Case C-206/02 P: Appeal brought on 3 June 2002 by LR af 1998 A/S, formerly Løgstør Rør A/S, against the judgment delivered on 20 March 2002 by the Fourth Chamber of the Court of First Instance of the European Communities in case T-23/99 between LR af 1998 A/S, formerly Løgstør Rør A/S, and the Commission of the European Communities
Date: 2002-08-24
Institutions: Court of Justice
Subjects: European Commission, action for annulment (EU), fine, heating, restrictive trade practice, type of business

C 202/4

EN

Official Journal of the European Communities

24.8.2002

— but in any event order the Commission of the European
Communities to pay the costs of the proceedings at first
instance and on appeal.

Pleas and main arguments

— Infringement of substantive Community law

— Infringement of the business principle (equal treat-
ment and reliance on previous decision-making
practice): the Commission was not entitled to depart
from its previous decision-making practice and to
apply the ‘guidelines’ particularly since it promised
the appellant advantages for cooperation (infor-
mation concerning cooperation). By securing coop-
eration the Commission was bound to existing
practices in regard to the setting of fines.

— Infringement of the principle of equal treatment and
discrimination (in relation to the duration of the
infringement): Whilst, according to the intendment
and wording of the guidelines,
fines are to be
graduated in line with the duration of an infringe-
ment, the judgment appealed against admits, in the
appellant’s case, of a clearly greater than linear
increase even where the reference period of one year
has been exceeded only by three months.

— Infringement of the prohibition of retroactive effect
owing to application of the ‘guidelines’ inasmuch as,
for the purpose of determining the fine,
those
guidelines have regard to overall turnover instead of
product turnover, as before.

— Infringement of essential procedural requirements

— Infringement of the right to be heard;

European Communities in case T-23/99 between LR af 1998
A/S, formerly Løgstør Rør A/S, and the Commission of the
European Commuinities, was brought before the Court of
Justice of the European Communities on 3 June 2002 by LR af
1998 A/S, formerly Løgstør Rør A/S, established in Løgstør,
Denmark, represented by D. Waelbroeck and H. Peytz, lawyers.

The Appellant claims that the Court should:

— annul the contested judgment of

the Court of First

Instance of 20 March 2002 in Case T-23/99;

— annul the Commission’s Decision of 21 October 1998,
as modified by a decision of 6 November 1998 in Case
IV/35.691, District Heating Pipes, fining the Appellant or
at the very least substantially reduce the amount of the
fine, or in the alternative refer the case back to the Court
of First Instance for judgment;

— declare the Guidelines on the method of setting fines
pursuant to Article 15(2) of Regulation 17/62 (2) and
Article 65(5) of the ECSC Treaty, (OJ 1998 C 9/3) illegal
pursuant to Article 241 of the EC Treaty; and

— order the Commission to pay the costs.

— Infringement of the duty to provide a statement of

reasons.

Pleas in law and main arguments

(1) KE KELIT Kunststoffwerke Gesellschaft m.b.H v Commission of

the European Communities [2002] ECR II-0000.

Appeal brought on 3 June 2002 by LR af 1998 A/S,
formerly Løgstør Rør A/S, against the judgment delivered
on 20 March 2002 by the Fourth Chamber of the Court
of First Instance of the European Communities in case
T-23/99 (1) between LR af 1998 A/S, formerly Løgstør Rør
A/S, and the Commission of the European Communities

(Case C-206/02 P)

(2002/C 202/05)

An appeal against the judgment delivered on 20 March 2002
by the Fourth Chamber of the Court of First Instance of the

Erroneous appreciation of the criteria for setting the fine
(infringement of Article 15(2) of Regulation 17/62 and the
principles of proportionality and equal treatment; misapplica-
tion or — in the alternative — illegality of
the 1998
Guidelines): the Court of First Instance cannot claim to have
taken sufficiently account of all factors relevant to the fine in
upholding the Commission’s calculation of the fine starting
from a basic amount which, in the case of the Appellant, was
set so high that adjustments for duration, aggravating, and
mitigating factors, all took place or would have taken place at
a level high above the maximum limit of the fine (10 % of
world wide turnover) set out in Regulation 17/62. The entire
method for calculation of the fine is flawed and represents a
wrong interpretation and application of Regulation 17/62.
The method results in final fines which do not reflect properly
the relevant individual factors, and do not even reflect the
relative size of the basic amounts chosen by the Commission
as adjusted for relevant factors, but instead — in the case of all
undertakings in categories 2 and 3 — solely reflect the size
of the undertakings’ world wide group turnover, thereby
attributing a disproportionate importance to this figure.

24.8.2002

EN

Official Journal of the European Communities

C 202/5

Infringement of the principles of legitimate expectations and
of non-retroactivity: the Court of First Instance erred in law in
considering that the discretion of the Commission to set fines
and its right ‘to raise the general level of fines’ take precedence
over Article 7 of the European Convention of Human Rights
and Fundamental Freedoms, as introduced in EC law by
Article 49 of the Charter of Fundamental Rights of the
European Union. The Appellant was entitled to rely on the
Commission’s practice on the setting of fines applicable at the
time when it approached the Commission. Moreover, a right
to increase the general level of fines within the prescribed
ceiling cannot be compared with the adoption in casu of a true
quasi-legislation in the form of guidelines and notices which
alter entirely the whole method of setting the fines.

Insufficient regard to mitigating circumstances

Incorrect application of the Leniency Notice

The appellant claims that the Court should:

1. At the same time as setting aside the judgment at first
instance of 20 March 2002, set aside Article 1 of the
Commission Decisions of 21 October 1998 (Com(1998)
3117 fin.) and 6 November 1998 (Com(1098) 3415 fin.
and Com(1998) 3117 fin. corrig.) (2) to the extent to
which the appellant is therein accused of participating in
an agreement and in the conduct of concerted practices
against Powerpipe AB; annul Article 3 of those Com-
mission decisions. In the alternative the appellant seeks a
reduction, as the Court deems fit, of the fine imposed on
it in Article 3.

2. Order the Commission to pay the appellant’s costs at first

instance and on appeal.

(1) OJ C 86, 27.03.1999, p. 31.
(2) EEC Council: Regulation No 17: First Regulation implementing
Articles 85 and 86 of the Treaty (OJ L 13, 21.02.1962, p. 204
[SE SER1 (59-62) p. 87]).

Pleas and main arguments

— Infringements of the prohibition of retroactive effect, the
principle of protection of legitimate expectations and the
principle of sound administration in the setting of fines:
the retroactive application of the ‘guidelines’ leads in the
appellant’s case more or less to a trebling of the fine in
consequence not of an individual assessment but of a
regulation operating in the nature of a penalty.

— Infringement of the principle of protection of legitimate
expectations as a result of the alteration of the method
for setting fines after cooperation with the appellant. An
undertaking which cooperates has a legitimate expec-
tation that the Commission will not subsequently alter
the principles determining the calculation of fines in such
a way that cooperation is in the end to no avail.

— Infringement of the rights of the defence as a result of
application of the new guidelines on setting fines without
affording the appellant the right to be heard.

Appeal brought on 4 June 2002 by Brugg Rohrsysteme
GmbH against the judgment delivered on 20 March 2002
by the Fourth Chamber of the Court of First Instance of
the European Communities in Case T-15/99 between
Brugg Rohrsysteme GmbH and the Commission of the
European Communities

(Case C-207/02 P)

(2002/C 202/06)

An appeal against the judgment delivered on 20 March 2002
by the Fourth Chamber of the Court of First Instance of the
European Communities in Case T-15/99 between Brugg
Rohrsysteme GmbH and the Commission of the European
Communities (1) was brought before the Court of Justice of the
European Communities on 4 June 2002 by Brugg Rohrsysteme
GmbH, represented by Dr Thomas Jestaedt, Prof. Dr Hans-
Joachim Salger and Dr Martin Sura, of the law firm, Lovells, in
Brussels, with an address for service in Luxembourg at the
Chambers of Philippe Dupont, of Arendt & Medernach.

— Infringement of the principle of equal treatment by failure
to reduce the starting amount for setting the appellant’s
fine: the Court and the Commission are mistaken as to
the scope and significance of the 10 percent limit in
Article 15(2) of Regulation No 17. It is not only the final
amount of the calculation which is decisive: rather in the
course of the calculation no amount may exceed the 10 %
limit. On account of the ratio of 5 to 1 (which is not
disputed) between the third and fourth categories of the
undertakings concerned the starting amount should also
have been reduced for the appellant.