Judgment of the Court of 28 October 1981. - Krupp Stahl AG v Commission of the European Communities. - System of production quotas for steel. - Joined cases 275/80 and 24/81.



European Court reports 1981 Page 02489



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

1 . MEASURES ADOPTED BY INSTITUTIONS - INDIVIDUAL DECISIONS UNDER THE ECSC TREATY - REQUIREMENTS AS TO FORM - INFRINGEMENT - PENALTIES - LIMITS

( ECSC TREATY , ART . 18 ; DECISION 22/60 OF THE HIGH AUTHORITY )

2 . MEASURES ADOPTED BY INSTITUTIONS - DUTY TO STATE REASONS - EXTENT - DECISION FIXING PRODUCTION QUOTAS

( ECSC TREATY , ART . 15 )

3 . ECSC - PRODUCTION - SYSTEM OF PRODUCTION QUOTAS FOR STEEL - REFERENCE PRODUCTION - CONDITIONS FOR INCREASE - NEW PRODUCTION CAPACITIES - CRITERIA OF ASSESSMENT

( GENERAL DECISION 2794/80 , ART . 4 , POINT 4 )

4 . ECSC - PRODUCTION - SYSTEM OF PRODUCTION QUOTAS FOR STEEL - REFERENCE PRODUCTION - CONDITIONS FOR INCREASE - NEW PRODUCTION CAPACITIES AND RESTRUCTURING OF UNDERTAKINGS - CUMULATIVE CONSIDERATION - NOT PERMISSIBLE

( GENERAL DECISION 2794/80 , ART . 4 , POINTS 4 AND 5 )

5 . OBJECTION OF ILLEGALITY - PROVISIONS OF GENERAL DECISIONS THE ILLEGALITY OF WHICH MAY BE PLEADED - PROVISIONS CONSTITUTING THE BASIS OF THE CONTESTED INDIVIDUAL DECISION

( ECSC TREATY , ART . 36 , THIRD PARAGRAPH )

Summary

1 . ALTHOUGH DECISION 22/60 ON THE IMPLEMENTATION OF ARTICLE 15 OF THE ECSC TREATY PRESCRIBES IN A DETAILED MANNER THE FORMAL REQUIREMENTS OF MEASURES OF THE HIGH AUTHORITY IN ORDER CLEARLY TO DISTINGUISH THE NATURE OF THOSE MEASURES , FAILURE TO COMPLY WITH THOSE REQUIREMENTS NEVERTHELESS DOES NOT ENTAIL THE NULLITY OF SUCH MEASURES WHERE THEY ARE UNQUES TIONABLY INDIVIDUAL DECISIONS TAKEN ON THE IMPLEMENTATION OF A SCHEME PREVIOUSLY ESTABLISHED BY MEANS OF A GENERAL DECISION ADOPTED IN ACCORDANCE WITH THE FORMAL REQUIREMENTS PRESCRIBED BY DECISION 22/60 .

2 . WHERE EXAMINATION OF THE FIGURES IN A NOTIFICATION FROM THE COMMISSION FIXING PRODUCTION QUOTAS MAKES IT POSSIBLE FOR THE UNDERTAKING TO WHICH THE NOTIFICATION IS ADDRESSED TO DETERMINE WHICH PROVISIONS OF THE GENERAL DECISION HAVE BEEN APPLIED TO TAKE ACCOUNT OF ITS OWN FINANCIAL POSITION , THE SUMMARY STATEMENT OF THE REASONS ON WHICH THE NOTIFICATION IS BASED CANNOT ADVERSELY AFFECT ITS VALIDITY SINCE IT IS NOT SUCH AS TO DEPRIVE THE UNDERTAKING OF THE OPPORTUNITY OF CHECKING THE CORRECT APPLICATION IN REGARD TO ITSELF OF THE RULES LAID DOWN BY THE BASIC DECISION OR TO PREVENT THE COURT FROM EXERCISING ITS TASK OF REVIEW .

3 . IN PROVIDING FOR A COMPARISON BETWEEN THE TOTAL PRODUCTION POSSIBILITIES EXISTING FOR 1979 AND THE NEW PRODUCTION CAPACITY ARISING FROM THE ACTIVATION OF NEW PLANT AFTER 1 JULY 1980 ARTICLE 4 , POINT 4 , OF DECISION 2794/80 ESTABLISHING A SYSTEM OF STEEL PRODUCTION QUOTAS FOR UNDERTAKINGS IN THE IRON AND STEEL INDUSTRY INTENDED TO COMPARE THE PRODUCTION CAPACITY EXISTING FOR 1979 WITH THAT ARISING WHEN NEW CAPACITIES ARE BROUGHT INTO OPERATION AND THUS TO GRANT THE BENEFIT OF AN ADAPTATION OF THE REFERENCE PRODUCTION TO EVERY UNDERTAKING WHICH INCREASED ITS PRODUCTION CAPACITY BY MORE THAN 15 % AT ANY TIME DURING THE SECOND HALF OF 1980 . THE PROVISION IN QUESTION MUST NOT THEREFORE BE INTERPRETED AS COMPARING THE ANNUAL PRODUCTION CAPACITIES FOR 1979 AND 1980 FOR ANY INCREASE IN QUOTA WOULD THEN DEPEND ON AN INCREASE IN PRODUCTION CAPACITIES WHICH WOULD HAVE TO BE PROPORTIONATELY LARGER ACCORDING TO HOW LATE IN THE SECOND HALF OF 1980 NEW PLANT IS ACTIVATED AND THE RESULT WOULD FAVOUR OR PLACE AT A DISADVANTAGE UNDERTAKINGS ON THE BASIS OF A FACTOR ALIEN TO THE SYSTEM .

4 . IT FOLLOWS FROM THE NATURE AND THE OBJECTIVES OF THE TWO DIFFERENT RESTRUCTURING MEASURES REFERRED TO IN ARTICLE 4 , POINTS 4 AND 5 , OF DECISION 2794/80 THAT FROM THE ECONOMIC POINT OF VIEW THEIR EFFECTS ARE IN NORMAL CASES INTENDED TO COMPENSATE ONE ANOTHER AND NOT TO BE CUMULATIVE . THAT ECONOMIC CONNECTION IN TURN NECESSITATES THE REJECTION OF AN INTERPRETATION WHICH WOULD RESULT IN THE TWO QUOTA INCREASES BEING ACCUMULATED AND GIVE RISE TO ABNORMAL PRODUCTION POSSIBILITIES CLEARLY EXCEEDING THE OBJECTIVES OF THE PROVISION IN QUESTION .

5 . ALTHOUGH IN AN ACTION FOR A DECLARATION THAT AN INDIVIDUAL DECISION IS VOID THE APPLICANT MAY ALLEGE THAT CERTAIN PROVISIONS OF GENERAL DECISIONS WHICH THE CONTESTED DECISION IMPLEMENTS ARE ILLEGAL , THE APPLICANT MAY DO SO ONLY IF THE INDIVIDUAL DECISION IS BASED ON THE RULES ALLEGED TO BE ILLEGAL .

Parties

IN JOINED CASES 275/80 AND 24/81

KRUPP STAHL AG , WHOSE REGISTERED OFFICE IS AT 165 ALLEESTRASSE , BOCHUM 4630 , REPRESENTED BY A . GODDE AND F . STEMMER , MEMBERS OF ITS BOARD OF DIRECTORS , ASSISTED BY K . PFEIFFER , H . BIEDENKOPF , P . OSSENBACH , ADVOCATES , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF J.-C . WOLTER , ADVOCATE , 2 RUE GOETHE ,

V

COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY H . MATTHIES , LEGAL ADVISER , ASSISTED BY E . GRABITZ , PROFESSOR AT THE FREE UNIVERSITY OF BERLIN , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF O . MONTALTO , A MEMBER OF THE LEGAL DEPARTMENT , JEAN MONNET BUILDING , KIRCHBERG ,

Subject of the case

APPLICATION FOR A DECLARATION THAT CERTAIN PROVISIONS OF THE NOTIFICATIONS OF THE COMMISSION OF 1 NOVEMBER 1980 AND 19 DECEMBER 1980 DETERMINING , PURSUANT TO THE GENERAL COMMISSION DECISION OF 31 OCTOBER 1980 ( OFFICIAL JOURNAL L 291 , P . 1 ), THE PRODUCTION QUOTAS FOR THE APPLICANT FOR THE LAST QUARTER OF 1980 AND THE FIRST QUARTER OF 1981 ARE VOID ,

Grounds

1 BY APPLICATIONS REGISTERED AT THE COURT REGISTRY ON 11 DECEMBER 1980 AND 9 FEBRUARY 1981 KRUPP STAHL AG BROUGHT PURSUANT TO THE SECOND PARAGRAPH OF ARTICLE 33 OF THE ECSC TREATY TWO ACTIONS FOR A DECLARATION THAT THE NOTIFICATIONS OF 1 NOVEMBER ( CASE 275/80 ) AND 19 DECEMBER 1980 , THE LATTER AS AMENDED BY LETTER DATED 9 FEBRUARY 1981 ( CASE 24/81 ), ARE VOID IN SO FAR AS THEY DETERMINE PRODUCTION QUOTAS FOR CRUDE STEEL AND FOR HOT-ROLLED WIDE AND NARROW STRIP UNDER GROUP I OF ARTICLE 2 OF DECISION 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 ARTICLE 3 OF DECISION 2794/80 PROVIDES THAT THE COMMISSION IS TO FIX QUARTERLY PRODUCTION QUOTAS FOR EACH UNDERTAKING ' ' ON THE BASIS OF THE REFERENCE PRODUCTION FIGURES AS REFERRED TO IN ARTICLE 4 OF THAT UNDERTAKING ' ' AND ' ' BY APPLICATION OF ABATEMENT RATES TO THOSE REFERENCE PRODUCTION FIGURES AS REFERRED TO IN ARTICLE 5 ' ' . ARTICLE 4 , POINTS 1 AND 2 , DETERMINES THE METHOD FOR CALCULATING THE REFERENCE PRODUCTION . ARTICLE 4 , POINTS 3 TO 5 , DEFINES THREE EXCEPTIONAL SITUATIONS JUSTIFYING AN INCREASE IN THE REFERENCE PRODUCTION FIGURES CALCULATED PURSUANT TO POINTS 1 AND 2 .

3 ARTICLE 4 , POINTS 4 AND 5 , READ AS FOLLOWS :

' ' ( 4 ) 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 .

IN THIS CASE , THE REFERENCE PRODUCTION SHALL BE INCREASED BY A QUANTITY DERIVED FROM APPLICATION TO THE NEW PRODUCTION POSSIBILITIES OF A RATE CORRESPONDING TO THE HIGHEST ANNUAL AVERAGE RATE OF UTILIZATION OF THE SAME PLANT IN THE COMMUNITY DURING THE YEARS 1977 , 1978 AND 1979 , LESS FIVE PERCENTAGE POINTS . THE REFERENCE PRODUCTION FOR CRUDE STEEL SHALL BE ADAPTED ACCORDINGLY .

( 5)TO TAKE ACCOUNT OF RESTRUCTURING , THE COMMISSION SHALL INCREASE THE REFERENCE PRODUCTION FIGURES :

- WHERE AN UNDERTAKING ' S TOTAL PRODUCTION OF THE FOUR GROUPS OF PRODUCTS DURING A REFERENCE PERIOD FALLS SHORT OF PRODUCTION IN THE SAME QUARTER OF 1974 , AND

- WHERE THIS UNDERTAKING HAS ACHIEVED FOR THE YEAR ENDING IN 1979 A PROFIT WHICH IS SHOWN IN ITS ANNUAL REPORT OR REPORTED TO THE NATIONAL OFFICIAL AGENCY RESPONSIBLE FOR THE FILING OF THE ANNUAL ACCOUNTS OF COMPANIES .

IN THIS CASE , THE COMMISSION SHALL INCREASE THE REFERENCE PRODUCTION FIGURES SO AS TO REACH THE TOTAL EQUIVALENT TO THE PRODUCTION OF THE CORRESPONDING QUARTER OF 1974 . ' '

4 BY NOTIFICATION OF 1 NOVEMBER 1980 THE COMMISSION DETERMINED THE PRODUCTION QUOTAS FOR THE APPLICANT FOR THE FOURTH QUARTER OF 1980 . IN DOING SO IT APPLIED ARTICLE 4 , POINT 5 , OF DECISION 2794/80 . THE APPLICANT HOWEVER TOOK THE VIEW THAT IT SATISFIED NOT ONLY THE CONDITIONS OF ARTICLE 4 , POINT 5 , BUT ALSO OF ARTICLE 4 , POINT 4 . IT THEREFORE SOUGHT THE BENEFIT OF THE CUMULATIVE APPLICATION OF THESE TWO PROVISIONS . IT MADE THE SAME REQUEST IN REGARD TO THE PRODUCTION QUOTAS WHICH THE COMMISSION HAD DETERMINED BY NOTIFICATION OF 19 DECEMBER 1980 FOR THE FIRST QUARTER OF 1981 .

5 BOTH REQUESTS WERE REJECTED BY THE COMMISSION . AS REGARDS THE PRODUCTION QUOTAS FOR THE FOURTH QUARTER OF 1980 THE COMMISSION CONTENDS THAT THE CONDITIONS FOR THE APPLICATION OF ARTICLE 4 , POINT 4 , WERE NOT SATISFIED , BUT EVEN IF THEY HAD BEEN IT WOULD NOT HAVE BEEN POSSIBLE , AS THE APPLICANT DESIRES , TO APPLY ARTICLE 4 , POINTS 4 AND 5 , CUMULATIVELY . AS REGARDS THE PRODUCTION QUOTAS FOR THE FIRST QUARTER OF 1981 THE COMMISSION ADMITTED IN A LETTER DATED 9 FEBRUARY 1981 ADDRESSED TO THE APPLICANT THAT THE CONDITIONS FOR APPLYING ARTICLE 4 , POINTS 4 AND 5 , WERE SATISFIED . IT NEVERTHELESS ADHERED TO ITS CONTENTION THAT THE PARAGRAPHS COULD NOT BE APPLIED CUMULATIVELY . AFTER FINDING THAT THE APPLICATION OF ARTICLE 4 , POINT 4 , WAS MORE ADVANTAGEOUS TO THE APPLICANT THAN THE APPLICATION OF ARTICLE 4 , POINT 5 , IT AMENDED , IN THE ABOVE-MENTIONED LETTER , THE NOTIFICATION OF 19 DECEMBER 1980 BY APPLYING ARTICLE 4 , POINT 4 , INSTEAD OF ARTICLE 4 , POINT 5 .

INFRINGEMENT OF ESSENTIAL PROCEDURAL REQUIREMENTS AND INSUFFICIENT STATEMENT OF REASONS

6 ALTHOUGH THE APPLICANT CLAIMS A DECLARATION THAT THE NOTIFICATIONS ADDRESSED TO IT ARE VOID ONLY IN SO FAR AS THEY DETERMINE THE PRODUCTION QUOTAS FOR GROUP I PRODUCTS REFERRED TO IN ARTICLE 2 OF DECISION 2794/80 , IT NEVERTHELESS CONTENDS THAT THOSE NOTIFICATIONS WERE , TAKEN AS A WHOLE , ISSUED IN BREACH OF THE ESSENTIAL PROCEDURAL REQUIREMENTS PRESCRIBED BY DECISION 22/60 OF THE HIGH AUTHORITY OF 7 SEPTEMBER 1960 ON THE IMPLEMENTATION OF ARTICLE 15 OF THE ECSC TREATY ( OFFICIAL JOURNAL , SPECIAL EDITION , SECOND SERIES VIII P . 13 ) AND IN BREACH OF THE GENERAL DUTY TO STATE REASONS WHICH IS INTENDED TO ENABLE THE PARTIES TO DEFEND THEIR RIGHTS AND THE COURT TO EXERCISE ITS REVIEW OF LEGALITY .

7 THE FORM OF DECISIONS RECOMMENDATIONS AND OPINIONS OF THE HIGH AUTHORITY IS DETERMINED IN DETAIL BY DECISION 22/60 . THUS IT IS PROVIDED THAT THE MEASURE IS TO BE EXPRESSELY DESCRIBED IN ITS TITLE , THAT IT MUST SHOW THE DATE OF ITS ADOPTION , THE FORM OF SIGNATURE , CONTAIN REFERENCE TO RELEVANT LEGISLATION AND TO OPINIONS OBTAINED , BE FURNISHED WITH A STATEMENT OF THE REASONS ON WHICH IT IS BASED AND BE SET OUT IN THE FORM OF ARTICLES . IN ADDITION IT PRESCRIBES THE PROCEDURE FOR NOTIFYING MEASURES OF THE HIGH AUTHORITY .

8 IT IS NOT DENIED THAT THE NOTIFICATIONS SENT TO THE APPLICANTS DO NOT COMPLY WITH THESE FORMAL REQUIREMENTS . THE COMMISSION HOWEVER DENIES THAT THEY ARE ESSENTIAL REQUIREMENTS NON-COMPLIANCE WITH WHICH MAKES THE CONTESTED NOTIFICATIONS VOID .

9 DECISION 22/60 PRESCRIBES IN SUCH A DETAILED MANNER THE FORMAL PRESENTATION OF MEASURES OF THE HIGH AUTHORITY IN ORDER CLEARLY TO DISTINGUISH THE NATURE OF MEASURES BY USING STANDARD FORMS . FAILURE TO COMPLY WITH THAT REQUIREMENT NEVERTHELESS DOES NOT ENTAIL THE NULLITY OF MEASURES WHEN THEY ARE UNQUESTIONABLY INDIVIDUAL DECISIONS TAKEN ON THE IMPLEMENTATION OF A SCHEME PREVIOUSLY ESTABLISHED BY MEANS OF A GENERAL DECISION ADOPTED IN ACCORDANCE WITH THE FORMAL REQUIREMENTS PRESCRIBED BY DECISION 22/60 . THAT IS PRECISELY THE CASE WITH THE CONTESTED NOTIFICATIONS WHICH CONSTITUTE NO MORE THAN THE APPLICATION OF ARTICLE 3 OF DECISION 2794/80 UNDER WHICH THE COMMISSION FIXES QUARTERLY PRODUCTION QUOTAS FOR EACH UNDERTAKING AND NOTIFIES THEM OF IT . THE SUBMISSION THAT THE CONTESTED NOTIFICATIONS DID NOT COMPLY WITH THE FORMAL REQUIREMENTS LAID DOWN BY DECISION 22/60 MUST THEREFORE BE REJECTED .

10 IT DOES NOT FOLLOW HOWEVER THAT SUCH NOTIFICATIONS MAY BE EXEMPTED FROM STATING THE REASONS ON WHICH THEY ARE BASED . IN THAT RESPECT THE APPLICANT OBJECTS THAT THE COMMISSION DID NOT STATE WHICH OF THE POINTS OF ARTICLE 4 OF DECISION 2794/80 IT WAS APPLYING OR INDICATE THE GROUNDS ON WHICH IT RELIED .

11 IN THE COMMISSION ' S VIEW THE NOTIFICATIONS SENT TO THE APPLICANT MUST BE CONSIDERED IN CONJUNCTION WITH DECISION 2794/80 OF WHICH THEY CONSTITUTE A MATHEMATICAL APPLICATION ON THE BASIS OF PRODUCTION FIGURES SUPPLIED BY THE APPLICANT ITSELF . THE APPLICANT MOREOVER HAD NO TROUBLE IN DETERMINING BY REFERENCE TO THAT DECISION WHICH PROVISIONS THEREOF HAD BEEN APPLIED TO IT .

12 THE APPLICANT ' S SUBMISSION IN RELATION TO THE NOTIFICATION RELATING TO THE FIRST QUARTER OF 1981 IS MANIFESTLY UNFOUNDED . AS AMENDED BY LETTER DATED 9 FEBRUARY 1981 THE NOTIFICATION REFERS NOT ONLY TO THE POINT OF ARTICLE 4 WHICH WAS APPLIED BUT TO THE REASONS WHICH LED THE COMMISSION TO APPLY IT . IN THOSE CIRCUMSTANCES THERE CAN BE NO QUESTION OF THERE BEING NO STATEMENT OF REASONS .

13 AS REGARDS THE NOTIFICATION OF 1 NOVEMBER 1980 , IT IS TO BE REGRETTED THAT THE COMMISSION DID NOT CONSIDER IT NECESSARY TO STATE THE PROVISIONS WHICH IT WAS APPLYING AND TO EXPLAIN THE INTERPRETATION WHICH IT WAS THUS GIVING TO DECISION 2794/80 . IT IS HOWEVER TRUE THAT IT WAS POSSIBLE FOR THE APPLICANT , BY EXAMINING THE FIGURES IN THE NOTIFICATION IN THE LIGHT OF THE METHODS OF CALCULATION DEFINED IN THE DECISION , TO DETERMINE WHICH PROVISIONS HAD BEEN APPLIED TO TAKE ACCOUNT OF ITS OWN ECONOMIC POSITION . THE COMMISSION ' S SUMMARY STATEMENT OF REASONS WAS THEREFORE NOT SUCH AS TO DEPRIVE THE APPLICANT OF THE OPPORTUNITY OF CHECKING THE CORRECT APPLICATION , IN REGARD TO ITSELF , OF THE RULES LAID DOWN BY DECISION 2794/80 OR TO PREVENT THE COURT FROM EXERCISING ITS TASK OF REVIEW AND THEREFORE CANNOT ADVERSELY AFFECT THE VALIDITY OF THE NOTIFICATION OF 1 NOVEMBER 1980 .

THE CONDITIONS FOR APPLYING ARTICLE 4 , POINT 4 , OF DECISION 2794/80

14 ARTICLE 4 , POINT 4 , PROVIDES FOR ADAPTATION OF THE REFERENCE PRODUCTION WHEN THE NEW PRODUCTION CAPACITIES BRING ' ' 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 ' ' . IT IS NOT DENIED THAT THE APPLICANT ACTIVATED ON 1 JULY 1980 AN ADDITIONAL PRE-HEATING OVEN , THE CONSTRUCTION OF WHICH WAS NOT THE SUBJECT OF AN UNFAVOURABLE OPINION ON THE PART OF THE COMMISSION . IN THE APPLICANT ' S VIEW THE EFFECT OF THAT NEW PLANT WAS IMMEDIATELY TO INCREASE THE PRODUCTION CAPACITY OF ITS UNDERTAKING BY AT LEAST 15 % FOR THE FOUR GROUPS OF ROLLED PRODUCTS COVERED BY THE QUOTA SYSTEM AND IT CONCLUDES FROM THIS THAT IT IS ENTITLED TO THE INCREASE IN THE REFERENCE QUOTA PROVIDED FOR BY ARTICLE 4 , POINT 4 . THE COMMISSION DENIES THAT THE CONDITIONS FOR APPLYING THAT PROVISION ARE SATISFIED . IN ITS VIEW THE TOTAL PRODUCTION POSSIBILITIES FOR THE FOUR GROUPS OF PRODUCTS IN QUESTION WAS INCREASED , AS A RESULT OF THE INVESTMENT IN QUESTION , BY ONLY 9.5 % IN RELATION TO THE TOTAL PRODUCTION POSSIBILITIES EXISTING FOR 1979 .

15 THAT DISCREPANCY ARISES FROM A DIFFERENCE OF INTERPRETATION OF ARTICLE 4 , POINT 4 . THE APPLICANT MAINTAINS THAT IT SUFFICES THAT THE NEW PLANT SHOULD , ON THE DAY ON WHICH IT IS ACTIVATED , INCREASE THE PRODUCTION CAPACITY BY 15 % IN RELATION TO THAT FOR 1979 . IT BASES THAT ARGUMENT ESSENTIALLY ON THE WORDING OF THE PROVISION WHICH DOES NOT SPECIFY THE ANNUAL NATURE OF THE INCREASE IN PRODUCTION POSSIBILITIES AND THE FACT THAT THE INTERPRETATION PROPOSED BY THE COMMISSION WOULD MAKE TAKING INTO CONSIDERATION NEW PRODUCTION CAPACITIES DEPEND ON THE DATE ON WHICH THEY BECAME OPERATIVE .

16 IN THE COMMISSION ' S VIEW ON THE OTHER HAND IT IS NECESSARY TO COMPARE THE MAXIMUM PRODUCTION POSSIBILITY FOR THE WHOLE OF 1980 AS ESTIMATED IN THE QUESTIONNAIRE NO 2-61 ECSC COMPLETED BY THE APPLICANT ITSELF IN THE SPRING OF 1980 WITH THE MAXIMUM PRODUCTION POSSIBILITY FOR THE WHOLE OF 1979 AS STATED IN THE SAME QUESTIONNAIRE . THE PARTICULARS SUPPLIED BY THE APPLICANT ITSELF SHOW THAT BY APPLYING THOSE CRITERIA THE MAXIMUM TOTAL PRODUCTION POSSIBILITY FOR 1980 IS ONLY 9.5 % HIGHER THAN THOSE EXISTING FOR 1979 .

17 THE COMMISSION JUSTIFIES ITS POSITION BY ARGUING THAT IT NEEDS TO ESTABLISH A COMPARISON BETWEEN IDENTICAL INFORMATION ALREADY AVAILABLE , NAMELY THE PRODUCTION POSSIBILITIES EXISTING FOR THE WHOLE OF EACH OF THE YEARS 1979 AND 1980 . IF THAT LEADS TO TAKING ACCOUNT OF NEW PLANT ONLY AS FROM 1981 IT IS IN ACCORD WITH THE OBJECTIVE OF POINT 4 WHICH IS INTENDED TO ENSURE THAT NEW CAPACITY IS GRADUALLY TAKEN INTO ACCOUNT .

18 THE COMMISSION IS NOT TO BE CRITICIZED FOR THE CONCERN WHICH PROMPTS IT TO HAVE RECOURSE , IN ITS INTERPRETATION OF ARTICLE 4 , POINT 4 , TO FACTS WHICH ARE KNOWN , EASILY COMPARABLE AND WHICH ENABLE THE EFFECTIVENESS OF THE QUOTA SYSTEM TO BE MAINTAINED BY STRICTLY LIMITING THE POSSIBILITY OF EXCEPTIONS . FURTHER IT IS NECESSARY THAT THE INTERPRETATION ADOPTED SHOULD NOT BE SUCH AS TO MAKE THE APPLICATION OF ARTICLE 4 , POINT 4 , SUBJECT TO CONDITIONS WHICH ARE NOT JUSTIFIED BY THE OBJECTIVES OF THE RULES IN QUESTION AND WHICH ARE A SOURCE OF DISCRIMINATION .

19 THE INTERPRETATION PROPOSED BY THE COMMISSION FINDS SUPPORT NEITHER IN THE WORDING NOR IN THE OBJECTIVES OF THE PROVISIONS IN QUESTION . THEY PROVIDE FOR A COMPARISON BETWEEN THE TOTAL PRODUCTION POSSIBILITIES EXISTING FOR 1979 AND THE NEW PRODUCTION CAPACITY ARISING FROM THE ACTIVATION OF NEW PLANT . THE DIFFERENCE BETWEEN THE TWO PRODUCTION CAPACITIES MUST BE AT LEAST 15% . IN THUS COMPARING THE PRODUCTION CAPACITY EXISTING FOR 1979 WITH THAT EXISTING WHEN NEW CAPACITY IS BROUGHT INTO OPERATION THE BENEFIT OF ARTICLE 4 , POINT 4 , IS GRANTED TO EVERY UNDERTAKING WHICH INCREASED ITS PRODUCTION CAPACITY BY MORE THAN 15% AT ANY TIME DURING THE SECOND HALF OF 1980 . ON THE OTHER HAND IN COMPARING , AS DOES THE COMMISSION , THE ANNUAL PRODUCTION CAPACITIES FOR 1979 AND 1980 THE INCREASE IN THE QUOTA IS MADE TO DEPEND ON AN INCREASE IN PRODUCTION CAPACITIES WHICH MUST BE PROPORTIONATELY LARGER ACCORDING TO HOW LATE IN THE SECOND HALF OF 1980 NEW PLANT IS ACTIVATED AND THE RESULT IS TO FAVOUR OR PLACE AT A DISADVANTAGE UNDERTAKINGS ON THE BASIS OF A FACTOR ALIEN TO THE SYSTEM .

20 IT FOLLOWS THAT THE INTERPRETATION AND APPLICATION BY THE COMMISSION OF ARTICLE 4 , POINT 4 , IN ITS NOTIFICATION TO THE APPLICANT OF 1 NOVEMBER 1980 ARE NOT WELL-FOUNDED AND THAT ACCORDINGLY THE NOTIFICATION MUST BE DECLARED TO BE VOID .

THE CUMULATIVE APPLICATION OF ARTICLE 4 , POINTS 4 AND 5 , OF DECISION 2794/80

21 THE RESTRUCTURING POLICY OF KRUPP STAHL AG OBLIGED IT TO REDUCE ITS PRODUCTION UNTIL JULY 1980 . AT THAT TIME IT ACTIVATED NEW PLANT WHICH SUBSTANTIALLY INCREASED ITS PRODUCTION POSSIBILITIES . IT FOLLOWS THAT THE APPLICANT SATISFIES THE CONDITIONS OF BOTH POINTS 4 AND 5 OF ARTICLE 4 . IT THEREFORE ASKS THAT IT BE GRANTED THE CUMULATIVE BENEFIT OF THE INCREASES IN THE REFERENCE PRODUCTION PROVIDED FOR BY BOTH PROVISIONS . THE COMMISSION CONSIDERS THAT IN A SITUATION SUCH AS THAT OF THE APPLICANT THERE IS NO GROUND FOR CUMULATIVELY APPLYING ARTICLE 4 , POINTS 4 AND 5 , AND THAT ONLY THE PROVISION WHICH IS MOST ADVANTAGEOUS TO THE UNDERTAKING IN QUESTION SHOULD BE APPLIED .

22 BOTH THE COMMISSION AND THE APPLICANT RELY ON THE WORDING OF ARTICLE 4 IN SUPPORT OF THEIR ARGUMENT . IN THE COMMISSION ' S VIEW THE STRUCTURE OF THE ARTICLE INDICATES THAT ONLY ONE CORRECTION TO THE REFERENCE PRODUCTION CALCULATED ON THE BASIS OF POINTS 1 AND 2 MAY BE MADE . IN THE APPLICANT ' S VIEW THE FACT THAT THE VARIOUS POSSIBILITIES OF ADAPTING THE NORMAL REFERENCE PRODUCTION ARE GIVEN IN SEQUENCE IN POINTS 3 , 4 AND 5 OF ARTICLE 4 , WITHOUT ITS BEING STATED THAT THE APPLICATION OF ONE EXCLUDES THE APPLICATION OF THE OTHERS , IS DECISIVE AND IMPLIES THE POSSIBILITY OF CUMULATIVE APPLICATION .

23 NEITHER THE WORDING NOR THE STRUCTURE OF THE PROVISION ENABLES THE MATTER TO BE SETTLED ONE WAY OR THE OTHER . IT IS THEREFORE BY CONSIDERING THE OBJECTIVES PURSUED BY DECISION 2794/80 AND MORE PARTICULARLY IN ARTICLE 4 , POINTS 4 AND 5 , THAT IT MUST BE DECIDED WHETHER OR NOT THOSE POINTS ARE CAPABLE OF CUMULATIVE APPLICATION .

24 THE COMMISSION JUSTIFIES ITS REFUSAL TO APPLY THOSE TWO PROVISIONS CUMULATIVELY BY THE NECESSITY TO PRESERVE THE GENERAL OBJECTIVES OF THE DECISION WHICH ARE TO RE-ESTABLISH A BALANCE BETWEEN SUPPLY AND DEMAND BY MEANS OF STRICT CONTROL OF PRODUCTION . A DOUBLE INCREASE IN THE REFERENCE PRODUCTION MIGHT , IN THE COMMISSION ' S VIEW , JEOPARDIZE THE WHOLE SYSTEM . IT WOULD PUT THE APPLICANT UNDERTAKING IN AN EXCESSIVELY ADVANTAGEOUS POSITION IN RELATION TO ITS COMPETITORS AND WOULD CREATE A DISCRIMINATORY SYSTEM WITH REGARD TO UNDERTAKINGS WHICH HAD FIRST REDUCED THEIR PRODUCTION AND THEN BROUGHT INTO OPERATION NEW PRODUCTION CAPACITIES BUT BEFORE JULY 1980 .

25 THE APPLICANT FINDS JUSTIFICATION FOR THE CUMULATIVE APPLICATION TO WHICH IT CONSIDERS ITSELF ENTITLED IN THE FACT THAT POINTS 4 AND 5 OF THE PROVISION AT ISSUE ARE CONCERNED WITH DIFFERENT CASES AND HAVE DIFFERENT OBJECTIVES . POINT 4 TAKES ACCOUNT OF A GROWTH IN CAPACITY IN RESPECT OF WHICH THE COMMISSION HAS NOT GIVEN AN UNFAVOURABLE OPINION WHEREAS POINT 5 TAKES ACCOUNT OF PREVIOUS RESTRUCTURING EFFORTS WHICH HAVE LED TO THE ELIMINATION OF NON-COMPETITIVE CAPACITIES . EVERY UNDERTAKING WHICH , LIKE THE APPLICANT , HAS UNDERTAKEN BOTH FORMS OF RESTRUCTURING IS ENTITLED TO THE TWO INCREASES CUMULATIVELY , EACH TAKING ACCOUNT OF A PARTICULAR KIND OF RESTRUCTURING .

26 IT IS CLEAR , AS THE COMMISSION STRESSES , THAT EXTENSIVE APPLICATION OF THE EXCEPTIONS TO THE REFERENCE PRODUCTION SYSTEM PROVIDED FOR IN ARTICLE 4 , POINTS 3 TO 5 , OF DECISION 2794/80 WOULD IMPERIL THE FUNDAMENTAL OBJECTIVE OF THE DECISION , NAMELY TO RE-ESTABLISH A BALANCE BETWEEN SUPPLY AND DEMAND IN THE STEEL MARKET . IT FOLLOWS THAT A RESTRICTIVE INTERPRETATION IS CONSISTENT WITH THE GENERAL OBJECTIVE OF THE DECISION . THAT IS THEREFORE THE INTERPRETATION WHICH MUST BE ADOPTED UNLESS IT PREVENTS CERTAIN SPECIAL OBJECTIVES OF THE PROVISIONS AT ISSUE OF DECISION 2794/80 FROM BEING TAKEN INTO ACCOUNT .

27 AS REGARDS THE SPECIFIC OBJECTIVES OF ARTICLE 4 , POINTS 4 AND 5 , IT IS TRUE , AS THE APPLICANT POINTS OUT , THAT THEY TAKE ACCOUNT OF TWO DIFFERENT KINDS OF RESTRUCTURING . IT DOES NOT HOWEVER FOLLOW THAT THE TWO PROVISIONS MUST THEREFORE BE APPLIED CUMULATIVELY .

28 ON THE CONTRARY IT FOLLOWS FROM THE NATURE AND THE OBJECTIVES OF THE TWO DIFFERENT RESTRUCTURING MEASURES REFERRED TO IN ARTICLE 4 , POINTS 4 AND 5 , THAT FROM THE ECONOMIC POINT OF VIEW THEIR EFFECTS ARE IN NORMAL CASES INTENDED TO COMPENSATE ONE ANOTHER AND NOT TO BE CUMULATIVE . THAT ECONOMIC CONNECTION IN TURN NECESSITATES THE REJECTION OF AN INTERPRETATION WHICH WOULD RESULT IN THE TWO QUOTA INCREASES BEING CUMULATED AND GIVE RISE TO ABNORMAL PRODUCTION POSSIBILITIES CLEARLY EXCEEDING THE OBJECTIVES OF THE PROVISION IN QUESTION .

29 FINALLY IT MUST BE POINTED OUT IN SUPPORT OF THE COMMISSION ' S ARGUMENT THAT IF THE APPLICANT ' S REFERENCE QUOTAS WERE TO BE INCREASED TWICE IT WOULD RESULT IN FAVOURING THE APPLICANT TO THE DETRIMENT OF UNDERTAKINGS WHICH HAD ALSO REDUCED AND THEN INCREASED THEIR PRODUCTION CAPACITY BUT HAD DONE ALL THIS BEFORE 1 JULY 1980 . SUCH A DIFFERENCE IN TREATMENT CANNOT BE JUSTIFIED IN REGARD TO THE OBJECTIVES OF THE DECISION . IT WOULD MEAN SEVERER TREATMENT OF UNDERTAKINGS WHICH HAD BEEN SPEEDIER IN IMPLEMENTING THEIR RESTRUCTURING PROGRAMME .

30 IT FOLLOWS FROM THE FOREGOING THAT THE COMMISSION RIGHTLY REFUSED TO APPLY ARTICLE 4 , POINTS 4 AND 5 , OF DECISION 2794/80 CUMULATIVELY . THE APPLICANT ' S SUBMISSION MUST THEREFORE BE REJECTED .

OBJECTIONS OF ILLEGALITY RAISED IN REGARD TO ARTICLE 4 , POINT 4 AND ARTICLE 7 OF DECISION 2794/80

31 THE APPLICANT RAISES TWO OBJECTIONS OF ILLEGALITY IN REGARD TO DECISION 2794/80 . THE FIRST OF THOSE OBJECTIONS RELATED TO THE REQUIREMENT THAT THERE SHOULD NOT BE AN UNFAVOURABLE OPINION OF THE COMMISSION AND IS THE MEANS WHEREBY THE APPLICANT CONTESTS THE LEGALITY OF THE CONSEQUENCES ATTACHED BY THE DECISION TO THE EXISTENCE OF AN UNFAVOURABLE OPINION . THE SECOND OBJECTION RELATES TO ARTICLE 7 OF THE DECISION AND INVOLVES A DENIAL THAT THE COMMISSION HAS POWER TO LAY DOWN DELIVERY QUOTAS .

32 WITH REGARD TO THOSE TWO OBJECTIONS IT SHOULD BE POINTED OUT THAT ALTHOUGH IN AN ACTION FOR A DECLARATION THAT AN INDIVIDUAL DECISION IS VOID THE APPLICANT MAY ALLEGE THAT CERTAIN PROVISIONS OF THE GENERAL DECISIONS WHICH THE CONTESTED DECISION IMPLEMENTS ARE ILLEGAL , THE APPLICANT MAY DO SO ONLY IF THE INDIVIDUAL DECISION IS BASED ON THE RULES ALLEGED TO BE ILLEGAL .

33 IN THIS CASE THE CONTESTED NOTIFICATIONS DO NOT APPLY THE CONSEQUENCES ATTACHED TO AN UNFAVOURABLE OPINION SINCE NO SUCH OPINION WAS GIVEN IN RESPECT OF THE APPLICANT ' S NEW INVESTMENTS . NOR DO THEY FIX DELIVERY QUOTAS AND ARE NOT THEREFORE BASED ON ARTICLE 7 OF DECISION 2794/80 . ACCORDINGLY THE OBJECTIONS OF ILLEGALITY RAISED BY THE APPLICANT ARE INADMISSIBLE .

Decision on costs

COSTS

34 THE COMMISSION HAS FAILED IN ITS SUBMISSIONS IN CASE 275/80 AND THE APPLICANT IN CASE 24/81 .

35 HOWEVER SINCE THE TWO CASES HAVE BEEN FORMALLY JOINED FOR THE PURPOSES OF THE ORAL PROCEDURE AND THE PARTIES HAVE TREATED THEM AS SUCH DURING THE WRITTEN PROCEDURE , IT IS IMPOSSIBLE TO DETERMINE THE COSTS ATTRIBUTABLE TO EACH OF THE CASES . IT IS THEREFORE RIGHT FOR THE PURPOSES OF THE PROPER ADMINISTRATION OF JUSTICE TO APPLY ARTICLE 69 ( 3 ) OF THE RULES OF PROCEDURE ACCORDING TO WHICH THE COURT MAY WHERE THE CIRCUMSTANCES ARE EXCEPTIONAL ORDER THAT THE PARTIES BEAR THEIR OWN COSTS .

Operative part

ON THOSE GROUNDS ,

THE COURT

HEREBY :

1 . DECLARES THAT THE COMMISSION ' S NOTIFICATION OF 1 NOVEMBER 1980 RELATING TO THE APPLICANT IN THE REFERENCE PRODUCTION AND PRODUCTION QUOTAS FOR THE FOURTH QUARTER OF 1980 IS VOID IN SO FAR AS IT RELATES TO GROUP I OF ROLLED PRODUCTS AND CRUDE STEEL ;

2.FOR THE REST , DISMISSES THE APPLICATION ;

3.ORDERS THE PARTIES TO BEAR THEIR OWN COSTS .