JUDGMENT OF 12. 6. 1958 — CASE 15/57 HAUTS FOURNEAUX DE CHASSE v HIGH AUTHORITY

In Case 15/57

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

Facts

1. Procedure

2. Conclusions of the parties

3. Summary of the facts

4. Summary of the submissions and arguments of the parties

A — Admissibility of the application

B — Substance

1. Infringement of the Treaty

(a) Infringement of Article 29 of the Convention

(b) Interference with the normal conditions of competition

(c) Disregard of the general objectives of the Treaty

(d) Prohibited discrimination giving rise to an indirect subsidy

2. Misuse of powers

Law

A — Admissibility

B — Substance

1. Infringement of the Treaty

(a) Infringement of Article 29 of the Convention

(b) Distortion of the normal conditions of competition

(c) Disregard of the general objectives of the Treaty

(d) Prohibited discrimination giving rise to an indirect subsidy

2. Misuse of powers

Costs

1. Procedure

2. Conclusions of the parties

3. Summary of the facts

4. Summary of the submissions and arguments of the parties

A —. Admissibility of the application

B —. Substance

1. Infringement of the Treaty

(a). Infringement of Article 29 of the Convention

(b). Interference with the normal conditions of competition

(c). Disregard of the general objectives of the Treaty

(d). Prohibited discrimination giving rise to an indirect subsidy

2. Misuse of powers

A —. Admissibility

B —. Substance

1. Infringement of the Treaty

(a). Infringement of Article 29 of the Convention

(b). Distortion of the normal conditions of competition

(c). Disregard of the general objectives of the Treaty

(d). Prohibited discrimination giving rise to an indirect subsidy

(i). The first complaint made by the applicant under this heading is based on the fact that its situation cannot be compared with that of other scrap consumers; it uses only scrap from Lyon district for which there was no need whatever for equalization. It denies that the price of Lyon scrap would fall into line with that of imported scrap if equalization had not been introduced; the applicant describes the claim to the contrary as a hypothetical one which is incapable of being checked. The Court rejects this complaint since there can be no doubt that, so long as the supply of domestic scrap is insufficient to meet the needs of the Common Market, the prices of domestic scrap will tend to fall into line with the higher prices of imported scrap. There is no reason why the price of scrap in the Lyon district should not follow this general tendency and the applicant has failed to mention any special circumstances which would establish that the Lyon district is not affected by the general trend of prices. Moreover, it follows from the figures produced during the preparatory inquiry that the prices for scrap in the Lyon district went up in parallel with the price of scrap in other districts and the price of imported scrap. Furthermore the applicant itself stated that the price of scrap which it bought showed some increase on account of purchases by competing undertakings, especially foundries using hot-blast cupolas which at least in part, are not subject to the equalization scheme.

(ii). Secondly, the applicant claims that the application of a uniform equalization rate to all categories of scrap constitutes a discriminatory measure prohibited under the provisions of Article 4 (b) of the Treaty. The applicant claims to use only light scrap, which it obtains cheaply and on which the uniform equalization rate falls relatively more heavily than in the case of the heavy scrap used by the steel mills. The Compagnie de Chasse is accordingly not in a situation which compares with that of the steel mills and in those circumstances the application in this case of uniform rules is alleged to constitute unlawful discrimination.

(iii). The third point raised by the applicant concerns the infringement of Article 4 (c) of the Treaty as a result of the discriminatory effect, amounting to an indirect subsidy, created by the equalization scheme in favour of the steel mills and at the expense of producers of pig-iron. The defendant admits that equalization tended to encourage the consumption of scrap, and that is why it wished to counteract this effect by introducing a bonus for any increase in the consumption of pig-iron. This issue has already been considered above under heading (b) for the purpose of determining whether there was any ground for believing that there has been interference with the normal conditions of competition, a question which was answered in the negative. For the same reasons, the changes which occurred in the respective postions of producers of pig-iron and the steel mills as a result of the decisions cannot be described as either discrimination or as indirect subsidies since the prohibition of the latter in Article 4 (c) of the Treaty refers only to subsidies granted by the States. This complaint is therefore without foundation.

2. Misuse of powers

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, 34, 36, 53, 59 and 80 of the Treaty, Annex II to the Treaty and Article 29 of the Convention; Having regard to Decisions of the High Authority No 22/54 of 26 March 1954 (JO No 4 of 30. 3. 1954) and No 14/55 of 26 March 1955 (JO No 8 of 30. 3. 1955); 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 rule on costs; THE COURT hereby:

1 Dismisses the application for annulment of the decision of the High Authority of 12 December 1956 declaring that the Compagnie des Hauts Fourneaux de Chasse, Chasse-sur-Rhône, Isère, shall pay to the Caisse de Péréquation des Ferrailles Importées the sum due on 31 August 1956 in implementation of the provisions relating to the equalization of imported ferrous scrap;

2 Orders the defendant to pay a quarter of the costs of the action and the applicant to pay three-quarters thereof.