CELEX: 61986CC0100
Language: en
Date: 1987-05-14 00:00:00
Title: Opinion of Mr Advocate General Mischo delivered on 14 May 1987. # Jacques Cauët and Bertrand Joliot v Commission of the European Communities. # Steel - Sale of a rolling mill - Transfer of reference quantities and the corresponding quotas. # Case 100/86.

Important legal notice

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61986C0100

Opinion of Mr Advocate General Mischo delivered on 14 May 1987.  -  Jacques Cauët and Bertrand Joliot v Commission of the European Communities.  -  Steel - Sale of a rolling mill - Transfer of reference quantities and the corresponding quotas.  -  Case 100/86.  

European Court reports 1987 Page 03379

Opinion of the Advocate-General

++++Mr President,  Members of the Court,  1 . The present case is the continuation of Case 48/86 which was an application for a declaration that the Commission decision of 13 January 1986 transferring Cockerill-DRC' s annual reference production and quantities to Sacilor with effect from 1 January 1985, on the basis of Article 15 ( 1 ) of Commission Decision No 234/84/ECSC of 31 January 1984, ( 1 ) was void .  2 . Realizing that the legal basis for its decision was incorrect, the Commission withdrew that decision and replaced it with a new one dated 10 March 1986, which had the same purpose but was based this time on Article 9 ( 4 ) of Decision No 234/84/ECSC . The applicants discontinued Case 48/86 and brought the present action against the new decision .  3 . The relevant facts in the present case are essentially as follows : first, on 22 October 1985 the applicants, acting as liquidators of Cockerill-DRC SA, which had ceased all production activity at the beginning of the third quarter of 1985, sold a rolling mill to the German company Dorninger for a price of FF*7*900*000; secondly, Dorninger virtually immediately ( on 4 November 1985 ) resold the mill to the French company Sacilor for a price of FF*10*300*000 .  4 . Earlier, in the summer of 1985, the applicants, relying on Article 15 ( 1 ) of Decision No 234/84/ECSC, had applied to the Commission for authorization to sell Cockerill-DRC SA' s reference production and quantities to its Belgian parent company Cockerill-Sambre with effect from the second quarter of 1985 . That application had been confirmed by the parent company .  A - Admissibility  5 . 1 . The Commission does not raise a formal objection of inadmissibility, but expresses its regret that the applicant did not help to keep the case within reasonable bounds by continuing the litigation within Case 48/86 instead of bringing the present action, since the facts are still the same and there is no new aspect to the arguments adduced .  6 . In this respect I would simply like to remind the Court that in its order of 18 June 1986 removing Case 48/86 from the Register the Court noted that by withdrawing its decision of 13 January 1986 it was the Commission which had justified the applicant in discontinuing the action . That is to say, if the applicant were obliged to direct the action against the new decision of 10 March 1986 at the stage of the reply this would "mean that it was impossible for the applicant to reply in writing to the defence of this decision which the Commission would have put forward for the first time in its rejoinder" ( paragraph 10 of the decision ).  The applicant cannot, therefore, be criticized for having acted as it has .  7 . 2 . On the other hand, the Commission is justified in raising an objection of inadmissibility with respect to the applicant' s second claim, to the effect that the Court should "order the Commission to use the powers conferred upon it by the ECSC Treaty to take steps to ensure equitable redress for the harm resulting from the contested decision ".  8 . To the extent that this application is merely a transcription of the third sentence of the first paragraph of Article 34 of the ECSC Treaty it is superfluous . The Commission' s obligation to redress any harm which the applicant may have suffered because of the decision in dispute is part of its more general obligation to take the measures necessary to comply with a judgment annulling a decision . There is therefore absolutely no need to stress the point . ( 2 )  9 . If the purpose of this application is to obtain immediate redress for such harm the terms of Article 34 of the ECSC Treaty itself are a barrier to its admissibility, because that article allows such an application to be brought only after the decision which has allegedly caused the harm has been declared void and after it has been established that the Commission does not intend to take the steps needed to redress the illegality found to exist . ( 3 )  10 . In any event, before there can be an obligation to make redress there must be fault, which in this case can only be established if the decision challenged was in fact unlawful .  That issue must therefore be examined .  B - The merits  11 . The applicant relies on four grounds in its application for annulment . They are as follows :  ( i ) Sacilor was not, or was no longer, the "present owner" of Cockerill-DRC SA' s rolling mill and the Commission had therefore committed a manifest error .  ( ii ) Dorninger, the initial purchaser of the mill, was not an "undertaking" within the meaning of the ECSC Treaty and could not therefore acquire or transfer the reference productions and quantities attached to it .  ( iii ) Sacilor never used the plant for production but was utilizing the references so acquired to increase the production of its other plant .  ( iv ) By refusing to allow the sale of the reference production and quantities to Cockerill-Sambre the Commission prevented the applicant from realizing part of the assets of Cockerill-DRC SA and thereby caused it harm .  12 . The gist of all these arguments is that the Commission was wrong to apply Article 9 ( 4 ) of Decision No 234/84/ECSC and that Article 15 ( 1 ) of the decision was the relevant provision .  13 . Let us start by analysing this problem . The beginning of Article 9 ( 4 ) reads as follows : "Where a plant - a works or an undertaking - undergoes a change of ownership, the new owner shall receive the plant' s reference production and quantities and the relevant quotas ...".  14 . In his order of 9 April 1986 in Case 48/86*R the President of the Court considered that under that provision the new owner of a plant automatically acquires the corresponding reference production and quantities . He held that the final result of the successive sales of the rolling mill to Dorninger and Sacilor was that Sacilor became the owner of the mill, and concluded that the Commission had no alternative but to transfer the reference production and quantities to Sacilor ( paragraphs 28 to 30 ).  15 . Under Article 15 ( 1 ) "where the undertakings concerned so request in advance, the Commission may authorize exchanges, sales or transfers of all or part of reference production or quantities if the plants corresponding to the reference figures to be transferred were permanently closed or sold and transferred to a third country after 1 January 1980 ". Mr Cauët and Mr Joliot consider that the present case is precisely a case of closure of plant within the meaning of that provision . We must therefore analyse what this concept covers .  16 . First of all, it is apparent that this would have been a case of pure and simple closure if the plant had been abandoned and had gradually become unusable because of rust and the effects of the weather . However, that is not what happened .  17 . Had the different components of the plant been sold as spare parts or scrap metal then this too could have been regarded as a permanent closure within the meaning of Article 15 . That did not happen either .  18 . In fact the plant was sold in its entirety to Dorninger .  19 . It is therefore beyond dispute that from the date of sale Cockerill-DRC SA was no longer the owner of the plant; this is not seriously disputed by Cockerill' s liquidators .  20 . However, the liquidators maintain that this is still a case of closure within the meaning of Article 15 ( 1 ) because Dorninger is not an undertaking for the purposes of the ECSC Treaty . Thus it could acquire only the bare property in the plant, and not the relevant reference production and quantities . A fortiori it could not transfer the reference production and quantities to Sacilor .  21 . There is no provision in Decision No 234/84/ECSC from which it may be concluded that reference production and quantities may only be transferred along with the plant in cases where the plant is sold to another steel undertaking .  22 . Article 9 ( 4 ) provides expressly that when a plant undergoes a change of ownership ( impliedly, of whatever kind ) the new owner receives the plant' s reference production and quantities . As the Commission correctly stresses, the new owner cannot derive any immediate advantage from it if he is not engaged in production with this plant . It follows indirectly from the first subparagraph of Article 9 ( 3 ) of Decision No 234/84/ECSC that an undertaking entitled to reference production and quantities retains the benefit of the production quotas attributed to it or recovers that benefit only if it carries on or resumes production activities .  23 . Had Dorninger decided to engage in such an activity it would have been regarded as a steel undertaking from that moment onwards and from being the mere recipient of the reference production and quantities it would have become their user .  24 . That did not happen in the present case, because some days after having purchased the plant Dorninger resold it to Sacilor . It cannot be, and indeed is not, disputed that Sacilor is a steel undertaking within the meaning of the ECSC Treaty .  25 . Since the reference production and quantities were not "extinguished" on the ground that the plant was the property of a non-steel undertaking for some days, they could be transferred to Sacilor .  26 . The applicants go on to argue, however, that Sacilor did not produce anything on the plant but was utilizing the references so acquired to increase the production of its other plant .  27 . As the President of the Court noted in his order of 9 April 1986 in Case 48/86*R ( at paragraph 31 ) the fact that Sacilor acquired the plant with the intention of dismantling it and not of using it for steel production ( 4 ) does not affect the question whether the Commission was entitled under Article 9 ( 4 ) to adopt the contested decision .  28 . According to the fifth recital in the preamble to Commission Decision No 2177/83/ECSC of 28 July 1983, ( 5 ) which introduced the second subparagraph of Article 9 ( 3 ) and Article 9 ( 4 ) into the quota system, the purpose of these provisions is to avoid any increase in references, in the interests of the market .  29 . That purpose is not compromised if the purchaser of plant does not use it or immediately dismantles it but utilizes the corresponding reference production and quantities to increase its total production on other plant which it may have ( the Commission calls this the "closure premium ").  30 . The applicants further maintain that the decision of 10 March 1986 should be declared void because the Commission committed a manifest error as to the identity of the new owner of the plant . The rolling mill was in fact consigned not to Sacilor but to Dillinger Huettenwerke in the Saarland .  31 . This point seems to be accepted but it too is not of such a nature as to call into question the validity of the decision adopted by the Commission on 10 March 1986 .  32 . It is not disputed that at that point the plant in question had undergone a change of ownership within the meaning of Article 9 ( 4 ). Consequently, Cockerill-DRC had ceased to be the holder of the plant' s reference production and quantities and the corresponding quotas, and these had passed to the new owner .  33 . There was therefore no manifest error on the Commission' s part on this vital point . It follows that even if the contested decision were to be declared void because of error as to the identity of the owner, such a decision could not have the effect of restoring to Cockerill-DRC SA the quotas corresponding to the rolling mill which it sold .  34 . Furthermore, no proof has been furnished that Sacilor is not or is no longer the owner of the plant . Even if this were the case the sole result would be that the Commission would be under an obligation to take a new decision on the basis of Article 9 ( 4 ) recording the transfer of the reference production and quantities concerned to the new owner . Even if it were certain that Dillinger Huettenwerke had become the owner of the plant before 10 March 1986, the date of the contested decision, the applicant would still have no interest in applying to have the decision declared void, whether on the ground that the decision withdrew reference production and quantities from the applicant, since at that time it was no longer the owner of the plant, or on the ground that it allocated them to Sacilor . Only the "true" owner would have such an interest .  35 . This claim thus cannot be upheld either .  36 . Finally, the applicants argue that the Commission' s decision caused them harm .  37 . Since this contention cannot at this stage constitute an application for damages ( see supra, issue of admissibility ) there is no need to determine whether the conditions for any grant of compensation are fulfilled ( fault, harm, causation ).  38 . It must be treated as an additional argument against the legality of the decision of 10 March 1986, in support of the claim that that decision should be declared void .  39 . Given that in view of the circumstances the Commission simply implemented the legal conclusions flowing automatically from Article 9 ( 4 ) of Decision No 234/84/ECSC its decision of 10 March 1986 was not capable of causing harm to the applicant .  40 . By selling Cockerill-DRC SA' s plant the liquidators also, by virtue of the applicable legislation, sold the corresponding reference production and quantities; they were therefore not in a position to dispose of them at a later date since to do so would be to "circumvent such a transfer of references" contrary to the last sentence of the first subparagraph of Article 9 ( 4 ).  41 . If, therefore, harm was suffered it was suffered as a result of Decision No 234/84/ECSC itself, Articles 9 ( 4 ) and 15 of which prevent an undertaking from separately transferring plant and the corresponding reference production and quantities . However, the applicant has not alleged that either one of these provisions is unlawful and at first reading it is difficult to see what foundation there could be for such an allegation .  42 . Moreover, as the harm consists mainly in the fact that Cockerill-DRC SA' s liquidators were not able to sell the references to Cockerill Sambre ( who had offered them FF*1*500*000 ) they should in fact have challenged the Commission' s decision of 27 September 1985 refusing that sale ( see Annex 13 to the Commission' s written observations in Case 48/86*R ).  43 . It therefore appears to me that none of the grounds put forward by the applicant against the legality of the contested decision of 10 March 1986 can be upheld .  44 . I therefore propose that the Court should dismiss the present application and order the applicant to pay the costs, including the costs relating to application 48/86*R in so far as that application concerned the suspension of the operation of the decision of 10 March 1986, such costs having been reserved until the judgment in Case 100/86 by the order of 18 June 1986 removing Case 48/86 from the Register .  (*) Language of the Case : French .  ( 1 ) Commission Decision No 234/84/ECSC of 31 January 1984 on the extension of the system of monitoring and production quotas for certain products of undertakings in the steel industry ( Official Journal 1984, L 29, p . 1 ).  ( 2 ) See for example the judgment of 23 February 1961 in Case 30/59 De Gezamenlijke Steenkolenmijnen in Limburg v High Authority (( 1961 )) ECR 1, in particular at p . 17 : "If the Court entertains the application it may not dictate to the High Authority the decisions which should be consequent upon the judgment annulling the decision but the Court must confine itself to referring the matter back to the High Authority ".  ( 3 ) Judgment of 10 June 1986 in Joined Cases 81 and 119/85 Usinor v Commission (( 1986 )) ECR 1777, at paragraph 24 .  ( 4 ) See Sacilor' s letter to the Commission of 13 November 1985, Annex 16 to the written observations of the Commission in Case 48/86*R .  ( 5 ) Commission Decision No 2177/83/ECSC of 28 July 1983 on the extension of the system of monitoring and production quotas for certain products of undertakings in the steel industry ( Official Journal 1983, L 208, p . 1 ).