Judgment of the Court of 12 July 1962. - Louis Worms v High Authority of the European Coal and Steel Community. - Case no 18-60.



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Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

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1 . EQUALIZATION SCHEME - IMPORTED FERROUS SCRAP EQUALIZATION FUND ( OCCF ) - ACTIVITIES OF THAT AGENCY - LIABILITY OF THE HIGH AUTHORITY

( ECSC TREATY, ARTICLE 53 )

2 . COMPETITION - PROHIBITED PRACTICES - BOYCOTTING - POWERS OF INTERVENTION OF THE HIGH AUTHORITY

( ECSC TREATY, ARTICLE 65 )

Summary

1 . ONLY IN CASES WHERE THE OCCF'S ACTIONS CONCERN THE FUNCTIONING OF THE EQUALIZATION SCHEME, AND THUS ARE IN THE NATURE OF AN OFFICIAL DUTY, CAN THEY BE CONSIDERED DIRECTLY TO GIVE RISE TO THE LIABILITY OF THE HIGH AUTHORITY .

2 . ARTICLE 65 ( 1 ) AND ( 5 ) OF THE ECSC TREATY, PROHIBITING CONCERTED PRACTICES TENDING TO DISTORT NORMAL COMPETITION WITHIN THE COMMON MARKET, ENABLES THE HIGH AUTHORITY TO INTERVENE AGAINST THE ORIGINATORS OF A BOYCOTT WHICH DISPLAYS THIS FEATURE .

Parties

IN CASE 18/60

LOUIS WORMS, RESIDING AT THE HAGUE, ASSISTED BY J . L . JANSSEN VAN RAAY, AVOCAT-AVOUE, OF ROTTERDAM, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF ROBERT KRIEPS, 12 AVENUE MARIE-THERESE, APPLICANT,

V

HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, B . VAN DER ESCH, ACTING AS AGENT, ASSISTED BY C . R . C . WIJCKERHELD BISDOM, ADVOCATE OF THE HOGE RAAD DER NEDERLANDEN, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2 PLACE DE METZ, DEFENDANT,

Subject of the case

APPLICATION UNDER ARTICLE 40 OF THE ECSC TREATY FOR REPARATION FOR INJURY SUFFERED BY THE APPLICANT CAUSED BY A WRONGFUL ACT OR OMISSION ON THE PART OF THE COMMUNITY IN THE APPLICATION OF THE SAID TREATY,

Grounds

P.202

THE APPLICANT INVOKES ARTICLE 40 OF THE TREATY ESTABLISHING THE ECSC TO OBTAIN REPARATION FOR THE INJURY HE HAS SUFFERED AS A RESULT OF A WRONGFUL ACT OR OMISSION ON THE PART OF THE COMMUNITY IN THE APPLICATION OF THE TREATY AND BASES HIS APPLICATION ON THE FOLLOWING THREE SUBMISSIONS :

1 . THE HIGH AUTHORITY FAILED TO EXERCISE ITS POWERS OVER THE OFFICE COMMUN DES CONSOMMATEURS DE FERAILLE ( OCCF ) TO COMPEL THE LATTER TO ENSURE THAT THE APPLICANT COULD CARRY ON HIS TRADE AS A SCRAP-DEALER . THE HIGH AUTHORITY IS LIABLE FOR THE DAMAGE ARISING FROM THIS OMISSION BY THE OCCF BECAUSE IT CONCERNED THE FUNCTIONING OF THE EQUALIZATION SCHEME, A SPHERE IN WHICH THAT AGENCY ( OCCF ) MUST BE CONSIDERED AS AN ORGAN OF THE HIGH AUTHORITY . FURTHERMORE, THE LATTER IS RESPONSIBLE FOR THE SITUATION BECAUSE IT FAILED IN ITS DUTY AS A PUBLIC AUTHORITY TO COMPLY WITH ITS OBLIGATIONS .

P . 203

2 . THE HIGH AUTHORITY FAILED TO INTERVENE TO BREAK UP THE BOYCOTT WHICH THE APPLICANT SUFFERED AT THE HANDS OF BOTH THE DUTCH SCRAP-DEALERS AND THE OCCF .

3 . THE HIGH AUTHORITY FAILED TO ACT IN A DETERMINED MANNER TO END ACTS OF FRAUD IN SCRAP-DEALING AND TO PROCEED AGAINST THOSE RESPONSIBLE .

A - AS TO ADMISSIBILITY

THE DEFENDANT CONTESTS THE ADMISSIBILITY OF THE THREE SUBMISSIONS RELIED ON :

1 . WITH REGARD TO THE FIRST SUBMISSION, THE DEFENDANT STATES THAT UNDER THE TERMS OF DECISION 2/57 ( OFFICIAL JOURNAL OF 28 JANUARY 1957 ) THE OCCF IS NOT AN ORGAN OF THE HIGH AUTHORITY WHEN IT BUYS FERROUS SCRAP AND THAT THE ALLEGED IRREGULARITIES COMMITTED IN THIS RESPECT BY THE OCCF CANNOT GIVE RISE TO LIABILITY ON THE PART OF THE DEFENDANT .

THIS LINE OF ARGUMENT DEALS WITH THE QUESTION WHETHER THE EXISTENCE OF A WRONGFUL ACT OR OMISSION ON THE PART OF THE COMMUNITY ( A CONDITION PRECEDENT FOR AN APPLICATION BASED ON ARTICLE 40 OF THE TREATY ) IS NOT PRECLUDED IN THIS CASE ON THE GROUND THAT CERTAIN ACTS OF THE OCCF FALL OUTSIDE THE FRAMEWORK OF THE COMMUNITY'S ACTIVITIES . THIS IS A QUESTION CONCERNING THE MERITS OF THIS SUBMISSION AND NOT ITS ADMISSIBILITY .

2 . WITH REGARD TO THE SECOND SUBMISSION, THE DEFENDANT REFERS TO THE FACT THAT THE APPLICATION SPECIFIES NEITHER THE PERIOD NOR THE NATURE OF THE ALLEGED BOYCOTT, NOR THE STEPS WHICH THE HIGH AUTHORITY SHOULD HAVE TAKEN, AND THEREFORE THE BRIEF STATEMENT OF THE GROUNDS ON WHICH THE APPLICATION IS BASED, AS REQUIRED BY ARTICLE 38 ( 1 ) ( C ) OF THE RULES OF PROCEDURE, IS DEFECTIVE .

IN HIS APPLICATION THE APPLICANT HAS STATED CLEARLY THE SUBMISSION RELATING TO THE BOYCOTT . HE HAS SUBSEQUENTLY COMPLETED AND AMPLIFIED THIS SUBMISSION DURING THE PROCEEDINGS . THE DEFENDANT'S OBJECTION CANNOT BE SUSTAINED .

3 . WITH REGARD TO THE THIRD SUBMISSION, THE DEFENDANT EMPHASIZES THAT THERE IS NO RELATIONSHIP OF CAUSE AND EFFECT BETWEEN THE STEPS TAKEN BY THE HIGH AUTHORITY IN THE SUPPRESSION OF THE SCRAP FRAUDS AND THE INJURY ALLEGED BY THE APPLICANT .

THIS ARGUMENT OF THE DEFENDANT, WHICH DEALS WITH THE REMOTENESS OF CAUSATION BETWEEN THE ALLEGED WRONGFUL ACT OR OMISSION AND THE INJURY SUFFERED, IS A QUESTION OF SUBSTANCE AND NOT OF ADMISSIBILITY .

P . 204

FOR THESE REASONS, THE PRELIMINARY OBJECTIONS OF INADMISSIBILITY RAISED BY THE DEFENDANT MUST BE DISMISSED . FURTHERMORE NO OBJECTION CAN BE RAISED BY THE COURT OF ITS OWN MOTION AGAINST THE ADMISSIBILITY OF THE APPLICATION .

THE APPLICATION IS THEREFORE ADMISSIBLE .

B - ON THE SUBSTANCE OF THE CASE

I . ( A ) IT MUST FIRST BE CONSIDERED WHETHER THE HIGH AUTHORITY IS LIABLE FOR THE WRONGFUL ACT OR OMISSION THAT THE OCCF IS ALLEGED TO HAVE COMMITTED BY REFUSING TO CONSIDER THE APPLICANT'S OFFERS TO SELL FERROUS SCRAP .

ACCORDING TO ARTICLES 11 AND 12 OF DECISION 2/57 OF THE HIGH AUTHORITY, THE CAISSE DE PEREQUATION DES FERRAILLES IMPORTEES IS THE EXECUTIVE ORGAN OF THE FINANCIAL ARRANGEMENTS AND IS ALONE COMPETENT TO MAKE DECISIONS TO ENSURE THE FUNCTIONING OF THOSE ARRANGEMENTS . IN THIS FIELD THE OCCF CAN ONLY MAKE PROPOSALS TO IT . THE POWERS BELONGING TO THE OCCF ARE OF A COMMERCIAL NATURE AND CONSIST IN NEGOTIATING PURCHASES OF FERROUS SCRAP ON JOINT ACCOUNT AND IN CONCLUDING DIRECT CONTRACTS FOR THE PURCHASE OF FERROUS SCRAP ON BEHALF OF CONSUMERS SUBSEQUENTLY TO BE DESIGNATED .

CONSEQUENTLY THE ACTIVITIES AT ISSUE HERE BEAR THE CHARACTERISTICS OF PRIVATE LAW AS IS SHOWN BY THE GENERAL SCHEME OF THE ABOVE - MENTIONED DECISION .

A CONTRARIO IT APPEARS FROM ARTICLE 15 ( 2 ) THEREOF THAT THE RIGHT RESERVED TO THE HIGH AUTHORITY TO MAKE DECISIONS ITSELF IN CERTAIN CASES DOES NOT EXIST WITH REGARD TO THE ACTIVITIES WHICH ARE THE SUBJECT OF THIS APPLICATION, AND WHICH ARE PROVIDED FOR IN ARTICLE 11 ( 2 ) AND ( 3 ).

WHEN CARRYING ON ITS STRICTLY COMMERCIAL ACTIVITIES, THE OCCF, A BELGIAN COMPANY UNDER PRIVATE LAW, IS GOVERNED BY NATIONAL LAW . IT IS ONLY IN CASES WHERE THE OCCF'S ACTS CONCERN THE FUNCTIONING OF THE EQUALIZATION SCHEME, AND ON THAT ACCOUNT HAVE THE CHARACTER OF A PUBLIC DUTY, THAT THEY CAN BE CONSIDERED AS DIRECTLY GIVING RISE TO THE LIABILITY OF THE HIGH AUTHORITY .

THERE IS NO DOUBT IN THIS CASE THAT THE OFFERS TO SELL FERROUS SCRAP MADE BY THE APPLICANT TO THE OCCF HAD AN EXCLUSIVELY COMMERCIAL CHARACTER AND, IN LAW, WERE NO DIFFERENT FROM THOSE MADE BY HIM TO THE UNDERTAKINGS USING SCRAP .

FURTHERMORE, IT APPEARS FROM THE DOCUMENTS PRODUCED BY THE APPLICANT THAT HE MADE THREE OFFERS TO SELL FERROUS SCRAP TO THE OCCF BY LETTERS DATED RESPECTIVELY 17 MARCH, 31 MARCH AND 12 MAY 1958 . THE FIRST TWO OFFERS CONTAINED NO INDICATION OF PRICE AND WERE IMPRECISELY DRAFTED, AS THE COURT WAS ABLE TO ESTABLISH BY COMPARING THE APPLICANT'S OFFERS WITH OTHER OFFERS FROM THIRD PARTIES TO THE OCCF, SO THAT THE OCCF'S REFUSAL TO ACCEPT THE APPLICANT'S OFFERS CANNOT BE CONSIDERED TO BE DISCRIMINATORY .

P . 205

ALTHOUGH THE OFFER OF 12 MAY 1958 WAS DRAWN UP IN GREATER DETAIL, THE OCCF'S REFUSAL TO ACCEPT IT EQUALLY CANNOT BE CONSIDERED TO BE DISCRIMINATORY WITH REGARD TO THE APPLICANT BECAUSE, AS THE DEFENDANT ASSERTED - AND THE APPLICANT HAS NOT DENIED - AN IDENTICAL OFFER, MADE BY A THIRD PARTY TO THE OCCF ON 1 MAY OF THE SAME YEAR AND OBVIOUSLY REFERRING TO THE SAME BATCH OF FERROUS SCRAP, HAD BEEN REFUSED IN SIMILAR TERMS .

CONSEQUENTLY THE ABOVE-MENTIONED FACTS WERE NOT OF SUCH A NATURE AS TO REQUIRE THE HIGH AUTHORITY TO INTERVENE WITH THE OCCF .

( B ) THE APPLICANT MAINTAINS THAT THE HIGH AUTHORITY, ACTING AS A PUBLIC AUTHORITY, HAD A DUTY TO EXERCISE ITS POWERS OVER THE OCCF IN ORDER TO GET THAT AGENCY TO ENTER INTO BUSINESS RELATIONS WITH HIM . THIS ALLEGATION MUST BE DISMISSED . IN FACT, THE OCCF'S CHOICE OF SELLERS WITH WHOM IT NEGOTIATES THE PURCHASE OF FERROUS SCRAP IS AN ACTIVITY GOVERNED BY PRIVATE LAW IN WHICH THE HIGH AUTHORITY HAS NO POWER TO INTERFERE .

II . ( A ) THE APPLICANT ALLEGES THAT THE HIGH AUTHORITY WAS GUILTY OF A WRONGFUL ACT OR OMISSION IN REFRAINING FROM INTERVENING TO BREAK THE BOYCOTT SET UP AGAINST HIM BY BOTH THE OCCF AND THE SCRAP-DEALERS .

IT IS GENERALLY ADMITTED THAT A BOYCOTT CONSTITUTES AN ILLEGAL ACT WHEN THE END IN VIEW OR THE MEANS USED ARE UNLAWFUL OR CONTRARY TO MORALITY, FOR EXAMPLE, WHEN SUCH SCHEMES TEND TO SATISFY A DESIRE FOR REVENGE OR A FEELING OF JEALOUSY WITHOUT BEING OF ANY USE TO THEIR ORIGINATORS, OR WHEN THERE EXISTS AN OBVIOUS DISPROPORTION BETWEEN THE ADVANTAGE SOUGHT AND THE INJURY SUFFERED BY THE VICTIM .

HOWEVER, IT MUST BE CONSIDERED WHETHER THE TREATY ESTABLISHING THE ECSC GIVES THE DEFENDANT THE POWER TO ACT AGAINST THE BOYCOTT FROM WHICH THE APPLICANT CLAIMS TO HAVE SUFFERED . ARTICLE 65 ( 1 ) AND ( 5 ) OF THE TREATY, WHICH PROHIBITS CONCERTED PRACTICES TENDING TO DISTORT NORMAL COMPETITION WITHIN THE COMMON MARKET, ENABLES THE HIGH AUTHORITY TO INTERVENE AGAINST THE ORIGINATORS OF A BOYCOTT WHICH PRESENTS THIS FEATURE . IN THIS CASE, HOWEVER, THE APPLICANT HAS FAILED TO SHOW THAT THE BOYCOTT WHICH HE ALLEGES HE HAS SUFFERED HAD THE EFFECT OF PREVENTING, RESTRICTING OR DISTORTING NORMAL COMPETITION WITHIN THE COMMON MARKET, WITHIN THE MEANING OF ARTICLE 65 OF THE ECSC TREATY .

P . 206

THE HIGH AUTHORITY DID NOT HAVE THE NECESSARY POWERS TO TAKE STEPS AGAINST THE BOYCOTT ALLEGED AND DESCRIBED BY THE APPLICANT . THEREFORE THE FACTS ALLEGED DO NOT FALL WITHIN THE COMPETENCE OF THE HIGH AUTHORITY .

( B ) THE APPLICANT COMPLAINS THAT THE HIGH AUTHORITY WAITED SIX YEARS BEFORE, ON 2 JUNE 1960, IT REFUSED A REQUEST FOR AUTHORIZATION MADE ON 26 APRIL 1954, IN PURSUANCE OF ARTICLE 65 ( 2 ) OF THE TREATY, BY THE CARTEL OF SCRAP DEALERS RECOGNIZED BY THE DUTCH IRON AND STEEL WORKS AS DIRECT SUPPLIERS . THE INJURY SUFFERED BY THE APPLICANT LIES IN THE FACT THAT, IF THE HIGH AUTHORITY HAD BEEN MORE DILIGENT, THE SAID CARTEL WOULD HAVE CEASED TO EXIST AT THE TIME WHEN THE SCRAP FRAUDS OCCURRED AND THUS THE APPLICANT COULD MORE EASILY HAVE ESTABLISHED BUSINESS RELATIONS WITH THE PURCHASERS OF SCRAP .

THIS ARGUMENT MUST BE DISMISSED . INDEED, THE POSSIBLE NEGLIGENCE OF THE HIGH AUTHORITY IN EXAMINING THE REQUEST FOR AUTHORIZATION OF THE ABOVE-MENTIONED CARTEL COULD HAVE CAUSED THE APPLICANT ONLY INDIRECT DAMAGE WHICH IN OTHER RESPECTS IS NOT SUFFICIENTLY PROVED IN LAW .

III . THE APPLICANT ALLEGES THAT THE HIGH AUTHORITY FAILED TO ACT IN A DETERMINED MANNER TO END THE ACTS OF FRAUD IN SCRAP-DEALING AND TO PROCEED AGAINST THOSE RESPONSIBLE .

THE APPLICANT HAS FAILED TO PRODUCE PROOF THAT HE HAS SUFFERED DIRECT INJURY AS A RESULT OF AN ALLEGED OMISSION ON THE PART OF THE HIGH AUTHORITY IN THIS RESPECT . ON THE CONTRARY, IT APPEARS FROM THE DOCUMENTS WHICH HE HAS PRODUCED THAT HE CONSIDERED HE HAD ALREADY BEEN RUINED BY THE BEGINNING OF 1958, AFTER THE LOSS OF HIS POSITION AS HANSA'S REPRESENTATIVE . HIS ALLEGATIONS THUS AMOUNT TO ASSERTING THAT HE COULD HAVE FOUND HIMSELF A NEW MEANS OF LIVELIHOOD IF THE HIGH AUTHORITY HAD INTERVENED MORE ENERGETICALLY OVER THE QUESTION OF THE SCRAP FRAUDS .

THE APPLICANT HAS NOT PRODUCED ANY PROOF OF THE EXISTENCE OF A LINK OF CAUSATION BETWEEN THE INJURY WHICH HE CLAIMS TO HAVE SUFFERED AND THE LACK OF ENERGY ON THE PART OF THE HIGH AUTHORITY IN THE SUPPRESSION OF THE SCRAP FRAUDS . THIS ARGUMENT MUST BE DISMISSED AND THE APPLICATION MUST THEREFORE BE DECLARED TO BE UNFOUNDED .

Decision on costs

UNDER THE TERMS OF ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .

AS THE APPLICANT HAS FAILED IN ALL HIS SUBMISSIONS, HE MUST BEAR THE COSTS, INCLUDING THOSE IN CONNEXION WITH THE APPLICATION FOR LEGAL AID .

Operative part

THE COURT

HEREBY :

1 . DISMISSES THE APPLICATION MADE BY LOUIS WORMS AGAINST THE HIGH AUTHORITY TO OBTAIN REPARATION FOR THE INJURY HE CLAIMS TO HAVE SUFFERED AS A RESULT OF THE WRONGFUL ACT OR OMISSION ON THE PART OF THE COMMUNITY IN THE APPLICATION OF THE TREATY ESTABLISHING THE ECSC;

2 . ORDERS THE APPLICANT TO PAY ALL THE COSTS .