Opinion of the Court of 13 December 1961. - Amendment of Article 65 of the Treaty establishing the European Coal and Steel Community. - Opinion 1/61.



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Summary

Subject of the case

Grounds

Operative part



Keywords

1. AMENDMENT OF THE ECSC TREATY WITHIN THE MEANING OF THE THIRD PARAGRAPH OF ARTICLE 95 - MODIFICATION OF THE POWERS CONFERRED UPON THE HIGH AUTHORITY BY ARTICLE 65 (2) - LIMITS

2. AMENDMENT OF THE ECSC TREATY WITHIN THE MEANING OF THE THIRD PARAGRAPH OF ARTICLE 95 - SYSTEM OF PRELIMINARY CONTROL PROVIDED FOR BY ARTICLE 65 (2) (C) - REPLACEMENT BY A SYSTEM OF SUBSEQUENT CHECKS - CONFERRING OF A NEW POWER - INADMISSIBILITY

3. AMENDMENT OF THE ECSC TREATY WITHIN THE MEANING OF THE THIRD PARAGRAPH OF ARTICLE 95 - ARTICLE 65 AS AN IMPLEMENTING PROVISION OF ARTICLE 4 (D) - DEROGATION BY AMENDMENT FROM THE LIMITS PRESCRIBED BY ARTICLE 65 (2) (C) - INADMISSIBLE INFRINGEMENT OF A BASIC PROVISIO

Summary

1. IN PRINCIPLE, ARTICLE 95 DOES NOT PREVENT THE RULES RELATING TO THE POWERS CONFERRED BY ARTICLE 65 UPON THE HIGH AUTHORITY FROM BEING ADAPTED BY MEANS OF AN AMENDMENT OF ARTICLE 65 (2) WITH A VIEW TO GIVING THE HIGH AUTHORITY POWER TO AUTHORIZE EITHER AGREEMENTS OF A DIFFERENT NATURE BUT HAVING THE SAME OBJECTIVES AS THOSE PROVIDED FOR IN THE PRESENT PARAGRAPH OR AGREEMENTS OF THE SAME NATURE AS BUT HAVING A DIFFERENT OBJECTIVE FROM THOSE PROVIDED FOR IN THE PARAGRAPH PRESENTLY IN FORCE OR, FINALLY, AGREEMENTS DIFFERING BOTH IN NATURE AND OBJECTIVE.

IT IS HOWEVER ESSENTIAL THAT THE AMENDED WORDING SHOULD STATE THE NATURE OF THE AGREEMENTS WHICH MAY BE AUTHORIZED AND DEFINE CLEARLY THE AIM OF SUCH AGREEMENTS BECAUSE OTHERWISE IT WOULD CONSTITUTE NOT THE ADAPTATION OF THE EXERCISE OF A POWER ALREADY CONFERRED UPON THE HIGH AUTHORITY WITHIN THE LIMITS OF THE DEROGATIONS ALLOWED BY ARTICLE 65 (2) BUT THE GRANT OF A POWER WITHOUT DEFINED LIMITS AND THUS OF SUCH A VAST AND INDEFINITE EXTENSION OF ITS EXISTING POWERS AS TO AMOUNT TO AN ALTERATION NOT ONLY IN THE EXTENT BUT IN THE NATURE OF THOSE POWERS, IN OTHER WORDS, TO A NEW POWER.

2. SINCE ARTICLE 65 (2) (C) PROVIDES FOR A SYSTEM OF PRELIMINARY EXAMINATION WITH REGARD TO THE AUTHORIZATION OF SPECIALIZATION AGREEMENTS OR JOINT-BUYING OR JOINT-SELLING AGREEMENTS THIS SYSTEM CANNOT BE REPLACED IN THE COURSE OF AN AMENDMENT WITHIN THE MEANING OF THE THIRD PARAGRAPH OF ARTICLE 95 BY A SYSTEM OF CHECKING THE FACTS AND OF SUBSEQUENT DIRECT INTERVENTION. SUCH AN AMENDMENT DOES NOT CONSTITUTE A MERE ADAPTATION OF THE HIGH AUTHORITY'S POWERS BUT THE GRANT OF A NEW POWER.

3. THE DEROGATING PROVISION OF ARTICLE 65 (2) LAYS DOWN AN OBJECTIVE CRITERION TO THE EFFECT THAT THE AGREEMENT CONCERNS " A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION WITHIN THE COMMON MARKET ". THIS CRITERION MAKES IT POSSIBLE TO ASSESS THE CASES IN WHICH AN AGREEMENT IS IN ANY CASE INCOMPATIBLE WITH THE PROHIBITION LAID DOWN BY ARTICLE 4 (D) AND BY ARTICLE 65 (1 ), SINCE ARTICLE 4 (D) CONSTITUTES A PRINCIPLE OF STRICT APPLICATION THE IMPLEMENTING PROVISIONS OF WHICH ARE CONTAINED IN ARTICLE 65.

IN THOSE CIRCUMSTANCES TO MAKE PROVISION, BY AN AMENDMENT WITHIN THE MEANING OF THE THIRD PARAGRAPH OF ARTICLE 95, FOR DEROGATION FROM THE LIMITS PRESCRIBED IN ARTICLE 65 (2) (C) CONSTITUTES AN INFRINGEMENT OF THE PROHIBITION LAID DOWN BY ARTICLE 4 (D )

Subject of the case

HAVING REGARD TO THE REQUEST FOR AN OPINION SUBMITTED ON 20 JULY 1961 UNDER THE THIRD AND FOURTH PARAGRAPHS OF ARTICLE 95 OF THE TREATY ESTABLISHING THE ECSC BY THE HIGH AUTHORITY AND THE SPECIAL COUNCIL OF MINISTERS OF THE EUROPEAN COAL AND STEEL COMMUNITY;

UPON HEARING THE ADVOCATES-GENERAL

Grounds

P. 254

WHEREAS ARTICLE 95 OF THE TREATY PROVIDES THAT THE AMENDMENTS REFERRED TO IN THE THIRD PARAGRAPH THEREOF SHALL BE SUBMITTED FOR THE OPINION OF THE COURT WHICH IS REQUIRED TO ASCERTAIN WHETHER THE PROPOSALS ARE IN ACCORDANCE WITH THE PROVISIONS OF THE SAID PARAGRAPH;

WHEREAS, SINCE THE HIGH AUTHORITY AND THE SPECIAL COUNCIL OF MINISTERS HAVE NOT BASED THEIR REQUEST UPON UNFORESEEN DIFFICULTIES EMERGING IN THE LIGHT OF EXPERIENCE IN THE APPLICATION OF THE TREATY, THE CONFORMITY OF THE PROPOSAL CONTAINED IN THE REQUEST FOR AN OPINION MUST BE CONSIDERED UNDER THE FOLLOWING ASPECTS :

(A) WHETHER THERE ARE FUNDAMENTAL ECONOMIC (OR TECHNICAL) CHANGES DIRECTLY AFFECTING THE COMMON MARKET IN COAL AND STEEL;

(B) WHETHER THE PROPOSAL CONSTITUTES AN ADAPTATION OF THE RULES FOR THE HIGH AUTHORITY'S EXERCISE OF ITS POWERS;

(C) WHETHER THE PROPOSAL " CONFLICTS WITH THE PROVISIONS OF ARTICLES 2, 3 AND 4 ";

(D) WHETHER IT INTERFERES WITH THE RELATIONSHIP BETWEEN THE POWERS OF THE HIGH AUTHORITY AND THOSE OF THE OTHER INSTITUTIONS OF THE COMMUNITY;

(E) WHETHER THE CIRCUMSTANCES MENTIONED UNDER (A) MAKE THE PROPOSAL NECESSARY AND WHETHER IT CONSTITUTES AN AMENDMENT APPROPRIATE TO THAT NECESSITY.

WHEREAS THE NEW VERSION OF ARTICLE 65 (2) AND (5) OF THE TREATY PROPOSED BY THE HIGH AUTHORITY AND THE COUNCIL OF MINISTERS IS AS FOLLOWS;

" HOWEVER, THE HIGH AUTHORITY SHALL AUTHORIZE SPECIALIZATION AGREEMENTS OR JOINT-BUYING OR JOINT-SELLING AGREEMENTS IN RESPECT OF PARTICULAR PRODUCTS, IF IT FINDS THAT :

(A) SUCH SPECIALIZATION OR SUCH JOINT-BUYING OR SELLING WILL MAKE FOR A SUBSTANTIAL IMPROVEMENT IN THE PRODUCTION OR DISTRIBUTION OF THOSE PRODUCTS;

(B) THE AGREEMENT IN QUESTION IS ESSENTIAL IN ORDER TO ACHIEVE THESE RESULTS AND IS NOT MORE RESTRICTIVE THAN IS NECESSARY FOR THAT PURPOSE; AND

(C) THE AGREEMENT IS NOT LIABLE TO GIVE THE UNDERTAKINGS CONCERNED THE POWER TO DETERMINE THE PRICES, OR TO CONTROL OR RESTRICT THE PRODUCTION OR MARKETING, OF A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION WITHIN THE COMMON MARKET, OR TO SHIELD THEM AGAINST EFFECTIVE COMPETITION FROM OTHER UNDERTAKINGS WITHIN THE COMMON MARKET.

P. 255

IF THE HIGH AUTHORITY FINDS THAT CERTAIN AGREEMENTS ARE STRICTLY ANALAGOUS IN NATURE AND EFFECT TO THOSE REFERRED TO ABOVE, HAVING PARTICULAR REGARD TO THE FACT THAT THIS PARAGRAPH APPLIES TO DISTRIBUTIVE UNDERTAKINGS, IT SHALL AUTHORIZE THEM ALSO WHEN SATISFIED THAT THEY MEET THE SAME REQUIREMENTS.

IN THE EVENT OF FUNDAMENTAL AND PERSISTENT CHANGE IN MARKETING CONDITIONS IN THE COAL OR STEEL INDUSTRIES THE HIGH AUTHORITY MAY IN ADDITION GRANT THE FOLLOWING AUTHORIZATIONS :

(A) IT MAY AUTHORIZE AGREEMENTS CONCERNING ADAPTATION TO NEW MARKETING CONDITIONS IF IT FINDS THAT :

THOSE AGREEMENTS ARE CAPABLE OF ATTAINING THE OBJECTIVES OF ADAPTATION WHICH THE HIGH AUTHORITY FINDS APPROPRIATE, AND

SUCH AGREEMENTS ARE ESSENTIAL IN ORDER TO ATTAIN THOSE OBJECTIVES AND ARE NOT MORE RESTRICTIVE THAN IS NECESSARY FOR THAT PURPOSE;

(B) THE HIGH AUTHORITY MAY, IN AUTHORIZING JOINT-BUYING OR JOINT-SELLING AGREEMENTS, DISREGARD WHOLLY OR IN PART THE CONDITIONS SET OUT IN SUBPARAGRAPH 1 (C ); NEVERTHELESS SUCH AUTHORIZATION SHALL BE SUBJECT TO THE FOLLOWING CONDITIONS;

THE EXISTENCE OF THE AGREEMENTS REFERRED TO IN INDENT (A) OF THIS SUBPARAGRAPH BETWEEN ALL THE UNDERTAKINGS IN QUESTION OR OTHER MEASURES CAPABLE OF ATTAINING THE OBJECTIVES OF ADAPTATION WHICH THE HIGH AUTHORITY HAS FOUND TO BE APPROPRIATE, AND THAT SUCH JOINT-BUYING OR JOINT-SELLING AGREEMENTS ARE CAPABLE OF FACILITATING THE ATTAINMENT OF THE OBJECTIVES OF ADAPTATION FOUND TO BE APPROPRIATE BY THE HIGH AUTHORITY AND ARE CAPABLE OF PREVENTING THE CHANGES WHICH HAVE OCCURRED IN MARKETING CONDITIONS FROM CAUSING SERIOUS SOCIAL AND ECONOMIC DISTURBANCES.

AUTHORIZATIONS MAY BE GRANTED SUBJECT TO SPECIFIED CONDITIONS AND FOR LIMITED PERIODS. IN SUCH CASES THE HIGH AUTHORITY SHALL RENEW AN AUTHORIZATION ONCE OR SEVERAL TIMES IF IT FINDS THAT THE REQUIREMENTS LAID DOWN ABOVE ARE STILL MET AT THE TIME OF RENEWAL. THE VALIDITY OF THE AUTHORIZATIONS REFERRED TO IN THE THIRD SUBPARAGRAPH ABOVE SHALL BE RESTRICTED TO THE PERIOD NECESSARY FOR THE UNDERTAKINGS TO ADAPT TO THE NEW MARKETING CONDITIONS. THE PERIOD SHALL BE CALCULATED SO THAT THE ADAPTATION MAY BE CARRIED OUT IN SUCH A WAY AS TO AVOID SOCIAL AND ECONOMIC DISTURBANCES. THE AUTHORIZATION MAY BE RENEWED AS NECESSARY.

P. 256

THE HIGH AUTHORITY SHALL REVOKE OR AMEND AN AUTHORIZATION IF IT FINDS THAT AS A RESULT OF A CHANGE IN CIRCUMSTANCES THE AGREEMENT NO LONGER MEETS THESE REQUIREMENTS, OR THAT THE ACTUAL RESULTS OF THE AGREEMENT OR OF THE APPLICATION THEREOF ARE CONTRARY TO THE REQUIREMENTS FOR ITS AUTHORIZATION. FURTHERMORE THE HIGH AUTHORITY SHALL REVOKE THE AUTHORIZATIONS REFERRED TO IN THE THIRD SUBPARAGRAPH AVOVE IF, TAKING ACCOUNT OF THE DEVELOPMENT OF THE MARKET TOGETHER WITH THE ECONOMIC AND SOCIAL DIFFICULTIES ARISING FROM ADAPTATION TO THIS DEVELOPMENT, IT FINDS THAT ADAPTATION IS PRODUCING INADEQUATE RESULTS.

THE HIGH AUTHORITY SHALL MAKE THE AUTHORIZATION REFERRED TO IN THE THIRD SUBPARAGRAPH ABOVE SUBJECT TO CHECKS ENABLING IT TO ASCERTAIN WHETHER THE AGREEMENT IS BEING USED OR IS LIABLE TO BE USED FOR THE SHARING OR EXPLOITATION OF MARKETS OR OTHERWISE INVOLVES SERIOUS DIFFICULTIES WITH REGARD TO THE FUNCTIONING OF THE COMMON MARKET. IF IT FINDS SUCH ABUSES OR THREATS OF ABUSES OR ANY OTHER SERIOUS DIFFICULTIES WITH REGARD TO THE FUNCTIONING OF THE COMMON MARKET IT SHALL ADDRESS TO THE ORGANIZATION ESTABLISHED UNDER THE AGREEMENT ALL APPROPRIATE RECOMMENDATIONS TO REMEDY THE SITUATION.

IF SUCH RECOMMENDATIONS ARE NOT IMPLEMENTED SATISFACTORILY WITHIN AN APPROPRIATE TIME THE HIGH AUTHORITY SHALL DETERMINE FOR THE ORGANIZATION IN QUESTION THE PRICES, CONDITIONS OF SALE AND DELIVERY PLANS BY MEANS OF DECISIONS ADOPTED AFTER CONSULTATION WITH THE GOVERNMENT CONCERNED; IT MAY ALSO REVOKE THE AUTHORIZATION. IN URGENT CASES CONSULTATION WITH THE GOVERNMENT CONCERNED MAY TAKE PLACE AFTER THE ADOPTION OF THE DECISION.

DECISIONS GRANTING, RENEWING, AMENDING, REFUSING OR REVOKING AN AUTHORIZATION SHALL BE PUBLISHED TOGETHER WITH THE REASONS THEREFOR; THE RESTRICTIONS IMPOSED BY THE SECOND PARAGRAPH OF ARTICLE 47 SHALL NOT APPLY THERETO. "

" 5. ON ANY UNDERTAKING WHICH HAS ENTERED INTO AN AGREEMENT WHICH IS AUTOMATICALLY VOID, OR HAS ENFORCED OR ATTEMPTED TO ENFORCE, BY WAY OF ARBITRATION, PENALTY, BOYCOTT OR OTHER MEANS, ANY AGREEMENT OR DECISION WHICH IS AUTOMATICALLY VOID OR AN AGREEMENT FOR WHICH AUTHORIZATION HAS BEEN REFUSED OR REVOKED, OR HAS OBTAINED AN AUTHORIZATION BY MEANS OF INFORMATION WHICH IT KNEW TO BE FALSE OR MISLEADING, OR HAS ENGAGED IN PRACTICES PROHIBITED BY PARAGRAPH 1 OF THIS ARTICLE, OR HAS INFRINGED THE DECISIONS OF THE HIGH AUTHORITY ADOPTED IN IMPLEMENTATION OF THE SIXTH SUBPARAGRAPH OF PARAGRAPH 2 THEREOF, THE HIGH AUTHORITY MAY IMPOSE FINES OR PERIODIC PENALTY PAYMENTS NOT EXCEEDING TWICE THE TURNOVER ON THE PRODUCTS WHICH WERE THE SUBJECT OF THE AGREEMENT, DECISION OR PRACTICE PROHIBITED BY THIS ARTICLE; IF, HOWEVER, THE PURPOSE OF THE AGREEMENT, DECISION OR PRACTICE IS TO RESTRICT PRODUCTION, TECHNICAL DEVELOPMENT OR INVESTMENT, THIS MAXIMUM MAY BE RAISED TO 10% OF THE ANNUAL TURNOVER OF THE UNDERTAKINGS IN QUESTION IN THE CASE OF FINES, AND 20% OF THE DAILY TURNOVER IN THE CASE OF PERIODIC PENALTY PAYMENTS. "

P. 257

WHEREAS ACCORDING TO THE EXTRACT OF THE MINUTES ANNEXED TO THE REQUEST FOR AN OPINION THE SPECIAL COUNCIL OF MINISTERS AT ITS MEETING OF 18 JULY 1961 IN LUXEMBOURG, ADOPTED THE PROPOSED AMENDMENT BY A MAJORITY OF FIVE-SIXTHS OF ITS MEMBERS.

THE GOVERNMENT OF THE NETHERLANDS, WITH THE AGREEMENT OF THE COUNCIL, HAS CONSIDERED IT APPROPRIATE TO NOTIFY THE COURT OF THE REASONS FOR ITS ABSTENTION.

BY A LETTER OF 28 SEPTEMBER 1961 THE COURT PUT A SERIES OF QUESTIONS TO THE HIGH AUTHORITY AND THE SPECIAL COUNCIL OF MINISTERS.

BY A LETTER OF 27 OCTOBER 1961 THE HIGH AUTHORITY AND THE SPECIAL COUNCIL OF MINISTERS REPLIED TO THOSE QUESTIONS.

THE QUESTIONS PUT AND THE ANSWERS RECEIVED ARE ANNEXED TO THIS OPINION.

A. WHEREAS THE HIGH AUTHORITY AND THE SPECIAL COUNCIL OF MINISTERS HAVE CITED IN SUPPORT OF THEIR PROPOSAL ON THE ONE HAND THE APPEARANCE ON THE MARKET OF A NEW SOURCE OF ENERGY AND ON THE OTHER HAND " INCREASED COMPETITION FROM FUEL IMPORTED FROM THIRD COUNTRIES ".

AS THE COURT HAS ALREADY FOUND IN A PREVIOUS OPINION, THE CIRCUMSTANCES RELIED UPON HAVE BROUGHT ABOUT FUNDAMENTAL CHANGES DIRECTLY AFFECTING THE COMMON MARKET.

THE REPLIS GIVEN TO THE QUESTIONS PUT, IN PARTICULAR THOSE APPEARING AT (B) 2, DO INDEED RAISE THE PROBLEM OF WHETHER THE CHANGES INDICATED ARE STILL OF THE SAME IMPORTANCE AND URGENCY AS IN 1959.

THE TABLE PRODUCED AT PAGE 12 OF THE REPLIES SHOWS ON THE ONE HAND THAT ALTHOUGH IN 1957 6 000 000 METRIC TONS OF COAL PRODUCED COULD NOT BE MARKETED (THE DIFFERENCE BETWEEN THE FIGURES APPEARING IN COLUMNS 1 AND 2 OF THE TABLE) AND ALTHOUGH THOSE FIGURES AMOUNTED FOR 1958 AND 1959 TO 21 000 000 AND 11 000 000 TONS RESPECTIVELY, ON THE OTHER HAND, IN THE COURSE OF THE LAST YEAR FOR WHICH FIGURES ARE AVAILABLE (1960) AN AMOUNT OF LESS THAN 1 000 000 METRIC TONS OF COAL PRODUCED COULD NOT BE MARKETED. THE TABLE SHOWS ON THE OTHER HAND THAT THE PROPORTION OF COAL FROM THIRD COUNTRIES SOLD IN THE COMMON MARKET FELL FROM 15.38% IN 1957 AND 12.38% IN 1958 TO 7.93% IN 1959 AND 7.05% IN 1960 SO THAT THOSE FIGURES TEND TO INDICATE THAT A CERTAIN ADAPTATION TO THE PRESENT ECONOMIC SITUATION HAS ALREADY TAKEN PLACE.

P. 258

WHILST THE COURT DRAWS ATTENTION TO THE DOUBTS TO WHICH THOSE FIGURES GIVE RISE, IT NEVERTHELESS CONCEDES THAT THE CHANGES WHICH HAVE TAKEN PLACE MAY BE REGARDED AS SUFFICIENT REASON FOR RECOGNIZING THE EXISTENCE OF A FUNDAMENTAL CHANGE IN ECONOMIC CONDITIONS WHICH DIRECTLY AFFECTS THE COMMON MARKET.

WHEREAS, WITH REGARD TO THE OTHER REQUIREMENTS OF ARTICLE 95, THE COURT CONSIDERS THAT IT MUST DRAW A DISTINCTION BETWEEN THE PROPOSALS :

(I) TO AUTHORIZE AGREEMENTS CONCERNING ADAPTATION TO NEW MARKETING CONDITIONS TO THE EXTENT TO WHICH SUCH AGREEMENTS APPEAR NECESSARY; AND

(II) TO CONCEDE, UNDER THE CONDITIONS LAID DOWN IN THE DRAFT, THAT THE AGREEMENTS MENTIONED AT (1) AND THE RELATED JOINT-BUYING AND JOINT-SELLING AGREEMENTS MAY BE AUTHORIZED AND THE CONDITIONS CONTAINED IN ARTICLE 65 (2) (C) DISREGARDED IN WHOLE OR IN PART.

(I) THE PROPOSAL TO ENABLE ADAPTATION AGREEMENTS TO BE AUTHORIZED UNDER ARTICLE 65

B. WHEREAS THE FIRST SUBPARAGRAPH OF ARTICLE 65 (2) ENABLES CERTAIN SPECIFIED AGREEMENTS TO BE AUTHORIZED BOTH BY REASON OF THEIR NATURE (SPECIALIZATION AGREEMENTS OR JOINT-BUYING OR JOINT-SELLING AGREEMENTS) AND OF THEIR AIM (THE FACT THAT THEY WILL MAKE FOR A SUBSTANTIAL IMPROVEMENT IN PRODUCTION OR DISTRIBUTION ).

IN PRINCIPLE, ARTICLE 95 DOES NOT PREVENT THE RULES RELATING TO THE POWERS CONFERRED BY ARTICLE 65 UPON THE HIGH AUTHORITY FROM BEING ADAPTED BY MEANS OF AN AMENDMENT OF ARTICLE 65 (2) WITH A VIEW TO GIVING THE HIGH AUTHORITY POWER TO AUTHORIZE EITHER AGREEMENTS OF A DIFFERENT NATURE FROM BUT HAVING THE SAME OBJECTIVE AS THOSE PROVIDED FOR IN THE PRESENT PARAGRAPH OR AGREEMENTS OF THE SAME NATURE AS BUT HAVING A DIFFERENT OBJECTIVE FROM THOSE PROVIDED FOR IN THE PARAGRAPH PRESENTLY IN FORCE, OR FINALLY, AGREEMENTS DIFFERING BOTH IN NATURE AND OBJECTIVE.

IT IS HOWEVER ESSENTIAL THAT THE AMENDED WORDING SHOULD STATE THE NATURE OF THE AGREEMENTS WHICH MAY BE AUTHORIZED AND DEFINE CLEARLY THE AIM OF SUCH AGREEMENTS BECAUSE OTHERWISE IT WOULD CONSTITUTE NOT THE ADAPTATION OF THE EXERCISE OF A POWER ALREADY CONFERRED UPON THE HIGH AUTHORITY WITHIN THE LIMITS OF THE DEROGATIONS ALLOWED BY ARTICLE 65 (2) BUT THE GRANT OF A POWER WITHOUT DEFINED LIMITS, AND THUS OF SUCH A VAST AND INDEFINITE EXTENSION OF ITS EXISTING POWERS, AS TO AMOUNT TO AN ALTERATION NOT ONLY IN THE EXTENT BUT IN THE NATURE OF THOSE POWERS, IN OTHER WORDS, TO A NEW POWER.

THE PROPOSED TEXT CONSTITUTES SUCH AN EXTENSION.

IN FACT IT ALLOWS, IN ADDITION TO THE PRESENT POSSIBILITIES OF AUTHORIZATION, THE AUTHORIZATION OF AGREEMENTS CONCERNING ADAPTATION TO NEW CONDITIONS OF MARKETING ALTHOUGH THIS TERM PROVIDES NO INFORMATION AS TO THE NATURE OF THE AGREEMENTS CONTEMPLATED AND MERELY INDICATES THE AIM OF SUCH AGREEMENTS BY MEANS OF THE VAGUE EXPRESSION : " CONCERNING ADAPTATION TO NEW CONDITIONS OF MARKETING ".

P. 259

THE VAGUENESS OF THIS EXPRESSION IS EMPHASIZED BY THE COMPARISON WITH THE WORDING OF ARTICLE 65 (2) (A) WHICH DOES NOT RENDER THE AUTHORIZATION OF SPECIALIZATION AGREEMENTS OR JOINT-BUYING OR JOINT-SELLING AGREEMENTS DEPENDENT ON THEIR " CONCERNING " SUBSTANTIAL IMPROVEMENT IN THE PRODUCTION OR DISTRIBUTION OF THE RELEVANT PRODUCTS BUT LAYS DOWN THE POSITIVE REQUIREMENT THAT SUCH AGREEMENTS SHALL " MAKE FOR " SUCH AN IMPROVEMENT.

ANY RELAXATION OF THIS REQUIREMENT WOULD INTRODUCE BETWEEN THE PROVISION IN FORCE AND THAT CONTAINING THE ADDITION A DIFFERENCE IN SCOPE WHICH IS UNACCEPTABLE BECAUSE IT CANNOT BE MEASURED.

THIS IS CONFIRMED BY THE FACT THAT THE HIGH AUTHORITY AND THE SPECIAL COUNCIL OF MINISTERS STATED IN REPLY TO A QUESTION PUT BY THE COURT THAT " IT IS IMPOSSIBLE TO DRAW UP A COMPLETE LIST OF AGREEMENTS WHICH MAY BE ENVISAGED WITH REGARD TO ADAPTATION TO THE NEW MARKETING CONDITIONS " THE REPLY MERELY SETTING OUT, BY WAY OF EXAMPLE ONLY AND SUBJECT TO RESERVATIONS, A SERIES OF ASSORTED AGREEMENTS.

IT IS IN FACT DIFFICULT TO CONCEIVE OF AGREEMENTS WHICH WOULD NOT FALL INTO THE CATEGORY SUGGESTED SO THAT ADOPTION OF THE PROPOSAL WOULD MODIFY THE RELEVANT PROVISION AND THE POWER WHICH IT CONFERS UPON THE HIGH AUTHORITY TO SUCH AN EXTENT THAT IT WOULD NO LONGER CONSTITUTE AN " ADAPTATION OF THE RULES FOR THE HIGH AUTHORITY'S EXERCISE OF ITS POWERS ".

C. WHEREAS THE VAGUENESS AS TO THE NATURE OF THE AGREEMENTS WHICH MAY BE AUTHORIZED MAKES IT IMPOSSIBLE TO ASCERTAIN WHETHER THE PROPOSAL CONFLICTS WITH THE PROVISIONS OF ARTICLES 2, 3 AND 4 OF THE TREATY SINCE THE PROPOSED WORDING DOES NOT RULE OUT THE POSSIBILITY THAT AMONGST THE AGREEMENTS THUS DESIGNATED THERE MIGHT BE SOME THE AUTHORIZATION OF WHICH WOULD BE INCOMPATIBLE WITH ONE OR MORE OF THOSE ARTICLES.

D. WHEREAS FOR SIMILAR REASONS THE COURT MUST RESTRICT ITSELF, AS REGARDS THE QUESTION OF ANY POSSIBLE " INTERFERENCE WITH THE RELATIONSHIP BETWEEN THE POWERS OF THE HIGH AUTHORITY AND THOSE OF THE OTHER INSTITUTIONS ", TO ASSUMING THAT SUCH AN INTERFERENCE IS IMPROBABLE, SINCE IT IS IMPOSSIBLE TO GIVE A MORE CATEGORICAL REPLY IN THIS CASE.

E. WHEREAS IT MAY BE LEFT OPEN WHETHER THIS PART OF THE DRAFT IS RENDERED NECESSARY BY THE SAID CHANGES IN CONDITIONS AND ALSO IT CONSTITUTES AN AMENDMENT APPROPRIATE TO THIS NECESSITY, SINCE IT IS APPARENT FROM THE FOREGOING THAT IN ITS PRESENT FORM IT DOES NOT COME WITHIN THE PROCEDURE PRESCRIBED BY ARTICLE 95.

P. 260

(II) THE PROPOSAL TO ALLOW DEROGATIONS FROM THE CONDITIONS IN ARTICLE 65 (2) OF THE TREATY

B. WHEREAS THE FIRST SUBPARAGRAPH OF ARTICLE 65 (2) OF THE TREATY RENDERS THE AUTHORIZATION OF AGREEMENTS SUBJECT TO THREE CONDITIONS WHICH CONSIST, FIRST AND SECONDLY, OF THE ASSURANCE THAT THESE AGREEMENTS CORRESPOND TO THE OBJECTIVES PRESCRIBED BY THE SAID PARAGRAPH, THAT THEY ARE ESSENTIAL TO THE ACHIEVEMENT OF THESE OBJECTIVES AND THAT THEY ARE NOT MORE RESTRICTIVE THAN IS NECESSARY FOR THAT PURPOSE.

THE INDENT (C) OF ARTICLE 65 (2) THEN INTRODUCES A CONDITION OF A DIFFERENT NATURE, NAMELY, THAT ALTHOUGH THE AGREEMENT SUBMITTED FOR AUTHORIZATION MAY BE IN ACCORDANCE WITH THE TREATY, BOTH WITH REGARD TO ITS NATURE AND ITS AIM, IT SHALL NOT BE " LIABLE TO GIVE THE UNDERTAKINGS CONCERNED THE POWER TO DETERMINE THE PRICES, OR TO CONTROL OR RESTRICT THE PRODUCTION OR MARKETING OF A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION WITHIN THE COMMON MARKET, OR TO SHIELD THEM AGAINST EFFECTIVE COMPETITION FROM OTHER UNDERTAKINGS WITHIN THE COMMON MARKET ".

THE IMPORTANCE OF THAT CONDITION VIEWED IN THE CONTEXT OF THE OBJECTIVES AND OF THE ORGANISATION OF THE COMMON MARKET BECOMES ALL THE MORE CLEAR IN THAT IT IS INTENDED TO ENSURE THAT NO AGREEMENT, NO MATTER HOW ACCEPTABLE IT IS AND NO MATTER EVEN ITS INTRINSIC MERITS, CAN BE PERMITTED TO ENABLE THE PERSONS CONCERNED, BY VIRTUE OF THEIR POWER IN A SPECIFIC SECTOR, TO CONTROL THE MARKET FOR THOSE PRODUCTS AND INDEED, WITH REGARD TO SUCH PRODUCTS, TO FRUSTRATE THE VERY OBJECTIVES OF THE COMMON MARKET.

THE RELEVANT CONDITIONS REQUIRE THE HIGH AUTHORITY TO CARRY OUT WHERE APPROPRIATE A DETAILED EXAMINATION WHICH MUST NOT BE CONFINED TO THE EVIDENCE OF THE APPLICANT OR TO THE AIM OF THE AGREEMENT, EVEN IF THE LATTER MEETS THE REQUIREMENTS OF INDENT (A ), BUT WHICH MUST TAKE IN ITS OBJECTIVE EFFECTS.

FURTHERMORE THE WORDING OF INDENT (C) SHOWS CLEARLY THAT THE HIGH AUTHORITY MUST MAKE AN OBJECTIVE APPRAISAL IN THE LIGHT OF CLEARLY DEFINED CRITERIA.

WITH REGARD TO THE " AGREEMENTS CONCERNING ADAPTATION ETC. ... " THE DRAFT OF THE HIGH AUTHORITY AND OF THE SPECIAL COUNCIL OF MINISTERS ENTIRELY RULES OUT SUCH A PRELIMINARY EXAMINATION. IT MAKES IT POSSIBLE TO EXCLUDE THE EXAMINATION IN WHOLE OR IN PART WITH REGARD TO JOINT-BUYING OR JOINT-SELLING AGREEMENTS WHERE THEY ARE CONCLUDED BETWEEN UNDERTAKINGS PARTICIPATING IN MEASURES OF ADAPTATION AND WHERE THEY ARE " CAPABLE OF FACILITING THE ATTAINMENT OF THE OBJECTIVES OF ADAPTATION FOUND TO BE APPROPRIATE ... AND ARE CAPABLE OF PREVENTING THE CHANGES WHICH HAVE OCCURRED IN MARKETING CONDITIONS FROM CAUSING SERIOUS SOCIAL AND ECONOMIC DISTURBANCES ".

IN ORDER TO COUNTERBALANCE THIS ABOLITION OF THE REQUIREMENTS OF ARTICLE 65 (2) (C ), THE DRAFT MAKES PROVISION FOR A NEW SIXTH SUBPARAGRAPH OF PARAGRAPH 2, WITH REGARD TO ALL AGREEMENTS REFERRED TO IN THE THIRD SUBPARAGRAPH, A PROVISION REQUIRING THE HIGH AUTHORITY ON ISSUING ITS AUTHORIZATION TO CARRY OUT A CHECK " WHEREBY IT MAY ASCERTAIN WHETHER THE AGREEMENT IS USED OR IS LIABLE TO BE USED FOR THE SHARING OR EXPLOITATION OF MARKETS OR OTHERWISE INVOLVES SERIOUS DIFFICULTIES WITH REGARD TO THE FUNCTIONING OF THE COMMON MARKET " AND CONFERS UPON THE HIGH AUTHORITY, IF IT CANNOT OTHERWISE COUNTER " ABUSES ", THE POWER ITSELF TO ESTABLISH WITH REGARD TO THE ORGANIZATION CONCERNED PRICES, CONDITIONS OF SALE AND DELIVERY PLANS.

P. 261

WHEREAS THE COURT DOES NOT INTEND FURTHER TO CONSIDER IN DETAIL THE ADVANTAGES AND DISADVANTAGES OF A SYSTEM OF PRELIMINARY EXAMINATION AND OF A SYSTEM CONSISTING OF A CHECK ON THE FACTS AND OF SUBSEQUENT DIRECT INTERVENTION. IT CONSIDERS THAT, IN THEORY AT ANY RATE, THE TWO SYSTEMS CAN CONTRIBUTE EQUALLY TO ACHIEVING THE OBJECTIVES OF THE TREATY.

THE TWO SYSTEMS NEVERTHELESS DIFFER IN AN ESSENTIAL RESPECT WITH REGARD TO THE POWERS WHICH THEY CONFER.

THIS CLEARLY EMERGES IN THE PRESENT CASE IN WHICH IT IS PROPOSED TO ABOLISH, WITH REGARD TO AN ENTIRE CATEGORY OF AGREEMENTS, THOSE CONCERNING ADAPTATION, THE POWER TO CARRY OUT THE PRELIMINARY EXAMINATION MENTIONED IN INDENT (C) AND TO REPLACE IT BY POWERS FOR WHICH ARTICLE 65 DOES NOT MAKE PROVISION : THE POWER, AND INDEED THE DUTY, TO CARRY OUT A SUBSEQUENT CHECK AND TO INTERVENE DIRECTLY.

SUCH A MODIFICATION OF THE SYSTEM SET UP BY THE TREATY AND OF THE POWERS CONFERRED UNDER IT CAN SCARCELY BE REGARDED AS ADAPTING THE RULES FOR THE HIGH AUTHORITY'S EXERCISE OF ITS POWERS UNDER THE TREATY.

WHEREAS THE POWER GIVEN TO THE HIGH AUTHORITY TO AUTHORIZE AGREEMENTS AND TO DISREGARD THE RESTRICTIONS LAID DOWN IN INDENT (C) OF THE FIRST SUBPARAGRAPH OF PARAGRAPH 2 DOES NOT CONSTITUTE A MERE ADAPTATION OF THE RULES FOR THE HIGH AUTHORITY'S EXERCISE OF ITS POWERS BUT RATHER THE GRANT OF A NEW POWER.

AS THE COURT HAS STATED ABOVE, IT FINDS THAT BOTH THE AMENDMENTS MADE TO THE FIRST PART OF THE FIRST SUBPARAGRAPH OF PARAGRAPH 2 WHICH ALLOW THE AUTHORIZATION OF TYPES OF AGREEMENT NOT PROVIDED FOR BY THE PROVISION NOW IN FORCE, AND THOSE MADE TO INDENT (A) OF THE FIRST SUBPARAGRAPH OF THE SAME PARAGRAPH, CONCERNING THE OBJECTIVES OF AGREEMENTS QUALIFYING FOR AUTHORIZATION, CAN BE REGARDED AS CONSTITUTING AN ADAPTATION OF THE RULES RELATING TO THE HIGH AUTHORITY'S EXERCISE OF ITS POWERS OF AUTHORIZATION.

ON THE OTHER HAND THE REMOVAL OF (C) WOULD GO BEYOND THE BOUNDS OF ADAPTATION AND FURTHERMORE, AS WILL BE SHOWN SUBSEQUENTLY, WOULD BE CONTRARY TO ARTICLE 4 (D ).

C. WHEREAS THE COURT MUST CONSIDER WHETHER THE PROPOSAL IS COMPATIBLE WITH ARTICLE 4 (D) OF THE TREATY.

P. 262

FOR THIS PURPOSE REGARD MUST ABOVE ALL BE HAD TO THE SCOPE OF THE PROHIBITION LAID DOWN BY THAT PROVISION.

THIS PROHIBITION IS CLEARLY INTENDED TO PREVENT UNDERTAKINGS FROM ACQUIRING BY MEANS OF RESTRICTIVE PRACTICES A POSITION WHICH ENABLES THEM TO HAVE OR EXPLOIT MARKETS.

THIS PROHIBITION IS OF STRICT APPLICATION AND DISTINGUISHES THE SYSTEM ESTABLISHED BY THE TREATY.

ARTICLE 65, WHICH CONTAINS THE PROVISIONS GIVING EFFECT TO THIS PRINCIPLE, STATES IN PARAGRAPH 1 THE SCOPE OF THE PROHIBITION BY FORBIDDING IN GENERAL TERMS ALL AGREEMENTS, AND IN PARTICULAR THOSE TENDING TO FIX OR DETERMINE PRICES, TO RESTRICT OR CONTROL PRODUCTION ETC. AND TO SHARE MARKETS, PRODUCTS, CUSTOMERS OR SOURCES OF SUPPLY.

INDENT (C) OF THE FIRST SUBPARAGRAPH OF PARAGRAPH 2 ENABLES DEROGATIONS TO BE MADE FROM THIS PROHIBITION ONLY WHERE THE AGREEMENT, AS WELL AS BEING APPROPRIATE TO THE PROCEDURES OR OBJECTIVES REFERRED TO AT (A) AND (B ), IS NOT CAPABLE :

OF DETERMINING PRICES;

CONTROLLING OR RESTRICTING PRODUCTION OR MARKETING;

SHIELDING THE UNDERTAKINGS IN QUESTION FROM EFFECTIVE COMPETITION WITHIN THE COMMON MARKET;

THIS PROVISION ESTABLISHES AN OBJECTIVE CRITERION FOR THE APPRAISAL OF CASES WHERE AN AGREEMENT IS IN ANY EVENT INCOMPATIBLE WITH THE PROHIBITION LAID DOWN BY ARTICLE 4 (D ): THE FACT THAT THE AGREEMENT CONCERNS " A SUBSTANTIAL PART OF THE PRODUCTS IN QUESTION WITH THE COMMON MARKET ".

IN THOSE CIRCUMSTANCES THE COURT CONSIDERS THAT THE POWER TO DISREGARD THE RESTRICTIONS ESTABLISHED BY INDENT (C) OF THE FIRST SUBPARAGRAPH OF PARAGRAPH 2 CONSTITUTES AN INFRINGEMENT OF THE PROHIBITION LAID DOWN IN ARTICLE 4 (D ).

D. WHEREAS IT IS UNNECESSARY TO REMARK UPON THE CONDITION THAT THE AMENDMENT MUST NOT INTERFERE WITH THE RELATIONSHIP BETWEEN THE POWERS OF THE HIGH AUTHORITY AND THOSE OF THE OTHER INSTITUTIONS.

E. WHEREAS, FINALLY, WITH REGARD TO THE QUESTION WHETHER THAT PART OF THE PROPOSAL IS NECESSARY AND WHETHER THE REMEDY WHICH IT PROVIDES IS APPROPRIATE TO SUCH NECESSITY, THE COURT IS NOT PERSUADED THAT THE PROPOSAL SUBMITTED TO IT IS NECESSARY AND APPROPRIATE.

P. 263

IN ORDER TO OBTAIN INFORMATION THE COURT SUBMITTED CERTAIN QUESTIONS TO THE HIGH AUTHORITY AND THE SPECIAL COUNCIL OF MINISTERS BUT IT IS BOUND TO SAY THAT THE ARGUMENTS SUBMITTED BOTH IN THE REQUEST FOR AN OPINION AND IN THE REPLY TO THE QUESTIONS DO NOT CONSTITUTE SUFFICIENT PROOF THAT THE SUGGESTED AMENDMENT IS A NECESSARY AND APPROPRIATE METHOD OF MEETING THE NEED WHICH HAS ARISEN AS A RESULT OF THE FUNDAMENTAL ECONOMIC CHANGES INVOKED.

WHEREAS FOR THESE REASONS IT MUST BE FOUND THAT THE SECOND PART OF THE PROPOSAL CONTAINED IN THE REQUEST FOR AN OPINION ALSO FAILS TO MEET THE CONDITIONS WHICH WOULD ATTRACT THE APPLICATION OF ARTICLE 95 OF THE TREATY

Operative part

DELIVERS THE FOLLOWING OPINION :

THE DRAFT AMENDMENT OF ARTICLE 65 OF THE TREATY ESTABLISHING THE EUROPEAN COAL AND STEEL COMMUNITY, IN THE FORM IN WHICH IT HAS BEEN SUBMITTED TO THE COURT BY THE HIGH AUTHORITY AND THE SPECIAL COUNCIL OF MINISTERS IN A LETTER OF 20 JULY 1961, IS INCOMPATIBLE WITH THE PROVISIONS OF THE THIRD AND FOURTH PARAGRAPHS OF ARTICLE 95 OF THE TREATY IN THAT :

(A) THE PROPOSAL TO ENABLE AN AUTHORIZATION WITHIN THE MEANING OF ARTICLE 65 (2) TO BE GRANTED FOR AGREEMENTS CONCERNING ADAPTATION TO NEW MARKETING CONDITIONS GOES BEYOND AN ADAPTATION OF THE RULES FOR THE HIGH AUTHORITY'S EXERCISE OF THE POWERS CONFERRED UPON IT BY THAT PROVISION.

(B) SINCE THE PROPOSAL PROVIDES FOR A DEROGATION, IN WHOLE OR IN PART, FROM THE REQUIREMENTS OF ARTICLE 65 (2) (C) IT GOES BEYOND AN ADAPTATION OF THE RULES FOR THE HIGH AUTHORITY'S EXERCISE OF THE POWERS CONFERRED UPON IT BY ARTICLE 65 (2) AND MOREOVER INFRINGES THE PROVISIONS OF ARTICLE 4 (D) OF THE TREATY