Judgment of the Court of 21 March 1955. - Kingdom of the Netherlands v High Authority of the European Coal and Steel Community. - Case 6-54.



European Court reports

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English special edition Page 00103

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Greek special edition Page 00013

Portuguese special edition Page 00019



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

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1 . DECISIONS OF THE HIGH AUTHORITY - REASONS - ESSENTIAL ELEMENTS

( TREATY, ARTICLE 15 AND ARTICLE 33 ).

2 . APPLICATIONS FOR ANNULMENT - PROCEDURAL REQUIREMENTS

( TREATY, ARTICLE 33 ).

3 . PRE-EXISTING AGREEMENTS - TRANSITIONAL PROVISIONS

( CONVENTION ON THE TRANSITIONAL PROVISIONS, SECOND PARAGRAPH OF ARTICLE 12 ).

4 . PRICES - MAXIMUM PRICES

( A ) FIXING

( TREATY, SUBPARAGRAPH ( A ) OF PARAGRAPH 1 OF ARTICLE 61 ).

( B ) UNDERTAKINGS IN A DOMINANT POSITION ON THE MARKET

( TREATY, ARTICLE 61 AND ARTICLE 66 ( 7 )).

( C ) NECESSITY OF FIXING MAXIMUM PRICES

( TREATY, ARTICLE 61 ).

5 . APPLICATIONS FOR ANNULMENT

( A ) EXAMINATION OF THE EVALUATION OF THE SITUATION BASED ON THE FACTS AND ECONOMIC CIRCUMSTANCES - CONDITIONS

( TREATY, SECOND SENTENCE OF THE FIRST PARAGRAPH OF ARTICLE 33 ).

( B ) MANIFEST FAILURE TO OBSERVE THE TREATY - CONCEPT

( TREATY, SECOND SENTENCE OF THE FIRST PARAGRAPH OF ARTICLE 33 ).

6 . MISUSE OF POWERS - PROOF

( TREATY, FIRST PARAGRAPH OF ARTICLE 33 ).

Summary

1 . THE HIGH AUTHORITY IS OBLIGED TO MENTION IN THE REASONS FOR ITS DECISION THE ESSENTIAL ELEMENTS OF THE FINDINGS OF FACT ON WHICH THE LEGAL JUSTIFICATION FOR THE MEASURE DEPENDS . ON THE OTHER HAND THE TREATY DOES NOT REQUIRE THAT IT SHOULD STATE, AND STILL LESS THAT IT SHOULD REFUTE, THE OPINIONS EXPRESSED IN THIS REGARD BY CONSULTATIVE BODIES OR BY CERTAIN OF THEIR MEMBERS .

2 . THE PROCEDURAL REQUIREMENTS LAID DOWN BY THE TREATY FOR THE ADOPTION OF DECISIONS MAY BE REGARDED AS ESSENTIAL AND CONSEQUENTLY THE QUESTION WHETHER THEY HAVE BEEN OBSERVED MUST BE EXAMINED BY THE COURT . THE AFFIRMATION THAT THE REQUISITE CONSULTATIONS WERE HELD CANNOT RELIEVE THE COURT OF THE DUTY TO CARRY OUT AN EXAMINATION WITH REGARD TO THE APPLICATION OF THOSE REQUIREMENTS .

3 . THE EXISTENCE OF AGREEMENTS WAS PROVISIONALLY AUTHORIZED SUBJECT TO CERTAIN CONDITIONS BY DECISION NO 37/53 OF 11 JULY 1953 ADOPTED IN APPLICATION OF ARTICLE 12 OF THE CONVENTION AND WITH THE RESERVATION THAT SUCH AGREEMENTS MIGHT SUBSEQUENTLY BE PROHIBITED .

4 . ( A ) THE FIXING OF MAXIMUM PRICES LAID DOWN IN ACCORDANCE WITH ARTICLE 61 OF THE TREATY MAY BE RESTRICTED TO ONE PART OF THE COMMON MARKET .

( B ) THE EXISTENCE OF A SITUATION WHICH MIGHT JUSTIFY THE APPLICATION OF THE PROVISIONS OF ARTICLE 66 ( 7 ) DOES NOT IN ITSELF CONSTITUTE AN OBSTACLE TO THE EXERCISE BY THE HIGH AUTHORITY OF THE POWERS ASSIGNED TO IT BY SUBPARAGRAPH ( A ) OF THE FIRST PARAGRAPH OF ARTICLE 61 .

( C ) IN ORDER TO EXAMINE WHETHER THE FIXING OF MAXIMUM PRICES IS NECESSARY A DISTINCTION SHOULD BE MADE BETWEEN THE FINDING OF FACTS AND ECONOMIC CIRCUMSTANCES ON WHICH THE DECISION IS BASED AND THE CONCLUSIONS DRAWN BY THE HIGH AUTHORITY IN ITS SUBSEQUENT EVALUATION OF THE SITUATION .

5 . ( A ) A STUDY OF THE MARKET TAKING ACCOUNT OF FACTORS RELATING TO THE MARKET STRUCTURE AND ECONOMIC TRENDS WOULD CONSTITUTE AN EVALUATION WITHIN THE MEANING OF THE SECOND SENTENCE OF THE FIRST PARAGRAPH OF ARTICLE 33 . THE EXAMINATION BY THE COURT EXTENDS TO THE EVALUATION OF THE SITUATION RESULTING FROM THE ECONOMIC FACTS AND CIRCUMSTANCES IF THE OBJECTION IS SUPPORTED BY APPROPRIATE EVIDENCE . THE MERE ASSERTION OF A MANIFEST FAILURE TO OBSERVE THE TREATY IS NOT SUFFICIENT TO OPEN THE WAY TO EXAMINATION BY THE COURT; ON THE OTHER HAND ARTICLE 33 DOES NOT REQUIRE PROOF TO BE GIVEN IN ADVANCE WHICH WOULD IMMEDIATELY ENTAIL THE ANNULMENT OF THE DECISION .

( B ) THE TERM " MANIFEST " PRESUPPOSES THAT A CERTAIN DEGREE IS REACHED IN THE FAILURE TO OBSERVE THE LEGAL PROVISIONS SO THAT THE FAILURE TO OBSERVE THE TREATY APPEARS TO DERIVE FROM AN OBVIOUS ERROR IN THE EVALUATION, HAVING REGARD TO THE PROVISIONS OF THE TREATY, OF THE SITUATION IN RESPECT OF WHICH THE DECISION WAS TAKEN . IN THE CASE OF SUBPARAGRAPH ( A ) OF THE FIRST PARAGRAPH OF ARTICLE 61 THE MANIFEST FAILURE TO OBSERVE THE TREATY CAN ONLY RESULT FROM THE FINDING BY THE COURT OF THE EXISTENCE OF AN ECONOMIC SITUATION WHICH, PRIMA FACIE, REVEALS NO NECESSITY FOR THE CONTESTED MEASURE IN THE PURSUIT OF THE OBJECTIVES SET OUT IN ARTICLE 3 OF THE TREATY, IN PARTICULAR PARAGRAPH ( C ).

6 . PROOF OF THE MOTIVES FOR THE CONTESTED DECISION SUCH AS TO ESTABLISH MISUSE OF POWERS MAY BE EVIDENT EITHER FROM THE PREPARATIONS, INCLUDING THE DELIBERATIONS OF THE CONSULTATIVE COMMITTEE AND OF THE COUNCIL OF MINISTERS, OR ELSE FROM THE INCOMPATIBILITY OF THE CONTESTED DECISION WITH THE AVOWED AND EVIDENT AIMS OF THE DECISION .

Parties

IN THE CASE :

GOVERNMENT OF THE KINGDOM OF THE NETHERLANDS WITH AN ADDRESS FOR SERVICE AT THE NETHERLANDS LEGATION IN LUXEMBOURG, REPRESENTED BY J . H . M . VERZIJL, PROFESSOR AT THE STATE UNIVERSITY IN UTRECHT, G . M . VERRIJN STUART, PROFESSOR AT THE UNIVERSITY OF THE CITY OF AMSTERDAM, ACTING AS AGENTS, APPLICANT,

V

HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, WITH AN ADDRESS FOR SERVICE AT ITS OFFICES, 2 PLACE DE METZ, LUXEMBOURG, REPRESENTED BY ITS LEGAL ADVISER, DOCTOR WALTER MUCH, ACTING AS AGENT, ASSISTED BY GEORGES VAN HECKE, ADVOCATE OF THE COUR D'APPEL, BRUSSELS, PROFESSOR AT THE UNIVERSITY OF LOUVAIN, DEFENDANT,

Subject of the case

APPLICATION FOR THE ANNULMENT OF DECISIONS NOS 18/54, 19/54 AND 20/54 OF THE HIGH AUTHORITY DATED 20 MARCH 1954,

Grounds

P . 111

A - ADMISSIBILITY

THE ADMISSIBILITY OF THE ACTION GIVES RISE TO NO CRITICISMS BY THE COURT OF ITS OWN MOTION AND MOREOVER HAS NOT BEEN THE SUBJECT OF ANY OBJECTION .

B - THE SCOPE OF THE ACTION

IT SHOULD BE EMPHASIZED THAT THE ACTION ONLY RELATES TO DECISIONS OF THE HIGH AUTHORITY NOS 19/54 AND 20/54 IN SO FAR AS THEY CONSTITUTE THE IMPLEMENTATION OF THE PRINCIPLE LAID DOWN IN DECISION NO 18/54 .

C - INFRINGEMENT OF ESSENTIAL PROCEDURAL REQUIREMENTS

( A ) THE APPLICANT FIRST ALLEGES THAT DECISION NO 18/54 FAILS TO STATE SUFFICIENTLY THE REASONS ON WHICH IT IS BASED BECAUSE THE HIGH AUTHORITY HAS MERELY JUSTIFIED ITS MEASURES BY STATING IN A PURELY HYPOTHETICAL FORM THAT THE STRUCTURE OF THE COMMON MARKET COULD COMPROMISE THE ACHIEVEMENT OF THE OBJECTIVES OF ARTICLE 3 OF THE TREATY .

UNDER ARTICLE 61 IT SHOULD HAVE FOUND AND STATED THAT THE NECESSITY EXISTED AND SHOULD HAVE SPECIFIED THE OBJECTIVE OR OBJECTIVES COMPROMISED IF THE MAXIMUM PRICES WERE TO BE ABOLISHED ALTOGETHER .

THE GENERAL PROVISIONS OF ARTICLES 5 AND 15 OF THE TREATY OBLIGE THE HIGH AUTHORITY TO STATE REASONS FOR ITS DECISIONS AND TO MAKE THOSE REASONS PUBLIC .

HOWEVER, NO DETAILS ARE GIVEN AS TO THE FORM AND EXTENT OF THAT OBLIGATION .

REASONABLY UNDERSTOOD THOSE REQUIREMENTS OBLIGE THE HIGH AUTHORITY TO MENTION IN THE REASONS FOR ITS DECISION THE ESSENTIAL ELEMENTS OF THE FINDINGS OF FACT ON WHICH THE LEGAL JUSTIFICATION FOR THE MEASURE DEPENDS .

THE TREATY DOES NOT REQUIRE THAT IT SHOULD STATE, AND STILL LESS THAT IT SHOULD REFUTE, THE OPINIONS EXPRESSED IN THIS REGARD BY CONSULTATIVE BODIES OR BY CERTAIN OF THEIR MEMBERS .

THE MEASURES REFERRED TO IN ARTICLE 61 ( A ) OF THE TREATY CAN BE APPLIED IF THE HIGH AUTHORITY " FINDS THAT SUCH A DECISION IS NECESSARY TO ATTAIN THE OBJECTIVES SET OUT IN ARTICLE 3, AND PARTICULARLY IN PARAGRAPH ( C ) THEREOF ".

P . 112

THE CONTESTED DECISION REFERS TO AND AFFIRMS THIS NECESSITY AND INDICATES THAT IT RESULTS FROM THE EXISTENCE OF CERTAIN ORGANIZATION HAVING A DECISIVE INFLUENCE ON THE MARKET IN SUCH A WAY THAT ALL EFFECTIVE COMPETITION IS EXCLUDED .

IT EXPRESSLY REFERS TO A POSITION WHICH IS DETRIMENTAL TO THE ACHIEVEMENT OF THE OBJECTIVES OF ARTICLE 3 WITH REGARD TO PRICES, PRODUCTION OR THE EMPLOYMENT OF LABOUR .

ALTHOUGH THEY DO NOT STATE PRECISELY WHICH OBJECTIVE OR OBJECTIVES REFERRED TO IN ARTICLE 3 ARE SPECIFICALLY ENVISAGED THE STATEMENT OF THE REASONS ON WHICH THE DECISION IS BASED CAN BE REGARDED IN ITS PRESENT FORM AS SATISFYING THE CONDITIONS FOR THE APPLICATION OF ARTICLE 61 ( A ).

THE STATEMENT OF REASONS THUS SATISFIES THE REQUIREMENTS AS TO FORM, WHICH ARE APPLICABLE .

( B ) IN ACCORDANCE WITH THE OPINION OF THE ADVOCATE GENERAL IT IS APPROPRIATE TO EXAMINE WHETHER THE PROCEDURAL REQUIREMENTS LAID DOWN BY THE TREATY FOR THE ADOPTION OF THE CONTESTED DECISIONS WERE COMPLIED WITH .

AS THEY WERE INTENDED TO ENSURE THAT THE MEASURES CONCERNED WERE FORMULATED WITH ALL DUE CARE AND PRUDENCE THESE PROCEDURAL REQUIREMENTS MAY BE REGARDED AS ESSENTIAL AND, CONSEQUENTLY, THE QUESTION WHETHER THEY HAVE BEEN OBSERVED MUST BE EXAMINED BY THE COURT .

ARTICLE 61 OF THE TREATY PROVIDES THAT THE DECISION OF THE HIGH AUTHORITY FIXING MAXIMUM PRICES MUST BE TAKEN :

( 1 ) " ON THE BASIS OF STUDIES MADE JOINTLY WITH UNDERTAKINGS AND ASSOCIATIONS OF UNDERTAKINGS, IN ACCORDANCE WITH THE FIRST PARAGRAPH OF ARTICLE 46 AND THE THIRD PARAGRAPH OF ARTICLE 48 " :

( 2 ) AFTER CONSULTING THE CONSULTATIVE COMMITTEE;

AND

( 3 ) AFTER CONSULTING THE COUNCIL OF MINISTERS .

IT APPEARS FROM THE EVIDENCE SUBMITTED THAT THE STUDIES REQUIRED BY ARTICLE 61 HAVE BEEN CARRIED OUT .

THE TEXT OF THE DECISION AFFIRMS THAT THE CONSULTATIONS WITH THE CONSULTATIVE COMMITTEE AND THE COUNCIL WERE HELD .

THAT AFFIRMATION CANNOT RELIEVE THE COURT OF THE DUTY TO CARRY OUT AN EXAMINATION WITH REGARD TO THE APPLICATION OF THE ABOVE-MENTIONED REQUIREMENTS .

IN THE PRESENT INSTANCE THE CONSULTATIONS REFERRED TO IN THE FIRST PARAGRAPH OF ARTICLE 61 RELATED BOTH TO THE APPROPRIATENESS OF THE MEASURES IN QUESTION AND TO THE LEVEL OF PRICES .

CONSEQUENTLY IN THIS RESPECT NO PROCEDURAL REQUIREMENT FOR THE VALIDITY OF THE DECISION HAS BEEN INFRINGED .

P . 113

D - INFRINGEMENT OF THE TREATY

( A ) IT IS NECESSARY TO EXAMINE THE INTRINSIC LEGALITY OF THE DECISION HAVING REGARD TO THE TERMS OF THE FIRST PARAGRAPH OF ARTICLE 61 OF THE TREATY WHICH GIVES THE HIGH AUTHORITY THE POWER TO FIX MAXIMUM PRICES " FOR ONE OR MORE OF THE PRODUCTS WITHIN ITS JURISDICTION ".

ON THE ONE HAND THAT TEXT MUST BE RECONCILED WITH ARTICLE 5 WHICH PROVIDES FOR LIMITED MEASURES OF INTERVENTION SUCH AS THOSE IN THE PRESENT INSTANCE . ON THE OTHER IN PROVIDING FOR THE ESTABLISHMENT OF MAXIMUM PRICES WITHIN THE COMMON MARKET THE TREATY MERELY DISTINGUISHES THE COMMON MARKET FROM THE EXTERNAL MARKET BUT WAS NOT INTENDED TO PROHIBIT A MEASURE OR MEASURES WHICH ONLY AFFECT CERTAIN SECTORS OF THE COMMON MARKET . FURTHERMORE THE MEASURE IN QUESTION INDIRECTLY AFFECTS THE WHOLE OF THAT MARKET .

( B ) IN SUPPORT OF THE ARGUMENT BASED ON THE BREACH OF THE TREATY THE APPLICANT CLAIMS THAT THE CONTESTED DECISION REFERS TO A MARKET STRUCTURE OF AN ILLEGAL NATURE .

IT STATES THAT THE DEFENDANT IS ACTING IN INFRINGEMENT OF THE TREATY IN STATING AS THE REASONS FOR ITS DECISION THE EXISTENCE OF AGREEMENTS AND CONCENTRATIONS OF UNDERTAKINGS WHICH ARE EXPRESSLY PROHIBITED BY ARTICLES 65 AND 66 OF THE TREATY . THAT ARGUMENT WOULD ONLY BE VALID IF, BY VIRTUE OF THE TREATY, AGREEMENTS AND CONCENTRATIONS WHICH CONFLICT WITH THOSE ARTICLES WERE DEPRIVED OF ALL LEGAL EFFECT . ON THE ONE HAND IN APPLICATION OF THE SECOND PARAGRAPH OF ARTICLE 12 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS THE EXISTENCE OF AGREEMENTS WAS PROVISIONALLY AUTHORIZED SUBJECT TO CERTAIN CONDITIONS BY DECISION NO 37/53 OF THE HIGH AUTHORITY OF 11 JULY 1953 WITH THE RESERVATION THAT SUCH AGREEMENTS MIGHT SUBSEQUENTLY BE PROHIBITED . IN THIS RESPECT ARTICLE 12 OF THE AFOREMENTIONED CONVENTION PROVIDES NO TIME-LIMIT FOR THE INTERVENTION OF THE HIGH AUTHORITY AND THE LATTER THEREFORE POSSESSES A DISCRETIONARY POWER IN THIS RESPECT WITHIN THE LIMITS OF THE TRANSITIONAL PERIOD .

ON THE OTHER HAND THE APPLICANT FINDS THAT A STRUCTURE CONTRARY TO THE TREATY IS CONSTITUTED BY THE FACT THAT THE NORD AND PAS-DE-CALAIS COALFIELD EXERCISES A DOMINANT INFLUENCE ON THE FRENCH MARKET AND ARGUES THAT THAT SITUATION FALLS EXCLUSIVELY WITHIN THE PROVISIONS OF ARTICLE 66 ( 7 ).

THE EXISTENCE OF A SITUATION WHICH MIGHT JUSTIFY THE APPLICATION OF THE PROVISIONS OF ARTICLE 66 ( 7 ) DOES NOT IN ITSELF CONSTITUTE AN OBSTACLE TO THE EXERCISE BY THE HIGH AUTHORITY OF THE POWERS ASSIGNED TO IT BY SUBPARAGRAPH ( A ) OF THE FIRST PARAGRAPH OF ARTICLE 61 .

CONSEQUENTLY THERE IS NOTHING TO PREVENT THE EFFECTS OF SUCH AGREEMENTS AND CONCENTRATIONS IN SO FAR AS THEY AFFECT THE LEVEL OF PRICES ON THE COMMON MARKET AND THE ACHIEVEMENT OF OBJECTIVES SET OUT IN ARTICLE 3 FROM BEING OPPOSED BY THE DEFENDANT WITH THE AID OF POWERS CONFERRED ON IT BY ARTICLE 61 OF THE TREATY .

( C ) IN SUPPORT OF THE ARGUMENTS BASED ON THE INFRINGEMENT OF THE TREATY THE APPLICANT OBJECTS THAT IN ITS DECISION THE HIGH AUTHORITY RELIES ON THE GENERAL OBJECTIVES OF THE TREATY AND THAT THAT GENERAL REFERENCE CANNOT CONSTITUTE SUFFICIENT REASONS BECAUSE THE SPECIAL PROVISIONS OF SUBPARAGRAPH ( A ) OF THE FIRST PARAGRAPH OF ARTICLE 61 REFER TO SPECIFIC HYPOTHESES .

P . 114

THAT REASONING IS WITHOUT LEGAL FOUNDATION . IN FACT ARTICLE 61 REFERS EXPRESSLY TO THE OBJECTIVES SET OUT IN ARTICLE 3 .

( D ) THE APPLICANT ALLEGES THAT THE CONTESTED DECISION IS BASED ON REASONS WHICH ARE WRONG IN SUBSTANCE .

THE FIXING OF MAXIMUM PRICES WAS NOT NECESSARY AS, IN VIEW OF THE DEVELOPMENT OF THE MARKET, PRICES ALREADY SHOWED A DOWNWARD TREND AND IN ANY CASE MAXIMUM PRICES COULD NOT BRING ABOUT A FALL IN PRICES BUT SOLELY A PRICE FREEZE .

ON THE OTHER HAND THE DEVELOPMENTS IN PRODUCTION AND EMPLOYMENT COULD ONLY BE THREATENED BY A FALL AND IF IT WERE SOUGHT TO COUNTERACT THAT DANGER MINIMUM PRICES SHOULD HAVE BEEN INTRODUCED .

HAVING REGARD TO THOSE ARGUMENTS A DISTINCTION SHOULD BE MADE BETWEEN THE FINDING OF FACTS AND ECONOMIC CIRCUMSTANCES ON WHICH THE DECISION WAS BASED AND THE CONCLUSIONS DRAWN BY THE HIGH AUTHORITY IN ITS SUBSEQUENT EVALUATION OF THE SITUATION .

IN THE PRESENT INSTANCE THE DECISION IN FACT STATES THAT IN SPITE OF THE TRENDS EXISTING ON THE MARKET AND BECAUSE OF THE MARKET STRUCTURE COAL PRICES WERE DETERMINED BY THE SELLING AGENCY OF THE RUHR COALFIELD AND BY THE HOUILLERES DU NORD ET DU PAS-DE-CALAIS .

BY DOCUMENTS SUBMITTED TO THE COURT ( MARKET DIVISION OF THE HIGH AUTHORITY OF 3 AND 15 FEBRUARY 1954, NOS 728 AND 6523 ) THE CONTENT OF WHICH IS NOT DISPUTED BY THE APPLICANT THE HIGH AUTHORITY PROVED THAT IN THE GERMAN AND FRENCH COALFIELDS THERE WAS NO TREND TOWARDS A GENERAL REDUCTION IN PRICES . ON THE CONTRARY PRODUCERS LET IT BE KNOWN THAT THEY INTENDED TO MAINTAIN THEIR PRICES AT THE EXISTING LEVEL .

MORE PARTICULARLY AFTER INTENSIVE DISCUSSION THE REPRESENTATIVES OF THE RUHR COAL PRODUCERS OPPOSED THE REDUCTION IN PRICES AND THE REPRESENTATIVES OF THE HOUILLERES DU NORD ET DU PAS-DE-CALAIS, AFTER LOOKING AT THE POSSIBILITY OF AN INCREASE IN PRICES BUT IN THE END NOT ADOPTING IT, DECLARED THAT THEY WISHED TO APPLY CURRENT PRICES WITH THE PROPOSED CHANGES EVEN IF PRICES WERE FREED WHICH DID NOT CONSTITUTE AN UNDERTAKING SUCH AS TO REMOVE ALL NECESSITY FOR FIXING MAXIMUM PRICES .

IN THE LIGHT OF THE EXISTING SITUATION THE HIGH AUTHORITY CAME TO THE CONCLUSION THAT THE FIXING OF MAXIMUM PRICES WAS NECESSARY; THE CORRECTNESS OF THIS CONCLUSION IS CONTESTED BY THE APPLICANT WHICH ARGUES THAT IN THE PRESENT CIRCUMSTANCES SUCH A MEASURE COULD NOT CAUSE OR SET OFF A FALL IN PRICES BUT AT THE VERY MOST A PRICE FREEZE . THUS IT CLAIMS THAT THE DECISION IS NOT WELL FOUNDED .

THE EVALUATION OF THE SITUATION RESULTING FROM THE ECONOMIC FACTS OR CIRCUMSTANCES IN THE LIGHT OF WHICH THE HIGH AUTHORITY TOOK ITS DECISIONS IS NOT SUBJECT TO EXAMINATION BY THE COURT SAVE WHERE THE HIGH AUTHORITY IS ALLEGED TO HAVE MISUSED ITS POWERS OR TO HAVE MANIFESTLY FAILED TO OBSERVE PROVISIONS OF THE TREATY .

P . 115

A STUDY OF THE MARKET TAKING ACCOUNT OF FACTORS RELATING TO THE MARKET STRUCTURE AND ECONOMIC TRENDS WOULD CONSTITUTE SUCH AN EXAMINATION .

IT IS THEREFORE NECESSARY TO EXAMINE WITH REGARD TO THEIR GENERAL SCOPE AND THEIR PRESENCE IN THIS INSTANCE THE TWO CONDITIONS WHICH ALONE ALLOW OF AN EXAMINATION OF THE PROPER ECONOMIC FOUNDATION OF A DECISION, THAT IS TO SAY MANIFEST FAILURE TO OBSERVE THE PROVISIONS OF THE TREATY AND MISUSE OF POWERS .

E - MANIFEST FAILURE TO OBSERVE PROVISIONS OF THE TREATY

IT SHOULD BE EMPHASIZED THAT THE OBJECTION OF THE MANIFEST FAILURE TO OBSERVE THE PROVISIONS OF THE TREATY WAS NOT RAISED BY THE APPLICANT AS A SEPARATE GROUND FOR ANNULMENT BUT SOLELY WITH A VIEW TO HAVING THE EXAMINATION BY THE COURT EXTEND TO AN ASSESSMENT OF THE SITUATION ARISING FROM THE ECONOMIC FACTS AND CIRCUMSTANCES IN THE PRESENT INSTANCE .

IN THIS RESPECT ARTICLE 33 DOES NOT REQUIRE THAT THE OBJECTION RAISED BE SUPPORTED BY FULL PROOF IN ADVANCE; THIS MOREOVER WOULD IMMEDIATELY ENTAIL THE ANNULMENT OF THE DECISION FOR INFRINGEMENT OF THE TREATY .

ON THE OTHER HAND THE MERE ASSERTION OF A MANIFEST FAILURE TO OBSERVE THE TREATY IS NOT SUFFICIENT TO OPEN THE WAY TO EXAMINATION BY THE COURT OF THE ECONOMIC EVALUATION AS OTHERWISE A SUBMISSION OF THIS KIND COULD BECOME A MERE FORMALITY .

IT IS NECESSARY AND IT IS SUFFICIENT THAT THE OBJECTION IS SUPPORTED BY APPROPRIATE EVIDENCE .

SUCH IS THE CASE IN THE PRESENT INSTANCE AND THAT EVIDENCE SHOULD BE EXAMINED FROM THE POINT OF VIEW OF MANIFEST FAILURE TO OBSERVE THE TREATY .

THE TERM " MANIFEST " PRESUPPOSES THAT A CERTAIN DEGREE IS REACHED IN THE FAILURE TO OBSERVE LEGAL PROVISIONS SO THAT THE FAILURE TO OBSERVE THE TREATY APPEARS TO DERIVE FROM AN OBVIOUS ERROR IN THE EVALUATION, HAVING REGARD TO THE PROVISIONS OF THE TREATY, OF THE SITUATION IN RESPECT OF WHICH THE DECISION WAS TAKEN .

IN THE PRESENT INSTANCE THE " MANIFEST " FAILURE TO OBSERVE THE TREATY CAN ONLY RESULT FROM THE FINDING BY THE COURT OF THE EXISTENCE OF AN ECONOMIC SITUATION WHICH PRIMA FACIE REVEALS NO NECESSITY FOR THE CONTESTED MEASURE IN THE PURSUIT OF THE OBJECTIVES SET OUT IN ARTICLE 3 OF THE TREATY, IN PARTICULAR PARAGRAPH ( C ).

THE STATEMENT IN THE CONTESTED DECISION THAT THE FIXING OF MAXIMUM PRICES WAS NECESSARY TO SERVE THE OBJECTIVES SET OUT IN ARTICLE 3 OF THE TREATY FOR REASONS RELATING TO THE MARKET STRUCTURE DOES NOT CONFLICT A PRIORI WITH THE TEXT OR THE SPIRIT OF SUBPARAGRAPH ( A ) OF ARTICLE 61 WHICH, UNLIKE SUBPARAGRAPH ( B ) DOES NOT ENVISAGE ANY CONDITION RELATING TO THE ECONOMIC CYCLE .

THE APPLICANT'S REASONING TO THE EFFECT THAT THE MAXIMUM PRICES IN FACT CONSTITUTE A MINIMUM WHICH STABILIZES AND FREEZES PRICES DOES NOT PRIMA FACIE EXCLUDE ALL NECESSITY FOR MAXIMUM PRICES AND CONSEQUENTLY IS NOT SUFFICIENT TO CONSTITUTE MANIFEST FAILURE TO OBSERVE THE TREATY .

P . 116

IT IS FURTHER APPROPRIATE TO EXAMINE WHETHER THE MANIFEST LACK OF NECESSITY FOR THE MEASURE RESULTS FROM THE AMOUNTS OF THE PRICES FIXED .

IT IS CLEAR FROM THE TABLE DRAWN UP BY THE PARTIES TOGETHER THAT THE NEW FIGURES ARE NOT IDENTICAL WITH THE OLD FIGURES AND THAT ACCORDING TO THE DEFENDANT'S CONTENTION, NOT CONTESTED BY THE APPLICANT, THE PRICES WHICH WERE FREED HAVE SHOWN A TENDENCY TO INCREASE .

THESE FINDINGS DO NOT THEREFORE REVEAL MANIFEST LACK OF NECESSITY .

HAVING REGARD TO THE OBJECTIVES OF ARTICLE 3 OF THE TREATY THE LACK OF NECESSITY OF THE MEASURE IS NOT EVIDENT IMMEDIATELY FROM THE RATE OF THE PRICES FIXED .

THAT ARTICLE OF THE TREATY OBLIGES THE HIGH AUTHORITY TO ENSURE THE ESTABLISHMENT OF CERTAIN ECONOMIC CONDITIONS AND THIS MIGHT JUSTIFY PREVENTIVE INTERVENTION EVEN IF CERTAIN REASSURING DECLARATIONS HAVE BEEN MADE WHICH CONTAIN NO COMMITMENT AS TO THE EXTENT OF THEIR VALIDITY .

IN THIS CONTEXT PARAGRAPH ( C ) MORE SPECIFICALLY ENVISAGES THE ESTABLISHMENT OF THE LOWEST PRICES BUT DOES NOT REQUIRE AN ATTEMPT TO REACH THE ABSOLUTE MINIMUM BUT MERELY A PRICE WHICH, WHILE BEING THE LOWEST WITHIN THE MEANING OF ARTICLE 3 ( C ), TAKES ACCOUNT OF THE OTHER OBJECTIVES IMPOSED BY THIS ARTICLE ON THE ACTIONS OF THE HIGH AUTHORITY .

IN THIS RESPECT AS WELL A FAILURE TO OBSERVE THE TREATY IS NOT MANIFESTLY EVIDENT FROM THE DECISION .

F - MISUSE OF POWERS

THIS SUBMISSION SEEKS A RULING THAT IN DETERMINING MAXIMUM PRICES ON THE BASIS OF ARTICLE 61 THE HIGH AUTHORITY WAS NOT SO MUCH PURSUING ITS DECLARED OBJECTIVES, IN PARTICULAR THE LOWERING OF PRICES, BUT IN REALITY WAS SEEKING TO COMBAT AGREEMENTS AND CONCENTRATIONS OF UNDERTAKINGS .

CONSEQUENTLY IT HAD MADE USE OF THE POWERS ASSIGNED TO IT BY ARTICLE 61 FOR A PURPOSE OTHER THAN THAT FOR WHICH THEY WERE CONFERRED UPON IT .

PROOF OF THE MOTIVES FOR THE CONTESTED DECISION MAY BE EVIDENT EITHER FROM THE PREPARATIONS, INCLUDING THE DELIBERATIONS OF THE CONSULTATIVE COMMITTEE AND OF THE COUNCIL OF MINISTERS, OR ELSE FROM THE FACT THAT IN VIEW OF THEIR LEVEL RELATIVE TO THE PRICES IN THE LISTS APPLICABLE BEFORE 1 APRIL 1954 THE NEW PRICES ARE INCOMPATIBLE WITH THE AVOWED AND EVIDENT AIMS OF THE DECISION .

HOWEVER, THE DOCUMENTS SUBMITTED BY THE PARTIES DO NOT REVEAL ANY COVERT INTENT .

AS TO THE ARGUMENT DERIVED FROM THE FACT THAT THE NEW PRICES ARE IDENTICAL OR ALMOST IDENTICAL WITH THE OLD PRICES THE COURT HAS ALREADY DISMISSED THIS ALLEGATION WITH REGARD TO THE MANIFEST FAILURE TO OBSERVE THE TREATY AND IN ADDITION EVEN FREEZING PRICES AT THEIR LEVEL AT THAT TIME MIGHT NOT HAVE BEEN WHOLLY WITHOUT ITS USE IN VIEW OF THE POSSIBILITY OF INCREASES INHERENT IN THE MARKET STRUCTURE .

MOREOVER, THE ARGUMENTS OF THE HIGH AUTHORITY CLEARLY RELATE TO A DISQUIETING SITUATION WITH REGARD TO PRICES AND IT IS IMPOSSIBLE TO REGARD THE CONTESTED DECISION AS A MEASURE WHOSE AIMS ARE INCOMPATIBLE WITH THE AIMS FOR WHICH THE POWER TO ESTABLISH MAXIMUM PRICES WAS CONFERRED ON THE HIGH AUTHORITY .

THE MISUSE OF POWERS HAS NOT BEEN ESTABLISHED .

Decision on costs

UNDER ARTICLE 60 OF THE RULES OF PROCEDURE OF THE COURT THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .

THE APPLICANT GOVERNMENT SHOULD THEREFORE BE ORDERED TO BEAR THE COSTS .

Operative part

THE COURT

HEREBY :

DISMISSES THE APPLICATION FOR THE ANNULMENT OF DECISIONS NOS 18/54, 19/54 AND 20/54 OF THE HIGH AUTHORITY DATED 20 MARCH 1954;

ORDERS THE APPLICANT TO PAY THE COSTS .