JUDGMENT OF 26. 6. 1958 — CASE 9/57 CHAMBRE SYNDICALE SIDERURGIE FRANCAISE v HIGH AUTHORITY ECSC
In Case 9/57
THE COURT composed of: M. Pilotti, President, A. van Kleffens and L. Delvaux, Presidents of Chambers, P. J. S. Serrarens, O. Riese, J. Rueff, Ch. L. Hammes, Judges, Advocate-General: M. Lagrange Registrar: A. Van Houtte
gives the following
JUDGMENT
Issues of fact
1. Facts
2. Conclusions of the parties
3. Submissions and arguments of the parties
A — Admissibility
1. Whether it is possible for a misuse of powers to have been committed affecting the applicant association itself
2. Whether the submissions constitute complaints of misuse of powers
B — Substance
4. Procedure
Law
A — Admissibility
B — Substance
1. The complaint of misuse of powers with regard to Articles 3 and 53 of the Treaty, that is to say that the objectives pursued by the High Authority are contrary to the objectives defined by Articles 3 and 53 of the Treaty
2. The complaint of misuse of powers in that the contested provisions are intended to effect an allocation
3. The complaint of misuse of powers in that the objective of the contested provisions was to prohibit certain investments
Costs
1. Facts
2. Conclusions of the parties
3. Submissions and arguments of the parties
A —. Admissibility
1. Whether it is possible for a misuse of powers to have been committed affecting the applicant association itself
2. Whether the submissions constitute complaints of misuse of powers
(a). The defendant has stated in the preamble to Decision No 2/57 that its essential objective was to ensure a regular supply of ferrous scrap to the Common Market. The applicant does not even allege that the provisions of this decision are not capable of attaining this objective. From the point when it is clear that the essential objective of the decision was in accordance with the Treaty, it becomes difficult to envisage misuse of powers.
(b). The defendant sets out the eight complaints in the application in four groups relating to Articles 3, 54, 59 and 65 of the Treaty respectively. The complaint with regard to Article 65 is based upon a manifestly mistaken interpretation of the wording of Article 53 which the applicant does not dispute.
(1). Three complaints of misuse of powers or of procedure:
(2). Two complaints of infringement of the Treaty:
B —. Substance
(a). There is a contradiction between the objective stated by the High Authority and the actual objective of the provisions complained of.
(b). According to Article 3 the High Authority must act in the common interest. The contested provisions pursue an objective which is contrary to the common interest in that
(c). The contested provisions pursue objectives contrary to those set out in Article 3 (d) and (g) in that they paralyse the expansion and improvement of the production potential of undertakings and thereby prevent the orderly expansion and modernization of production.
(d). The contested provisions pursue an objective contrary to that laid down in Article 3 (b) (equal access to the sources of production) in that
(a). With regard to the complaint that by Article 6 (3) of the decision it subjected undertakings in comparable conditions to a different system, the defendant replies that the provision in Article 6 (3) is not in the nature of a penalty but reflects the principle of imposing a supplementary charge on any increase in consumption of ferrous scrap during a reference period. On the contrary, the provisions conferring a notional reference consumption in respect of plant put into service before the date complained of constitute a transitional benefit for the undertakings.
(b). With regard to the complaint that, by Article 9 of the decision, it has placed at a disadvantage undertakings which for technical reasons are incapable of reducing their specific input, the defendant replies that only solid-charged electric furnaces have a specific input which it is technically possible to reduce. It is true that there appear to be technical limitations to the possibility of a reduction with regard to such plant. Nevertheless the insignificant part of the item ferrous scrap in the cost price of special steel largely compensates for the disadvantage following from taxation at the supplementary rate.
4. Procedure
A —. Admissibility
B —. Substance
1. The complaint of misuse of powers with regard to Articles 3 and 53 of the Treaty, that is to say that the objectives pursued by the High Authority are contrary to the objectives defined by Articles 3 and 53 of the Treaty
(a). Pursuant to Article 53 (b) of the Treaty the High Authority may, with the unanimous assent of the Council, itself make any financial arrangements which it recognizes to be necessary for the performance of the tasks set out in Article 3. The exercise of the powers thus conferred upon the High Authority is subject to the conditions set out in Articles 2 and 5 concerning the establishment, administration and guidance of the Common Market.
(b). The purpose of the provisions contested in the present application was to make the contribution for the equalization of the prices of imported ferrous scrap progressively selective by increasing the rate applicable to the consumption of bought scrap above a given reference level and by graduating the charges thereby imposed in terms of a specific input coefficient for ferrous scrap in the installations and the manufacturing processes requiring scrap.
(c). Pursuant to the beginning of Article 3 of the Treaty, when the institutions of the Community carry out the tasks defined in the said article they must act in the common interest. The concept of the common interest referred to in Article 3, far from being restricted to the sum of individual interests of undertakings or of categories of undertakings subject to the jurisdiction of the Community, considerably exceeds the scope of such interests and is defined in relation to the general aims clearly laid down in Article 2.
(d). Nevertheless consideration must be given to the question whether the measures taken are compatible with the rules in Article 3 (b), the beginning of subparagraph (d) and subparagraph (g) and the applicant alleges that the High Authority's adoption of the said measures constitutes serious disregard of these objectives.
(e). Pursuant to Article 3 (d) and (g) of the Treaty the institutions of the Community, and particularly the High Authority in exercising the powers conferred upon it by Article 53 (b), are required to ensure the maintenance of conditions which will encourage undertakings to expand and improve their production potential and promote the orderly expansion and modernization of production and the improvement of quality. The High Authority refers to those legal objectives at the beginning of the disputed decision, the stated aim of which is to ensure regular supplies to the market in ferrous scrap and to encourage undertakings to save ferrous scrap without, however, making it more difficult to increase output capacity.
(g). The indirect means of action in relation to production prescribed in Article 57 are to be distinguished from the direct influence referred to in the third subparagraph of the second paragraph of Article 5 not by the aims pursued but by the methods appropriate to attain them. Indirect means of action, by affecting, especially as a result of the financial arrangements under Article 53, certain of the factors which play a part in forming prices, create conditions which encourage undertakings freely and willingly to choose the behaviour desired by the High Authority for the accomplishment of the tasks with which it is charged under the Treaty. On the other hand direct influence, such as the allocation of resources for which provision is made in Article 59, is not concerned with how producers would behave if they acted freely but directly prescribes, on pain of fines, as is stated in Article 59 (7), the behaviour which the High Authority considers necessary with regard to the situation with which the Treaty requires it to cope.
2. The complaint of misuse of powers in that the contested provisions are intended to effect an allocation
3. The complaint of misuse of powers in that the objective of the contested provisions was to prohibit certain investments
Upon reading the pleadings; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to Articles 2, 3, 4, 5, 33, 46, 47, 48, 53, 54, 57, 58, 59, 65 and 80 of the Treaty and Annex II thereto; Having regard to the Protocol on the Statute of the Court of Justice; Having regard to the Rules of Procedure of the Court of Justice and the rules of the Court on costs, THE COURT hereby: