CELEX: C1998/072/15
Language: en
Date: 1998-03-07 00:00:00
Title: Appeal brought on 7 January 1998 by British Steel plc against the judgment delivered on 24 October 1997 by the First Chamber (Extended Composition) of the Court of First Instance of the European Communities in Case T-243/94 between British Steel plc, supported by SSAB Svenskt Stål AB and Det Danske Stålvalseværk A/S and the Commission of the European Communities, supported by the Council of the European Union, the Italian Republic, the Kingdom of Spain and Ilva Laminati Piani SpA (Case C-1/98 P)

C 72/8                EN                 Official Journal of the European Communities                                     7.3.98
Pleas in law and main arguments adduced in support:                 Appeal brought on 7 January 1998 by British Steel plc
                                                                    against the judgment delivered on 24 October 1997 by
                                                                    the First Chamber (Extended Composition) of the Court
Actionable measure                                                  of First Instance of the European Communities in Case
                                                                    T-243/94 between British Steel plc, supported by SSAB
The Kingdom of Spain challenges Commission                         Svenskt Stål AB and Det Danske Stålvalsevñrk A/S and
Guidelines' intended to help its departments to implement           the Commission of the European Communities, supported
Article 24 of Regulation (EEC) No 4253/88. None the                 by the Council of the European Union, the Italian
less, despite the term used by the institution which drafted        Republic, the Kingdom of Spain and Ilva Laminati Piani
the contested act, the Kingdom of Spain considers that it                                        SpA
constitutes an actionable measure within the meaning of                                    (Case C-1/98 P)
Article 173 of the EC Treaty as interpreted by the Court
of Justice.                                                                                  (98/C 72/15)
Lack of competence of the Commission
                                                                    An appeal against the judgment delivered on 24 October
                                                                    1997 by the First Chamber (Extended Composition) of the
Article 24 of Regulation (EEC) No 4253/88 only confers              Court of First Instance of the European Communities in
on the Commission the power to reduce, suspend or                   case T-243/94 between British Steel plc, supported by
cancel assistance if an operation or measure appears to             SSAB Svenskt Stål AB and Det Danske Stålvalsevñrk A/S
justify only part of the assistance allocated and if there is       and the Commission of the European Communities,
an irregularity or a significant change affecting the nature        supported by the Council of the European Union, the
or conditions of the operation or measure for which the             Italian Republic, the Kingdom of Spain and Ilva Laminati
Commission's approval has not been sought.                          Piani SpA, was brought before the Court of Justice of the
                                                                    European Communities on 7 January 1998 by British Steel
                                                                    plc, represented by Messrs Richard Plender QC and
The sole object of the power conferred by Article 24 on
                                                                    William Sibree, solicitor of the Supreme Court, with an
the Commission to reduce, suspend or cancel assistance is
                                                                    address for service in Luxembourg at the Chambers of
to prevent such assistance being directed to something
                                                                    Elvinger, Hoss and Prussen, 15 Côte d'Eich.
other than that for which it was allocated. The power
conferred on the Commission was in no way intended to
serve as a means of penalising the failure of Member
States to fulfil their obligations under Article 23 of the          The Appellant claims that the Court should:
Regulation.
                                                                    (i)   quash the decision of the Court of First Instance;
The Commission may not resort to its powers under
Article 24 in order to impose economic sanctions upon
Member States for failure to fulfil other provisions. The           (ii) annul Commission Decisions 94/258/ECSC (1) and
Commission only has the power to allocate and, therefore,                 94/259/ECSC (2) of 12 April 1994; and
except where there exists a specific provision conferring
upon it actual powers to impose penalties, should Member
States fail to fulfil their obligations under Article 23, the
                                                                    (iii) order the Commission to pay the Appellant's costs in
Commission only has available the general procedure
                                                                          the Court of Justice and in the Court of First
under Article 169 of the EC Treaty, whose only object is
                                                                          Instance.
to find that a Member State has breached Community law
and that it should bring such infringement to an end,
without involving the application of a pecuniary sanction,
save in the case of failure to comply with a judgment as            Alternatively, in case the Court of Justice should consider
provided for in Article 171 of the EC Treaty.                       that the state of the proceedings does not permit it to give
                                                                    final judgment in the matter, the Appellant requests the
                                                                    Court to refer the case back to the Court of First Instance
Failure to provide a statement of reasons                           for judgment and reserve the costs.
When it adopted the guidelines' which the Kingdom of
                                                                    Pleas in law and main arguments adduced in support:
Spain is challenging, the Commission failed to set forth
both the reason why it took the decision to apply
economic penalties on Member States for failure to fulfil
their obligations under Article 23 of Regulation (EEC)              These proceedings raise a point which is of general
No 4253/88 and the basis on which such power to impose              importance, particularly for the Community's coal and
sanctions is based.                                                 steel industries. It may be summarised as follows.
(1) OJ L 374, 31.12.1988, pp. 1Ð14.
                                                                    When there is in force a general Decision declaring that
                                                                    aid in any form whatsoever and whether specific or non-
                                                                    specific which Member States might grant to their steel
 ---pagebreak--- 7.3.98               EN                   Official Journal of the European Communities                                           C 72/9
industries is prohibited and providing that aid to the steel         the case of aid for other purposes it stated (at
industry, whether specific or non-specific, financed by              paragraph 51):
Member States . . . may be deemed Community aid and
therefore compatible with the orderly functioning of the
common market only if it satisfies certain prescribed                the Aid Code is intended only to authorise generally, and
conditions for specified categories of aid, can the                  subject to certain conditions, derogations from the
Commission       lawfully     make     individual    Decisions       prohibition of aid for certain categories which it lists
authorising the grant of State aid which does not fall               exhaustively . . . Aid not falling into categories which the
within any of those categories?                                      Code exempts from that prohibition thus remain subject
                                                                     exclusively to Article 4(c). It follows that where such aid
                                                                     nevertheless proves necessary to attain the objectives of
                                                                     the Treaty, the Commission is empowered to rely on
The Appellant submits that that answer to the question is
                                                                     Article 95 of the Treaty in order to deal with that
No'. The Aid Code in force at the material time was the
                                                                     unforeseen situation, if need be by means of an individual
Fifth Steel Aid Code adopted on 27 November 1991 by
                                                                     decision.'
Commission Decision 3855/91/ECSC (3). Article 1
provided that
                                                                     The Appellant submits that the statement is incorrect. The
                                                                     principle whereby the Commission is not empowered to
Aid to the steel industry, whether specific or non-specific,        authorise State aid to the steel industry in such a situation
financed by Member States or their regional or local                 may be characterised as a case of lack of competence.
authorities or through State resources in any form
whatsoever may be deemed Community aid and therefore
compatible with the orderly functioning of the common                (1) concerning aid to be granted by Spain to the public integrated
                                                                         steel company Corporación de la Siderurgia Integral (OJ L 112,
market only if it satisfied the provisions of Articles 2 to 5'.
                                                                         3.5.1994, p. 58).
                                                                     (2) concerning aid to be granted by Italy to the public steel sector
                                                                         (Ilva group) (OJ L 112, 3.5.1994, p. 64).
                                                                     (3) OJ L 362, 31.12.1991, p. 57.
Articles 2 to 5 provided that aid might be considered
compatible with the common market when granted for
research and development (Article 2), environmental
protection (Article 3), closures (Article 4) and general
regional aid schemes in Greece, Portugal and the former
GDR (Article 5).
                                                                     Reference for a preliminary ruling from the Hof van
                                                                     Beroep, Ghent, by order of that court of 18 December
By its Decisions 94/258/ECSC and 94/259/ECSC of                      1997 in the case of Openbaar Ministerie v. D.R.C.
12 April 1994, the Commission purported to authorise aid                                    Schacht and others
to the Italian and Spanish public steel industries which fell
outside the provisions of Articles 2 to 5. The purpose of                                     (Case C-3/98)
the Fifth Steel Aid Code was to prohibit the authorisation                                     (98/C 72/16)
of such aid; and it was not open to the Commission to
authorise it, during the currency of the Code, without any
amendment of the latter. This answer is compelled by
practical as well as legal considerations. If the                    Reference has been made to the Court of Justice of the
Commission could authorise individual grants of State aid,           European Communities by an order of the Hof van
in the face of the terms of the Aid Code, the prohibition            Beroep (Court of Appeal) of 18 December 1997, which
contained in that Code would be ineffective: indeed, it              was received at the Court Registry on 9 January 1998, for
would be writ in water'.                                            a preliminary ruling in the case of Openbaar Ministerie
                                                                     (Office of the Public Prosecutor) v. D.R.C. Schacht on the
                                                                     following question:
The Court of First Instance, on the other hand, concluded
(at paragraph 50 of the judgment) that
                                                                     Must Article 14a(1)(a) in conjunction with Article 1(a)(i)
                                                                     of Council Regulation (EEC) No 1408/71 on the
                                                                     application of social security schemes to employed
the [Fifth Steel Aid] Code constitutes a binding legal              persons, to self-employed persons and to members of their
framework only for the types of aid enumerated by it                 families moving within the Community be interpreted as
which are compatible with the Treaty'.                               meaning that a normally self-employed person who is
                                                                     temporarily working in another Member State, retains his
                                                                     status as a self-employed person during the period of the
                                                                     continuing application to him of the legislation of the
(that is, aid for research and development, environmental            Member State in which he usually works, in accordance
protection, closures and general regional aid schemes). In           with the provisions of the applicable legislation, so that it