CELEX: 61983CC0081
Language: en
Date: 1984-05-30 00:00:00
Title: Opinion of Mr Advocate General Lenz delivered on 30 May 1984. # Acciaierie e Ferriere Busseni SpA v Commission of the European Communities. # ECSC - System of production quotas for ssteel - Fines for exceeding quotas. # Case 81/83.

OPINION OF MR ADVOCATE GENERAL LENZ
      DELIVERED ON 30 MAY 1984 (
            1
         )
      
         Mr President,
      
      
         Members of the Court,
      
      A —
      The applicant in the proceedings to which this opinion relates was notified on 6 August 1981 in accordance with Commission Decision No 1832/81/ECSC of 3 July 1981 including concrete reinforcing bars and merchant bars in the new system of production quotas established under Decision No 1831/81/ECSC (Official Journal 1981, L 184, p. 1) of the amount of its production quota for the third quarter of 1981 in respect of products falling within Categories V and VI (12975 tonnes). On 26 October 1981 it was also notified of the amount of its production quota in respect of those categories for the fourth quarter of 1981 (14087 tonnes) and that 12538 tonnes thereof could be disposed of in the Common Market. Those decisions have never been the subject of legal proceedings.
      After checks had shown that the applicant had not adhered to those limits but had exceeded its production quota for the third quarter of 1981 in respect of products of Categories V and VI by 3125 tonnes and that for the fourth quarter of 1981 in respect of the same categories by 6079 tonnes and its delivery quota by 6565 tonnes, the Commission, by letters of 16 March and 22 June 1982, complained to the applicant and invited it to comment. The applicant responded in a telex message dated 13 May 1982 and a letter dated 29 June 1982, in which it relied on the statements it had made on 26 March 1982 when it was given an opportunity to state its case regarding overproduction in the first and second quarters of 1982, when it contended primarily that' financial and social commitments had forced it to exceed its production quota.
      On 24 March 1983, as the Commission was not satisifed with that explanation, it adopted a formal decision imposing a fine. In the decision it repeated the aforementioned charges that the quotas had been exceeded and declared that the applicant's difficult financial situation could not provide justification therefor. Since the undertaking had a deficit in 1981 and since it had exceeded its quotas by more than 10 % it was also declared that it was appropriate to impose, in accordance with the second paragraph of Article 12 of Decision No 1831/81, a fine at the rate of 82.5 ECU per tonne in respect of the excess for the third quarter of 1981 and one at the rate of 90 ECU per tonne in respect of the excess for the fourth quarter of 1981. That resulted in a total fine of 958084 ECU (or Lit 1280536751) which had, moreover, to be paid within two months of notification of the decision and the fine would increase by 1 % for each month that it remained outstanding.
      Busseni, which had at its own request been subject for two years to “amministrazione controllata” [courtsupervised management procedure] by a decision on 23 April 1982 of the Tribunale [District Court] of Brescia brought an action before the Court of Justice in respect of that decision claiming:
      that the operation of the contested decision should be suspended;
      that the decision of 24 March 1983 should be declared void; in the alternative, that the fine imposed by that decision should be reduced;
      in the further alternative, that the periods within which the fines must be paid should be extended.
      B —
      In my opinion those claims, which the Commission considers to be in part inadmissible and in part not wellfounded, call for the following observations.
      1. The application to suspend the operation of the contested decision
      The claim set out in the application that the operation of the contested decision should be suspended is clearly inadmissible. In that connection Article 83 (3) of the Rules of Procedure provides that the application is to be made by a separate document. It has also been held by the Court that failure to observe that provision renders the claim inadmissible. I refer the Court in that respect to its judgments in Cases 108/63 (
            2
         ) and 32/64 (
            3
         ).
      2. The principal claim, that the contested decision should be declared void
      The arguments put forward in support of this application fall into two groups. The first group relates to the correctness of the decision fixing the quotas, disregard of which was said to be the ground for the penalty imposed by the contested decision. The second group seeks to put forward reasons justifying or excusing the failure to comply with the production quotas so as to deprive the decision imposing the fines of its foundation.
      (a) Lawfulness of the decision fixing the quotas
      
               (aa)
            
            
               In this respect it was alleged that the Commission should have examined the applicant's situation in the light of Article 14 of Decision No 1831/81 and adjusted its production quota. It was stated that the applicant was experiencing exceptional difficulties which made it impossible to adhere to the quotas. It had already had a serious crisis in 1977 as a result of extensive liabilities which had necessitated extensive recourse to the Cassa Integrazione Guadagni [income supplement fund] and led in 1978 to the conclusion of an out-of-court settlement.
               It is true that the applicant, as it emphasizes, drew attention to that state of affairs even before the contested decision was adopted. I refer to its letter of 24 April 1981 to the Commission which it produced in earlier proceedings (Case 284/82 (
                     4
                  )) in which inter alia it gave details of the sums still to be paid in respect of that settlement before the end of 1981. I also remind the Court of the applicant's letter of 9 December 1981, likewise produced in the earlier proceedings, in which it requested the Commission to adopt a decision under Article 14 of Decision No 2794/80 on account of the exceptional difficulties it was experiencing. Finally, I remind the Court of the applicant's letter of 17 December 1981 in which it contended once again that the reduction in production required of it would make it impossible to adhere to the settlement of 1978 and to continue to finance its production and in which it renewed its request, based on its extensive liabilities in respect of social insurance, for the application of Article 14 of Decision No 2794/80.
               However, it is quite evident that such arguments cannot now be entertained in this case.
               It is a well-established principle of the Court's case-law that it is not possible when challenging a decision to impose a fine to argue that the individual decision on which it is based and the failure to observe which is to be penalized is illegal. That was held by the Court as long ago as 1965 in its judgment in Case 36/64 (
                     5
                  ); it was emphasized once again in its judgment in Case 265/82 (
                     6
                  ) and was also referred to in its judgment in Case 10/83 (
                     7
                  ) in relation to a case where the objection that a provision for the adjustment of the quota had not been applied was likewise not raised until the proceedings challenging the decision to impose a fine.
               The applicant should therefore have sought to have the quotas adjusted under Article 14 of Decision No 1831/81 when it was notified of them, or should have done so at least when the Commission failed to respond to its second request (which may also be regarded as an implied application under Article 14 of Decision No 1831/81, adjusting on 1 February 1982 only the quota for the first quarter of 1981, as we heard in Case 284/82 (
                     8
                  ) (which amounted without doubt to an implied rejection of the applicant's request in respect of the other quarters). As it failed to do so the decision fixing the quotas became final and is not now subject to review (even in relation to the fact that the restriction of the power to adjust the quotas contained in Article 14 of Decision No 1831/81 to undertakings whose total reference production is less than 60000 tonnes per year, of which the applicant is clearly not one, appears open to challenge).
            
         
               (bb)
            
            
               The first group of arguments also contains the applicant's reference to the fact that as early as 1977 it cut its workforce and reduced its production by closing down one rolling mill and restricting the production of a second. That fact has already been referred to in its letter of 18 May 1981 produced in Case 284/82 (
                     8
                  ) and in its aforementioned letter of 17 December 1981. It also stated in the latter that its production was reduced by 40% because it was no longer possible to finance its previous production level.
               The applicant adds the conclusion that the Commission should not have based its decision on the undertaking's production for the years from 1977 to 1980, in which production was considerably below the level of that in 1974 (as may be seen from its consumption of electricity and gas), but should have increased the reference production figure in accordance with Article 4 (5) of Decision No 2794/80 (particularly since the applicant made a profit in 1979) or Article 4 (3) thereof (in view of the applicant's below-average utilization of production facilities). Again, that is simply criticism by the applicant of the decisions fixing its quotas, a matte which likewise cannot be raised in proceedings relating to the imposition of a fine, since an application for such an increase made on 2 February 1983 is clearly out of time. (It is therefore possible to leave open the questions whether Article 6 of Decision No 1831/81 did in fact supersede Article 4 (5) of Decision No 2794/80, which the Commission disputes, whether the applicant could show a profit for 1979 and whether it cannot rightly be objected that the Commission was not in a position to know if the applicant's utilization of production facilities was more than 10 percentage points below the average rate of the other undertakings of the Community, because the applicant did not deliver a statement of its capacity for the years from 1977 to 1980.
            
         (b) The plea of necessity
      It is possible to interpret the applicant's contentions at least in part as meaning that its existence would have been in jeopardy had it adhered to the production quotas (on the assumption that they were lawful) because it would then have utilized only between 20% and 25% of its facilities and would no longer have been able to comply with the settlement of 1978, to pay social insurance contributions or to finance its business. It had therefore to exceed its quotas in order to secure its survival. In other words the applicant contends that there was a crisis which justified its action or relieved it of fault.
      Once again a brief examination of that contention shows that it does not provide grounds for declaring void the decision imposing a fine since similar arguments have been held to be irrelevant in a series of cases. One such case is Case 188/82 (
            9
         ), in which it was stated that necessity could not be relied upon as justification. That was also the position in Casse 263/82 (
            10
         ) in which it was emphasized that there was no place for such considerations in connection with Article 58 of the ECSC Treaty because otherwise the quota system, would have to be terminated. (Whether or not the quota system should be terminated is a matter for the relevant political authorities under the ECSC Treaty to decide, not the Court).
      The same view is taken in Joined Cases 31, 138 and 204/82 (
            11
         ), in which it was stated that if a minimum capacity had to be guaranteed the objective laid down in Article 58 of the ECSC could not be attained, and finally in Case 10/83 (
            12
         ), in which it was emphasized that to admit reliance on economic difficulties as justification for exceeding a quota would lead to the collapse of the quota system.
      
               (c)
            
            
               That is sufficient to show that the main claim cannot be upheld.
            
         3. The alternative claims that the fine should be reduced and the period for payment extended
      
               (a)
            
            
               With regard to the application for a reduction in the amount of the fine my submission may be brief because the only independent argument put forward in that respect was that enforcement of the decision to impose a fine would ruin the applicant and would render a positive conclusion to the proceedings before the Tribunale of Brescia impossible.
               All that need be said in that connection has already been said in the opinion delivered in Case 234/82 (
                     13
                  ). Substantial fines are essential for the effectiveness of the quota system. If no fine, or only a minimal fine, could be imposed where there were financial difficulties such efficacy would in fact no longer be secured. Further factors militating against admission of the arguments relied upon by the applicant are the fact that such a possibility would lead to discrimination and the fact that the rules would be difficult to apply in practice if the fines had to be adjusted to the financial situation of the undertaking in question. Moreover, that was evidently the view taken by the Court when it stated in its judgments in Cases 235/82 (
                     14
                  ) and 10/83 (
                     15
                  ) that the fact that payment of a fine would lead to the closure of a business did not justify a claim that the fine should be reduced.
               Accordingly all that can be done by way of taking account of financial difficulties in paying a fine is to take advantage of the Commission's express willingness to grant a period within which to pay the fine if the existence of financial difficulties can be shown. The applicant has apparently not yet made an application to that effect,
            
         
               (b)
            
            
               My comments may be equally brief in relation to the alternative claim that the Court should grant an extension of the period for payment. Such a request could be granted only, if at all, in the context of proceedings for enforcement of a decision (if the Court were to suspend the operation of a decision, as appears to be possible under Article 89 of the Rules of Procedure). However, it may not be made in proceedings concerning a decision to impose a fine. That has already been made clear by the Court in its judgement in Case 235/82 (
                     14
                  ) in which it was emphasized that the Court of Justice cannot issue instructions to the Commission to grant beneficial terms of payment.
            
         C — By way of summary, I am of the opinion that the applicant's claims must be dismissed because they are in part inadmissible and in part not wellfounded. In the event of such a conclusion to the proceedings the applicant must pay the costs.
      (
            1
         )	Translated from the German.
      (
            2
         )	Judgment of 21 January 1965 in Case 108/63 Officine Elettromeccaniche Ing. A. Merlini v High Authority of the European Coal and Steel Community [1965] ECR 1.
      (
            3
         )	Judgment of 17 June 1965 in Case 32/64 Government of the Italian Republic v Commission of the European Economic Community [1965] ECR 365.
      (
            4
         )	Judgment of 9 February 1984 in Case 284/82 Acciaierie e Ferriere Busseni SpP v Commission of the European Communities [1984] ECR 557.
      (
            5
         )	Judgment of 2 June 1965 in Cast 36/64 Société Rhénane d'Exploitation et de Manutention (SOREMA) v High Authority of the Europpean Coa! and Steel Community [1965] ECR 329.
      (
            6
         )	Judgment of 19 October 1983 in Case 265/82 Union Sidérurgique du Nord et de l'Est de la france (Utinor) v Commission of the European Communities [1983] ECR 3105.
      (
            7
         )	Judgment of 1 March 1984 in Case 10/83 Metalgoi SpA v Commission of the European Communities [19841 ECR 1271.
      (
            8
         )	Judgment of 9 February 1984 in Case 284/82 Acciaierie e ferierre Bussent SpA v Commission o/the European Communities [1984] ECR 557.
      (
            9
         )	Judgment of 16 November 1983 in Case 188/82 Thyssen AC v Commission o/the European Communities [1983] ECR 3721.
      (
            10
         )	Judgment of 14 December 1983 in Case 263/82 Klòckner-Werke AC v Commission of the European Communities [1983] ECR 4143.
      (
            11
         )	Judgment of 15 December 1983 in Joined Cases 31/82, 138/82 and 204/82 Metallurgiki Halyps AE v Commission of the European Communities [1983] ECR 4193.
      (
            12
         )	Judgment of 1 March 1984 in Case 10/83 Metalgoi SpA v Commission of the European Communities [1984] ECR 1271.
      (
            13
         )	Opinion of 26 October 1983 delivered in Case 234/82 Fernere di Roè Voîciano SpA v Commission of the European Communities [1983] ECR 3940.
      (
            14
         )	Judgment of 30 November 1983 in Case 235/82 Ferriere San Carlo SpA v Commission of the European Communities [1983] ECR 3123.
      (
            15
         )	Judgment of 1 March 1984 in Case 10/83 Metalgoi SpA v Commission of the European Communities [1984] ECR 1271.