Judgment of the Court of 8 February 1968. - Kingdom of the Netherlands v Commission of the European Communities. - Case 28-66.



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Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

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1 . TRANSPORT - SPECIAL INTERNAL RATES AND CONDITIONS - PURPOSE OF SUCH SPECIAL RATES AND CONDITIONS - AUTHORIZATION JUSTIFIED

( ECSC TREATY, ARTICLE 70 )

2 . TRANSPORT - SPECIAL INTERNAL RATES AND CONDITIONS - UNFORESEEABLE CIRCUMSTANCES JUSTIFYING AUTHORIZATION OF SPECIAL RATES AND CONDITIONS - MODIFICATIONS IN THE INFRASTRUCTURE OF TRANSPORT

3 . ECSC TREATY - GENERAL OBJECTIVES - NATURAL CONDITIONS OF COMPETITION - CONCEPT

( ECSC TREATY, SECOND PARAGRAPH OF ARTICLE 2 )

4 . ECSC TREATY - GENERAL OBJECTIVES - CONTINUITY OF EMPLOYMENT - PRESERVATION OF BALANCE BETWEEN DIFFERENT GENERAL OBJECTIVES

( ECSC TREATY, ARTICLES 2 AND 3 )

5 . TRANSPORT - SPECIAL INTEREST RATES AND CONDITIONS - APPLICATION TO A GROUP OF UNDERTAKINGS - AUTHORIZATION PERMISSIBLE

( ECSC TREATY, ARTICLE 70 )

6 . TRANSPORT - SPECIAL INTERNAL RATES AND CONDITIONS - RESTRICTIVE CLAUSE - AUTHORIZATION EXCEPTIONAL NATURE - TEMPORARY AUTHORIZATION - FIXING OF TIME-LIMIT

( ECSC TREATY, ARTICLE 70 )

Summary

1 . THE PURPOSE OF THE AUTHORIZATION OF SPECIAL RATES AND CONDITIONS IS TO GRANT TEMPORARY AID TO ENABLE UNDERTAKINGS TO OVERCOME - IN PARTICULAR BY MEANS OF A READAPTATION OF PRODUCTION AND DISTRIBUTION - EXCEPTIONAL DIFFICULTIES RESULTING FROM UNFORESEEABLE CIRCUMSTANCES WHICH ARE LIKELY TO RESULT IN A SITUATION IN WHICH THE COMPOSITION OF PRODUCTION COSTS NO LONGER CORRESPONDS TO THE NATURAL CONDITIONS OF COMPETITION EXISTING BETWEEN THEM .

CF . PARAGRAPH 2, SUMMARY, JUDGMENT IN JOINED CASES 27, 28 AND 29/58, ( 1960 ) ECR 505 .

2 . THE UNFORESEEABLE NATURE OF THE CIRCUMSTANCES JUSTIFYING THE GRANT OF SPECIAL RATES AND CONDITIONS MUST BE ASSESSED IN THE LIGHT OF THE FACTS OF EACH CASE AND ACCORDING TO A REASONABLE ASSESSMENT OF THE SITUATION .

IN THE TRANSPORT SECTOR, MODIFICATIONS IN THE INFRASTRUCTURE, EXECUTION OF WHICH BRINGS ABOUT A CHANGE IN THE EXISTING ECONOMIC SITUATION, CONSTITUTE SUCH UNFORESEEABLE CIRCUMSTANCES .

3 . THE CONCEPT SET OUT IN THE SECOND PARAGRAPH OF ARTICLE 2 OF THE TREATY CONCERNING CONDITIONS WHICH WILL OF THEMSELVES ENSURE THE MOST RATIONAL DISTRIBUTION OF PRODUCTION CANNOT BE REGARDED AS A FIXED CONCEPT, BUT COVERS FACTS WHICH ARE THEMSELVES CONTINGENT AND VARIABLE, IN PARTICULAR WITH REGARD TO TIME .

4 . ALTHOUGH IT IS TRUE THAT THE ESTABLISHMENT OF THE COMMON MARKET IS BASED IN PARTICULAR ON THE MOST RATIONAL DISTRIBUTION OF PRODUCTION AT THE HIGHEST POSSIBLE LEVEL OF PRODUCTIVITY, IT IN NO WAY FOLLOWS THAT THE SOCIAL OBJECTIVES SET OUT IN ARTICLE 2 OF THE TREATY ARE ALWAYS OF SECONDARY IMPORTANCE AND CAN IN NO CASE CONSTITUTE ONE OF THE DECISIVE GROUNDS FOR COMMUNITY ACTION .

AS THE GENERAL OBJECTIVES SET OUT IN ARTICLES 2 AND 3 OF THE ECSC TREATY CANNOT ALWAYS BE PURSUED SIMULTANEOUSLY IN THEIR TOTALITY, THE COMMUNITY MUST CONTINUALLY RECONCILE ANY POSSIBLE CONFLICT WHICH MAY BE IMPLIED BY THESE OBJECTIVES WHEN CONSIDERED INDIVIDUALLY, AND WHEN SUCH CONFLICT ARISES MUST GRANT SUCH PRIORITY TO ONE OR OTHER OF THE GENERAL OBJECTIVES AS APPEARS NECESSARY HAVING REGARD TO THE ECONOMIC FACTS OR CIRCUMSTANCES IN THE LIGHT OF WHICH IT ADOPTS ITS DECISIONS .

CF . PARAGRAPH 4(B ), SUMMARY, JUDGMENT IN CASE 8/57, ( 1958 ) ECR 245 .

5 . THE APPLICATION OF SPECIAL RATES AND CONDITIONS IN THE INTEREST OF ONE OR MORE UNDERTAKINGS DOES NOT NECESSARILY IMPLY INDIVIDUAL MEASURES AND IN NO WAY EXCLUDES THE INTRODUCTION OF MEASURES ADAPTED TO A GROUP OF UNDERTAKINGS WHICH ARE SIMILARLY PLACED .

6 . AS THE APPLICATION OF SPECIAL RATES AND CONDITIONS CONSTITUTES AN ALTOGETHER EXCEPTIONAL PROCEDURE, THE TREATY ONLY ALLOWS IT TO THE EXTENT TO WHICH IT ENABLES THE UNDERTAKINGS IN WHOSE FAVOUR IT OPERATES TO RE-ESTABLISH, WITHIN THE APPROPRIATE TIME - LIMITS, CONDITIONS WHICH WILL OF THEMSELVES ENSURE THE MOST RATIONAL DISTRIBUTION OF PRODUCTION AT THE HIGHEST POSSIBLE LEVEL OF PRODUCTIVITY . IN ORDER TO ENSURE OBSERVANCE OF THE OBJECTIVES OF THE TREATY, A TIME-LIMIT MUST BE ATTACHED TO THE TEMPORARY AGREEMENT GIVEN BY THE HIGH AUTHORITY TO THE APPLICATION OF THE SPECIAL RATES AND CONDITIONS .

CF . PARAGRAPH 2, SUMMARY, JUDGMENT IN JOINED CASES 27, 28 AND 29/58, ( 1960 ) ECR 241 .

Parties

IN CASE 28/66

GOVERNMENT OF THE KINGDOM OF THE NETHERLANDS, REPRESENTED BY PROFESSOR W . RIPHAGEN, LEGAL ADVISER TO THE MINISTRY OF FOREIGN AFFAIRS AT THE HAGUE, ASSISTED BY D . J . VEEGENS, ADVOCATE OF THE HAGUE, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE NETHERLANDS EMBASSY, 8 RUE PIERRE-D' ASPELT,

APPLICANT,

V

COMMISSION OF THE EUROPEAN COMMUNITIES, TAKING THE PLACE OF THE HIGH AUTHORITY OF THE ECSC BY VIRTUE OF ARTICLE 9 OF THE TREATY OF 8 APRIL 1965, REPRESENTED BY ITS LEGAL ADVISERS, R . BAEYENS AND H . MATTHIES, ACTING AS AGENTS, ASSISTED BY C.R.C . WIJCKERHELD BISDOM, ADVOCATE OF THE HAGUE, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2 PLACE DE METZ,

DEFENDANT,

Subject of the case

APPLICATION FOR THE ANNULMENT OF DECISION NO 14/66 OF THE HIGH AUTHORITY OF 20 JULY 1966, CONCERNING THE AUTHORIZATION OF SPECIAL RATES AND CONDITIONS INTRODUCED BY THE DEUTSCHE BUNDESBAHN ( GERMAN FEDERAL RAILWAYS ) AND APPLICABLE TO THE CARRIAGE OF COAL AND STEEL TO OR FROM THE SAARLAND,

Grounds

P . 11

IN SUPPORT OF ITS APPLICATION THE APPLICANT MAINTAINS THAT, BY MEANS OF THE CONTESTED DECISION, THE DISPUTED AUTHORIZATIONS WERE GRANTED WITHOUT SATISFYING THE CONDITIONS WHICH APPEAR, IN PARTICULAR, IN ARTICLES 4(B ) AND 70 OF THE TREATY AND TO WHICH THE APPLICATION OF SPECIAL INTERNAL RATES AND CONDITIONS IS SUBJECT . IT ALLEGES THAT THESE CONDITIONS, WHICH HAVE PREVIOUSLY BEEN DEFINED BY THE COURT OF JUSTICE, PREVENT THE AUTHORIZATION OF THE SPECIAL RATES AND CONDITIONS REFERRED TO IN THE FOURTH PARAGRAPH OF ARTICLE 70 OF THE TREATY, EXCEPT WHERE NECESSARY TO ENABLE THE UNDERTAKINGS IN WHOSE FAVOUR THEY OPERATE TO OVERCOME EXCEPTIONAL AND TEMPORARY DIFFICULTIES RESULTING FROM UNFORESEEABLE CIRCUMSTANCES WHICH ARE LIKELY TO RESULT IN A SITUATION IN WHICH THE COMPOSITION OF THE PRODUCTION COSTS NO LONGER CORRESPONDS TO THE NATURAL CONDITIONS IN WHICH THESE UNDERTAKINGS ARE PLACED . IN THIS RESPECT THE APPLICANT MAINTAINS, FIRST, THAT THE CHANGE WHICH HAS TAKEN PLACE IN THE CONDITIONS OF COMPETITION OF THE UNDERTAKINGS OF THE SAARLAND FOLLOWING THE CANALIZATION OF THE MOSELLE, THE MAIN AND THE NECKAR IS OF A PERMANENT RATHER THAN A TEMPORARY NATURE .

SECONDLY, THE APPLICANT MAINTAINS THAT, AS THE IMPROVEMENT IN LINES OF COMMUNICATIONS CARRIED OUT BY PUBLIC WORKS AUTHORITIES IS ONE OF THE CONSTANT PREOCCUPATIONS OF THE PUBLIC AUTHORITIES IN ALL THE MEMBER STATES, IT CANNOT BE REGARDED AS AN UNFORESEEABLE CIRCUMSTANCE . IT FURTHER MAINTAINS THAT THE NATURAL CONDITIONS IN WHICH THE UNDERTAKINGS OPERATE INCLUDE THE PHYSICAL AND TECHNICAL CONDITIONS PECULIAR TO EACH OF THE VARIOUS PRODUCERS, AS THEY ARE CONSTANTLY CHANGING OR, AT LEAST, ARE SUBJECT TO CONSTANT VARIATIONS, EVEN THOUGH THESE VARIATIONS ARE THE RESULT OF HUMAN INTERVENTION . AMONG THESE NATURAL CONDITIONS MUST BE INCLUDED THE POSITION OF THE UNDERTAKINGS IN THE LIGHT OF THE INFRASTRUCTURE OF TRANSPORT AS IT EXISTS AND AS IT MAY BE CHANGED AT ANY TIME . FOR THIS REASON IT IS CONTENDED THAT A MODIFICATION IN THIS INFRASTRUCTURE, LIKE THAT WHICH HAS TAKEN PLACE IN THIS INSTANCE, CANNOT CONSTITUTE A FACTOR LIKELY TO CAUSE THE COMPOSITION OF PRODUCTION COSTS NO LONGER TO CORRESPOND TO THE NATURAL OPERATING CONDITIONS OF THE UNDERTAKINGS OF THE SAARLAND OF WHICH THIS MODIFICATION FORMS AN INTERGRAL PART .

FIRST, THE MATERIAL CHANGE IN THE CONDITIONS OF COMPETITION OF THE UNDERTAKINGS OF THE SAARLAND, WHICH TOOK PLACE AS A RESULT OF THE CANALIZATION OF THE MOSELLE, THE MAIN AND THE NECKAR MUST NOT BE CONFUSED WITH THE ECONOMIC CONSEQUENCES WHICH IT INVOLVES AND, MORE PRECISELY, WITH THE DIFFICULTIES WHICH RESULT THEREFROM FOR THESE UNDERTAKINGS . ALTHOUGH THIS MATERIAL CHANGE IS OF A PERMANENT NATURE, IT DOES NOT FOLLOW THAT THE DIFFICULTIES WHICH RESULT THEREFROM FOR CERTAIN FOR CERTAIN UNDERTAKINGS MUST ALSO BE OF PERMANENT NATURE . ON THE CONTRARY, IT IS POSSIBLE THAT IN FUTURE SUCH DIFFICULTIES MAY BE SURMOUNTED, IN PARTICULAR THROUGH A READJUSTMENT IN THE PRODUCTION AND DISTRIBUTION JUSTIFYING APPROPRIATE TEMPORARY AID . THE AIM OF THE SPECIAL RATES AND CONDITIONS IN QUESTION IS PRECISELY TO GRANT AID OF THIS KIND WHICH IS INTENDED TO FACILITATE SUCH A READJUSTMENT .

P . 12

MOREOVER, THE UNFORESEEABLE NATURE OF THE CIRCUMSTACES JUSTIFYING THE GRANT OF SPECIAL RATES AND CONDITIONS MUST BE ASSESSED IN THE LIGHT OF THE FACTS OF EACH CASE AND ACCORDING TO A REASONABLE ASSESSMENT OF THE SITUATION . FOR THE PURPOSES OF SUCH AN ASSESSMENT A DISTINCTION MUST BE MADE IN THE TRANSPORT SECTOR BETWEEN THE NORMAL WORK OF DEVELOPMENT OF THE INFRASTRUCTURE AND OTHER WORK, GENERALLY OF GREATER IMPORTANCE, THE EXECUTION OF WHICH BRINGS ABOUT A CHANGE IN THE EXISTING ECONOMIC SITUATION . IN THIS INSTANCE THE CANALIZATION OF THE MOSELLE, THE MAIN AND THE NECKAR CANNOT BE REGARDED SIMPLY AS THE NORMAL WORK OF DEVELOPMENT OF THE INFRASTRUCTURE INCUMBENT UPON EACH MEMBER STATE .

THE APPLICANT COMPLAINS IN ADDITION THAT, IN ORDER TO JUSTIFY THE MEASURES OF SUPPORT IN DISPUTE, THE HIGH AUTHORITY BASED ITS DECISION ON THE CHANGES IN THE INFRASTRUCTURE OF INLAND WATERWAYS . IT MAINTAINS THAT THE PURPOSE AND EFFECT OF THESE MEASURES IS NOT TO PROVIDE AGAINST EXTERNAL CIRCUMSTANCES WHICH CHANGE THE NATURAL CONDITIONS AND, IN THIS WAY, CAUSE THE COMPOSITION OF PRODUCTION COSTS NO LONGER TO CORRESPOND TO THOSE CONDITIONS, BUT, ON THE CONTRARY, TO CORRECT THE EFFECTS ON COMPETITION OF DIFFERENCES IN THE NATURAL CONDITIONS IN WHICH THE UNDERTAKINGS OPERATE .

THE CONCEPT SET OUT IN THE SECOND PARAGRAPH OF ARTICLE 2 OF THE TREATY CONCERNING CONDITIONS WHICH WILL OF THEMSELVES ENSURE THE MOST RATIONAL DISTRIBUTION OF PRODUCTION CANNOT BE REGARDED AS A FIXED CONCEPT, BUT COVERS FACTS WHICH ARE THEMSELVES CONTINGENT AND VARIABLE, IN PARTICULAR WITH REGARD TO TIME . FOR THIS REASON, THE EXECUTION OF PUBLIC WORKS, WHICH INVOLVES A CHANGE IN THE INFRASTRUCTURE OF A REGION IN WHICH UNDERTAKINGS ARE ESTABLISHED CERTAINLY CONSTITUTES, AT THE BEGINNING, A SUDDEN CHANGE IN THE EXISTING ENVIRONMENT, EVEN THOUGH THE NEW SITUATION IS DESTINED AFTER A CERTAIN TIME TO BECOME PART OF THE CONDITIONS IN WHICH THESE UNDERTAKINGS WILL HENCEFORTH BE CALLED UPON TO CARRY OUT THEIR ACTIVITIES . THESE COMPLAINTS MUST THEREFORE BE REJECTED .

IN ADDITION, THE APPLICANT CRITICIZES THE HIGH AUTHORITY ON THE GROUND THAT IT ATTRIBUTED EXCESSIVE IMPORTANCE TO THE PURSUIT OF AIMS OF A SOCIAL NATURE IN ORDER TO JUSTIFY ITS DECISION AND RETAIN THE RATES AND CONDITIONS IN DISPUTE . IN SUPPORT OF THIS CRITICISM IT MAINTAINS THAT, AMONG THE OBJECTIVES SET OUT IN ARTICLE 2 OF THE TREATY, THE OBLIGATION TO ENSURE CONTINUITY OF EMPLOYMENT IS OF SECONDARY IMPORTANCE IN COMPARISON WITH THE NEED TO ENSURE THE MOST RATIONAL DISTRIBUTION OF PRODUCTION AT THE HIGHEST POSSIBLE LEVEL OF PRODUCTIVITY . IN ACCORDANCE WITH THE CASE-LAW OF THE COURT, A TEMPORARY RECESSION IN EMPLOYMENT AND THE CLOSURE OF UNDERTAKINGS INCAPABLE OF CONTINUING WITHOUT CONSTANT, ADEQUATE AID MUST BE ACCEPTED .

ALTHOUGH IT IS TRUE THAT THE ESTABLISHMENT OF THE COMMON MARKET IS BASED IN PARTICULAR ON THE MOST RATIONAL DISTRIBUTION OF PRODUCTION AT THE HIGHEST POSSIBLE LEVEL OF PRODUCTIVITY, IT IN NO WAY FOLLOWS THAT THE SOCIAL OBJECTIVES SET OUT IN ARTICLE 2 OF THE TREATY ARE ALWAYS OF SECONDARY IMPORTANCE AND CAN IN NO CASE CONSTITUTE ONE OF THE DECISIVE GROUNDS FOR COMMUNITY ACTION . ALTHOUGH THE GENERAL OBJECTIVES OF THE TREATY SET OUT IN ARTICLES 2 AND 3 CANNOT ALWAYS BE PURSUED SIMULTANEOUSLY IN THEIR TOTALITY, THE COMMUNITY MUST CONTINUALLY RECONCILE THESE OBJECTIVES WHEN CONSIDERED INDIVIDUALLY AND, WHEN CONFLICT ARISES, MUST GRANT SUCH PRIORITY TO CERTAIN GENERAL OBJECTIVES AS APPEAR NECESSARY, HAVING REGARD TO THE ECONOMIC FACTS OR CIRCUMSTANCES IN THE LIGHT OF WHICH IT ADOPTS ITS DECISIONS . IF THE DIFFICULTIES FROM WHICH CERTAIN UNDERTAKINGS SUFFER ARE LIKELY TO LEAD TO WIDESPREAD UNEMPLOYMENT WHICH WILL FRUSTRATE THE PURSUIT OF THESE GENERAL OBJECTIVES OF A SOCIAL NATURE, THE COMMUNITY MUST INTRODUCE MEASURES WHICH WILL ENSURE OBSERVANCE OF THESE OBJECTIVES IN PARTICULAR . RECOURSE TO THE FOURTH PARAGRAPH OF ARTICLE 70 OF THE TREATY, IN ORDER TO ENABLE THE UNDERTAKINGS CONCERNED TO ADJUST THEMSELVES AS SOON AS POSSIBLE TO THE NEW CONDITIONS OF COMPETITION RATHER THAN TO GRANT THEM A PERMANENT SUBSIDY WHICH WOULD BE CONTRARY TO THE GENERAL OBJECTIVES OF THE TREATY, MAY CONSTITUTE AN APPROPRIATE MEASURE WITH WHICH TO MEET DIFFICULTIES OF THIS TYPE . FOR THIS REASON THIS COMPLAINT CANNOT BE ACCEPTED .

P . 13

THE APPLICANT FURTHER MAINTAINS THAT THE CONTESTED DECISION INFRINGES THE FOURTH PARAGRAPH OF ARTICLE 70 OF THE TREATY, IN THAT, CONTRARY TO THE PROVISION REFERRING TO SPECIAL RATES AND CONDITIONS IN THE INTEREST " OF ONE OR MORE COAL - OR STEEL-PRODUCING UNDERTAKINGS ", IT AUTHORIZED THE RATES AND CONDITIONS IN DISPUTE WITHOUT CONSIDERING INDIVIDUALLY THE BASIC OPERATING CONDITIONS OF EACH OF THE UNDERTAKINGS OF THE SAARLAND REFERRED TO . IN PARTICULAR, THE APPLICANT MAINTAINS THAT THE CONTESTED DECISION SUPPLIES INSUFFICIENT INFORMATION CONCERNING THE DIRECT AND INDIRECT EFFECTS OF THE ABOVEMENTIONED CANALIZATIONS ON THE STEEL-WORKS ESTABLISHED IN THE SAARLAND AND IT DOES NOT MAKE IT POSSIBLE TO ASSESS WHETHER OR NOT THE RATES AND CONDITIONS IN DISPUTE INVOLVE EXCESSIVE AID TO THE RECIPIENT UNDERTAKINGS .

TO ALLOW THE APPLICATION OF SPECIAL RATES AND CONDITIONS IN THE INTEREST OF ONE OR MORE UNDERTAKINGS DOES NOT NECESSARILY IMPLY INDIVIDUAL MEASURES PECULIAR TO EACH UNDERTAKING AND IN NO WAY EXCLUDES THE INTRODUCTION OF MEASURES ADAPTED TO A GROUP OF UNDERTAKINGS WHICH ARE SIMILARLY PLACED . FURTHERMORE, THE CANALIZATION OF THESE RIVERS CHANGED THE CONDITIONS OF COMPETITION IN THE TRANSPORT SECTOR BETWEEN THE UNDERTAKINGS OF THE SAARLAND GOVERNED BY THE ECSC TREATY AND COMPETING UNDERTAKINGS ESTABLISHED IN OTHER INDUSTRIAL DISTRICTS AND IN A POSITION TO USE THE NEW WATERWAYS . THUS, THIS CANALIZATION AFFECTS CONDITIONS OF COMPETITION BETWEEN THE DIFFERENT INDUSTRIAL DISTRICTS RATHER THAN BETWEEN UNDERTAKINGS CONSIDERED INDIVIDUALLY . THEREFORE, THE ADVANTAGE GRANTED TO THE UNDERTAKINGS OF THE SAARLAND BY THE RATES AND CONDITIONS IN DISPUTE TO ENABLE THEM TO OVERCOME THE DIFFICULTIES WHICH THEY FACE AS A RESULT OF THIS CANALIZATION MAY ALSO BE OF A GENERAL NATURE . AS REGARDS IN PARTICULAR THE STEEL-WORKS OF THE SAARLAND IT HAS NOT BEEN SHOWN THAT THIS ADVANTAGE INVOLVES MORE THAN APPROPRIATE AID TO THE UNDERTAKINGS IN WHOSE FAVOUR IT IS GRANTED . THE PRESENT COMPLAINT IS, THEREFORE, UNFOUNDED .

IN ADDITION, THE APPLICANT CRITICIZES THE HIGH AUTHORITY FOR HAVING AUTHORIZED THE SPECIAL RATES AND CONDITIONS SO AS TO ENABLE THE UNDERTAKINGS OF THE SAARLAND TO COPE WITH STRUCTURAL DIFFICULTIES AND FOR HAVING THUS BECOME INVOLVED IN THE REGIONAL POLICY OF A MEMBER STATE, ALTHOUGH IT WAS NOT AUTHORIZED TO ADAPT ITS ACTIVITIES TO THE EXIGENCIES OF SUCH A POLICY . THE APPLICANT MAINTAINS THAT, AS THE FOURTH PARAGRAPH OF ARTICLE 70 OF THE TREATY IS A SPECIAL PROVISION, THE HIGH AUTHORITY, IF IT WISHED TO REMEDY THE STRUCTURAL DIFFICULTIES OF THE SAARLAND, COULD HAVE RESORTED TO OTHER MEANS OF ACTION, SUCH AS ARTICLES 37 AND 67 OF THE TREATY OR THE PROTOCOL ON ENERGY PROBLEMS OF 21 APRIL 1964 AND DECISION NO 3/65 OF THE HIGH AUTHORITY OF 17 FEBRUARY 1965 .

P . 14

IT MAY BE SEEN FROM THE STATEMENT OF REASONS FOR THE CONTESTED DECISION, TAKEN AS A WHOLE, THAT THE CHANGE IN THE CONDITIONS OF COMPETITION WHICH RESULTED FROM THESE CANALIZATIONS WORSENED A SITUATION WHICH WAS ALREADY CAUSING CONCERN, BUT TO THE EXTENT TO WHICH IT MAY BE REGARDED AS TEMPORARY, IT WAS THIS WORSENING SITUATION ALONE WHICH THE HIGH AUTHORITY INTENDED TO REMEDY BY MEANS OF THE CONTESTED DECISION . THE FUNDAMENTAL REASON FOR THIS DECISION IS THEREFORE TO REMEDY THESE DIFFICULTIES OF READJUSTMENT . EVEN THOUGH, IN THE INTENTION OF THE GOVERNMENT WHICH INTRODUCED THEM, THE RATES AND CONDITIONS IN DISPUTE MAY FORM PART OF A REGIONAL POLICY, NEITHER THE STATEMENT OF REASONS FOR THE CONTESTED DECISION NOR THE AIM OF THE AUTHORIZATIONS IN DISPUTE SHOWS THAT THE HIGH AUTHORITY ARRIVED AT ITS DECISIONS FOR REASONS FOREIGN TO THE PRINCIPLES OF THE TREATY . THE PRESENT COMPLAINT CANNOT THEREFORE BE ACCEPTED .

THE APPLICANT ALSO MAINTAINS THAT THE CONTESTED DECISION IS ILLEGAL IN THAT IT DID NOT FIX ANY TIME-LIMIT FOR THE AUTHORIZATIONS IN DISPUTE . IT ALLEGES THAT, CONTRARY TO THE FOURTH PARAGRAPH OF ARTICLE 70 OF THE TREATY, THESE AUTHORIZATIONS ARE NOT OF A TEMPORARY NATURE BUT GRANT ADVANTAGES WHICH ARE EITHER PERMANENT OR OF INDEFINITE DURATION TO THE UNDERTAKINGS OF THE SAARLAND . THE DEFENDANT REFUTES THIS BY CLAIMING THAT THE TEMPORARY NATURE OF THE AUTHORIZATIONS IN DISPUTE IS CONFIRMED BY ARTICLE 4(2 ) OF THE CONTESTED DECISION WHICH SHOWS THAT THESE AUTHORIZATIONS ARE BASED ON A SERIES OF SPECIFIC FACTS AND MAY ALWAYS BE CALLED IN QUESTION EITHER AT THE REQUEST OF AN INTERESTED PARTY OR BY THE HIGH AUTHORITY OF ITS OWN VOLITION . IN ADDITION, IT OBSERVES THAT, WITH THE AGREEMENT OF THE EUROPEAN PARLIAMENT, IT HAS RECENTLY BEGUN TO REPLACE AUTHORIZATIONS OF THIS TYPE, WHICH ARE OFTEN EXTENDED FROM YEAR TO YEAR, BY AUTHORIZATIONS CONTAINING CLAUSES SIMILAR TO THAT OF ARTICLE 4(2 ) ABOVEMENTIONED .

THE NATURE AND THE SCOPE OF THE SPECIAL INTERNAL RATES AND CONDITIONS PROVIDED FOR IN THE FOURTH PARAGRAPH OF ARTICLE 70 ARE SIMILAR TO THE PROTECTIVE MEASURES BY WHICH A MEMBER STATE ATTEMPTS TO RESTORE THE BALANCE TO THE COMPETITIVE POSITION OF CERTAIN UNDERTAKINGS AFFECTED BY TEMPORARY DIFFICULTIES IN THE PRODUCTION OR DISPOSAL OF THEIR PRODUCTS . THE FOURTH PARAGRAPH OF ARTICLE 70 REQUIRES THE HIGH AUTHORITY TO VERIFY THAT THE SPECIAL INTERNAL RATES AND CONDITIONS ARE IN ACCORDANCE WITH THE PRINCIPLES OF THE TREATY . IT FOLLOWS FROM THE PRELIMINARY PROVISIONS OF THE TREATY, IN PARTICULAR ARTICLES 2 TO 4 WHICH SET OUT THE FUNDAMENTAL OBJECTIVES OF THE COMMUNITY, THAT THE APPLICATION OF MEASURES OF SUPPORT SUCH AS THOSE INTRODUCED IN THIS INSTANCE IS AN ALTOGETHER EXCEPTIONAL PROCEDURE . THIS PROCEDURE IS EMPHASIZED BY THE FOURTH PARAGRAPH OF ARTICLE 70 WHICH CONFERS ON THE HIGH AUTHORITY THE POWER TO MAKE ITS AGREEMENT TEMPORARY OR CONDITIONAL . THESE MEASURES MAY, THEREFORE, ONLY BE APPLIED TO THE EXTENT TO WHICH THEY MAKE IT POSSIBLE TO RE-ESTABLISH WITHIN THE APPROPRIATE TIME - LIMITS CONDITIONS WHICH WILL OF THEMSELVES ENSURE THE DISTRIBUTION OF PRODUCTION AT THE HIGHEST POSSIBLE LEVEL OF PRODUCTIVITY . AS NO TIME-LIMIT IS ATTACHED TO THE AUTHORIZATION GIVEN BY THE HIGH AUTHORITY, IT IS INCAPABLE OF EFFECTIVELY STIMULATING THE UNDERTAKINGS IN WHOSE FAVOUR IT IS GIVEN TO ADJUST THEMSELVES TO THE NEW CONDITIONS OF COMPETITION OR OF PREVENTING THEM FROM REGARDING THE MEASURES AS A PERMANENT AID INTENDED TO OFFSET THE DIFFICULTIES WHICH THEY FACE .

P . 15

IN THIS INSTANCE THE CONTESTED DECISION IS BASED ONLY ON DIFFICULTIES OF AN ECONOMIC NATURE, AFFECTING ALL THE ECSC UNDERTAKINGS ESTABLISHED IN THE SAARLAND .

ARTICLE 2 OF THIS DECISION LAYS DOWN CONDITIONS, THE PURPOSE OF WHICH IS TO PREVENT THE APPLICATION OF THE RATES AND CONDITIONS IN DISPUTE FROM LEADING TO DISCRIMINATION TO THE DETRIMENT OF CERTAIN UNDERTAKINGS WHICH COMPETE WITH THE UNDERTAKINGS OF THE SAARLAND; THOSE CONDITIONS HOWEVER ARE NOT CALCULATED TO STIMULATE THE READJUSTMENT OF THE LATTER UNDERTAKINGS . THIS DECISION ALSO FAILS TO FIX A TIME - LIMIT FOR THE DURATION OF THE AUTHORIZATIONS IN DISPUTE . IT FOLLOWS FROM ARTICLE 4(2 ) THEREOF THAT THE AGREEMENT OF THE HIGH AUTHORITY MAY BE REVOKED IF THE CIRCUMSTANCES WHICH GAVE RISE TO ITS GRANT NO LONGER EXIST OR ARE CHANGED . BY IMPLYING THAT THIS AGREEMENT MAY BE MAINTAINED AS LONG AS THE DIFFICULTIES JUSTIFYING IT CONTINUE TO EXIST, THIS PROVISION FAILS TO TAKE INTO ACCOUNT THE FACT THAT, IN THIS INSTANCE, THE ESSENTIAL PURPOSE OF THE AGREEMENT IN QUESTION IS PRECISELY TO ENABLE THE UNDERTAKINGS IN WHOSE FAVOUR IT OPERATES TO OVERCOME THOSE DIFFICULTIES AND NOT SIMPLY TO OFFSET THEM FOR AS LONG AS THEY EXIST OR REMAIN UNCHANGED . THUS, BY THE MERE ADDITION OF A FORMAL CLAUSE TO THE AUTHORIZATION, THE DECISION DOES NOT GUARANTEE THAT THE AID ACCORDED TO THE UNDERTAKINGS OF THE SAARLAND WILL BE USED IN A MANNER WHICH IS COMPATIBLE WITH THE OBJECTIVES OF THE TREATY . FOR THIS REASON ARTICLE 4(2 ) OF THE CONTESTED DECISION DOES NOT SATISFY THE REQUIREMENTS OF THE FOURTH PARAGRAPH OF ARTICLE 70 OF THE TREATY . THE DECISION MUST THEREFORE BE ANNULLED .

Decision on costs

UNDER THE TERMS OF THE FIRST SUBPARAGRAPH OF ARTICLE 69(2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS IF THEY HAVE BEEN ASKED FOR IN THE SUCCESSFUL PARTY'S PLEADINGS . AS THE APPLICANT HAS BEEN SUCCESSFUL IN ITS APPLICATION, THE DEFENDANT MUST BE ORDERED TO BEAR THE COSTS OF THE ACTION .

Operative part

THE COURT

HEREBY :

1 . ANNULS DECISION NO 14/66 OF THE HIGH AUTHORITY AND REFERS THE MATTER BACK TO THE COMMISSION;

2 . ORDERS THE DEFENDANT TO BEAR THE COSTS OF THE ACTION .