHORITY CONFINED ITSELF TO DESCRIBING THIS, QUITE RIGHTLY, AS A DEVICE ON THE PART OF MODENA BUT DID NOT INFER, TO THE FURTHER DETRIMENT OF THE APPLICANT, THAT ANY AGGRAVATING EFFECTS HAD THEREBY RESULTED .

P . 307

2 . MODENA'S CRITICISM OF THE HIGH AUTHORITY FOR REFUSING TO ADMIT THE EXISTENCE OF MITIGATING CIRCUMSTANCES CANNOT BE ACCEPTED . NEITHER THE FACT THAT OTHER UNDERTAKINGS USED SIMILAR DEVICES TO THOSE NOTED IN THE CASE OF THE APPLICANT NOR THE DIFFICULT SITUATION IN WHICH IT CLAIMS TO HAVE FOUND ITSELF OWING TO THE GENERALLY UNFAVOURABLE SHORT-TERM ECONOMIC CIRCUMSTANCES, ALTHOUGH IT HAS FURNISHED NO PROOF ON THIS POINT, CAN PREVAIL OVER THE STRICT OBLIGATION TO COMPLY WITH THE RULES LAID DOWN BY THE TREATY . MOREOVER, BY MAKING SUFFICIENT ALTERATIONS TO ITS PRICE LIST, THE APPLICANT COULD HAVE OBTAINED THE SAME RESULTS WHICH IT SOUGHT TO ACHIEVE BY GRANTING ILLEGAL REDUCTIONS . HOWEVER, IN VIEW OF THE CONSIDERATIONS PREVIOUSLY STATED, THE APPLICANT MUST BE EXONERATED FROM THE FOURTH CHARGE AGAINST IT, AND CONSEQUENTLY THE TOTAL AMOUNT OF THE ILLEGAL REDUCTIONS WHICH IT GRANTED TO ITS CUSTOMERS IS REDUCED BY APPROXIMATELY ONE HALF . THE FINE IMPOSED ON IT SHOULD THEREFORE BE REDUCED PROPORTIONATELY .

Decision on costs

THE APPLICANT HAS FAILED IN ITS SUBMISSIONS IN RESPECT OF THREE OF THE FOUR CHARGES LAID AGAINST IT IN THE CONTESTED DECISION . HOWEVER, IN VIEW OF THE SIZE OF THE AMOUNTS IN DISPUTE IN EACH OF THE FOUR CHARGES, IT IS APPROPRIATE TO APPLY ARTICLE 69 ( 3 ) OF THE RULES OF PROCEDURE AND TO ORDER THE APPLICANT TO BEAR THREE-FIFTHS OF THE DEFENDANT'S COST .

THE APPLICANT HAS PUT FORWARD NO CONCLUSIONS TO THE EFFECT THAT THE OTHER PARTY BE ORDERED TO PAY THE COSTS . ACCORDINGLY THERE ARE NO GROUNDS FOR ORDERING THE HIGH AUTHORITY TO PAY PART OF THE COSTS .

Operative part

THE COURT

HEREBY :

1 . RULES THAT THE APPLICATION AGAINST THE INDIVIDUAL DECISION OF THE HIGH AUTHORITY OF 21 JUNE 1961 IS ADMISSIBLE; DISMISSES THE APPLICATION AS REGARDS THE FIRST THREE CHARGES MADE AGAINST THE APPLICANT COMPANY AND GRANTS THE APPLICATION AS REGARDS THE FOURTH CHARGE;

2 . REDUCES TO 4 000 000 LIRE THE AMOUNT OF THE FINE IMPOSED ON THE APPLICANT BY THE CONTESTED DECISION;

3 . ORDERS THE APPLICANT TO PAY THREE-FIFTHS OF THE COST OF THE DEFENDANT .