Judgment of the Court of 16 February 1982. - Ferriera Padana SpA v Commission of the European Communities. - System of production quotas for steel. - Case 276/80.



European Court reports 1982 Page 00517



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

1 . ECSC - PRODUCTION - SYSTEM OF QUOTAS - OBLIGATION OF THE COMMISSION TO CARRY OUT STUDIES JOINTLY WITH UNDERTAKINGS AND ASSOCIATIONS OF UNDERTAKINGS - LIMITS

( ECSC TREATY , ART . 58 ( 2 ))

2 . ECSC - PRODUCTION - SYSTEM OF QUOTAS - EXISTENCE OF A MANIFEST CRISIS - EXPRESS FINDING FOR EACH SECTOR OF THE STEEL INDUSTRY - NOT REQUIRED

( ECSC TREATY , ART . 58 ( 1 ))

3 . ECSC - PRODUCTION - SYSTEM OF QUOTAS - INSUFFICIENCY OF THE MEANS OF ACTION PROVIDED FOR IN ARTICLE 57 OF THE TREATY - POWER OF APPRAISAL OF THE COMMISSION

( ECSC TREATY , ARTS . 57 AND 58 ( 1 ))

4 . ECSC - PRODUCTION - SYSTEM OF PRODUCTION QUOTAS FOR STEEL - DECISION NO 2794/80 - RETROACTIVE NATURE

5 . MEASURES OF THE INSTITUTIONS - TIME FROM WHICH THEY TAKE EFFECT - PRINCIPLE THAT THEY MAY NOT BE RETROACTIVE - EXCEPTIONS - CONDITIONS

6 . ECSC - OBJECTIVES - COMPROMISE BETWEEN VARIOUS OBJECTIVES - DUTY OF THE COMMISSION

( ECSC TREATY , ARTS . 2 , 3 , AND 4 )

7 . ECSC - PRODUCTION - SYSTEM OF QUOTAS - CONCOMITANT ADOPTION OF MEASURES CONCERNING IMPORTS FROM NON-MEMBER COUNTRIES - POWER OF APPRAISAL OF THE COMMISSION

( ECSC TREATY , ART . 58 ( 1 ))

8 . ECSC - PRODUCTION - SYSTEM OF PRODUCTION QUOTAS FOR STEEL - DISTINCTION BETWEEN INTEGRATED AND NON-INTEGRATED UNDERTAKINGS - NOT PERMISSIBLE

( ECSC TREATY , ART . 58 )

9 . ECSC - PRODUCTION - SYSTEM OF PRODUCTION QUOTAS FOR STEEL - PRINCIPLE OF SOLIDARITY - EXCLUSION FROM THE SYSTEM OF SMALL AND MEDIUM-SCALE UNDERTAKINGS - NOT PERMISSIBLE

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

Summary

1 . ALTHOUGH , PURSUANT TO ITS OBLIGATION UNDER ARTICLE 58 ( 2 ) OF THE ECSC TREATY TO CARRY OUT STUDIES JOINTLY WITH UNDERTAKINGS AND ASSOCIATIONS OF UNDERTAKINGS IN ORDER TO DETERMINE PRODUCTION QUOTAS , THE COMMISSION IS OBLIGED TO CONSULT UNDERTAKINGS AND ASSOCIATIONS IN CONDUCTING SUCH STUDIES , THAT OBLIGATION DOES NOT IMPLY THAT IT MUST CONSULT EACH UNDERTAKING INDIVIDUALLY OR THAT IT MUST OBTAIN THE AGREEMENT OF THE STEEL PRODUCERS TO THE MEASURES PROPOSED .

2 . THE COMMISSION IS NOT BOUND BY THE TERMS OF ARTICLE 58 OF THE ECSC TREATY TO ESTABLISH IN ITS DECISIONS FIXING PRODUCTION QUOTAS FOR THE STEEL INDUSTRY A FINDING THAT THERE WAS A MANIFEST CRISIS IN EVERY SECTOR OF THE STEEL INDUSTRY IF THERE IS MANIFESTLY A GENERAL CRISIS .

3 . IN THE EVENT OF A MANIFEST CRISIS ARTICLE 58 OF THE ECSC TREATY CONFERS UPON THE COMMISSION A WIDE POWER TO APPRAISE WHETHER THE INDIRECT MEANS OF ACTION AT ITS DISPOSAL UNDER ARTICLE 57 OF THAT TREATY HAVE PROVED INSUFFICIENT AND WHETHER IT IS NECESSARY TO INTERVENE DIRECTLY IN ORDER TO RESTORE THE BALANCE BETWEEN SUPPLY AND DEMAND .

4 . ALTHOUGH DECISION NO 2794/80/ECSC FIXED PRODUCTION QUOTAS FOR THE STEEL INDUSTRY FROM 1 OCTOBER 1980 , WHEREAS IT DID NOT ENTER INTO FORCE UNTIL 31 OCTOBER 1980 , IT 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 .

5 . 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 .

6 . IT IS NOT CERTAIN THAT ALL THE OBJECTIVES OF THE ECSC TREATY CAN BE SIMULTANEOUSLY PURSUED IN THEIR ENTIRETY AND IN ALL CIRCUMSTANCES . IT IS THE TASK OF THE COMMISSION TO EFFECT A PERMANENT COMPROMISE BETWEEN THOSE DIFFERENT OBJECTIVES .

7 . UNDER THE TERMS OF ARTICLE 58 ( 1 ) OF THE ECSC TREATY THE COMMISSION HAS POWER TO TAKE ' ' TO THE NECESSARY EXTENT ' ' THE MEASURES PROVIDED FOR IN ARTICLE 74 AT THE SAME TIME AS ANY MEASURE TAKEN ON THE BASIS OF ARTICLE 58 . THE APPRAISAL OF THE NECESSITY OF TAKING SUCH MEASURES IS A MATTER FOR THE COMMISSION , SUBJECT TO THE COURT ' S POWER TO REVIEW THE LAWFULNESS OF THE COMMISSION ' S EXERCISE OF ITS DISCRETION .

8 . ONCE THE COMMISSION DECIDES TO ESTABLISH A GENERAL SYSTEM OF QUOTAS FOR THE STEEL INDUSTRY , IT CANNOT DISTINGUISH BETWEEN INTEGRATED AND NON-INTEGRATED UNDERTAKINGS IF IT WISHES TO ACHIEVE ITS OBJECTIVE OF REDUCING PRODUCTION .

9 . BY PROVIDING FOR INTERVENTION BY MEANS OF COERCIVE ACTION IN CERTAIN DEFINED CIRCUMSTANCES THE ECSC TREATY DEROGATES FROM THE NORMAL RULES GOVERNING THE WORKING OF THE COMMON MARKET , WHICH ARE BASED ON THE PRINCIPLE OF THE MARKET ECONOMY .

THEREFORE IT CANNOT BE ARGUED THAT THE COMMISSION SHOULD NOT INCLUDE SMALL AND MEDIUM-SCALE STEEL UNDERTAKINGS , WHICH ARE MORE EFFICIENT , IN A SYSTEM OF PRODUCTION QUOTAS FOR STEEL SINCE THAT SYSTEM WOULD OTHERWISE BE RENDERED INEFFECTIVE .

Parties

IN CASE 276/80

FERRIERA PADANA SPA , WHOSE REGISTERED OFFICE IS IN PADUA , ITALY , ACTING THROUGH PROFESSOR SERGIO GAMBI , ITS CHAIRMAN , AND REPRESENTED BY ALDO PERISSINOTTO , OF THE PADUA BAR , AND BY GIUSEPPE CELONA , OF THE MILAN BAR , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF GEORGES MARGUE , 20 RUE PHILIPPE-II ,

APPLICANT ,

V

COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY ALBERTO PROZZILLO , ACTING AS AGENT , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ORESTE MONTALTO , JEAN MONNET BUILDING , KIRCHBERG ,

DEFENDANT ,

Subject of the case

APPLICATION FOR A DECLARATION THAT AN INDIVIDUAL DECISION OF THE COMMISSION CONCERNING THE FIXING OF PRODUCTION QUOTAS FOR CERTAIN STEEL PRODUCTS IS VOID ( ARTICLE 33 OF THE ECSC TREATY ),

Grounds

1 BY AN APPLICATION LODGED AT THE COURT REGISTRY ON 12 DECEMBER 1980 FERRIERA PADANA SPA , A MANUFACTURER OF CONCRETE REINFORCING BARS , BROUGHT AN ACTION UNDER THE SECOND PARAGRAPH OF ARTICLE 33 OF THE ECSC TREATY FOR A DECLARATION THAT THE COMMISSION ' S INDIVIDUAL DECISION OF 1 NOVEMBER 1980 , AS AMENDED ON 18 NOVEMBER 1980 , FIXING THE APPLICANT ' S PRODUCTION QUOTAS FOR THE FOURTH QUARTER OF 1980 PURSUANT TO DECISION NO 2794/80/ECSC OF THE COMMISSION OF 31 OCTOBER 1980 ESTABLISHING A SYSTEM OF STEEL PRODUCTION QUOTAS ( OFFICIAL JOURNAL 1980 L 291 , P . 1 ) IS VOID .

2 THE APPLICATION IS NOT BASED ON AN ERRONEOUS FIXING OF THE APPLICANT ' S INDIVIDUAL QUOTAS . THE APPLICANT CONTENDS THAT THE CONTESTED DECISION IS UNLAWFUL BECAUSE IT IS IN APPLICATION OF THE GENERAL DECISION , DECISION NO 2794/80/ECSC , WHICH IT CONSIDERS UNLAWFUL ON THE GROUND THAT IT IS IN BREACH OF THE GENERAL RULES OF COMMUNITY LAW AND INFRINGES ARTICLES 58 ( 1 ) AND ( 2 ) OF THE ECSC TREATY .

THE INFRINGEMENT OF ESSENTIAL PROCEDURAL REQUIREMENTS

3 THE APPLICANT INVOKES , ON THE ONE HAND , THE FAILURE TO CONSULT THE CONSULTATIVE COMMITTEE AS REQUIRED BY ARTICLE 58 ( 1 ) OF THE ECSC TREATY AND , ON THE OTHER HAND , THE FAILURE TO COMPLY WITH THE REQUIREMENT LAID DOWN BY ARTICLE 58 ( 2 ) THAT STUDIES BE CONDUCTED IN CONJUNCTION WITH UNDERTAKINGS AND ASSOCIATIONS . IT ARGUES IN THIS CONNECTION THAT THE PREAMBLE TO DECISION NO 2794/80/ECSC DOES NOT MENTION THAT THE CONSULTATION OF THE CONSULTATIVE COMMITTEE TOOK PLACE , AND THAT STUDIES WERE CONDUCTED SOLELY IN CONJUNCTION WITH THE ASSOCIATION OF PRODUCERS OF CRUDE STEEL , TO THE EXCLUSION OF MANUFACTURERS OF CONCRETE REINFORCING BARS . FURTHERMORE , THE TIME WITHIN WHICH THOSE STUDIES WERE CONDUCTED SHOWS THAT THEY IN FACT RELATED TO A FAIT ACCOMPLI .

4 THOSE SUBMISSIONS CANNOT BE UPHELD . IN THE FIRST PLACE , THE ASSERTION THAT THE CONSULTATION OF THE CONSULTATIVE COMMITTEE DID NOT TAKE PLACE IS INCORRECT SINCE THE CONTESTED DECISION EXPRESSLY STATES THAT THAT CONSULTATION TOOK PLACE AND THE COMMISSION HAS EXPLAINED , WITHOUT BEING CONTRADICTED , THAT THE CONSULTATIVE COMMITTEE DELIVERED ITS OPINION ON 16 OCTOBER 1980 .

5 SECONDLY , THE COMMISSION ' S OBLIGATION TO CARRY OUT STUDIES JOINTLY WITH UNDERTAKINGS AND ASSOCIATIONS OF UNDERTAKINGS MUST RECEIVE A WIDER INTERPRETATION THAN THAT PLACED UPON IT BY THE APPLICANT . IN FACT , THE COMMISSION OBTAINS INFORMATION ON THE GENERAL SITUATION IN THE STEEL INDUSTRY AND ITS VARIOUS SECTORS BY CONDUCTING CONTINUOUS STUDIES . IN THIS CONNECTION IT SHOULD BE RECALLED THAT , ACCORDING TO ARTICLE 46 OF THE ECSC TREATY , UNDERTAKINGS AND THEIR ASSOCIATIONS ARE ENTITLED TO PRESENT ANY SUGGESTIONS OR COMMENTS TO THE HIGH AUTHORITY ON QUESTIONS AFFECTING THEM . FURTHERMORE , THE APPLICANT , LIKE ANY OTHER STEEL UNDERTAKING , IS BOUND REGULARLY TO FURNISH THE COMMISSION WITH ITS PRODUCTION FIGURES AND PRICES . IN ADDITION THE COMMISSION CARRIED OUT SPECIFIC STUDIES CONCERNING THE REQUIREMENTS OF THE QUOTA SYSTEM . THESE VARIOUS FACTORS CONSTITUTE THE STUDIES WITHIN THE MEANING OF ARTICLE 58 ( 2 ) OF THE ECSC TREATY WHICH THE COMMISSION WAS ABLE TO TAKE INTO ACCOUNT .

6 ALTHOUGH THE COMMISSION IS OBLIGED TO CONSULT UNDERTAKINGS AND ASSOCIATIONS OF UNDERTAKINGS IN CONDUCTING SUCH STUDIES , THAT OBLIGATION DOES NOT IMPLY THAT IT MUST CONSULT EACH UNDERTAKING INDIVIDUALLY OR THAT IT MUST OBTAIN THE AGREEMENT OF THE STEEL PRODUCERS TO THE MEASURES PROPOSED UNDER ARTICLE 58 . IN THIS CASE THE COMMISSION INFORMED THE STEEL PRODUCERS OF THE MEASURES WHICH IT INTENDED TO TAKE AND IT HELD MEETINGS WITH THE ASSOCIATIONS OF UNDERTAKINGS CONCERNED , INCLUDING THE ASSOCIATION OF ITALIAN PRODUCERS OF CONCRETE REINFORCING BARS , ALLOWING THEM TO BRING THEIR PROPOSALS TO THE COMMISSION ' S ATTENTION . ALTHOUGH THE APPLICANT IS NOT A MEMBER OF THAT ASSOCIATION IT COULD HAVE PUT FORWARD ITS POINT OF VIEW INDIVIDUALLY IF IT HAD SO REQUESTED . THE COMMISSION THUS DISCHARGED ITS DUTY TO CONDUCT STUDIES JOINTLY WITH UNDERTAKINGS AND ASSOCIATIONS OF UNDERTAKINGS .

THE INFRINGEMENT OF ARTICLE 58 ( 1 ) OF THE ECSC TREATY

7 THE APPLICANT CONSIDERS THAT THE CONDITIONS REQUIRED BY ARTICLE 58 ( 1 ) OF THE ECSC TREATY , NAMELY THE EXISTENCE OF A DECLINE IN DEMAND CONSTITUTING A MANIFEST CRISIS AND THE INSUFFICIENCY OF THE MEANS OF ACTION PROVIDED FOR IN ARTICLE 57 TO DEAL WITH IT , WERE NOT FULFILLED AS REGARDS CONCRETE REINFORCING BARS AND ACCORDINGLY THE QUOTA SYSTEM ESTABLISHED IN THAT SECTOR WAS IN NO WAY JUSTIFIED .

8 WITH REGARD TO THE DECLINE IN DEMAND , THE APPLICANT DISPUTES THAT CONCRETE REINFORCING BARS WERE AFFECTED . REFERRING TO A DOCUMENT OF JULY 1980 IN WHICH THE COMMISSION DESCRIBED THE DECLINE IN DEMAND FROM THE UNITED STATES AND IRANIAN MARKETS , THE APPLICANT CONTENDS THAT CONCRETE REINFORCING BARS ARE NOT CONCERNED WITH THE FIRST MARKET BY REASON OF THE COST OF TRANSPORT , WHILST THE FALL RECORDED ON THE SECOND REQUIRED A SEARCH FOR ALTERNATIVE MARKETS RATHER THAN A CUT IN PRODUCTION . THE FALL IN THE PRICES OF CONCRETE REINFORCING BARS MENTIONED BY THE COMMISSION WAS CAUSED BY A REDUCTION IN THE PRICE OF THE RAW MATERIAL AND AN INCREASE IN COMPETITION . THE COMMISSION ' S ARGUMENT THAT THE PRICE OF FERROUS SCRAP , THE RAW MATERIAL FOR CONCRETE REINFORCING BARS , IS DETERMINED BY THE PRICE OF THE FINISHED PRODUCT IS NOT DECISIVE SINCE SCRAP CONSTITUTES THE RAW MATERIAL FOR A WHOLE RANGE OF FINISHED OR SEMI-FINISHED PRODUCTS . FURTHERMORE , IN ITS REQUEST FOR THE COUNCIL ' S ASSENT , THE COMMISSION STATED THAT PRODUCTION OF LONG PRODUCTS ( WHICH INCLUDE CONCRETE REINFORCING BARS ) WAS APPRECIABLY EXCEEDING THE VOLUNTARY DELIVERY PROGRAMMES . ACCORDING TO THE APPLICANT , IT IS CLEAR THAT THAT WAS TO MEET AN INCREASE IN DEMAND OR FORECASTS OF DEMAND .

9 THOSE SUBMISSIONS CANNOT BE UPHELD . IT IS CLEAR FROM THE DOCUMENTS BEFORE THE COURT THAT WHEN THE QUOTA SYSTEM WAS INTRODUCED THERE WAS , OWING TO THE FLAGGING ECONOMY , A SHARP DECLINE IN DEMAND IN ALL SECTORS USING STEEL , INCLUDING THE CONSTRUCTION SECTOR WHICH CONSTITUTES THE OUTLET FOR THE PRODUCTS IN QUESTION . THAT DECLINE IN DEMAND , COUPLED WITH THE EXISTENCE OF CONSIDERABLE STOCKS BUILT UP THROUGH OVER-PRODUCTION IN THE PAST , LED TO A FALL IN PRODUCTION AND IN PRICES . THAT CIRCUMSTANCE IS CONFIRMED BY THE FACT THAT THE APPLICANT ' S PRODUCTION FOR THE FIRST TEN MONTHS OF 1980 AMOUNTED TO 81 000 TONNES WHILST ITS PRODUCTION CAPACITY IS 230 400 TONNES . FURTHERMORE , THE COMMISSION IS NOT BOUND BY THE TERMS OF ARTICLE 58 TO ESTABLISH IN ITS DECISION A FINDING THAT THERE WAS A MANIFEST CRISIS IN EVERY SECTOR OF THE STEEL INDUSTRY IF THERE IS MANIFESTLY A GENERAL CRISIS , AS THERE WAS IN THIS CASE .

10 THE APPLICANT ALSO COMPLAINS THAT THE COMMISSION FAILED TO HAVE RECOURSE TO THE MEANS OF ACTION PROVIDED FOR IN ARTICLE 57 OF THE ECSC TREATY WHICH WOULD HAVE BEEN SUFFICIENT TO DEAL WITH THE CRISIS . IT SHOULD HAVE REQUESTED THE GOVERNMENTS TO INCREASE THE CONSUMPTION OF CONCRETE REINFORCING BARS BY THE PUBLIC SERVICES . IT SHOULD ALSO HAVE HAD RECOURSE TO THE FIXING OF MINIMUM PRICES , WHICH CONSTITUTES THE SPECIFIC REMEDY AGAINST THE FALL IN PRICES .

11 IN THE EVENT OF A MANIFEST CRISIS ARTICLE 58 OF THE ECSC TREATY CONFERS UPON THE COMMISSION A WIDE POWER OF APPRAISAL WHICH IT EXERCISED IN ADOPTING DECISION NO 2794/80/ECSC . THE COMMISSION HAS SET OUT THE REASONS FOR WHICH IT CONSIDERED THAT THE MEANS OF ACTION PROVIDED FOR IN ARTICLE 57 WERE NOT SUFFICIENT TO DEAL WITH THE CRISIS . IT CONSIDERED THAT IT COULD NOT TAKE STEPS TO INFLUENCE GENERAL CONSUMPTION IN THE PRESENT ECONOMIC SITUATION . THE STEEL UNDERTAKINGS , WHICH HAD INCREASINGLY FAILED TO FULFIL THEIR INDIVIDUAL DELIVERY COMMITMENTS , REFUSED TO COMMIT THEMSELVES FOR THE LAST QUARTER OF 1980 . THE COMMISSION ACCORDINGLY CONCLUDED THAT THE INDIRECT MEANS OF ACTION AT ITS DISPOSAL HAD PROVED INSUFFICIENT AND THAT IT WAS NECESSARY TO INTERVENE DIRECTLY IN ORDER TO RESTORE THE BALANCE BETWEEN SUPPLY AND DEMAND . IN ARRIVING AT THAT CONCLUSION THE COMMISSION DID NOT EXCEED THE LIMITS TO ITS POWER OF APPRAISAL AND THE SUBMISSION MUST THEREFORE BE REJECTED .

INFRINGEMENT OF ARTICLE 58 ( 2 ) OF THE ECSC TREATY

12 THE APPLICANT ALLEGES THAT THE COMMISSION FAILED TO DETERMINE THE QUOTAS ON AN EQUITABLE BASIS , TAKING ACCOUNT OF THE PRINCIPLES SET OUT IN ARTICLES 2 , 3 AND 4 OF THE ECSC TREATY .

13 IT CLAIMS IN THE FIRST PLACE , THAT UNDERTAKINGS WHICH HAD COMPLIED WITH THE VOLUNTARY RESTRICTIONS ON DELIVERIES AND OBSERVED THE MINIMUM PRICES WERE PLACED AT A DISADVANTAGE .

14 BUT THE APPLICANT IS AMONGST THE UNDERTAKINGS WHICH FAILED TO OBSERVE THEIR COMMITMENTS REGARDING THE LIMITATION OF DELIVERIES . IT CANNOT THEREFORE COMPLAIN OF THE EXCESSIVELY FAVOURABLE TREATMENT ACCORDED SUCH UNDERTAKINGS . IN FACT ITS QUOTA FOR THE PERIOD IN DISPUTE WAS CALCULATED ON THE BASIS OF TWO MONTHS , OCTOBER 1978 AND NOVEMBER 1979 , SITUATED IN QUARTERS WHEN THE APPLICANT EXCEEDED ITS VOLUNTARY DELIVERY PROGRAMME BY 13% AND 37% RESPECTIVELY , AND ON THE BASIS OF A THIRD MONTH , DECEMBER 1977 , SITUATED IN A QUARTER WHEN THE APPLICANT ' S PRODUCTION WAS 7% BELOW THE VOLUNTARY DELIVERY PROGRAMME .

15 SECONDLY , THE APPLICANT COMPLAINS OF THE FACT THAT DECISION NO 2794/80/ECSC , WHICH ENTERED INTO FORCE ON THE DATE OF ITS PUBLICATION IN THE OFFICIAL JOURNAL OF THE EUROPEAN COMMUNITIES , NAMELY 31 OCTOBER 1980 , PROVIDES FOR PRODUCTION QUOTAS AS FROM 1 OCTOBER 1980 ; THE APPLICANT ALSO CRITICIZES THE JUSTIFICATION ADVANCED BY THE COMMISSION FOR THE RETROACTIVE NATURE OF THAT DECISION .

16 WITH REGARD TO THE FIRST POINT , IT SHOULD BE POINTED OUT , FIRST , 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 , AND SECONDLY , THAT , 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 .

17 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 .

18 THE APPLICANT CLAIMS , WITH REGARD TO THAT JUSTIFICATION FOR THE RETROACTIVE NATURE OF THE DECISION , THAT IT KEPT ITS PRODUCTION AT THE LEVEL OF THE PRECEDING MONTHS AND THAT IT IS UNFAIR THAT IT SHOULD HAVE TO BEAR THE CONSEQUENCES OF THE CONDUCT OF OTHERS .

19 THIS COMPLAINT CANNOT BE UPHELD . ALTHOUGH CERTAIN UNDERTAKINGS DID NOT INCREASE THEIR PRODUCTION IN OCTOBER IN ANTICIPATION OF THE INTRODUCTION OF QUOTAS FOR THE MONTHS TO FOLLOW , THAT FACT CANNOT ENTITLE THEM TO CLAIM SPECIAL TREATMENT .

20 FURTHERMORE , THE COMMISSION RESPECTED THE LEGITIMATE EXPECTATIONS OF THE PERSONS 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 . ALTHOUGH IN ITS COMMUNICATION OF 11 OCTOBER 1980 THE COMMISSION DID NOT IN FACT INDICATE WHAT THE LEVEL OF THE QUOTAS WOULD BE , WHICH MIGHT HAVE PREVENTED THE UNDERTAKINGS FROM ESTABLISHING THE PRECISE CONSEQUENCES OF THE COMMISSION ' S RECOMMENDATION AND ENSURING THAT THEIR PRODUCTION WAS NOT EXCESSIVE IN RELATION TO THE QUOTAS WHICH WERE TO BE ALLOCATED FOR THE QUARTER AS A WHOLE , IT NEVERTHELESS REMAINS THAT THE UNDERTAKINGS RECEIVED NOTICE OF THE COMMISSION ' S INTENTIONS .

21 THIRDLY , THE APPLICANT COMPLAINS THAT THE COMMISSION FAILED TO TAKE ACCOUNT OF THE PRINCIPLES SET OUT IN ARTICLES 2 , 3 AND 4 OF THE ECSC TREATY . THAT SUBMISSION HAS NOT BEEN ARGUED WITH SUFFICIENT SPECIFICATION TO ENABLE THE COURT TO GIVE A RULING ON IT . FURTHERMORE IT SHOULD BE RECALLED THAT THE COURT HAS ALREADY STATED THAT IT IS NOT CERTAIN THAT ALL THE OBJECTIVES OF THE TREATY CAN BE SIMULTANEOUSLY PURSUED IN THEIR ENTIRETY AND IN ALL CIRCUMSTANCES ; IT IS THE TASK OF THE COMMISSION TO EFFECT A PERMANENT COMPROMISE BETWEEN THOSE DIFFERENT OBJECTIVES .

BREACH OF THE PRINCIPLE OF PROPORTIONALITY

22 THE APPLICANT COMPLAINS THAT THE COMMISSION FAILED TO TAKE THE MEASURES AGAINST IMPORTS PROVIDED FOR BY ARTICLE 74 OF THE ECSC TREATY IF SUCH IMPORTS CAUSE OR THREATEN TO CAUSE SERIOUS INJURY TO PRODUCTION WITHIN THE COMMON MARKET OF LIKE OR DIRECTLY COMPETING PRODUCTS .

23 UNDER THE TERMS OF ARTICLE 58 THE COMMISSION HAS POWER TO TAKE ' ' TO THE NECESSARY EXTENT ' ' THE MEASURES PROVIDED FOR IN ARTICLE 74 AT THE SAME TIME AS ANY MEASURE TAKEN ON THE BASIS OF ARTICLE 58 . THE APPRAISAL OF THE NECESSITY OF TAKING SUCH MEASURES IS A MATTER FOR THE COMMISSION , SUBJECT TO THE COURT ' S POWER TO REVIEW THE LAWFULNESS OF THE COMMISSION ' S EXERCISE OF ITS DISCRETION .

24 IN THIS CONNECTION IT MUST BE EMPHASIZED THAT THE APPLICANT HAS NOT ADDUCED ANY EVIDENCE IN SUPPORT OF ITS SUBMISSION THAT THE COMMISSION MISUSED ITS DISCRETION . ON THE CONTRARY , EVEN BEFORE THE INTRODUCTION OF THE QUOTA SYSTEM , THE COMMISSION TOOK STEPS TO CONTROL THE LEVEL OF PRICES AND THE QUANTITY OF IMPORTS OF STEEL PRODUCTS FROM NON-MEMBER COUNTRIES . IN PARTICULAR IT FIXED BASIC PRICES , CONCLUDED ARRANGEMENTS WITH NON-MEMBER COUNTRIES AND TOOK SUPERVISORY ACTION . AT THE TIME OF THE ADOPTION OF DECISION NO 2794/80/ECSC IT FURTHER INTENSIFIED THAT SUPERVISION AND REVIEWED THE BASIC PRICES . MOREOVER , ACCORDING TO THE FIGURES SUPPLIED BY THE COMMISSION , THE LEVEL OF IMPORTS FELL BETWEEN 1977 AND 1979 AND THAT TENDENCY CONTINUED BEFORE AND AFTER THE INTRODUCTION OF THE QUOTA SYSTEM . THEREFORE THE COMMISSION CANNOT BE ACCUSED OF NOT HAVING TRIED TO COMBAT IMPORTS FROM NON-MEMBER COUNTRIES .

25 IT IS IMPORTANT TO POINT OUT ALSO THAT IN ITS NEGOTIATIONS WITH NON-MEMBER COUNTRIES THE COMMISSION FACES CONSIDERABLE DIFFICULTIES AS A RESULT OF THE FACT THAT THE ECSC IS A NET EXPORTER OF STEEL ; IN SUCH CIRCUMSTANCES IT IS COMPELLED TO ENSURE THE CONTINUANCE OF COMMUNITY EXPORTS AT THE SAME TIME AS IT MUST ATTEMPT TO LIMIT IMPORTS INTO THE COMMUNITY , AND IT HAD REASON TO FEAR THAT BY TAKING NON-NEGOTIATED RESTRICTIVE DECISIONS WITH REGARD TO NON-MEMBER COUNTRIES IT MIGHT PROVOKE RETALIATORY MEASURES ON THEIR PART WHICH WOULD BE DETRIMENTAL TO THE GENERAL INTEREST .

26 THE APPLICANT FURTHER MAINTAINS THAT THE PRODUCERS OF CRUDE STEEL , WHO WERE OBLIGED TO REDUCE THEIR PRODUCTION , DERIVED NO BENEFIT FROM A SIMULTANEOUS REDUCTION IN DEMAND FROM NON-INTEGRATED STEEL WORKS . THE COMMISSION , WHICH FAILED TO TAKE ACCOUNT OF THE DIFFERENT POSITION OF THE LATTER UNDERTAKINGS , SHOULD NOT HAVE ACCORDED THEM THE SAME TREATMENT AS INTEGRATED UNDERTAKINGS .

27 IT MUST BE POINTED OUT THAT EVEN THOUGH UNDERTAKINGS LIKE THE APPLICANT HAVE NOT ALL UNDERGONE A CRISIS ON THE SAME SCALE AS INTEGRATED UNDERTAKINGS , THEY ALSO HAVE BEEN OBLIGED TO REDUCE THEIR PRODUCTION BECAUSE OF THE FALL IN DEMAND . ONCE THE COMMISSION HAD DECIDED TO ESTABLISH A GENERAL SYSTEM OF QUOTAS IT COULD NOT DISTINGUISH BETWEEN INTEGRATED AND NON-INTEGRATED UNDERTAKINGS IF IT WISHED TO ACHIEVE ITS OBJECTIVE OF REDUCING PRODUCTION .

28 THE APPLICANT ALSO CRITICIZES THE FACT THAT PRODUCTION DESTINED FOR EXPORT TO NON-MEMBER COUNTRIES WAS INCLUDED IN THE QUOTAS , WHICH WEAKENED THE COMMUNITY UNDERTAKINGS IN THE FACE OF THE FIERCE COMPETITION WHICH PREVAILS ON SUCH MARKETS .

29 THE APPLICANT HAS NOT , HOWEVER , ADDUCED ANY EVIDENCE OF LOSS OF MARKETS OR SHOWN THAT IT HAD TO REFUSE ORDERS FOR EXPORTS TO NON-MEMBER COUNTRIES . FURTHERMORE , THE COMMISSION HAS EMPHASIZED THAT IT WAS PREPARED TO GRANT AN INCREASE IN THE QUOTAS IN ACCORDANCE WITH ARTICLE 14 OF DECISION NO 2794/80/ECSC IF A PRODUCER WAS PREVENTED FROM INCREASING THE VOLUME OF ITS EXPORTS TO NON-MEMBER COUNTRIES . THIS COMPLAINT ACCORDINGLY CANNOT BE UPHELD .

THE ABSENCE OF A MANIFEST CRISIS AND THE IRREGULAR APPLICATION OF THE PRINCIPLE OF SOLIDARITY

30 THE APPLICANT MAINTAINS THAT THE DIFFICULTIES FACED BY A PART OF THE SECTOR OF PRODUCTION AS A RESULT OF THE ADVANCED TECHNOLOGY AND HIGHER PRODUCTIVITY OF OTHER UNDERTAKINGS MAY NOT BE REGARDED AS A MANIFEST CRISIS WITHIN THE MEANING OF THE TREATY . IT SAYS THAT IF THERE WAS A LOW RATE OF UTILIZATION OF PLANT IT WAS DUE TO AN UNREASONABLE EXPANSION RELATED TO PUBLIC AIDS ; MOREOVER , A CRISIS IS BY ITS VERY NATURE TEMPORARY , WHILST THE COMMISSION HAS BEEN PREOCCUPIED FOR FIVE YEARS IN DEALING WITH THE DIFFICULTIES FACED BY THE EUROPEAN STEEL INDUSTRY . FINALLY , THE APPLICANT SUBMITS THAT UNDERTAKINGS WHICH HAVE MODERNIZED MAY NOT BE REQUIRED TO SACRIFICE THE BENEFIT OF SUCH MODERNIZATION BECAUSE OTHER UNDERTAKINGS HAVE FAILED TO DO LIKEWISE .

31 THE COMPLAINTS SUBMITTED BY THE APPLICANT AMOUNT TO A CLAIM THAT THE SMALL AND MORE EFFICIENT UNDERTAKINGS SHOULD HAVE BEEN EXEMPTED FROM THE QUOTA SYSTEM . BUT IF THE COMMISSION HAD NOT INCLUDED THE SMALL AND MEDIUM-SCALE UNDERTAKINGS , WHICH , ACCORDING TO THE APPLICANT , MEET 33% OF THE REQUIREMENTS OF THE COMMON MARKET , ANY QUOTA SYSTEM WOULD HAVE BEEN INEFFECTIVE .

32 IN THIS CONNECTION IT MUST BE RECALLED THAT IN ITS JUDGMENT OF 18 MARCH 1980 IN THE ' ' CONCRETE REINFORCING BARS ' ' CASE ( VALSABBIA ) ( 1980 ) ECR 907 , AT PARAGRAPH 80 ) THE COURT HELD THAT :

' ' . . . BY PROVIDING FOR INTERVENTION BY MEANS OF COERCIVE ACTION IN CERTAIN DEFINED CIRCUMSTANCES THE TREATY DEROGATES FROM THE NORMAL RULES GOVERNING THE WORKING OF THE COMMON MARKET , WHICH ARE BASED ON THE PRINCIPLE OF THE MARKET ECONOMY . ' '

SUCH CONSIDERATIONS APPLY EQUALLY IN THIS CASE .

33 WITH REGARD TO THE POSSIBLE DURATION OF A MANIFEST CRISIS WITHIN THE MEANING OF ARTICLE 58 , IT MAY BE SAID THAT , EVEN THOUGH THE STEEL SECTOR HAS EXPERIENCED OBVIOUS DIFFICULTIES , THE APPLICANT ' S OBSERVATIONS ARE IRRELEVANT SINCE IT WAS ONLY BY ITS DECISION OF 19 OCTOBER 1980 , NOT FIVE YEARS EARLIER , THAT THE COMMISSION ESTABLISHED THE EXISTENCE OF A MANIFEST CRISIS .

34 HAVING REGARD TO ALL THE FOREGOING CONSIDERATIONS THE APPLICATION MUST BE DISMISSED .

Decision on costs

COSTS

35 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE , THE UNSUCCESSFUL PARTY MUST BE ORDERED TO PAY THE COSTS .

36 SINCE THE APPLICANT HAS FAILED IN ITS SUBMISSIONS IT MUST BE ORDERED TO PAY THE COSTS .

Operative part

ON THOSE GROUNDS ,

THE COURT

HEREBY :

1 . DISMISSES THE APPLICATION ;

2 . ORDERS THE APPLICANT TO PAY THE COSTS .