Judgment of the Court (Fifth Chamber) of 30 November 1983. - Ferriere San Carlo SpA v Commission of the European Communities. - System of production quotas for steel - Action challenging a Commission decision imposing a fine. - Case 235/82.



European Court reports 1983 Page 03949



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

1 . ECSC - PRODUCTION - PRODUCTION QUOTA SYSTEM - INCLUSION OF EXTERNAL TRADE - COMMISSION ' S POWER TO DECIDE - CONDITIONS FOR EXERCISE OF SUCH POWER - PRODUCTION INTENDED FOR EXPORT TO NON-MEMBER COUNTRIES - NO OBLIGATION TO EXEMPT FROM QUOTA SYSTEM

( ECSC TREATY , ART . 58 )

2 . ECSC - PRODUCTION - STEEL PRODUCTION QUOTA SYSTEM - DECISION NO 2794/80 - RETROACTIVE EFFECT - LIMITS

3 . MEASURES ADOPTED BY THE INSTITUTIONS - APPLICATION RATIONE TEMPORIS - PRINCIPLE OF ABSENCE OF RETROACTIVE EFFECT - EXCEPTIONS - CONDITIONS

4 . ECSC - PRODUCTION - PRODUCTION QUOTA SYSTEM - PURPOSE - GUARANTEE OF A MINIMUM LEVEL OF PRODUCTION AND A MINIMUM LEVEL OF EMPLOYMENT FOR EACH UNDERTAKING - DUTY IMPOSED ON THE COMMISSION - ABSENCE

( ECSC TREATY , ART . 58 )

5 . ECSC - AIMS - CONSTANT RECONCILIATION

( ECSC TREATY , ARTS 2 , 3 AND 4 )

6 . ECSC - PRODUCTION - STEEL PRODUCTION QUOTA SYSTEM - UNDERTAKING ' S PRODUCTION IN EXCESS OF ITS QUOTA - EMERGENCY - EMERGENCY DUE TO UNDERTAKING ' S SERIOUS ECONOMIC DIFFICULTIES - PRINCIPLE NOT APPLICABLE

( ECSC TREATY , ART . 58 ; DECISION NO 2794/80 )

Summary

1 . THE EXTENT TO WHICH EXTERNAL TRADE IS TO BE TAKEN INTO CONSIDERATION IN RELATION TO MEASURES ADOPTED UNDER ARTICLE 58 OF THE ECSC TREATY IS A MATTER FOR THE COMMISSION TO DECIDE , AND IN ARRIVING AT THAT DECISION IT MUST TAKE ACCOUNT OF THE COMMUNITY STEEL INDUSTRY ' S OWN NEEDS AND THE COMMUNITY ' S INTERESTS IN ITS RELATIONS WITH NON-MEMBER COUNTRIES . THEREFORE IT IS NOT POSSIBLE TO INFER FROM ARTICLE 58 ANY OBLIGATION ON THE COMMISSION TO EXEMPT FROM THE QUOTA SYSTEM THE PRODUCTION WHICH CERTAIN UNDERTAKINGS MIGHT PREFER TO DIRECT TOWARDS EXPORT MARKETS .

2 . ALTHOUGH THE GENERAL DECISION , DECISION NO 2794/80 , PROVIDED FOR PRODUCTION QUOTAS FOR THE STEEL INDUSTRY FROM 1 OCTOBER 1980 WHEREAS IT ONLY CAME INTO FORCE ON 31 OCTOBER 1980 , IT DID NOT HAVE GENUINE RETROACTIVE EFFECT SINCE THE UNDERTAKINGS AFFECTED WERE ABLE TO ADJUST THEIR PRODUCTION IN NOVEMBER AND DECEMBER TO TAKE ACCOUNT OF THEIR QUOTAS FOR THE QUARTER AND THEREBY AVOID ANY INFRINGEMENT .

3 . ALTHOUGH IN GENERAL THE PRINCIPLE OF LEGAL CERTAINTY PRECLUDES A COMMUNITY MEASURE FROM TAKING EFFECT FROM A POINT IN TIME BEFORE ITS PUBLICATION , IT MAY EXCEPTIONALLY BE OTHERWISE WHERE THE PURPOSE TO BE ACHIEVED SO DEMANDS AND WHERE THE LEGITIMATE EXPECTATIONS OF THOSE CONCERNED ARE DULY RESPECTED .

4 . THE GOAL OF THE STEEL PRODUCTION QUOTA SYSTEM INTRODUCED UNDER ARTICLE 58 OF THE ECSC TREATY IS TO IMPROVE MARKET CONDITIONS SO AS TO ENABLE THE PROFITABILITY OF UNDERTAKINGS TO BE MAINTAINED OR RESTORED IN THE LONG TERM AND THEREBY ENABLE THE JOBS WHICH DEPEND ON IT TO BE PRESERVED AS FAR AS POSSIBLE . HOWEVER , ARTICLE 58 DOES NOT IN ANY WAY REQUIRE THE COMMISSION TO GUARANTEE EACH INDIVIDUAL UNDERTAKING A MINIMUM LEVEL OF PRODUCTION DETERMINED IN ACCORDANCE WITH THE UNDERTAKING ' S OWN CRITERIA OF PROFITABILITY AND DEVELOPMENT . THE AIM OF THAT ARTICLE IS TO SPREAD IN THE MOST EQUITABLE MANNER POSSIBLE AMONGST ALL UNDERTAKINGS THE REDUCTIONS REQUIRED BY THE ECONOMIC SITUATION , NOT TO GUARANTEE UNDERTAKINGS A MINIMUM LEVEL OF EMPLOYMENT PROPORTIONATE TO THEIR CAPACITY .

5 . THE GENERAL AIMS SET OUT IN ARTICLES 2 , 3 AND 4 OF THE ECSC TREATY MUST CONSTANTLY BE RECONCILED WITH ONE ANOTHER IN THE LIGHT OF THE ECONOMIC CIRCUMSTANCES AND THEREFORE PRIORITY MAY NOT BE GIVEN TO ONE OF THOSE AIMS TO THE DETRIMENT OF THE OTHERS .

6 . THE PRODUCTION QUOTA SYSTEM ESTABLISHED BY DECISION NO 2794/80 WOULD BE GRAVELY COMPROMISED OR EVEN DESTROYED IF EVERY UNDERTAKING WERE ABLE , BY PLEADING EMERGENCY DUE TO SERIOUS ECONOMIC DIFFICULTIES , TO EXCUSE ITSELF FROM OBSERVANCE OF THE RESTRICTIONS AND TO EXCEED AT WILL THE PRODUCTION QUOTA ALLOCATED TO IT . THE CHAIN REACTION THEREBY RELEASED WOULD CULMINATE IN THE COLLAPSE OF THE SYSTEM , SO THAT ARTICLE 58 OF THE ECSC TREATY WOULD BECOME A DEAD LETTER .

Parties

IN CASE 235/82

FERRIERE SAN CARLO SPA , AN UNDERTAKING HAVING ITS REGISTERED OFFICE AT 1 VIA NAZIONALE , CAINO IN THE PROVINCE OF BRESCIA , REPRESENTED BY ITS MANAGING DIRECTOR , FAUSTINO BUSSENI , A SURVEYOR , AND ADVISED BY FABRIZIO MASSONI , ITS LEGAL ADVISER , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF ANDRE ELVINGER , 15 COTE D ' EICH ,

APPLICANT ,

V

COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY SERGIO FABRO , ACTING AS AGENT , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ORESTE MONTALTO , A MEMBER OF ITS LEGAL DEPARTMENT , JEAN MONNET BUILDING , KIRCHBERG ,

DEFENDANT ,

Subject of the case

APPLICATION REQUESTING THE COURT TO DECLARE VOID THE DECISION OF 13 AUGUST 1982 BY WHICH THE COMMISSION , PURSUANT TO ARTICLE 9 OF COMMISSION DECISION NO 2794/80/ECSC OF 31 OCTOBER 1980 , IMPOSED A FINE OF 165 570 EUROPEAN CURRENCY UNITS ON THE APPLICANT FOR EXCEEDING BY 2 007 TONNES THE PRODUCTION QUOTA ALLOCATED TO IT FOR THE FOURTH QUARTER OF 1980 IN RESPECT OF PRODUCTS FALLING WITHIN CATEGORY IV ( LIGHT SECTIONS ),

Grounds

1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 17 SEPTEMBER 1982 FERRIERE SAN CARLO SPA BROUGHT AN ACTION UNDER THE SECOND PARAGRAPH OF ARTICLE 36 OF THE ECSC TREATY CHALLENGING THE COMMISSION ' S DECISION OF 13 AUGUST 1982 IMPOSING A FINE ON IT UNDER ARTICLE 58 OF THE ECSC TREATY AND COMMISSION DECISION NO 2794/80/ECSC OF 31 OCTOBER 1980 ESTABLISHING A SYSTEM OF STEEL PRODUCTION QUOTAS FOR UNDERTAKINGS IN THE IRON AND STEEL INDUSTRY ( OFFICIAL JOURNAL , L 291 , P . 1 ).

2 THE CONTESTED DECISION STATES THAT IN BREACH OF THE AFOREMENTIONED DECISION NO 2794/80 THE APPLICANT EXCEEDED BY 2 007 TONNES THE PRODUCTION QUOTA OF 5 792 TONNES WHICH THE COMMISSION HAD ALLOCATED TO IT FOR THE FOURTH QUARTER OF 1980 IN RESPECT OF PRODUCTS FALLING WITHIN CATEGORY IV . IT DECLARES THAT THE APPLICANT ' S PRODUCTION THEREFORE EXCEEDED THE QUOTA ALLOCATED TO IT BY MORE THAN 10% AND , PURSUANT TO THE FIRST AND SECOND PARAGRAPHS OF ARTICLE 9 OF THE SAID DECISION , IT IMPOSES ON THE UNDERTAKING A FINE OF 2 007 BY 82.5 ECU , THAT IS TO SAY A TOTAL OF 165 570 ECU .

3 BY THIS ACTION THE APPLICANT SEEKS PRIMARILY TO HAVE THE CONTESTED DECISION FIXING THE FINE DECLARED VOID OR IN THE ALTERNATIVE TO HAVE THE FINE REDUCED , AND FINALLY REQUESTS THE COURT TO GRANT ' ' TERMS AND PAYMENT PERIODS ' ' WHICH TAKE ACCOUNT OF BOTH ITS FINANCIAL POSITION AND THE CURRENT SITUATION OF THE IRON AND STEEL INDUSTRY .

THE CLAIM THAT THE CONTESTED DECISION SHOULD BE DECLARED VOID

4 IN SUPPORT OF ITS CLAIM THAT THE DECISION SHOULD BE DECLARED VOID THE APPLICANT RELIES ON THE FOLLOWING SUBMISSIONS : THE CONTESTED DECISION TOOK NO ACCOUNT OF THE FACT THAT THE QUOTA IN QUESTION WAS EXCEEDED SOLELY BECAUSE OF AN ORDER EXPORTED TO A NON-MEMBER COUNTRY ; THE GENERAL DECISION ON WHICH THE CONTESTED DECISION IS BASED , DECISION NO 2794/80 , HAS UNLAWFUL RETROACTIVE EFFECT ; THE CONTESTED DECISION INFRINGES ARTICLES 3 AND 4 OF THE ECSC TREATY ; IT ALSO INFRINGES ARTICLE 14 OF DECISION NO 2794/80 AND ARTICLE 33 OF THE ECSC TREATY ; THE QUOTA ALLOCATED TO THE APPLICANT WAS NOT ADJUSTED DESPITE THE FACT THAT ITS PRODUCTION POTENTIAL HAD INCREASED ; THE CONTESTED DECISION TOOK NO ACCOUNT OF THE APPLICANT ' S CONDUCT AFTER 31 OCTOBER 1980 .

THE FIRST SUBMISSION IN THE APPLICATION

5 THE APPLICANT CONTENDS THAT ITS ALLEGED SURPASSING OF ITS QUOTA WAS DUE EXCLUSIVELY TO THE EXPORTATION OF TWO CONSIGNMENTS OF 1 000 TONNES EACH TO LIBYA ON 10 NOVEMBER AND 4 DECEMBER 1980 . IT ARGUES THEREFORE THAT THE COMMISSION SHOULD NOT PENALIZE AN UNDERTAKING FOR EXPORTING TO A NON-MEMBER COUNTRY , PARTICULARLY WHEN IN DOING SO THE APPLICANT HAS COMPLIED WITH THE SPIRIT OF THE TREATY AS EXPRESSED IN ARTICLES 3 AND 4 AND HAS , MOREOVER , CAUSED NO INJURY TO ITS COMPETITORS ESTABLISHED IN THE MEMBER STATES .

6 AS THE COURT HAS ALREADY EMPHASIZED IN OTHER JUDGMENTS THE EXTENT TO WHICH EXTERNAL TRADE IS TO BE TAKEN INTO CONSIDERATION IN RELATION TO MEASURES ADOPTED UNDER ARTICLE 58 OF THE ECSC TREATY IS A MATTER FOR THE COMMISSION TO DECIDE , AND IN ARRIVING AT THAT DECISION IT MUST TAKE ACCOUNT OF THE COMMUNITY STEEL INDUSTRY ' S OWN NEEDS AND THE COMMUNITY ' S INTERESTS IN ITS RELATIONS WITH NON-MEMBER COUNTRIES . THEREFORE IT IS NOT POSSIBLE TO INFER FROM ARTICLE 58 ANY OBLIGATION ON THE COMMISSION TO EXEMPT FROM THE QUOTA SYSTEM THE PRODUCTION WHICH CERTAIN UNDERTAKINGS MIGHT PREFER TO DIRECT TOWARDS EXPORT MARKETS . THE SUBMISSION MUST THEREFORE BE REJECTED .

7 FURTHERMORE , AS THE COMMISSION RIGHTLY STATED THE PENALTY FOR EXCEEDING THE QUOTA WAS IMPOSED NOT IN RESPECT OF THE EXPORTS TO A NON-MEMBER COUNTRY BUT IN RESPECT OF THE TOTAL PRODUCTION DURING THE QUARTER IN QUESTION . MOREOVER , IT IS CLEAR FROM THE EVIDENCE THAT IN DECEMBER 1980 ALONE , THAT IS TO SAY AFTER THE ORDER INTENDED FOR EXPORT TO A NON-MEMBER COUNTRY HAD BEEN COMPLETED , THE APPLICANT MANUFACTURED 2 439 TONNES OF STEEL PRODUCTS , WHICH IS GREATER THAN THE EXCESS PRODUCTION WITH WHICH IT IS CHARGED .

THE SECOND SUBMISSION IN THE APPLICATION

8 THE APPLICANT MAINTAINS THAT THE RETROACTIVE EFFECT OF THE CONTESTED DECISION IS UNLAWFUL FOR TWO REASONS : IN THE FIRST PLACE , THE FIRST ORDER OF 1 000 TONNES , DESPATCHED TO A NON-MEMBER COUNTRY ON 10 NOVEMBER 1980 , WAS IN RESPECT OF A CONTRACT MADE ON 7 OCTOBER 1980 , THAT IS TO SAY BEFORE DECISION NO 2794/80 , WHICH WAS PUBLISHED IN THE OFFICIAL JOURNAL ON 31 OCTOBER 1980 , CAME INTO FORCE ; IN THE SECOND PLACE , IT WAS WRONG TO RELY ON PRODUCTION IN THE LAST THREE MONTHS OF 1980 IN ORDER TO DETERMINE ANY EXCESS BECAUSE PRODUCTION IN OCTOBER AND ORDERS ACCEPTED BEFORE 31 OCTOBER ARE NOT NORMALLY TO BE TAKEN INTO ACCOUNT . CONSEQUENTLY , THE APPLICANT MAINTAINS THAT THE COMMISSION SHOULD , AT THE VERY LEAST , WITHDRAW ITS OBJECTIONS IN RESPECT OF HALF OF THE ALLEGED EXCESS PRODUCTION .

9 THE REPLY TO BE GIVEN TO THAT SUBMISSION , AS THE COURT HAS HELD ON A NUMBER OF OCCASIONS ( JUDGMENT OF 16 . 2 . 1982 IN CASE 258/80 SPA METALLURGICA RUMI V COMMISSION ( 1982 ) ECR 487 ; JUDGMENT OF 16 . 2 . 1982 IN CASE 276/80 FERRIERA PADANA SPA V COMMISSION ( 1982 ) ECR 517 ), IS THAT DECISION NO 2794/80/ECSC DID NOT HAVE GENUINE RETROACTIVE EFFECT SINCE THE UNDERTAKINGS WERE ABLE TO ADJUST THEIR PRODUCTION IN NOVEMBER AND DECEMBER TO TAKE ACCOUNT OF THEIR QUOTAS FOR THE QUARTER AND THEREBY AVOID ANY INFRINGEMENT . MOREOVER , ALTHOUGH IN GENERAL THE PRINCIPLE OF LEGAL CERTAINTY PRECLUDES A COMMUNITY MEASURE FROM TAKING EFFECT FROM A POINT IN TIME BEFORE ITS PUBLICATION , IT MAY EXCEPTIONALLY BE OTHERWISE WHERE THE PURPOSE TO BE ACHIEVED SO DEMANDS AND WHERE THE LEGITIMATE EXPECTATIONS OF THOSE CONCERNED ARE DULY RESPECTED .

10 IN THE CIRCUMSTANCES OF THIS CASE IT WAS NECESSARY TO INCLUDE THE MONTH OF OCTOBER IN THE SYSTEM IN ORDER TO PREVENT UNDERTAKINGS FROM INCREASING THEIR PRODUCTION IN OCTOBER IN ANTICIPATION OF THE REDUCTIONS SUBSEQUENTLY TO BE APPLIED .

11 FURTHERMORE , THE COMMISSION RESPECTED THE LEGITIMATE EXPECTATIONS OF THOSE CONCERNED BY MEANS OF THE COMMUNICATION OF 11 OCTOBER 1980 ( OFFICIAL JOURNAL , C 264 , P . 2 ) WHEREBY IT GAVE NOTICE OF ITS INTENTION TO INCLUDE THE MONTH OF OCTOBER IN THE SYSTEM OF QUOTAS , AND BY MEANS OF THE DECISION PUBLISHED ON THE SAME DATE ( OFFICIAL JOURNAL , L 268 , P . 25 ) REQUIRING THE UNDERTAKINGS TO SUPPLY INFORMATION ON THEIR PRODUCTION FOR OCTOBER 1980 .

12 MOREOVER , THE DOCUMENTS PRODUCED BY THE COMMISSION SHOW THAT IT HELD TWO MEETINGS WITH INDEPENDENT ITALIAN PRODUCERS ON 4 AND 17 OCTOBER 1980 IN ORDER TO INFORM THEM OF THE INTRODUCTION OF A QUOTA SYSTEM FOR STEEL PRODUCTS .

13 THUS EVEN IF THE COMMISSION DID NOT INDICATE PRECISELY WHAT THE LEVEL OF QUOTAS WOULD BE , WHICH MIGHT HAVE PREVENTED THE UNDERTAKINGS FROM DETERMINING THE PRECISE CONSEQUENCES OF THE COMMISSION ' S ADVICE AND ENSURING THAT THEIR PRODUCTION WAS NOT EXCESSIVE IN RELATION TO THE QUOTAS WHICH WERE TO BE ALLOCATED TO THEM FOR THE WHOLE QUARTER , THE FACT IS THAT THE UNDERTAKINGS DID RECEIVE NOTICE OF THE COMMISSION ' S INTENTIONS .

14 IN VIEW OF THE FOREGOING THE SECOND SUBMISSION IN SUPPORT OF THE APPLICATION MUST BE REJECTED .

THE THIRD SUBMISSION IN THE APPLICATION

15 FERRIERE SAN CARLO IS OF THE OPINION THAT IT CAUSED NO INJURY TO COMPETING UNDERTAKINGS ESTABLISHED IN THE EUROPEAN ECONOMIC COMMUNITY BECAUSE IT DELIVERED THE EXCESS PRODUCTION OUTSIDE THE COMMUNITY . IT ARGUES THAT THEREFORE , SINCE THE CONTESTED DECISION DID NOT TAKE ACCOUNT OF THAT FACT , IT INFRINGED THE PROVISIONS OF ARTICLES 3 AND 4 OF THE ECSC TREATY , IN PARTICULAR THOSE WHICH REQUIRE THE COMMISSION TO ENABLE UNDERTAKINGS TO SECURE A MINIMUM LEVEL OF FINANCIAL RESOURCES , TO MAINTAIN THE LEVEL OF EMPLOYMENT AND A SUFFICIENT PRODUCTION CAPACITY AND TO PROMOTE THE ORDERLY EXPANSION AND MODERNIZATION OF PRODUCTION .

16 THE SUBMISSION AMOUNTS TO A PRELIMINARY OBJECTION WHICH CHALLENGES IN EFFECT ONCE MORE THE LEGALITY OF THE GENERAL DECISION , DECISION NO 2794/80 .

17 AS THE COURT HAS ALREADY HELD IN RESPONSE TO COMPARABLE ARGUMENTS ( JUDGMENT OF 16 . 2 . 1982 IN FERRIERA PADANA SPA , CITED ABOVE , AND JUDGMENT OF 7 . 7 . 1982 IN CASE 119/81 , KLOCKNER V COMMISSION OF THE EUROPEAN COMMUNITIES ( 1983 ) ECR 2627 ), THE APPLICANT ' S ARGUMENT FAILS TO APPRECIATE THE TRUE PURPOSE OF ARTICLE 58 WITHIN THE SYSTEM OF THE TREATY AS A WHOLE . THE PROVISION IS INTENDED TO ENABLE THE COMMUNITY TO DEAL WITH A CRISIS CAUSED BY A DECLINE IN DEMAND . IT PROVIDES FOR THE INTRODUCTION OF A SYSTEM OF PRODUCTION QUOTAS WHICH IS INTENDED TO SPREAD EQUITABLY THROUGHOUT THE IRON AND STEEL INDUSTRY OF THE COMMUNITY THE UNAVOIDABLE CONSEQUENCES OF THE ADJUSTMENT OF PRODUCTION TO THE REDUCED NUMBER OF POSSIBILITIES OF DISPOSAL .

18 THE GOAL OF THOSE RESTRICTIVE MEASURES IS TO IMPROVE MARKET CONDITIONS SO AS TO ENABLE THE PROFITABILITY OF UNDERTAKINGS TO BE MAINTAINED OR RESTORED IN THE LONG TERM AND THEREBY ENABLE THE JOBS WHICH DEPEND ON IT TO BE PRESERVED AS FAR AS POSSIBLE . HOWEVER , CONTRARY TO THE APPLICANT ' S CONTENTIONS , ARTICLE 58 DOES NOT IN ANY WAY REQUIRE THE COMMISSION TO GUARANTEE EACH INDIVIDUAL UNDERTAKING A MINIMUM LEVEL OF PRODUCTION DETERMINED IN ACCORDANCE WITH THE UNDERTAKINGS ' S OWN CRITERIA OF PROFITABILITY AND DEVELOPMENT . THE AIM OF THAT ARTICLE IS TO SPREAD IN THE MOST EQUITABLE MANNER POSSIBLE AMONGST ALL UNDERTAKINGS THE REDUCTIONS REQUIRED BY THE ECONOMIC SITUATION , NOT TO GUARANTEE UNDERTAKINGS A MINIMUM LEVEL OF EMPLOYMENT PROPORTIONATE TO THEIR CAPACITY .

19 AS REGARDS IN PARTICULAR THE PROVISIONS OF ARTICLES 2 , 3 AND 4 , MENTIONED IN PARAGRAPH ( 2 ) OF ARTICLE 58 AND RELIED UPON BY THE APPLICANT , IT SHOULD BE OBSERVED THAT THE GENERAL AIMS SET OUT IN THOSE ARTICLES MUST CONSTANTLY BE RECONCILED WITH ONE ANOTHER IN THE LIGHT OF THE ECONOMIC CIRCUMSTANCES AND THEREFORE PRIORITY MAY NOT BE GIVEN TO ONE OF THOSE AIMS TO THE DETRIMENT OF THE OTHERS . AS FAR AS THE REFERENCE IN ARTICLE 58 ( 2 ) TO THE NEED ' ' TO MAINTAIN EMPLOYMENT ' ' IS CONCERNED , IT IS MADE IN RELATION TO A REGULATORY MECHANISM TO WHICH THE COMMISSION HAS NOT RESORTED . IT SHOULD BE ADDED THAT IN ESTABLISHING THE QUOTA SYSTEM THE COMMISSION DID NOT DISREGARD THE NEED TO MAINTAIN EMPLOYMENT AS FAR AS POSSIBLE BECAUSE IT TOOK ACCOUNT , IN ARTICLE 4 ( 3 ) OF DECISION NO 2794/80 , OF THE LEVEL OF UTILIZATION OF CAPACITY .

20 THE SUBMISSION MUST THEREFORE BE REJECTED .

THE FOURTH SUBMISSION IN THE APPLICATION

21 THE APPLICANT MAINTAINS THAT THE CONTESTED DECISION INFRINGES ARTICLE 14 OF DECISION NO 2794/80 AND ARTICLE 33 OF THE ECSC TREATY .

22 THE COURT FINDS THAT THE APPLICANT HAS NOT ADDUCED ANY EVIDENCE IN SUPPORT OF ITS SUBMISSIONS WHICH WOULD ENABLE THE COURT TO DETERMINE WHETHER IT IS WELL FOUNDED . IN THE CIRCUMSTANCES THE SUBMISSION MUST BE REJECTED .

THE FIFTH SUBMISSION IN THE APPLICATION

23 THE APPLICANT MAINTAINS THAT THE QUOTA ALLOCATED TO IT FOR THE FOURTH QUARTER OF 1980 WAS NOT ADJUSTED DESPITE THE FACT THAT ITS PRODUCTION POTENTIAL HAD INCREASED DUE TO THE ACTIVATION OF A NEW ROLLING-MILL . IT IS THEREFORE OF THE OPINION THAT THE CONTESTED DECISION INFRINGES ARTICLE 14 OF DECISION NO 2794/80 , ARTICLES 13 AND 14 OF COMMISSION DECISION NO 1831/81/ECSC OF 24 JUNE 1981 ( OFFICIAL JOURNAL , L 180 , P . 1 ) AND ARTICLES 14 AND 15 OF COMMISSION DECISION NO 1696/82/ECSC OF 30 JUNE 1982 ( OFFICIAL JOURNAL , L 191 , P . 1 ).

24 THE COURT NOTES FIRST THAT THE ONLY PROVISIONS WHICH THE APPLICANT MAY USEFULLY RELY UPON , IN VIEW OF THE FACT THAT THE ALLEGED EXCESS PRODUCTION TOOK PLACE DURING THE FOURTH QUARTER OF 1980 , ARE THOSE CONTAINED IN ARTICLE 4 ( 4 ) OF DECISION NO 2794/80 , WHICH STATES AS FOLLOWS :

' ' WHERE , FURTHER TO AN INVESTMENT PROGRAMME DULY REPORTED AND NOT THE SUBJECT OF AN UNFAVOURABLE OPINION , THE UNDERTAKING ACTIVATES A NEW PLANT AFTER 1 JULY 1980 , THE COMMISSION SHALL ADAPT APPROPRIATELY THE REFERENCE PRODUCTION OF THIS UNDERTAKING , PROVIDED IT FINDS THAT THE NEW PRODUCTION POSSIBILITY THUS ESTABLISHED BRINGS THE TOTAL PRODUCTION POSSIBILITIES FOR THE FOUR GROUPS OF PRODUCTS TO A LEVEL EXCEEDING BY AT LEAST 15 % THE TOTAL PRODUCTION POSSIBILITIES EXISTING FOR 1979 . ' '

25 THE COURT NOTES SECONDLY THAT IT IS CLEAR FROM THE EVIDENCE AND IN PARTICULAR FROM THE REPLIES GIVEN BY THE COMMISSION TO THE QUESTIONS ASKED BY THE COURT , WHICH WERE NOT CONTRADICTED BY THE APPLICANT , THAT ALTHOUGH THE LATTER REQUESTED THE COMMISSION SEVERAL TIMES TO VERIFY THE IMPROVEMENT IN ITS PLANT IT WAS ONLY ON 26 OCTOBER 1982 , AS A RESULT OF A FURTHER INSPECTION CARRIED OUT BY COMMISSION STAFF , THAT IT COULD BE ESTABLISHED THAT CERTAIN MODIFICATIONS HAD BEEN MADE TO THE PLANT BETWEEN AUGUST 1981 AND FEBRUARY 1982 AND THAT AS A RESULT THE APPLICANT ' S PRODUCTION CAPACITY HAD MORE THAN DOUBLED . IN THE CIRCUMSTANCES THE COMMISSION , BY A DECISION NOTIFIED TO THE UNDERTAKING ON 22 NOVEMBER 1982 , ADJUSTED THE UNDERTAKING ' S PRODUCTION QUOTAS WITH EFFECT FROM THE FOURTH QUARTER OF 1981 PURSUANT TO ARTICLE 13 OF DECISION NO 1831/81 .

26 IT FOLLOWS THAT THE APPLICANT IS IN NO RESPECT ENTITLED TO REQUEST AN ADJUSTMENT OF THE PRODUCTION QUOTA ALLOCATED TO IT FOR THE FOURTH QUARTER OF 1980 , THE ONLY ONE AT ISSUE IN THIS CASE , AND THAT THE AFOREMENTIONED SUBMISSION MUST BE REJECTED .

THE SIXTH SUBMISSION IN THE APPLICATION

27 FINALLY , THE APPLICANT MAINTAINS THAT THE CONTESTED DECISION IS UNLAWFUL BECAUSE IT DID NOT TAKE ACCOUNT OF ITS CONDUCT AFTER 31 OCTOBER 1980 AND IN PARTICULAR OF THE FACT THAT FERRIERE SAN CARLO CLOSED ITS WORKS DURING NOVEMBER AND DECEMBER 1980 IN ORDER NOT TO EXCEED THE PRODUCTION QUOTAS ALLOCATED TO IT .

28 THE COURT CONSIDERS THAT THIS SUBMISSION MUST BE REJECTED BECAUSE IN THE FIRST PLACE EVEN IF IT WERE PROVEN , THE FACT RELIED UPON BY FERRIERE SAN CARLO IS WHOLLY IRRELEVANT TO THE QUESTION OF THE LEGALITY OF THE CONTESTED DECISION , AND IN THE SECOND PLACE IT APPEARS FROM THE EVIDENCE THAT ITS STATEMENT IS IN FACT INCORRECT : DURING THE QUARTER IN QUESTION THE APPLICANT PRODUCED 3 166 TONNES IN OCTOBER , 2 194 TONNES IN NOVEMBER AND 2 439 TONNES IN DECEMBER . IT IS THEREFORE NOT REASONABLY POSSIBLE TO MAINTAIN THAT THE APPLICANT CEASED OPERATIONS DURING NOVEMBER AND DECEMBER 1980 .

29 IT FOLLOWS FROM THE WHOLE OF THE FOREGOING THAT THE CLAIM IN THE APPLICATION TO THE EFFECT THAT THE CONTESTED DECISION SHOULD BE DECLARED VOID MUST BE REJECTED .

THE ALTERNATIVE CLAIM FOR A REDUCTION OF THE FINE

30 THE COURT NOTES FIRST THAT THE FIFTH AND SIXTH SUBMISSIONS CONSIDERED PREVIOUSLY , WHICH MAY BE REGARDED AS ARGUMENTS PRESENTED IN SUPPORT OF BOTH THE CLAIM FOR A DECLARATION THAT THE CONTESTED DECISION IS VOID AND THE CLAIM FOR A REDUCTION OF THE FINE , HAVE BEEN REJECTED BECAUSE THEY ARE BASED ON ALLEGATIONS WHICH HAVE PROVED TO BE FALSE .

31 SECONDLY , ALTHOUGH THE APPLICANT MAINTAINED THAT PAYMENT OF THE FINE IMPOSED ON IT WOULD FORCE IT TO CLOSE ITS WORKSHOPS AND TO LAY OFF ITS 30 EMPLOYEES , THE COURT TAKES THE VIEW THAT THAT FACT , BY ITSELF , IS NOT SUCH AS TO ENABLE IT TO REDUCE THE AMOUNT OF THE FINE .

32 AS IT HAS ALREADY HELD ( IN ITS JUDMENT OF 11 MAY 1983 IN JOINED CASES 303 AND 312/81 , KLOCKNER V COMMISSION ( 1983 ) ECR 1507 ) THE SYSTEM OF PRODUCTION QUOTAS WOULD BE GRAVELY COMPROMISED IF EVERY UNDERTAKING WERE ABLE , BY PLEADING EMERGENCY DUE TO SERIOUS ECONOMIC DIFFICULTIES , TO EXCUSE ITSELF FROM OBSERVANCE OF THE RESTRICTIONS AND TO EXCEED AT WILL THE PRODUCTION QUOTA ALLOCATED TO IT . THE CHAIN REACTION THEREBY RELEASED WOULD CULMINATE IN THE COLLAPSE OF THE SYSTEM , SO THAT ARTICLE 58 OF THE TREATY WOULD BECOME A DEAD LETTER .

33 MOREOVER , IT APPEARS FROM THE EVIDENCE AND IN PARTICULAR FROM THE REPORT OF THE AUDIT CARRIED OUT ON 21 SEPTEMBER 1982 AT FERRIERE SAN CARLO THAT ALTHOUGH THE APPLICANT ' S FINANCIAL POSITION DOES IN FACT GIVE CAUSE FOR CONCERN , THE AUDITORS CONSIDER THAT A FURTHER FINANCIAL BURDEN , SUCH AS THAT ARISING FROM THE FINE IMPOSED BY THE COMMISSION , COULD BE SUPPORTED IF PAYMENTS COULD BE SPREAD OVER A PERIOD OF TIME . IT IS CLEAR FROM THE EVIDENCE AND IN PARTICULAR FROM THE ORAL PROCEEDINGS THAT THE COMMISSION IS WILLING TO ALLOW FERRIERE SAN CARLO TIME TO PAY PROVIDED THAT IT IS NOT TOO LONG .

34 THIRDLY , FERRIERE SAN CARLO MAINTAINS THAT THE FINE IMPOSED ON IT , WHICH WAS BASED ON A UNIFORM RATE OF 82.5 ECU PER EXCESS TONNE , INFRINGED THE PROVISIONS OF ARTICLE 58 ( 4 ) OF THE ECSC TREATY WHICH PROVIDES THAT THE COMMISSION ' ' MAY IMPOSE UPON UNDERTAKINGS WHICH DO NOT COMPLY WITH DECISIONS TAKEN BY IT UNDER THIS ARTICLE FINES NOT EXCEEDING THE VALUE OF THE TONNAGES PRODUCED IN DISREGARD THEREOF ' ' . MORE SPECIFICALLY THE APPLICANT IS OF THE OPINION THAT THE AMOUNT OF THE FINE SHOULD NOT EXCEED THE PROFIT ON THE EXCESS TONNAGE , AND RELIES IN THAT RESPECT ON THE ARGUMENT PRESENTED TO THE COURT BY FERRIERE DI ROE VOLCIANO IN CASE 234/82 .

35 THE COURT OBSERVES , FIRST , THAT AFORMENTIONED PROVISIONS OF ARTICLE 58 OF THE ECSC TREATY ARE BASED ON THE NOTION OF THE VALUE OF THE TONNAGES PRODUCED IN DISREGARD OF THE QUOTA , NOT THE PROFIT REALIZED IN RESPECT OF SUCH PRODUCTION , AND SECONDLY THAT THE REFERENCE TO THE ARGUMENT PUT FORWARD BY FERRIERE DI ROE VOLCIANO IS IN ANY CASE UNJUSTIFIED SINCE THAT ARGUMENT WAS BASED ESSENTIALLY ON THE FACT THAT THAT UNDERTAKING OPERATED EXCLUSIVELY AS A PROCESSOR FOR OTHER UNDERTAKINGS ; THAT IS NOT THE CASE WITH THE APPLICANT . IN THE CIRCUMSTANCES THERE WAS NO SPECIAL REASON IN THIS CASE TO DEPART FROM A STRICT APPLICATION OF THE PROVISIONS OF ARTICLE 58 AND THE COMMISSION APPLIED IT CORRECTLY .

36 FINALLY , ALTHOUGH THE APPLICANT SOUGHT TO RELY ON ITS GOOD FAITH THE COURT HAS FOUND NO REASON IN THAT RESPECT TO JUSTIFY A REDUCTION IN THE AMOUNT OF THE FINE .

37 IT FOLLOWS FROM THE WHOLE OF THE FOREGOING THAT THE CLAIM FOR A REDUCTION OF THE FINE MUST BE REJECTED .

THE CLAIM THAT THE COURT SHOULD GRANT THE APPLICANT ' ' TERMS AND PAYMENT PERIODS ' ' TAKING INTO ACCOUNT BOTH ITS FINANCIAL POSITION AND THE CURRENT SITUATION IN THE IRON AND STEEL INDUSTRY

38 CLAIMS OF THIS SORT WHICH IN FACT REQUIRE THE COURT TO ISSUE INSTRUCTIONS TO THE COMMISSION , WHICH ALONE HAS THE POWER TO GRANT TERMS OF PAYMENT TO UNDERTAKINGS WHICH HAVE BEEN FINED , ARE MANIFESTLY INADMISSIBLE .

Decision on costs

COSTS

39 ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE PROVIDES THAT THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS . AS FERRIERE SAN CARLO HAS FAILED IN ITS SUBMISSIONS , IT MUST BE ORDERED TO PAY THE COSTS .

Operative part

ON THOSE GROUNDS

THE COURT ( FIFTH CHAMBER )

HEREBY :

1 . DISMISSES THE APPLICATION .

2 . ORDERS THE APPLICANT TO PAY THE COSTS .