JUDGMENT OF 21. 6. 1958 — CASE 11/57 SOCIÉTÉS ÉLECTRIQUES D'UGINE v HIGH AUTHORITY ECSC
In Case 11/57
THE COURT composed of: M. Pilotti, President, A. van Kleffens and L. Delvaux, Presidents of Chambres, 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
I. — Facts
II — Conclusions of the parties
III — 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 undertaking itself.
2. Whether the submissions constitute complaints of misuse of powers.
B — Substance
First complaint: The contested provisions of the financial arrangement pursue objectives contrary to the general objectives laid down for the activities of the High Authority.
Second complaint: Misuse of powers arising from the influence of the financial arrangement on investment.
Third complaint: Misuse of powers in that the financial arrangement was used for the purposes of allocation.
IV — Procedure
Law
A — Admissibility
B — Substance
1. The complaint of misuse of powers with regard to Article 3 of the Treaty, that is to say that the objectives pursued through contested provisions of the financial arrangements are contrary to the general objectives laid down for the activities of the High Authority.
2. The complaint of misuse of powers with regard to Article 59 of the Treaty in that the financial arrangement was used for the purpose of allocation.
3. The complaint of misuse of powers with regard to Article 54 of the Treaty, by the influence of the financial arrangement on investments.
Costs
I. —. Facts
II —. Conclusions of the parties
III —. 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 undertaking itself.
2. Whether the submissions constitute complaints of misuse of powers.
(a). two complaints of misuse of powers, one in relation to Article 59 and the other in relation to Article 54;
(b). two complaints of infringement of the Treaty, one relating to Article 54 (the scope of the powers conferred by Article 53 with reference to Article 54) and the other relating to Article 3 (b), (c), (d), (e) and (g).
B —. Substance
(a). The principle of equal access to the sources of production (Article 3 (b)) is excluded from the High Authority's reasons since it:
(b). The establishment of the lowest prices (Article 3 (c)), the maintenance of conditions encouraging undertakings to expand and improve their production potential (Article 3 (d)) and the requirement to promote the orderly expansion and modernization of production (Article 3 (g)) are excluded from the reasons for the High Authority's action since they hamper the development of undertakings by measures which lead either to an increase in selling prices, in so far as the imposition of penalties in fact allows competitive prices to be obtained,
(c). Protection of employment (Article 3 (e)) is precluded from the reasons for the High Authority's action since through the contested measures it is hampering factories' production and causing unemployment or movement of workers.
(a). With regard to subparagraph (b) the applicant criticizes Article 6 (3), 8 and 9 of the contested decision which bring about the fixing of different prices for purchasers of ferrous scrap. Furthermore there is no reason why the financial arrangements had to ensure strictly uniform compensation since the discrimination consisted in exempting producers of special steel from the levy at the supplementary rate. The contested system does not involve an arbitrary distinction affecting a specified category of producers. Nor is it capable of distorting competition between categories of producers whose products, special steel on the one hand, and ordinary steel on the other, are not in competition with each other.
(b). With regard to subparagraph (c) it has by no means been established that, but for the contested system, the applicant undertaking would have obtained supplies of ferrous scrap more cheaply; there are good grounds for considering that the reverse would have been the case.
(c). With regard to subparagraphs (d) and (g) the objectives to which they relate cannot be isolated and considered apart from the context of the article as a whole. The objectives of Article 3 must be properly reconciled and the objective of subparagraph (a) takes precedence over the others.
(d). With regard to subparagraph (e) the gloomy prospects which the applicant holds out are purely hypothetical.
IV —. Procedure
A —. Admissibility
B —. Substance
1. The complaint of misuse of powers with regard to Article 3 of the Treaty, that is to say that the objectives pursued through contested provisions of the financial arrangements are contrary to the general objectives laid down for the activities of the High Authority.
(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 to 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). 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.
(d). 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.
(e). Furthermore the objectives laid down in Article 3 of the Treaty must be appraised as a whole and pursued exclusively in the common interest. The concept of the common interest referred to in Article 3, far from being restricted to the sum of the individual interests of coal and steel 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.
(f). 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 with regard to Article 59 of the Treaty in that the financial arrangement was used for the purpose of allocation.
3. The complaint of misuse of powers with regard to Article 54 of the Treaty, by the influence of the financial arrangement on 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 thereof; 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: