JUDGMENT OF 21. 3. 1955 — CASE 6/54 NETHERLANDS v HIGH AUTHORITY

In the Case:

THE COURT, composed of: Massimo Pilotti, President, P. J. S. Serrarens and Ch. L. Hammes (Presidents of Chambers), O. Riese, L. Delvaux, J. Rueff and A. van Kleffens, Judges, Advocate General: K. Roemer, Registrar: A. Van Houtte,

gives the following

JUDGMENT

The procedure and the conclusions of the parties

Facts

Submissions of the parties

1. The infringement of the Treaty

2. The misuse of powers

3. Infringement of essential procedural requirements

4. The Court's right of investigation

ing from the economic facts or circumstances in the light of which a decision was taken only exists in very exceptional circumstances. In the present case the applicant is challenging the High Authority's economic forecast with its own and this is not sufficient to establish manifest failure to observe the Treaty. Law

A — The admissibility of the action

B — The scope of the action

C — Infringement of essential procedural requirements

D — Infringement of the Treaty

E — Manifest failure to observe provisions of the Treaty

F — Misuse of powers

Costs

1. By application lodged at the Court Registry on 7 May 1954 at the suit of its Envoy Extraordinary and Minister Plenipotentiary in Luxembourg, the Government of the Kingdom of the Netherlands, with an address for service at the seat of its Legation in Luxembourg, seeks the annulment of three decisions of the High Authority dated 20 March 1954 and published in the Journal Officiel de la Communauté (pp. 267 et seq.) under Nos 18/54, 19/54 and 20/54 claiming that

2. The High Authority with an address for service at its offices, 2 Place de Metz, Luxembourg, in accordance with an order given at its request extending the time-limit for lodging its pleadings, lodged its defence on 30 June 1954 within the prescribed period contending that

3. On 31 August 1954 the applicant lodged its reply within the time-limit fixed by order of the President of the Court of 1 July 1954 and reaffirmed the claims set out in its application.

4. The rejoinder was lodged on 15 October 1954, within the time-limit laid down for the defendant by order of the judge acting as President of 31 August 1954 and the defendant reaffirmed its prior contentions.

5. The case having been placed on the roll of the Second Chamber the preliminary report provided for in the second paragraph of Article 34 of the Rules of Procedure of the Court was lodged on 7 November 1954 by Judge Hammes, the Rapporteur appointed by the President of the Court by letter of 15 October 1954.

6. The report recommended an inquiry to obtain the production of documents and the verification of the facts alleged by the parties and the fixing of a date for the commencement of such measures.

7. By order of the Chamber of 1 December 1954, after it had heard the Advocate General and reserved the possibility of other preparatory measures, the parties were required to supply before 13 December information and all the relevant documents on questions specified in greater detail in that decision.

8. These requirements having been satisfied by the parties, the Advocate General having been heard, the Chamber, by order of 21 December 1954, in conformity with Article 45 (1) of the Rules of Procedure of the Court declared the inquiry closed.

9. In accordance with Article 45 (2) of the Rules of Procedure of the Court the file was passed to the Advocate General and subsequently to the President of the Court who fixed the date for the oral proceedings as the hearing of the Court on 1 February 1955. All the written pleadings and the supporting documents were lodged and registered at the Court Registry. They were notified to interested parties by the Registrar.

(1). The public hearings were held on 1, 2 and 4 February 1955.

(2). At the commencement of the hearings the Judge-Rapporteur, in conformity with Article 21 of the Protocol on the Statute of the Court of Justice, read his report.

(3). The hearings were declared closed by the President in accordance with Article 50 (2) of the Rules of Procedure of the Court and the Court commenced its deliberations upon the case.

1. The Common Market for coal, ore and scrap was opened on 10 February 1953.

2. With particular regard to coal the decisions taken by the High Authority on 12 February 1953, Nos 3/53 and 4/53 regulated the methods of price quotation, the conditions for publicizing the lists and the conditions of sale.

3. Apart from those measures the High Authority by Decision No 6/53 of 5 March 1953 fixed the maximum prices for coal in a general recommendation which was to expire on 31 March 1954.

4. As those rules expired on 31 May 1954 they were replaced by new provisions dated 20 March 1954 Nos 18/54, 19/54 and 20/54 which entered into force on 1 April 1954 and expired on 31 March 1955.

5. The new decision laying down a principle is based on Article 61 and Article 63 (2) of the Treaty.

6. In order to attain those objectives the High Authority deemed it necessary for a limited period to adopt the measures contested by the application by rendering more flexible the methods previously used for fixing maximum prices, taking account in particular of the increase in revenue as a result of the elimination of certain special charges with effect from 1 April 1954.

1. The infringement of the Treaty

(a). In the opinion of the applicant paragraph 6 of the preamble to Decision No 18/54 infringes Articles 5 and 61 of the Treaty because the High Authority bases its argument on the possibility that one of the objectives of Article 3 might not be achieved instead of stating the need for its intervention. In particular it should have indicated the consequences which the freeing of prices would in fact have entailed and the aims which would not have been achieved in the absence of the rules. In particular it should have stated that one or more of those objectives would not in fact be achieved if maximum prices were not fixed. Without such indications it would indeed be possible for the High Authority to intervene continually in infringement of Article 5 of the Treaty.

(b). The applicant maintains that the High Authority infringed Article 61 in taking into account a market structure contrary to the provisions of the Treaty and thereby approving the existence of an unlawful structure.

2. The misuse of powers

(a). For the reasons set out under (b) above the applicant argues that at the same time the High Authority had been guilty of misuse of powers: in reality it had adopted the contested decision in order to combat the activity of certain organizations which it should have done by applying not Article 61 but the methods provided by Article 65; furthermore, it was under an obligation to apply those methods in order to dissolve those organizations without delay.

(b). The proof that the fixing of the maximum price was carried out for a purpose other than to obtain the lowest possible prices in accordance with Article 3 (c) is, in the opinion of the applicant, derived from the fact that the new maximum prices fixed are not appreciably lower than the list prices which were applied previously by producers.

(c). If and in so far as the High Authority feared detrimental effects on production and the employment of labour this apprehension could in the opinion of the applicant only have arisen from the expectation of a considerable fall in prices; on that hy pothesis, however, only the fixing of minimum prices would be required and therefore from this aspect as well the decision constitutes a misuse of powers.

3. Infringement of essential procedural requirements

4. The Court's right of investigation

A —. The admissibility of the action

B —. The scope of the action

C —. Infringement of essential procedural requirements

(a). The applicant first alleges that Decision No 18/54 fails to state sufficiently the reasons on which it is based because the High Authority has merely justified its measures by stating in a purely hypothetical form that the structure of the Common Market could compromise the achievement of the objectives of Article 3 of the Treaty.

(b). In accordance with the opinion of the Advocate General it is appropriate to examine whether the procedural requirements laid down by the Treaty for the adoption of the contested decisions were complied with.

D —. Infringement of the Treaty

(a). It is necessary to examine the intrinsic legality of the decision having regard to the terms of the first paragraph of Article 61 of the Treaty which gives the High Authority the power to fix maximum prices for one or more of the products within its jurisdiction.

(b). In support of the argument based on the breach of the Treaty the applicant claims that the contested decision refers to a market structure of an illegal nature.

(c). In support of the arguments based on the infringement of the Treaty the applicant objects that in its decision the High Authority relies on the general objectives of the Treaty and that that general reference cannot constitute sufficient reasons because the special provisions of subparagraph (a) of the first paragraph of Article 61 refer to specific hypotheses.

(d). The applicant alleges that the contested decision is based on reasons which are wrong in substance.

E —. Manifest failure to observe provisions of the Treaty

F —. Misuse of powers

Upon reading the pleadings; Upon hearing the parties; Upon hearing the opinion of the Advocate General which accorded with the view of the Court; Having regard to Articles 3, 5, 33, 35, 61, 65, 66 and 84 of the Treaty and Article 12 of the Convention on the Transitional Provisions; Having regard to the Protocol on the Statute of the Court of Justice; Having regard to the Rules of Procedure of the Court and the rules of the Court on costs, THE COURT hereby: