CELEX: 61999CJ0176
Language: en
Date: 2003-10-02 00:00:00
Title: Judgment of the Court (Fifth Chamber) of 2 October 2003. # ARBED SA v Commission of the European Communities. # Appeal - Agreements and concerted practices - European producers of beams - Notification of the statement of objections. # Case C-176/99 P.

Case C-176/99 P ARBED SAvCommission of the European Communities
            «(Appeal – Agreements and concerted practices – European producers of beams – Notification of the statement of objections)»
            
               
                  Opinion of Advocate General Stix-Hackl delivered on 26 September 2002 
                     
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                  Judgment of the Court (Fifth Chamber), 2 October 2003  
                     
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            Summary of the Judgment
         
         
                  
                  ECSC – Agreements, decisions and concerted practices – Prohibited – Decision imposing a fine on a company which was not the addressee of the statement of objections following  a procedure conducted
                     exclusively against one of its subsidiaries – Infringement of the rights of the defence – Annulment
                  (  ECSC Treaty, Arts 36 and 65(1) and (5)) The principle of the rights of the defence, applicable in the context of an administrative procedure, requires, in particular,
         the inclusion in the statement of objections addressed by the Commission to an undertaking on which it intends to impose a
         penalty for infringement of competition rules of the essential factors taken into consideration against that undertaking,
         such as the facts alleged, the classification of those facts and the evidence on which the Commission relies, so that the
         undertaking may submit its arguments effectively during the administrative procedure brought against it.Given its importance, the statement of objections must specify unequivocally the legal person on whom fines may be imposed
         and be addressed to that person.A decision imposing a fine on a company must therefore be annulled for infringement of the rights of the defence where it
         is established that the statement of objections was addressed not to the company, but to one of its subsidiaries, that the
         statement of objections did not state that a fine might be imposed on the company,  that the company was denied access to
         the file on the ground that it was not the addressee of that statement and that ambiguity persisted up to the end of the procedure
         as to the legal person on whom the fines would be imposed, despite the fact that that company was aware of the statement of
         objections and of the procedure which had been initiated against that subsidiary.see paras 19-23
      

      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
            
            JUDGMENT OF THE COURT (Fifth Chamber)2 October 2003  (1)
         
         
            
         
               ((Appeal – Agreements and concerted practices – European producers of beams – Notification of the statement of objections))
               
            In Case C-176/99 P, 
            
            
             ARBED SA,   established in Luxembourg, represented by A. Vandencasteele, avocat,
            
            
            appellant, 
            
            APPEAL against the judgment of the Court of First Instance of the European Communities (Second Chamber, Extended Composition)
            of 11 March 1999 in Case T-137/94  
             ARBED  v  
             Commission  [1999] ECR II-303, seeking to have that judgment set aside,
            
            the other party to the proceedings being: 
             Commission of the European Communities,   represented by J. Currall and W. Wils, acting as Agents, assisted by J.-Y. Art, avocat, with an address for service in Luxembourg,defendant at first instance, 
            
            THE COURT (Fifth Chamber),,
            
            composed of: M. Wathelet, President of the Chamber, D.A.O. Edward, A. La Pergola, P. Jann (Rapporteur) and S. von Bahr, Judges, 
            
            Advocate General: C. Stix-Hackl, Registrar: M.-F. Contet, Principal Administrator, 
            
            
            having regard to the Report for the Hearing,after hearing oral argument from the parties at the hearing on 31 January 2002,
            
            after hearing the Opinion of the Advocate General at the sitting on 26 September 2002,
         gives the following
         
         
         Judgment
         1
            
         By application lodged at the Court Registry on 11 May 1999, ARBED SA brought an appeal under Article 49 of the ECSC Statute
         of the Court of Justice against the judgment of the Court of First Instance of 11 March 1999 in Case T-137/94  
          ARBED  v  
          Commission  [1999] ECR II-303 (
         the judgment under appeal), by which the Court of First Instance dismissed in part ARBED's application for, inter alia, annulment of Commission Decision
         94/215/ECSC of 16 February 1994 relating to a proceeding pursuant to Article 65 of the ECSC Treaty concerning agreements and
         concerted practices engaged in by European producers of beams (OJ 1994 L 116, p. 1) (
         the contested decision). By that decision, the Commission imposed a fine on the appellant under Article 65 of the ECSC Treaty. 
         
            
               Facts and the contested decision
            
         
         2
            
         According to the judgment under appeal, the European steel industry underwent, from 1974 onwards, a crisis characterised by
         a fall in demand giving rise to problems of excess supply and capacity and low prices. 
         
         
         3
            
         In 1980, after having attempted to manage the crisis by way of unilateral voluntary commitments given by undertakings as regards
         the amount of steel put on the market and minimum prices (
         the Simonet Plan) or by fixing guide and minimum prices (
         the Davignon Plan, the  
         Eurofer I agreement), the Commission declared that there was a manifest crisis within the meaning of Article 58 of the ECSC Treaty
         and imposed mandatory production quotas for, inter alia, beams. That Community system came to an end on 30 June 1988. 
         
         
         4
            
         Long before that date, the Commission had announced in various communications and decisions that the quota system was to be
         abandoned, pointing out that the end of that system would mean a return to a market characterised by free competition between
         undertakings. However, the sector continued to be affected by excess production capacity which, according to expert opinion,
         had to undergo a sufficient and rapid reduction to enable undertakings to meet world competition. 
         
         
         5
            
         From the end of the quota system, the Commission set up a surveillance system involving the collection of statistics on production
         and deliveries, monitoring of market developments and regular consultation with undertakings on the market situation and trends.
         The undertakings in the sector, some of which were members of the Eurofer trade association, thus maintained regular contact
         with DG III (Directorate-General for the  
         Internal Market and Industrial Affairs) of the Commission by way of consultation meetings. The surveillance system came to an end on 30 June 1990 and was replaced
         by an individual and voluntary information scheme. 
         
         
         6
            
         At the beginning of 1991, the Commission carried out a series of inspections in the offices of a number of steel undertakings
         and associations of undertakings in the sector. A statement of objections was sent to them on 6 May 1992. Hearings were held
         at the beginning of 1993. 
         
         
         7
            
         On 16 February 1994, the Commission adopted the contested decision, by which it found that 17 European steel undertakings
         and one of their trade associations had participated in a series of agreements, decisions and concerted practices designed
         to fix prices, share markets and exchange confidential information on the market for beams in the Community, in breach of
         Article 65(1) of the ECSC Treaty. By that decision, it imposed fines on 14 undertakings for infringements committed between
         1 July 1988 and 31 December 1990. 
         The proceedings before the Court of First Instance and the judgment under appeal
         
         8
            
         On 8 April 1994, the present appellant brought an action before the Court of First Instance for, inter alia, annulment of
         the contested decision. 
         
         
         9
            
         By the judgment under appeal, the Court of First Instance granted the present appellant's application in part and reduced
         the fine imposed on it. 
         Forms of order sought by the parties
         
         10
            
         The appellant claims that the Court should: 
         
         
         ─
            set aside the judgment under appeal; 
         
         
         
         ─
            either, as the case stands at present, annul the contested decision and order the Commission to pay the costs of both sets
            of proceedings or, in the alternative, refer the case back to the Court of First Instance and reserve the costs. 
         
         
         
         
         11
            
         The Commission contends that the Court should: 
         
         
         ─
            reject all the grounds of appeal raised by the appellant; 
         
         
         
         ─
            uphold the judgment under appeal in its entirety; 
         
         
         
         ─
            order the appellant to pay the costs of the present proceedings. 
         
         
         The grounds of appeal
         
         12
            
         The appellant raises five grounds of appeal: 
         
         1.
          infringement of the rights of the defence during the administrative procedure in so far as the Court of First Instance failed
         to censure the fact that the appellant had not received a statement of objections; 
         
         
         2.
          erroneous assessment, as regards the question whether there was a quorum, of the minutes of the Commission meeting during
         which the contested decision was adopted; 
         
         
         3.
          infringement of the right to compliance with essential procedural requirements in so far as the Court of First Instance erred
         in taking the view that the contested decision had been properly authenticated; 
         
         
         4.
          infringement of the rights of the defence during the proceedings before the Court of First Instance; 
         
         
         5.
          infringement of Article 65 of the ECSC Treaty. 
         
         
         The appealThe first ground of appeal
         
         
         13
            
         The first ground of appeal alleges infringement of the rights of the defence during the administrative procedure. It is directed
         against paragraphs 94 to 102 of the judgment under appeal, in which the Court of First Instance ruled on recital 322 of the
         grounds for the contested decision. 
         
         
         14
            
         Recital 322 states: Only TradeARBED [SA (
         TradeARBED)] took part in the various arrangements and agreements. However, TradeARBED is a sales company that sells, inter alia, beams
         on a commission basis for its parent company ARBED SA. TradeARBED receives a small percentage of the sales price for its services.
         To ensure equality of treatment, this Decision is addressed to ARBED SA, the beams-producing company in the ARBED group, and
         the turnover in the relevant products is the turnover of ARBED and not of TradeARBED.
         
         
         15
            
         Paragraphs 94 and 95 of the judgment under appeal are worded as follows: 
         
         94
            
         As regards, second, the question whether the Commission breached the applicant's rights of defence by addressing to it a decision
         imposing on it a fine calculated on the basis of its turnover, without first having formally sent it a statement of objections
         or even indicated its intention of imputing to it liability for the infringements committed by its subsidiary, the Court observes
         that the procedural rights on which the applicant relies are, in the present case, guaranteed by the first paragraph of Article
         36 of the ECSC Treaty, which provides that before imposing a pecuniary sanction as provided for in the Treaty the Commission
         must give the party concerned the opportunity to submit its comments. 
         
         
         95
            
         As to whether, in the present case, ARBED was given the opportunity to submit its comments before the [contested] decision
         was adopted, the Court finds that the Commission did not at any point in the administrative proceedings formally advise the
         applicant of its intention to impute to it liability for the conduct of TradeARBED called in question in the statement of
         objections and, accordingly, to impose on it a penalty calculated on the basis of its own turnover. The Court considers that
         such an omission could constitute a procedural irregularity capable of adversely affecting the applicant's rights of defence.
         
         
         
         16
            
         In paragraph 96 of the judgment under appeal, the Court of First Instance referred to a set of facts which had occurred during
         the administrative procedure. It continued as follows: 
         
         97
            
         It follows from all the foregoing that, in particular: (a) either ARBED or TradeARBED, as applicable, replied without distinction
         to the requests for information which the Commission addressed to TradeARBED; (b) ARBED regarded TradeARBED as merely its
         sales  
         agency or  
         organisation; (c) ARBED spontaneously regarded itself as the addressee of the statement of objections formally notified to TradeARBED,
         of which it was fully aware, and instructed a lawyer to defend its interests; (d) the applicant's lawyer presented himself
         without distinction as either counsel for ARBED or counsel for TradeARBED; and (e) ARBED was requested to provide the Commission
         with certain information concerning its turnover for the products and the period of infringement referred to in the statement
         of objections. 
          98 The Court concludes that throughout the administrative procedure there was some uncertainty as to the respective roles
         and liability of the two companies ARBED and TradeARBED, as regards both the substantive issues (see also the numerous documents
         in the Commission's file which refer sometimes to ARBED and sometimes to TradeARBED) and the procedural aspects. This confusion
         persisted up to the stage of the written procedure before the Court, since in point 1 of the application (p. 3) the applicant
         stated that it (and not TradeARBED) had replied to the statement of objections on 3 August 1992 (this assertion, which was
         described as a  
         clerical error, was rectified by the applicant's lawyer in a corrigendum of 8 April 1994).  99 In the light of that confusion, the Court also considers that the statement of objections necessarily came within ARBED's
         control, that ARBED took it for granted from the outset that the Commission was holding it liable for the conduct of its subsidiary
         TradeARBED and that, accordingly, it could not seriously imagine that the amount of the fine which it might eventually be
         required to pay, as an undertaking subject to the prohibition in Article 65 of the Treaty, would be calculated by reference
         only to TradeARBED's turnover (see also point 12 of the statement of objections, which refers to the turnover of the ARBED
         group). Indeed, it even received confirmation that that would not be the case in the form of the request for information on
         its own turnover.  100 Furthermore, ARBED was given the opportunity to submit its observations on the objections which the Commission proposed
         to uphold against TradeARBED, both through its subsidiary and by the participation in the administrative hearing of two members
         of its legal department, assisted by a lawyer who, according to the information in the file referred to above, represented
         both companies. ARBED also had the opportunity to submit its observations on the imputation of liability contemplated by the
         Commission when it was requested to provide information concerning its turnover. In that regard, the Court has already found
         that the applicant could not take that request to mean anything other than that the Commission intended to hold it liable
         for TradeARBED's conduct.  101 Having regard to all the facts of the case, moreover, the Court considers that Mr Temple Lang's letter of 30 June 1992,
         in which he stated that ARBED was not the addressee of the statement of objections and apparently denied it the right of access
         to the file for that reason, regrettable though it might be, did not in fact adversely affect the applicant's rights of defence;
         nor did the applicant put forward any plea based specifically on such a refusal. 
         
         102
            
         Having regard to all the specific circumstances of the present case, the Court therefore considers that such an irregularity
         is not such as to entail the annulment of the [contested] decision in so far as it concerns the applicant.
         
         
         
         17
            
         By its first ground of appeal, the appellant claims that the Court of First Instance was wrong to reject its plea for annulment
         of the contested decision alleging that, after having sent TradeARBED a statement of objections in which all of the objections
         were attributed to that undertaking, the Commission then took the contested decision against the appellant without first informing
         it of its intention or of the reasons which, in the Commission's opinion, justified that course of action and without giving
         the appellant an opportunity to make known its point of view on that intention and the formal reasons for it. 
         
         
         18
            
         The Commission contends that the judgment under appeal should be upheld. It submits that the Court of First Instance examined
         the question whether the failure to inform the appellant formally and expressly of the Commission's intention to impute to
         it liability for the conduct of TradeARBED was such as to constitute an infringement of the rights of the defence. After stating
         detailed reasons, the Court of First Instance found that the appellant had been given an opportunity, during the procedure
         before the Commission, to submit its point of view on that imputation. 
         Findings of the Court
         
         
         19
            
         In all proceedings in which sanctions, especially fines or penalty payments, may be imposed, observance of the rights of the
         defence is a fundamental principle of Community law which must be complied with even if the proceedings in question are administrative
         proceedings (Case 85/76  
          Hoffmann-La Roche  v  
          Commission  [1979] ECR 461, paragraph 9). 
         
         
         20
            
         That principle requires, in particular, the inclusion in the statement of objections addressed by the Commission to an undertaking
         on which it intends to impose a penalty for infringement of competition rules of the essential factors taken into consideration
         against that undertaking, such as the facts alleged, the classification of those facts and the evidence on which the Commission
         relies, so that the undertaking may submit its arguments effectively during the administrative procedure brought against it
         (see, to that effect, Case 41/69  
          ACF Chemiefarma  v  
          Commission  [1970] ECR 661, paragraph 26; Case C-62/86  
          AKZO  v  
          Commission  [1991] ECR I-3359, paragraph 29; and Joined Cases C-89/85, C-104/85, C-114/85, C-116/85, C-117/85 and C-125/85 to C-129/85
          
          Ahlström Osakeyhtiö and Others  v  
          Commission  [1993] ECR I-1307, paragraph 135). 
         
         
         21
            
         Given its importance, the statement of objections must specify unequivocally the legal person on whom fines may be imposed
         and be addressed to that person (see Joined Cases C-395/96 P and C-396/96 P  
          Compagnie Maritime Belge Transports and Others  v  
          Commission  [2000] ECR I-1365, paragraphs 143 and 146). 
         
         
         22
            
         It is common ground that, in the present case, the statement of objections did not state that fines might be imposed on the
         appellant. Moreover, as the Court of First Instance observed in paragraph 101 of the judgment under appeal, the appellant
         was not the addressee of the statement of objections and was denied a right of access to the file for that reason. 
         
         
         23
            
         While it is undisputed that the appellant was aware of the statement of objections addressed to its subsidiary TradeARBED
         and of the procedure which had been initiated against that subsidiary, it cannot be concluded from that fact that the appellant's
         rights of defence were not infringed. Ambiguity as to the legal person on whom the fines would be imposed, which could have
         been dispelled only by properly addressing a fresh statement of objections to the appellant, persisted up to the end of the
         administrative procedure. 
         
         
         24
            
         It follows that the Court of First Instance was wrong to conclude from the facts of the present case, in paragraph 102 of
         the judgment under appeal, that the failure to address a statement of objections to the appellant was not such as to entail
         annulment of the contested decision, in so far as it concerned the appellant, on the ground of infringement of the rights
         of the defence. 
         
         
         25
            
         Since the first ground of appeal is well founded, the judgment under appeal must be set aside without its being necessary
         to examine the other grounds of appeal. 
         The action on the substance
         
         26
            
         Under Article 61 of the Statute of the Court of Justice, if an appeal is well founded and the Court of Justice quashes the
         decision of the Court of First Instance, it may itself give final judgment in the matter, where the state of the proceedings
         so permits. That is the case here. 
         
         
         27
            
         It follows from paragraphs 19 to 23 of this judgment that the action is well founded and that the contested decision must
         be annulled in so far as it concerns the appellant. 
         
         Costs
         28
            
         Under the first paragraph of Article 122 of the Court's Rules of Procedure, where an appeal is well founded and the Court
         itself gives final judgment in the case, the Court must make a decision as to costs. Under Article 69(2) of those Rules, which
         applies to appeal proceedings by virtue of Article 118, the unsuccessful party must be ordered to pay the costs if they have
         been applied for in the successful party's pleadings. 
         
         
         29
            
         The Commission has been unsuccessful in its defence and the appellant has applied for costs to be awarded against the Commission.
         The Commission must therefore be ordered to pay the costs of both the proceedings before the Court of First Instance and the
         present appeal proceedings. 
         
         On those grounds, 
         
         
         
            
            THE COURT (Fifth Chamber)
         
         
         hereby: 
         
            
            1.
              Annuls the judgment of the Court of First Instance of 11 March 1999 in Case T-137/94  
                ARBED  v  
                Commission ;  
            
            
            2.
               Annuls Commission Decision 94/215/ECSC of 16 February 1994 relating to a proceeding pursuant to Article 65 of the ECSC Treaty
               concerning agreements and concerted practices engaged in by European producers of beams in so far as it concerns ARBED SA; 
            
            
            3.
              Orders the Commission of the European Communities to pay the costs of both the proceedings before the Court of First Instance
               and the present appeal proceedings.  
            
            
                  Wathelet
               
               
                  Edward 
               
               
                  La Pergola 
               
            
                  Jann
               
               
                  von Bahr 
               
               
                  
               
            
                  
               
               
                  
               
               
                  
               
            
                  
               
               
                  
               
               
                  
               
            
                  
               
               
                  
               
               
                  
               
            
            
            
            
            
            
            
            
         
         
         Delivered in open court in Luxembourg on 2 October 2003. 
         
         
         
         
                  R. Grass 
               
               
                  M. Wathelet  
               
            
         
         
         
                  Registrar
               
               
                  President of the Fifth Chamber
               
            
      
      
          1 –
            
             Language of the case: French.