JUDGMENT OF 10.5.1960 — JOINED CASES 3 TO 18, 25 AND 26/58 BARBARA ERZBERGBAU v HIGH AUTHORITY

In Joined Cases

THE COURT composed of: A. M. Donner, President (Rapporteur), L. Delvaux and R. Rossi, Presidents of Chambers, O. Riese and Ch. L. Hammes, Judges Advocate-General: M. Lagrange Registrar: A. Van Houtte

gives the following

JUDGMENT

I — Conclusions of the parties

II — The facts

III — Submissions and arguments of the parties

A — Nature and admissibility of the applications

B — The powers of the High Authority

C — Infringement of the Treaty

D — Misuse of powers

E — Infringement of essential procedural requirements

Cases 17/58 (Maximilianshütte) and 26/58 (Luitpoldhütte)

Case 18/58 (Ilsede-Peine)

A — Infringement of essential procedural requirements

B — On the question of ultra vires

C — Infringement of the Treaty

IV — Procedure

Grounds of judgment

Jurisdiction

The submission as to infringement of the Treaty

The submission concerning infringement of essential procedural requirements

The submission as to misuse of powers

Costs

I —. Conclusions of the parties

1. Dismiss the applications as unfounded, and

2. Order the applicants and interveners to bear the costs.

II —. The facts

(a). The special rates and conditions constitute a discriminatory measure in favour of the undertakings compared with undertakings placed in comparable situations from the point of view of transport;

(b). The maintenance of the rates and conditons is not necessary for achieving the objectives set out in Articles 2 and 3 of the Treaty.

III —. Submissions and arguments of the parties

A —. Nature and admissibility of the applications

B —. The powers of the High Authority

C —. Infringement of the Treaty

(a). The applicants allege, first, that the abolition or modification of the special rates and conditions is of itself contrary to the Treaty if only because the High Authority has let the transitional period run out and has thus deprived the applicants of the right conferred by Article 23 of the Convention to make the applications for aid mentioned therein by way of compensation for loss caused by the abolition of the protective rates. In applying the Treaty, the High Authority must take into account the general principle of the protection of acquired situations according to which the administration, in the exercise of its powers, may only affect the assets of an individual in so far as the granting of assistance or of an indemnity ensures that the latter does not suffer any loss.

(b). In case the Court should reject the argument put forward under (a), the applicants rely on the fact that the authorization for which Article 70 of the Treaty, read together with Article 10 of the Convention, makes provision, was not required.

(c). In case the Court should not accept the proposition that the special rates and conditions at issue are not covered by Article 70, the applicants allege that the High Authority wrongly refused to grant the authorization for which the fourth paragraph of Article 70 of the Treaty makes provision.

D —. Misuse of powers

E —. Infringement of essential procedural requirements

(a). The High Authority has not stated the reasons which led it to cut down the amount of the reduction in rates to 8 % of the aforementioned general rate.

(b). The decision is also erroneous in substance. The High Authority was wrong in evaluating the two factors which jointly make up the amount of the reduction in rate of 21 % at 13 % and 8 % respectively: (a) 13 %—protective measures and (b) 8 %—compensation for losses arising from the establishment of the interzonal frontier.

(c). The High Authority, having accepted the proposition that a special rate was justified by reason of the location near the interzonal frontier, should, in application of the fifth paragraph of Article 70, have left the decision as to the desirability and necessity of any reduction in rates to the national authorities, and in particular to the Federal Railways.

A —. Infringement of essential procedural requirements

B —. On the question of ultra vires

(a). Article 71 (b) of the scale of dues for navigation on the Mittellandkanal concerns toll charges appertaining to public law levied in connexion with the use of the canal, and the High Authority does not have the right to encroach upon the fiscal sovereignty of the Member States.

(b). Even if it were admitted that these payments were within Article 70 of the Treaty, the High Authority ought to have examined all the fiscal systems of the Member States in so far as they bear upon transport by inland waterway.

(c). The applicant adds that in any event Article 70 does not apply to the existing rate, because it is applied to all the undertakings situated in a given region, such that it cannot be of a discriminatory nature.

C —. Infringement of the Treaty

(a). The rate at issue is intended to counteract competition from another means of transport. This rate was introduced in 1950 with a view to re-establishing competitive parity in respect of rates for carriage by rail, which had been reduced in 1949 by special rate 6 B 33.

(b). In view of the fact that the High Authority applied the fourth paragraph of Article 70 to certain undertakings in the region of the Upper Palatinate located near the interzonal frontier, it no longer has the right to refuse to apply the said provision to other undertakings situated near the aforesaid zone.

IV —. Procedure

1. The applicants, pointing out that the power conferred on the High Authority by the seventh paragraph of Article 10 of the Convention expired on 9 February 1958. deny that the High Authority had the power to take the decisions notified by letter of 12 February 1958.

2. In Case 18/58 the applicant has also argued that the High Authority had no power to take a decision concerning Article 71 (b) of the scale of dues for navigation on the Mittellandkanal because that scale lays down toll charges governed by public law and, therefore, covers a matter attributable to the fiscal sovereignty of the Member States.

1. The applicants allege that by reason of the economic and social consequences which may follow from the abolition of the special internal rates and conditions, the interested parties are entitled to claim the grant of the aids provided for in Article 23 of the Convention on the Transitional Provisions.

2. The applicants allege that the High Authority, in applying the seventh paragraph of Article 10 of the Convention, has misinterpreted Article 70 of the Treaty to which that article refers.

3. The applicants have also argued that the High Authority is mistaken in seeing discrimination in every special rate.

4. The fourth paragraph of Article 70 provides that the application of special internal rates and conditions in the interest of one or more coal-or steel-producing undertakings shall require the prior agreement of the High Authority.

5. The applicants complain that the High Authority did not also take into account considerations of general economic policy such as whether it was expedient to approve protective measures which might appear desirable in favour of critical areas and underprivileged regions. In support of their argument they point to the provisions of the second paragraph of Article 2 and Article 3 (a), (d), (e) and (g).

6. On the contrary, when economic conditions in the transport sector do not require or justify special rates (which is the case notably when competition from another means of transport must be counteracted), it is only in exceptional cases that a special rate can be considered to be in accordance with the principles of the Treaty.

1. The applicants allege that insufficient reasons are given for the decisions because they do not state the reasons for which, in applying the principle of comparability within the meaning of Article 70, the criterion of comparability from the point of view of transport was alone taken into account, and also because those decisions do not set out in detail the reasons which, in the opinion of the High Authority, would have justified the retention of the special rates.

2. The applicants in Cases 17/58 and 26/58 allege that the High Authority has not given sufficient reasons for that part of the contested decision which involves the increase of tariff 6 B 31 — in so far as it affects the carriage of coal — as the result of the cutting of the previous 2196 reduction to 8 %.

3. The applicant in Case 18/58 also complains that the High Authority did not state the reasons for which it considered that Article 71 (b) of the scale of dues for navigation on the Mittellandkanal is discriminatory.

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the oral observations of the parties; Upon hearing the opinion of the Advocate-General; Having regard to Articles 2, 3, 4, 15, 33, 37, 60, 67, 70 and 88 of the Treaty establishing the European Coal and Steel Community, and to Articles 1, 10 and 23 of the Convention on the Transitional Provisions annexed to that Treaty; Having regard to the Protocol on the Statute of the Court of Justice of the European Coal and Steel Community; Having, regard to the Rules of Procedure of the Court of Justice of the European Coal and Steel Community, and to the rules of that Court on costs, THE COURT hereby:

1 Dismisses the applications as unfounded;

2 Orders the applicants and the interveners to bear the costs.