1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 16 JULY 1982 THE COMPANY LUCCHINI SIDERURGICA SPA , BRESCIA , BROUGHT AN ACTION UNDER ARTICLES 33 AND 36 OF THE ECSC TREATY FOR A DECLARATION THAT THE INDIVIDUAL DECISION OF THE COMMISSION OF 11 JUNE 1982 IMPOSING ON IT A FINE UNDER ARTICLE 58 OF THE ECSC TREATY AND UNDER THE GENERAL DECISION NO 2794/80 OF 31 OCTOBER 1980 ESTABLISHING A SYSTEM OF STEEL PRODUCTION QUOTAS FOR UNDERTAKINGS IN THE IRON AND STEEL INDUSTRY ( OFFICIAL JOURNAL , L 291 , P . 1 ) WAS VOID .
2 THE CONTESTED DECISION STATES THAT THE APPLICANT EXCEEDED ITS PRODUCTION QUOTA FOR ROLLED PRODUCTS OF GROUP IV BY 5 488 TONNES IN THE FIRST QUARTER OF 1981 IN BREACH OF THE AFORESAID DECISION NO 2794/80 . FOR THAT REASON IT IMPOSES ON THE APPLICANT A FINE OF 5 488 BY 75 ECU = 411 600 ECU ( LIT 544 699 092 ).
3 IT SHOULD BE BORNE IN MIND THAT THE AFORESAID DECISION NO 2794/80 ESTABLISHED A SYSTEM OF STEEL PRODUCTION QUOTAS FOR UNDERTAKINGS IN THE IRON AND STEEL INDUSTRY . THE SYSTEM IS SO ARRANGED THAT THE COMMISSION ON THE BASIS OF CERTAIN REFERENCE PRODUCTION FIGURES FIXES FOR THE UNDERTAKINGS CONCERNED QUARTERLY PRODUCTION QUOTAS FOR CRUDE STEEL AND FOR FOUR GROUPS OF ROLLED PRODUCTS . THE FIRST PARAGRAPH OF ARTICLE 9 PROVIDES THAT FIRMS EXCEEDING THEIR PRODUCTION QUOTAS ARE TO BE FINED A SUM AMOUNTING GENERALLY TO 75 ECU PER TONNE OF EXCESS FOR ORDINARY STEELS .
4 IN THIS ACTION THE APPLICANT CLAIMS A DECLARATION THAT THE CONTESTED DECISION IMPOSING THE FINE IS VOID OR ALTERNATIVELY A REDUCTION OF THE FINE . FOR THAT PURPOSE IT SUBMITS THAT THERE HAS BEEN A FAILURE TO PROVIDE A SUFFICIENT STATEMENT OF THE REASONS ON WHICH THE DECISION IS BASED , A WRONG ASSESSMENT OF THE FACTS AND SPECIAL CIRCUMSTANCES . FAILURE TO STATE SUFFICIENT REASONS
5 IN THE FIRST PLACE THE APPLICANT CLAIMS THAT THERE IS NO SUFFICIENT STATEMENT OF REASONS IN THE CONTESTED DECISION INASMUCH AS THE DECISION DOES NOT SHOW THE REASONS WHICH LED THE COMMISSION TO IMPOSE A FINE OF 75 ECU PER TONNE OF EXCESS PRODUCTION . IN THAT RESPECT IT STATES THAT BOTH ARTICLE 58 ( 4 ) OF THE ECSC TREATY AND ARTICLE 9 OF DECISION NO 2794/80 GIVE THE COMMISSION A DISCRETION , WHICH IT MUST EXERCISE , IN FIXING THE FINE .
6 ON THE OTHER HAND , THE COMMISSION IS OF THE OPINION THAT ARTICLE 9 OF DECISION NO 2794/80 LEAVES IT NO DISCRETION . IT STATED DURING THE PROCEEDINGS THAT IT APPLIED THE LATTER PROVISION IN SUCH A WAY AS TO FIX THE FINE AT 75 ECU PER TONNE OF EXCESS PRODUCTION , SAVE IN CERTAIN EXCEPTIONAL CASES . AS A RESULT , NO SPECIAL STATEMENT OF REASONS IN RELATION TO THE DETERMINATION OF THE AMOUNT OF THE FINE IS NECESSARY , SAVE IN EXCEPTIONAL CASES .
7 IT SHOULD BE BORNE IN MIND THAT ACCORDING TO ARTICLE 58 ( 4 ) OF THE ECSC TREATY THE COMMISSION MAY IMPOSE UPON UNDERTAKINGS WHICH DO NOT COMPLY WITH DECISIONS TAKEN BY IT FINES NOT EXCEEDING THE VALUE OF THE TONNAGES PRODUCED IN DISREGARD THEREOF . THAT PROVISION , WHICH IS OF A GENERAL NATURE , HAS BEEN IMPLEMENTED BY THE FIRST PARAGRAPH OF ARTICLE 9 OF DECISION NO 2794/80 ACCORDING TO WHICH THE FINE TO BE IMPOSED IN THE EVENT OF THE PRODUCTION QUOTA ' S BEING EXCEEDED IS GENERALLY TO BE 75 ECU PER TONNE OF EXCESS PRODUCTION . THE DECISION THUS SPECIFIES THE CONDITIONS FOR USING THE POWER CONFERRED BY ARTICLE 58 ( 4 ) OF THE TREATY SO THAT THE COMMISSION FIXES IN ALL CASES IN WHICH QUOTAS ARE EXCEEDED A FINE EQUAL TO 75 ECU PER TONNE , SAVE IN EXCEPTIONAL CASES JUSTIFYING THE APPLICATION OF A RATE OTHER THAN THE NORMAL RATE . THE COMMISSION WAS VALIDLY ENTITLED TO EXERCISE ITS DISCRETION BY FIXING SUCH A RULE WHICH MEETS THE REQUIREMENTS OF EQUALITY WHILST LEAVING THE POSSIBILITY OPEN TO TAKE ACCOUNT OF EXCEPTIONAL SITUATIONS .
8 AS A RESULT THE VIEW MUST BE TAKEN THAT NO SPECIFIC STATEMENT OF REASONS IN RELATION TO THE RATE OF THE FINE IS NECESSARY SAVE IN EXCEPTIONAL CASES IN WHICH THE COMMISSION APPLIES A RATE OTHER THAN THE NORMAL RATE . IN FIXING THE FINE IN THIS CASE AT THE RATE OF 75 ECU PER TONNE OF EXCESS PRODUCTION THE COMMISSION ' S VIEW WAS THAT THE SERIOUSNESS OF THE INFRINGEMENT CORRESPONDED TO THE GENERAL RULE , THAT IS TO SAY THERE WERE NO CIRCUMSTANCES JUSTIFYING A DEPARTURE FROM THE NORMAL RATE . THE COMMISSION HAS THUS GIVEN ALL THE INFORMATION NECESSARY FOR THE APPLICANT TO KNOW ITS RIGHTS AND THE COURT TO EXERCISE ITS POWER OF REVIEW .
9 THAT SUBMISSION MUST THEREFORE BE REJECTED . WRONG ASSESSMENT OF THE FACTS
10 THE APPLICANT CLAIMS FURTHER THAT THE CONTESTED DECISION IS BASED ON A WRONG ASSESSMENT OF THE FACTS . THE OPERATIVE PART OF THE DECISION RECORDS AN EXCESS OF 5 488 TONNES IN GROUP IV PRODUCTS ALONE WHEREAS IN FACT THAT FIGURE IS MADE UP OF 1 157 TONNES OF GROUP II PRODUCTS AND 4 331 TONNES OF GROUP IV PRODUCTS .
11 THE COMMISSION DISPUTES THE FIGURES PUT FORWARD BY THE APPLICANT AND CONFIRMS THE STATEMENTS IN ITS DECISION WHICH ARE BASED ON THE FINDINGS OF ITS INSPECTORS . MOREOVER IT CHALLENGES THE RELEVANCE FOR THESE PROCEEDINGS OF THE ALLEGED DIFFERENCE IN FIGURES .
12 IT MUST BE OBSERVED THAT EVEN IF THE APPLICANT ' S ALLEGATIONS WERE ESTABLISHED , THAT FACT WOULD NOT BE LIKELY TO AFFECT THE FINE IN ANY WAY SINCE THE TOTAL EXCESS RECORDED IN THE DECISION IS NOT CHALLENGED AND THE RATE OF THE FINE WHICH THE COMMISSION MUST IMPOSE BY REASON OF THE EXCESS IS INDEPENDENT OF THE QUESTION WHETHER THE EXCESS PRODUCTION HAS OCCURRED IN RESPECT OF ONE GROUP RATHER THAN ANOTHER .
13 THAT SUBMISSION ALSO MUST THEREFORE BE REJECTED . THE EXISTENCE OF SPECIAL CIRCUMSTANCES
14 THE APPLICANT FURTHER MAINTAINS THAT BECAUSE OF SPECIAL CIRCUMSTANCES APPLICABLE IN ITS CASE NO FINE SHOULD HAVE BEEN IMPOSED OR AT LEAST ITS AMOUNT OUGHT TO BE REDUCED . IN THAT RESPECT IT POINTS OUT THAT IT GAVE NOTICE ITSELF OF THE EXCESS IMMEDIATELY AFTER THE END OF THE FIRST QUARTER OF 1981 , NAMELY ON 7 APRIL , WHEN IT FOUND THAT THE QUOTA HAD NOT BEEN OBSERVED . IN ITS TELEX MESSAGE IT EXPLAINED THE ABNORMAL TECHNICAL CIRCUMSTANCES WHICH HAD CAUSED THE EXCESS PRODUCTION AND OFFERED TO OFFSET IT DURING THE FOLLOWING QUARTERS . HOWEVER , THE COMMISSION DID NOT ANSWER THAT TELEX MESSAGE AND WITHOUT ANY OTHER REACTION COMMENCED ITS INQUIRY AT THE BEGINNING OF 1982 .
15 TO SHOW THE UNINTENTIONAL AND UNFORESEEABLE NATURE OF THE EXCESS PRODUCTION THE APPLICANT STATES THAT IT HAD BROUGHT INTO OPERATION IN MARCH 1981 A MODIFIED ROLLING MILL IN ITS ESTABLISHMENT AT CASTO WHICH IN THE COMMISSIONING STAGE HAD PRODUCED A GREATER OUTPUT THAN EXPECTED . IT WAS NOT POSSIBLE TO STOP OR SLOW DOWN PRODUCTION SINCE THE COMMISSIONING OF NEW PLANT REQUIRES THE FULL USE OF ITS CAPACITY IN ORDER TO ALLOW THE NECESSARY TESTS AND ADJUSTMENTS AND MOREOVER UNDERTAKINGS ENTERED INTO WITH THE TRADE UNIONS AND THE SUPPLIERS PREVENTED PRODUCTION FROM BEING STOPPED . FOR THE LATTER REASON ALSO IT WAS NOT POSSIBLE TO STOP PRODUCTION IN THE TWO OTHER PLANTS .
16 THE APPLICANT ADDS THAT IMMEDIATELY FOLLOWING ITS TELEX MESSAGE IT PROGRAMMED A REDUCTION IN ITS PRODUCTION IN ORDER DURING THE SECOND STAGE TO KEEP WITHIN THE LIMITS FIXED , WHICH IT IN FACT DID . DURING THE SECOND QUARTER OF 1981 IT HAD KEPT 11 028 TONNES BELOW THE QUOTA ALLOCATED TO IT FOR GROUP IV PRODUCTS . SINCE THE CONTESTED DECISION RECORDS AN EXCESS OF 5 488 TONNES OF GROUP IV PRODUCTS FOR THE PREVIOUS QUARTER THE VIEW MUST BE TAKEN THAT THE WHOLE EXCESS FOR THE FIRST QUARTER OF 1981 WAS OFFSET DURING THE FOLLOWING QUARTER .
17 THE COMMISSION EMPHASIZES THE STRICTLY QUARTERLY NATURE OF THE QUOTAS ON WHICH THE COMMUNITY RULES ARE BASED . THE MERE FACT OF EXCEEDING THE QUOTA THUS LEADS TO A FINE QUITE APART FROM THE REASON FOR THE EXCESS . THEREFORE IF THE QUOTA IS EXCEEDED IT CANNOT BE MADE GOOD BY A SUBSEQUENT REDUCTION .
18 IN PARTICULAR THE COMMISSION DENIES THAT THE INCREASE IN PRODUCTION OF A TRIAL MILL IS AN ABNORMAL AND UNFORESEEBLE EVENT . THE APPLICANT THUS KNOWINGLY TOOK THE RISK OF PRODUCING EXCESS OUTPUT . IN ANY EVENT IT COULD HAVE REDUCED OR SUSPENDED PRODUCTION IN ITS OTHER ESTABLISHMENTS .
19 THE COMMISSION FURTHER STATES THAT THE TELEX MESSAGE IN WHICH THE APPLICANT GAVE NOTICE THAT IT HAD EXCEEDED ITS QUOTA IS IRRELEVANT SINCE THE COMMISSION ALREADY HAD KNOWLEDGE OF THE FACTS BY REASON OF THE REGULAR INSPECTIONS MADE BY ITS AGENTS . AS REGARDS THE ALLEGED COMPENSATION , THE COMMISSION OBSERVES THAT THE REDUCTION IN PRODUCTION DURING THE SECOND QUARTER OF 1981 , WHICH IS NOT DISPUTED , MIGHT ALSO BE DUE TO OTHER CAUSES SUCH AS REDUCTION IN DEMAND ON THE MARKET .
20 IT SHOULD BE EMPHASIZED IN THAT RESPECT THAT THE QUARTERLY NATURE OF THE QUOTA SYSTEM ESTABLISHED BY DECISION NO 2794/80 IS AN ESSENTIAL ELEMENT OF THE SCHEME . THE COMMISSION THUS RIGHTLY INSISTS ON THE FACT THAT ALL FORECASTS AND THE FIXING OF QUOTAS ARE BASED ON QUARTERLY PRODUCTION AND THAT UNDERTAKINGS ARE RESPONSIBLE FOR ENSURING THAT PRODUCTION DOES NOT EXCEED THE QUOTAS FIXED FOR THAT PERIOD .
21 THAT IS THE REASON WHY THE PRODUCER NORMALLY BEARS THE RISK OF NOT OBSERVING THE QUOTAS . THE IRREGULAR PRODUCTION OF A ROLLING MILL AND THE PROBLEMS CAUSED BY RELATIONS WITH TRADE UNIONS , ON WHICH THE APPLICANT RELIES , FALL WITHIN THE SPHERE OF NORMAL BUSINESS RISKS AND ARE NOT CAPABLE OF EXONERATING THE APPLICANT FROM ITS RESPONSIBILITY FOR OBSERVING THE QUOTAS .
22 IN THE SAME WAY A REDUCTION IN THE PRODUCTION FOR A SUBSEQUENT QUARTER IS NOT CAPABLE OF CORRECTING A PREVIOUS IRREGULARITY SINCE THE DECISIVE PERIOD IN APPLYING THE SYSTEM IS QUARTERLY .
23 THUS THE COMMISSION RIGHTLY FOUND IN THE CONTESTED DECISION THAT THE APPLICANT HAD DISREGARDED ITS OBLIGATIONS UNDER COMMUNITY LAW AND IMPOSED A FINE ON IT . THUS THE APPLICATION FOR A DECLARATION THAT THE CONTESTED DECISION IMPOSING THE FINE IS VOID MUST BE DISMISSED .
24 HOWEVER , THE APPLICANT CLAIMS IN THE ALTERNATIVE A REDUCTION IN THE FINE IN VIEW OF THE SPECIAL CIRCUMSTANCES OF THE CASE .
25 AS HAS BEEN STATED ABOVE , THE FINE MUST BE FIXED ACCORDING TO ARTICLE 9 OF DECISION NO 2794/80 AT AN AMOUNT OF 75 ECU PER TONNE OF EXCESS PRODUCTION , SAVE IN EXCEPTIONAL CASES JUSTIFYING A DEPARTURE FROM THE NORMAL RATE . IN THIS CASE EXCEPTIONAL CIRCUMSTANCES JUSTIFY SUCH A DEPARTURE .
26 IT IS NOT DISPUTED THAT DURING THE QUARTER IN QUESTION THE APPLICANT ENCOUNTERED EXCEPTIONAL DIFFICULTIES IN OBSERVING THE QUOTA ALLOCATED AND THAT IT MADE A REDUCTION IN ITS SUBSEQUENT PRODUCTION . ALTHOUGH THERE MAY BE MANY REASONS FOR SUCH A REDUCTION IT MUST NEVERTHELESS BE BORNE IN MIND IN THE PRESENT CASE THAT IN ITS TELEX MESSAGE OF 7 APRIL 1981 THE APPLICANT OFFERED IN ADVANCE TO OFFSET THE EXCESS , WHICH INDICATES THAT IT VOLUNTARILY REDUCED ITS PRODUCTION IN ORDER TO COMPENSATE FOR EXCEEDING THE QUOTA AND TO REGULARIZE THE SITUATION .
27 SINCE THE COMMISSION DID NOT ANSWER THAT TELEX MESSAGE AND THUS REGRETTABLY NEGLECTED THE RULES OF GOOD ADMINISTRATION , IT LEFT THE APPLICANT IN DOUBT AS TO WHETHER THE COMMISSION WAS ACCEPTING THE APPLICANT ' S OFFER . SINCE IN THOSE CIRCUMSTANCES THE APPLICANT IN FACT REDUCED ITS PRODUCTION TO A CONSIDERABLE EXTENT TO COMPENSATE FOR HAVING EXCEEDED THE QUOTA , IT IS NECESSARY TO RECOGNIZE IN ITS FAVOUR THAT THERE WAS AN EXCEPTIONAL SITUATION JUSTIFYING THE FIXING OF A RATE LOWER THAN THE NORMAL RATE .
28 IN THOSE CIRCUMSTANCES THE FINE MUST BE REDUCED . IN VIEW OF THE AMOUNT OF THE REDUCTION IN PRODUCTION MADE DURING THE SECOND QUARTER OF 1981 A FINE OF AN AMOUNT EQUAL TO HALF THAT IMPOSED , NAMELY 205 800 ECU ( LIT 272 349 546 ) APPEARS APPROPRIATE .