Order of the President of the Court of First Instance of 11 August 1995. - Tsimenta Halkidos AE v Commission of the European Communities. - Competition - Payment of a fine - Bank guarantee - Procedure for interim relief - Suspension of operation. - Case T-104/95 R



European Court reports 1995 Page II-02235



Summary

Parties

Grounds

Operative part



Keywords

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Applications for interim measures ° Suspension of operation of a measure ° Suspension of operation of a decision imposing a fine ° Conditions for granting an application ° Provision of a guarantee ° Permissibility ° Limits ° Exceptional circumstances

(EC Treaty, Art. 185; Rules of Procedure of the Court of First Instance, Art. 104(2))

Summary

It is only in exceptional circumstances that the judge hearing an application for interim measures should order the suspension of the applicant undertaking' s obligation to provide a bank guarantee securing payment of a fine imposed on it.

The risk of court-ordered liquidation which the recovery of the fine or the provision of a bank guarantee might entail cannot be regarded as a circumstance giving rise to urgency, where the undertaking is subject to a procedure for the reorganization of undertakings in difficulty during the currency of which it cannot be wound up; in any event, that is to say, even if liquidation were not out of the question, it does not appear, having regard to the very substantial indebtedness of the undertaking, of which the debt due to the Commission represents only a minute proportion, and to the claims of the other creditors, that the adoption by the Commission of enforcement measures as provided for in Article 192 of the Treaty would in itself be liable to trigger such a result.

Moreover, as regards the balance of the interests concerned, a financial situation as burdened with debt as that of the applicant necessitates the provision of guarantees designed to protect the financial interests of the Community.

Parties

In Case T-104/95 R,

Tsimenta Chalkidos AE, a company incorporated under Greek law, established at Athens (Greece), represented by Panagiotis Bernitsas, of the Athens Bar, with an address for service in Luxembourg at the Chambers of Phillipe Dupont, 8-10 Rue Mathias Hardt,

applicant,

v

Commission of the European Communities, represented by Theofanis Christoforou and Richard Lyal, of the Legal Service, with an address for service in Luxembourg at the office of Carlos Gómez de la Cruz, of the Legal Service, Wagner Centre, Kirchberg,

defendant,

APPLICATION for suspension of the operation of Commission Decision 94/815/EC of 30 November 1994 relating to a proceeding under Article 85 of the EC Treaty (Cases IV/33.126 and 33.322 ° Cement, OJ 1994 L 343, p. 1), in so far as it requires the applicant to pay a fine of ECU 1 856 000,

THE PRESIDENT OF THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES

makes the following

Order

Grounds

1 On 30 November 1994 the Commission adopted Decision 94/815/EC relating to a proceeding under Article 85 of the EC Treaty (Cases IV/33.126 and 33.322 ° Cement, OJ 1994 L 343, p. 1) ("the Decision").

2 According to Article 1 of the Decision, the 42 cement producers and trade associations listed there, including the applicant, infringed Article 85(1) of the EC Treaty by participating in an agreement designed to ensure non-transhipment to home markets and to regulate cement transfers from one country to another.

3 According to Article 6 of the Decision, some of those cement producers, including the applicant, also infringed the provisions of Article 85(1) of the Treaty from 1 July 1981 to 19 May 1989 by participating, within the framework of the EPC (Export Policy Committee), in a continuous concerted practice involving the examination of the situation on Community markets, the sharing of third-country markets, the setting of prices for products intended for overseas export, the exchange of individualized data on export availabilities and on actual exports to third countries and designed to prevent incursions by competitors on respective national markets in the Community.

4 Article 9 of the Decision imposes on the applicant a fine of ECU 1 856 000 in respect of the infringements found in Articles 1 and 6. Article 11 provides that the fine is to be paid within three months of the date of notification of the Decision, and that, on expiry of that period, interest is automatically to be payable on the sum due at the rate of 9.25%.

5 The Decision was initially notified to the applicant on 13 December 1994. However, that notification was superseded, as a result of an error in the reproduction of the text of the Decision, by a subsequent notification dated 8 February 1995.

6 The notification letters informed the applicant that, if it brought an action before the Court, the Commission would not take any steps to recover the fine pending the outcome of the proceedings before that court, subject to the accrual of interest on the sum due from the date of expiry of the prescribed payment period and to the provision, by no later than that date, of a bank guarantee acceptable to the Commission, covering the amount due by way of both the principal sum and interest or additional sums due.

7 By application lodged at the Court Registry on 12 April 1995 the applicant brought an action under Article 173 of the EC Treaty for the annulment of the Decision.

8 By a separate document lodged at the Court Registry on 17 May 1995, the applicant made this application under Articles 185 and 186 of the EC Treaty for suspension of the operation of the Decision in so far as it requires it to pay a fine of ECU 1 856 000.

9 The Commission submitted its observations on the present application for interim measures on 29 May 1995.

10 The parties presented oral argument on 26 June 1995. In the course of that hearing, the applicant produced a number of documents relating to its financial situation and was requested to produce other documents and figures within one week.

11 On 30 June 1995 the applicant sent to the Court the documents requested.

Law

12 Under the combined provisions of Articles 185 and 186 of the EC Treaty and Article 4 of Council Decision 88/591/ECSC, EEC, Euratom of 24 October 1988 establishing a Court of First Instance of the European Communities (OJ 1988 L 319, p. 1), as amended by Council Decisions 93/350/Euratom, ECSC, EEC of 8 June 1993 (OJ 1993 L 144, p. 21) and 94/149/ECSC, EC of 7 March 1994 (OJ 1994 L 66, p. 29), the Court may, if it considers that circumstances so require, order that the operation of the contested act be suspended or prescribe any necessary interim measures.

13 Article 104(2) of the Rules of Procedure provides that applications for interim measures referred to in Articles 185 and 186 of the Treaty must state the circumstances giving rise to urgency and the pleas of fact and law establishing a prima facie case for the interim measures applied for. Such measures must be provisional in the sense that they do not prejudge the decision on the substance of the case (see the order of the President of the Court of First Instance in Case T-301/94 R Laakmann Karton v Commission [1994] ECR II-1279, paragraph 10).

Arguments of the parties

14 So far as the circumstances giving rise to urgency are concerned, the applicant argues first that, in this case, the commencement of an action before the Court does not result in the suspension of the execution of the Decision, since, as is evidenced by documents before the Court, the applicant is absolutely unable to provide the letter of guarantee required by the Commission and the provision of such a letter is an essential requirement if the Commission is to refrain from taking steps to recover the fine after the expiry of the prescribed payment period. The applicant submits that, in view of its extremely difficult financial situation and, in particular, its actual indebtedness of DR 104 730 284 254, as well as the fact that it is already subject to the Greek law on special liquidation, the recovery of the fine by the Commission or, alternatively, the procurement of a letter of guarantee, together with the cost which that would involve, must necessarily result in its suffering serious and irreparable damage, namely insolvency, and loss of employment on the part of its staff.

15 As regards the pleas establishing a prima facie case for the suspension applied for, the applicant maintains, first, that it is clear from the wording of the Decision alone that there is an inconsistency between the part entitled "The facts" (Chapters 3, 4, 5 and 6), which contains no reference to it whatever, the part entitled "Legal assessment" (Chapters 8, 9 and 10), which refers to it only in vague terms, and the operative part. According to the applicant, the Commission has not succeeded in establishing or showing that the applicant committed the alleged infringements of Article 85(1) of the Treaty. The facts proved relate only to other undertakings. Second, the applicant considers that the Decision infringes the first and last subparagraphs of Article 15(2) of Regulation No 17 of the Council of 6 February 1962, the first regulation implementing Articles 85 and 86 of the Treaty (OJ, English Special Edition 1959-1962, p. 87), in that, since the Commission has not been able to establish that the applicant participated, either intentionally or negligently, in agreements affecting the internal market, it was not empowered to impose a fine on the applicant pursuant to that provision. Lastly, the applicant considers that in those circumstances the fine imposed on it constitutes at the same time a breach of the principle of proportionality.

16 The Commission, for its part, considers that the applicant has failed to show that it is unable either to pay the fine or to provide a bank guarantee. The Commission observes in that regard, first, that the applicant has been awarded DR 50 billion by the Greek courts in proceedings between it and the Italian cement undertaking Calcestruzzi, although that sum is subject to a prohibition in favour of the National Bank of Greece, the applicant' s main creditor, whereby it may not be disposed of, pledged, set off or assigned. Second, the Commission points out that, at the present time, none of the cases pending against the applicant before the national courts requires it definitively and irrevocably to settle its debts forthwith or to undertake a forced sale of its assets. Third, the Commission notes that the applicant is covered by the Greek law on the reorganization of undertakings in difficulty, which means that it cannot be wound up so long as the procedure for its reorganization is still continuing. Fourth, the Commission states that the applicant' s draft balance sheet for the 1994 financial year shows that its outstanding debts from customers in Greece amount to DR 3 190 344 953, and that it is thus in a position to raise the sum of DR 550 000 000 corresponding to the fine imposed. Lastly, the Commission considers that the letters in the case-file from two medium-sized banks do not in themselves constitute sufficient evidence of the applicant' s inability to provide the bank guarantee required as an alternative to payment of the fine.

17 As regards the question whether the pleas advanced in support of the main action make out a prima facie case, the Commission maintains that, contrary to the applicant' s claims, the Decision refers to the applicant not only in its operative part but also in the parts dealing with the facts and the legal assessment. The Commission argues that, in any event, once the Decision found that the applicant was one of the founder members of the EPC, the reference to the EPC and to the concerted practice ascertained with regard to the EPC ipso facto covers the applicant. The Commission therefore considers that the applicant' s arguments do not make out a prima facie case and that consequently any assessment of them by the judge hearing applications for interim measures would involve an examination of the merits which could seriously prejudge the decision in the main proceedings. Lastly, the Commission maintains that to test the amount of the fine imposed against the principle of proportionality would exceed the confines of these interlocutory proceedings.

Appraisal of the judge hearing applications for interim measures

18 Before a ruling is given on this application for interim measures, it must be noted that the applicant is seeking thereby the suspension of the operation of the Decision in so far as Article 9 thereof imposes on it a fine of ECU 1 856 million. It is common ground that, in its letter notifying the Decision, the Commission informed the applicant that, if it brought an action before the Court, no steps would be taken to recover the fine pending the outcome of the proceedings before that court, provided that a bank guarantee acceptable to the Commission, covering both the principal sum and any interest and additional sums due, were provided. Moreover, the Commission stated during the hearing that, although the applicant did not provide a bank guarantee by the expiry of the period prescribed for the payment of the fine, no steps would be taken to recover it until such time as the President of the Court has ruled on the application for interim measures. In those circumstances, it must be held that the effective aim of the application can only be to secure the suspension of the condition to which foregoing immediate steps for the recovery of the fine has been made subject, namely the provision of a bank guarantee in the event of the commencement of an action before the Court.

19 It is settled case-law that such an application can be upheld only if there are exceptional circumstances. This condition must be understood as being closely linked to the conditions laid down in Article 104(2) of the Rules of Procedure. It is consequently necessary to appraise the urgency of the interim measures applied for by examining whether the enforcement of the contested measure prior to any decision on the substance would be liable to cause the party seeking those measures serious and irreversible damage which could not be made good even if the contested decision were ultimately annulled by the Court. At all events, it is for the applicant to prove that it cannot await the outcome of the main proceedings without suffering such damage. Furthermore, a decision to suspend also presumes that the balance of the interests concerned is in favour of granting that measure (see, most recently, the order of the President of the Court of First Instance in Case T-308/94 R Cascades v Commission [1995] ECR II-265).

20 As regards the circumstances giving rise to urgency, the applicant claims in essence that, in view of its very difficult financial situation, the recovery of the fine by the Commission or, alternatively, the procurement of a letter of guarantee (assuming that such a letter can be obtained, despite the refusal by the banks hitherto approached), together with the costs which that would entail, would be bound to lead to its insolvency and its staff losing their jobs.

21 The applicant has not even succeeded, however, in refuting the Commission' s assertion that it is covered by Article 44 of the Greek law on the reorganization of undertakings in difficulty, which means that it cannot be wound up whilst the procedure for its reorganization is still continuing. In those circumstances, it must be held that the applicant has not made out even a prima facie case in support of its claim that the immediate enforcement of the Decision could expose it to a risk of court-ordered liquidation.

22 In any event, even if the applicant were not covered by the statutory scheme referred to above, and hence were really faced with a serious risk of court-ordered liquidation by reason, inter alia, of the level of its indebtedness, it does not appear that the adoption by the Commission of measures to recover the fine would in itself trigger such a result. First of all, it is apparent from the documents in the case, and has not been contested by the applicant, that such a fine represents only 0.025% of its total debts. Furthermore, it is clear from the second paragraph of Article 192 of the EC Treaty that the enforcement of the Decision is governed by the rules of civil procedure in force in the Member State in question ° in this instance, Greece. The recovery of the fine by the Commission consequently falls to be effected by the implementation of such a procedure, in the course of which the Commission' s position in relation to other secured or unsecured creditors, and the rank occupied by the debt due to it in the context of the applicant' s very substantial indebtedness, will probably still need to be examined. There appears, therefore, to be no prima facie risk that the steps which the Commission may take to recover the fine will have any immediate repercussions on the applicant' s financial situation, or at least not until the relevant legal position is finally clarified. It is also necessary in that context to take into account the fact that international arbitration is currently pending in relation to the dispute between the applicant and Calcestruzzi, the decision in which, according to the applicant, was due to be delivered in July 1995.

23 The Court further finds, in the circumstances, that the balance of the interests concerned is not in favour of granting the interim relief applied for. In view of the particular circumstances of the present case, suspension of the operation of the Decision, in so far as it requires the applicant to pay a fine, would be disproportionate, despite its provisional nature, to the Commission' s interest in being able actually to recover the fine in the event of the dismissal of the main action and, consequently, in protecting the financial interests of the Community.

24 It follows from the foregoing that the applicant has failed to show that the enforcement of the Decision could cause it damage incapable of being subsequently remedied by the enforcement of a judgment of the Court in its favour. Nor has it shown that any damage which it might suffer would be manifestly disproportionate to the defendant' s interest in having the Decision enforced.

25 In those circumstances, the application for suspension of the operation of the contested Decision must be dismissed, without there being any need to examine whether the pleas and arguments relied on by the applicant in support of the main action make out a prima facie case.

26 In any event, under Article 108 of the Rules of Procedure an order for interim measures may at any time, on application by a party, be varied or cancelled on account of a change in circumstances. It is for the applicant, should the need arise, to apply to the Court in the event that changes in its financial situation brought about, in particular, by the decision of the arbitration tribunal are liable to cause it imminent damage which cannot await the outcome of the substantive proceedings (see, most recently, the order of the President of the Court of First Instance in Cases T-79/95 R and T-80/95 R SNCF and British Railways v Commission [1995] ECR II-0000, paragraph 43).

Operative part

On those grounds,

THE PRESIDENT OF THE COURT OF FIRST INSTANCE

hereby orders:

1. The application for interim measures is dismissed.

2. The costs are reserved.

Luxembourg, 11 August 1995.