CELEX: 61992CO0040
Language: en
Date: 1992-05-22 00:00:00
Title: Order of the President of the Court of 22 May 1992. # Commission of the European Communities v United Kingdom. # Special rights of the Milk Marketing Boards - Skimmed and semi-skimmed milk. # Case C-40/92 R.

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61992O0040

Order of the President of the Court of 22 May 1992.  -  Commission of the European Communities v United Kingdom.  -  Special rights of the Milk Marketing Boards - Skimmed and semi-skimmed milk.  -  Case C-40/92 R.  

European Court reports 1992 Page I-03389

SummaryPartiesGroundsOperative part
Keywords

++++Application for interim measures ° Interim measures ° Conditions of granting ° Urgency ° Measures taken and undertakings given at national level to guarantee maintenance of the status quo ° No urgency  (EEC Treaty, Art. 186; Rules of Procedure, Art. 83(2))  

Summary

If, in proceedings for interim measures brought by the Commission in the context of an action for failure to fulfil obligations, the defendant Member State claims that the application for interim measures should be dismissed on the ground that, in its view, measures taken and undertakings given at national level are sufficient to preserve the status quo, that Member State thereby guarantees that those measures and undertakings will be respected and will not be revoked or varied before the Court has given judgment in the main proceedings.  Where it has not been shown in what respect the interim measures applied for would be such as to afford a significantly greater guarantee that the status quo will be maintained than the measures already taken and undertakings already given at national level, there is no need, given the absence of urgency, to order interim measures.  

Parties

In Case C-40/92 R,  Commission of the European Communities, represented by Peter Gilsdorf, Principal Legal Adviser, and Christopher Docksey, of the Commission' s Legal Service, acting as Agents, with an address for service in Luxembourg at the office of Roberto Hayder, a representative of the Commission' s Legal Service, Wagner Centre, Kirchberg,  applicant,  v  United Kingdom of Great Britain and Northern Ireland, represented by John Collins, Treasury Solicitor, acting as Agent, assisted by Stephen Richards and Rupert Anderson, Barristers-at-law, with an address for service in Luxembourg at the British Embassy, 14 Boulevard Roosevelt,  defendant,  APPLICATION for interim measures, in particular an order that the United Kingdom take such action as is necessary to restrain the Milk Marketing Board of England and Wales and the Milk Marketing Board of Northern Ireland from taking or maintaining certain action or threatened action against dairy farmers and dairies designed to extend the Boards' exclusive rights to purchase milk to skimmed and semi-skimmed milk,  THE PRESIDENT OF THE COURT  makes the following  Order  

Grounds

1 By an application lodged at the Court Registry on 13 February 1992, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty seeking, inter alia, a declaration that, by failing to take the necessary measures to ensure that the Milk Marketing Boards ("MMBs") do not exceed the exclusive rights granted to them only in relation to whole milk, by failing to prevent the MMBs from restricting the possibilities of producers to produce and market milk products outside those exclusive rights, by failing to supervise the MMBs and by failing to ensure that competition is not affected more than is absolutely necessary, the United Kingdom has failed to fulfil its obligations under Regulation (EEC) No 804/68 of the Council of 27 June 1968 on the common organization of the market in milk and milk products (OJ, English Special Edition 1968 (I), p. 176), as amended by Council Regulation (EEC) No 1421/78 (OJ 1978 L 171, p. 12) and Council Regulation (EEC) No 1422/78 of 20 June 1978 concerning the granting of certain special rights to milk producer organizations in the United Kingdom (OJ 1978 L 171, p. 14). In the alternative, in the event that the Court should hold that skimmed and semi-skimmed milk falls within the scope of the exclusive rights of the MMBs, the applicant seeks a declaration that the producers and/or processors who have relied upon the interpretation of Community law that was accepted by the United Kingdom until its change of position in June 1991, namely that skimmed and semi-skimmed milk falls outside the scope of MMB operations, enjoy a legitimate expectation to carry on trading in low-fat milk outside the exclusive purchasing rights of the MMB of England and Wales and of the MMB of Northern Ireland for a reasonable period and at least up to the date of the judgment of the Court.  2 By a separate document, lodged at the Court Registry on the same date, the Commission submitted an application for interim measures under Article 186 of the EEC Treaty and Article 83 of the Rules of Procedure, asking the Court to order the United Kingdom to take such action as is appropriate and necessary to restrain the MMB of England and Wales and the MMB of Northern Ireland from asserting, imposing or pursuing any restriction, levy, fine, legal proceeding or threat thereof of whatsoever nature concerning the production and/or marketing of skimmed and semi-skimmed milk by the dairy farmers and dairies concerned who have relied in terms of their production, investment or financial planning upon the long-established understanding of the scope of the exclusive rights of the MMBs before the changes in policy by the MMBs and the United Kingdom, until such time as the Court has the opportunity to pronounce judgment in the main proceedings. The application for interim measures also asks the Court to order the United Kingdom to cooperate with the Commission in laying down interim guidelines concerning the area of agreement between the parties on genuine contract processing as soon as possible.  3 The defendant submitted written observations on the application for interim measures on 11 March 1992 and the parties were heard in oral argument on 30 March 1992.  4 Before considering whether the application for interim measures is justified, it is appropriate briefly to set out the antecedents of the case and its legal context.  5 Article 25 of Regulation (EEC) No 804/68 of the Council on the common organization of the market in milk and milk products, as amended by Council Regulation No 1421/78, provides that, at its request and on certain conditions, a Member State may be authorized to grant to a producers' organization the exclusive right to buy milk produced and marketed without processing from producers established in the area in which the organization carries out its activities. That exclusive right is coupled with an obligation on the part of the organization to buy milk offered to it by the producers concerned.  6 Article 1 of Council Regulation (EEC) No 1422/78 concerning the granting of certain special rights to milk producer organizations in the United Kingdom states that, as regards the United Kingdom, the conditions referred to in Regulation No 804/68 are at present fulfilled, and provides that the United Kingdom may therefore be authorized to grant the rights set out in Article 25 of Regulation No 804/68 to five existing producer organizations (MMBs) covering England, Wales, Scotland and Northern Ireland. Regulation No 1422/78 also lays down certain conditions regarding those organizations' exercise of their special rights; in particular, those rights may not apply to quantities of milk which the producer withholds from sale to the MMB either by agreement with that organization or with a view to marketing it in another Member State or in a non-member country.  7 By Regulation (EEC) No 1565/79 of 25 July 1979 laying down rules for implementing Regulation (EEC) No 1422/78 concerning the granting of certain special rights to milk producer organizations in the United Kingdom (OJ 1979 L 188, p. 29), the Commission authorized the United Kingdom to grant the rights set out in Article 25 of Regulation No 804/68 to the five MMBs in question.  8 It appears from the preambles to the aforementioned regulations and from the case-file that MMBs are statutory bodies established under United Kingdom law which, since 1933, have had rights similar to those conferred by the Community rules.  9 By letter dated 22 February 1991 from the Director-General for Agriculture the Commission drew the United Kingdom authorities' attention to the fact that, according to complaints received by the Commission, the England and Wales MMB had decided that milk marketed in liquid form by producers fell within its exclusive right to purchase milk irrespective of its fat content and that producers having their milk processed by dairies under contract processing arrangement were in breach of the MMB' s exclusive right, since the milk was to be regarded as having been marketed when it left the producer' s possession. The Commission pointed out that, in 1987 and again in 1988, that MMB had urged it, through the United Kingdom authorities, to include skimmed and semi-skimmed milk within its exclusive right in view of its increasing commercial importance. On two occasions the Commission stressed the difficulties which would be involved in modifying the relevant Community regulations, since it took the view that the exclusive purchasing powers conferred on the MMBs by Article 25 of Regulation No 804/68 could cover only whole milk marketed by producers.  10 By letter dated 7 March 1991, the United Kingdom Permanent Representation informed the Commission that the United Kingdom authorities themselves had been surprised at the position statement of the MMB of England and Wales. It was based on interpretations of the law concerning the MMBs which were in some important respects contrary to the views of both the United Kingdom authorities and the Commission, which had been put very clearly to the MMB. It appears from that letter that as a result the United Kingdom authorities had asked the MMB in question to withdraw its position statement.  11 On 19 April 1991 the MMB of England and Wales announced in a press statement that at that time it did not intend to bring legal proceedings in respect of low-fat milk against producers who processed that milk themselves. However, the press statement contained a warning to producers that the MMB' s position could be altered as a result of changes affecting its operations and that the MMB reserved its rights against producers whom it considered to be in breach of the law.  12 On 8 May 1991 the Commission sent the United Kingdom a formal letter of notice pursuant to Article 169 of the Treaty in which it drew attention among other things to the obligation imposed on the United Kingdom authorities by Article 10 of Council Regulation No 1422/78 to take the necessary measures for continuing supervision of compliance by the MMBs with Community rules.  13 By letter dated 21 June 1991, the United Kingdom authorities informed the Commission that they had reviewed the legal position with regard to the extent of the MMBs' exclusive rights and reached the conclusion that "milk produced and marketed without processing", to which according to Article 25 of Council Regulation No 804/68 those rights relate, meant all forms of liquid milk for direct human consumption. The United Kingdom authorities took the view that consequently skimmed and semi-skimmed milk was covered by those exclusive rights and that the MMB of England and Wales together with the MMB of Northern Ireland, about which complaints had also been made to the Commission, were justified in asserting their rights against the producers and dairies concerned.  14 On 23 September 1991 the Commission sent a reasoned opinion to the United Kingdom authorities. In it, the Commission describes the increasing pressures and intimidation brought to bear by the two MMBs in question on producers marketing their milk in skimmed and semi-skimmed form and on dairies producing such milk on producers' behalf, and asks the United Kingdom authorities to take all the measures necessary to restrain the MMBs and preserve the status quo until such time as the dispute has been resolved by the Court of Justice.  15 It appears from the documents before the Court that on 8 October 1991 the MMB of England and Wales sent producers marketing their own skimmed and semi-skimmed milk a letter asking them to sign a withholding agreement enclosed with the letter in order to exclude the milk in question from compulsory delivery to the MMB. Under the withholding agreement, the producer undertakes to pay, in respect of each litre of skimmed or semi-skimmed milk sold commencing on 1 January 1992, a contribution to be determined by the MMB. However, the agreement provides that the amount owing is not to become payable until either the Court of Justice decides, or the Commission ceases to contest, that skimmed or semi-skimmed milk is within the MMB' s exclusive right. It is stipulated that the agreement is to be deemed to be void ab initio in the event that the Court of Justice decides that the milk is not within the MMB' s exclusive right.  16 By letter dated 6 November 1991, the MMB of England and Wales notified the producers in question that, on the basis that the Commission would not apply for interim measures against the United Kingdom to prevent the MMB from asserting its alleged rights over skimmed and semi-skimmed milk, the MMB would not issue any proceedings or take any disciplinary action against producers who had not signed the withholding agreement but who were selling skimmed and semi-skimmed milk as of 6 November 1991. In addition, that letter asked producers who had relied on assurances given by the MMB or by its staff in making investment decisions to get in touch with the organization with a view to a possible claim for compensation.  17 As far as Northern Ireland is concerned, it further appears from the case-file that as from April 1991 the MMB of Northern Ireland has been involved in legal proceedings in the High Court of Justice in Northern Ireland against Strathroy Milk Marketing, an undertaking which, it appears, markets considerable quantities of skimmed and semi-skimmed milk produced under contracts concluded with an increasing number of producers who have withheld their milk from compulsory delivery to the MMB. In the course of those proceedings the High Court made an interlocutory order on 1 July 1991 in which it took note of the MMB' s undertaking to pay if necessary damages for any loss (including loss of earnings) that the defendant undertaking or its producers might sustain and ordered Strathroy Milk Marketing to limit its sales of skimmed and semi-skimmed milk in Great Britain and Northern Ireland to 17 million and 2.1 million litres respectively until the end of the main proceedings.  18 It should be noted that under Article 186 of the EEC Treaty the Court may in any cases before it prescribe any necessary interim measures.  19 According to Article 83(2) of the Rules of Procedure, in order for there to be a decision ordering interim measures such as those sought in this case, there must be circumstances giving rise to urgency and pleas of fact and law establishing a prima facie case for the interim measures applied for. As the Court has consistently held, the urgency of an application for interim measures, such as that made in this case, must be assessed in relation to the necessity for an order granting interim relief in order to prevent serious and irreparable damage being caused.  20 With regard to the urgency, the Commission argues that the unlawful and sudden change of policy by the MMB of England and Wales and by the MMB of Northern Ireland, which was approved by the United Kingdom authorities, frustrates the legitimate expectation of economic operators who, before this application for interim measures was brought, based themselves, as regards their existing or planned production of skimmed and semi-skimmed milk, on the recently accepted interpretation of the relevant rules. The Commission takes the view that, for the economic operators concerned, it is imperative to preserve the status quo through the interim measures applied for.  21 As far as concerns England and Wales, the Commission argues that the position announced by the relevant MMB with regard to producers marketing their own skimmed and semi-skimmed milk ° even supposing that it is maintained after the application for interim measures is brought ° is not sufficient in order to maintain the status quo. The threat of having to pay retroactively from 1 January 1992 a contribution in respect of sales of skimmed and semi-skimmed milk is itself a threat to the financial viability of the producers concerned, which are small businesses operating with tight profit margins in a highly competitive market. As a result, those producers' economic survival is threatened. This is all the more true of producers who have their skimmed and semi-skimmed milk processed and marketed by dairies. Those producers are not covered by the MMB' s declaration of intent and are faced with threatened legal proceedings and the threat of having to pay a levy to the MMB at any time. The same is true of the dairies which produce low-fat milk for those producers, since they may be faced at any time with legal proceedings which they would have difficulties in defending themselves against in view of the costs.  22 As far as Northern Ireland is concerned, the Commission maintains that the interlocutory injunction granted on 1 July 1991 against the only independent dairy in the region limits its outlets unjustifiably and debars producers linked to that dairy from increasing their production. In addition, the eight processors in the region who market their own skimmed and semi-skimmed milk are threatened with the prospect of legal proceedings being brought at any time by the Northern Ireland MMB.  23 The defendant maintains, in common with the Commission, that it is necessary to preserve the status quo pending the Court' s judgment. It also argues, however, that the Community rules confer rights not only on producers but also on the MMBs and that the status quo has to safeguard the interests of all the parties involved. The defendant considers that, at present, the status quo is adequately safeguarded by the measures taken and the undertakings given at national level.  24 As far as concerns England and Wales, the defendant observes that the MMB has undertaken to maintain its position as set out in its aforementioned letter of 6 November 1991 with regard to producers who market their own skimmed and semi-skimmed milk. The MMB will require those producers to pay the contribution applicable as from 1 January 1992 only if the present interpretation of the United Kingdom authorities is approved by the Court of Justice. The defendant further observes that, as regards producers who have their skimmed and semi-skimmed milk processed and marketed by dairies to which they entrust those activities, the relevant MMB has undertaken to refrain from taking any new legal proceedings, except in respect of processing contracts which, on the basis of the criteria set out by the Commission itself in its application for interim measures, simply constitute artifices designed to circumvent the MMB' s exclusive rights, that it to say where the producer has no interest in the dairy in question and exercises no control over its activities. In those cases where proceedings have already been issued against such producers or dairies, the MMB of England and Wales has undertaken to take no further procedural steps.  25 As far as Northern Ireland is concerned, the defendant maintains that producers delivering their milk to Strathroy Milk Marketing initially declared that they were withholding their production from compulsory delivery to the MMB for export. Legal proceedings against the dairy were taken only after it announced that, notwithstanding the producers' declarations, the skimmed and semi-skimmed milk produced would be marketed in Great Britain and Northern Ireland. The interlocutory injunction granted by the High Court of Justice in Northern Ireland on 1 July 1991 adequately preserves the status quo in that the limitation on the quantities marketed precludes the recruitment of new producers by Strathroy Milk Marketing. Lastly, a small number of producers in Northern Ireland market their own production of skimmed and semi-skimmed milk, but none of them pay a contribution to the relevant MMB. The MMB has undertaken not to require those producers to pay contributions pending a ruling by the Court of Justice in favour of the defendant' s present interpretation.  26 The defendant argues that in these circumstances the Court should not grant the interim measures applied for.  27 It is appropriate to observe in the first place that, if the defendant claims that the application for interim measures should be dismissed on the ground that, in its view, the measures taken and the undertakings given at national level are sufficient to preserve the status quo, that party thereby guarantees that those measures and undertakings, as described in paragraphs 24 and 25 above, will be respected by the MMBs and will not be revoked or varied before the Court has given judgment in the main proceedings.  28 It should be observed secondly that, in relation to the situation resulting from the measures taken and the undertakings given at national level, the interim measures applied for would mean, among other things, that the MMBs concerned would be debarred from obtaining from producers already marketing skimmed and semi-skimmed milk payment of contributions in respect of the period up to the date of the Court' s judgment, even if that judgment upheld the MMBs' interpretation.  29 The Commission considers that it is necessary, in interlocutory proceedings, to protect those producers' legitimate expectation with regard to the extent of the MMBs' exclusive rights, since the mere threat of having to pay retroactively the contribution announced by the MMBs is capable of causing damage to those producers. However, it should be pointed out that the judge dealing with applications for interim relief may not prejudge the Court' s judgment by securing an interested party definitively against the effects which may ensue from the judgment as regards the period prior to its delivery. Moreover, in the alternative form of order sought in its main application, the Commission specifically asks the Court to declare that those producers' legitimate expectation should be protected and that they should be allowed to continue to market skimmed and semi-skimmed milk outside the MMBs' exclusive rights, that is to say without having to pay them any contribution, at least until judgment has been given in the main proceedings. With regard to this point, the application for interim measures made by the Commission is tantamount to a request to grant the claims made in the main proceedings at the stage of the interlocutory proceedings.  30 In addition, there is a discrepancy between the interim measures sought and the measures taken and the undertakings given at national level in so far as they relate not only to those producers who were marketing skimmed and semi-skimmed milk at the date when the application for interim measures was brought, but also to producers who have made preparations, by way of investment or financial planning, to market skimmed or semi-skimmed milk. It is sufficient to observe in that regard that, in the absence of specific criteria, mere plans for the future marketing of skimmed and semi-skimmed milk cannot in general be granted interim protection. As the United Kingdom has emphasized, the specific situations of a dairy or of an individual producer are to be assessed in judicial proceedings at national level.  31 For the rest, the Commission has not shown in what respect the measures applied for are such as to afford a significantly greater guarantee that the status quo will be maintained than the measures already taken and the undertakings already given at national level.  32 It should therefore be held that, in view of those measures and undertakings, the requirement as to urgency is not satisfied and that therefore the application for interim measures must be dismissed.  33 It must, however, be observed that this order may be varied under Article 87 of the Rules of Procedure at any time on account of a change in circumstances.  

Operative part

On those grounds,  THE PRESIDENT OF THE COURT  hereby orders:  1. The application for interim measures is dismissed.  2. The costs are reserved.  Luxembourg, 22 May 1992.