JUDGMENT OF 17. 7. 1959 — JOINED CASES 32 AND 33/58 SNUPAT v HIGH AUTHORITY
In Joined Cases 32 and 33/58
THE COURT composed of: A. M. Donner, President, O. Riese (Rapporteur) and J. Reuff, Presidents of Chambers, L. Delvaux, Ch. L. Hammes. R. Rossi and N. Catalano, Judges, Advocate-General: M. Lagrange Registrar: A. Van Houtte
gives the following
JUDGMENT
Issues of fact and of law
I — Conclusions of the parties
1. n Case 32/58
2. n Case 33/58
II — Facts
III — Submissions and arguments of the parties
1. Admissibility (Case 32/58)
A — Was the application against the letter of the CPFI of 12 May 1958 lodged within due time?
B — Do the respective letters of the DPFI of 12 May 1958 and of the OCCF of 2 June 1958 constitute decisions?
2. The substance of Cases 32/58 and 33/58
A — Case 32/58: Action for failure to act
B — Case 32/58: The applications for annulment and the objections of illegality
C — Special features of Case 33/58
(a) Discussion of the subject-matter of the dispute
(b) Discussion as to substance
Grounds of judgment
First part: Case 32/58
Admissibility
1. The letter from the CPFI of 12 May 1958
(a) Was the application against that letter lodged within the prescribed period?
(b) Does the letter of 12 May 1958 constitute a decision?
2. The action for failure to act
3. The application against the letter from the OCCF of 2 June 1958
Substance
1. Can the applicant raise an objection of illegality against the letters of the High Authority of 18 December 1957 and 17 April 1958?
(a) Does the letter of 18 December 1957 constitute a decision?
(b) Does the letter of 17 April 1958 constitute a decision?
2. May the Court examine the legality of the principles set out in the letters of 18 December 1957 and 17 April 1958?
3. Is it legal to subject group ferrous scrap to equalization?
4. Is the action for failure to act well founded?
Second part: Case 33/58
Admissibility
Costs
I —. Conclusions of the parties
1. n Case 32/58
1. The implied decision of refusal resulting from the absence of a reply for more than two months to the request for exemption submitted to the Caisse de Péréquation des Ferrailles Importées (CPFI) (Imported Ferrous Scrap Equalization Fund) and to the Office Commun des Consommateurs de Ferraille (OCCF) (Joint Bureau of Ferrous Scrap Consumers) by letters of 31 March 1958.
2. The decision of the CPFI of 12 May 1958 fixing the amount of the levy, in application of the provisions of the letter of 18 December 1957, at US $228 430-75.
3. In so far as necessary, the decision to postpone taking a decision resulting from the letter of 2 June 1958 addressed to the applicant undertaking by the OCCF.
4. On the ground that it is illegal, the general decision constituted by the letter of 18 December 1957 addressed by the High Authority to the OCCF on the definition of the concept of ferrous scrap from own resources for the purposes of Decisions Nos 22/54, 14/55 and 2/57.
5. In so far as necessary, the general decision constituted by the letter of 17 April 1958 addressed by the High Authority to the OCCF on the definition of the concept of ferrous scrap from own resources for the purposes of Decisions Nos 22/54, 14/55 and 2/57.
1. …
2. As regards the alleged implied decision of refusal resulting from the absence of a reply from the High Authority in respect of the letter from SNUPAT of 31 March 1958, rule that the High Authority was not required to grant the exemption requested and did not commit a misuse of powers in not granting that exemption, and accordingly dismiss the application;
3. Dismiss the application brought against the letters of 12 May and 2 June 1958 as inadmissible, since they do not constitute decisions against which an application may be brought;
4. In addition, reject the objections of illegality raised against the letter of 18 December 1957 and the claim for annulment, in so far as necessary, of the letter of 17 April 1958; with all consequences at law, in particular as regards payment of fees, costs and all other expenses.
2. n Case 33/58
II —. Facts
1. In its steelworks at Saint-Michel-de-Maurienne (Savoy) the applicant manufactures fine steel. Well over half the ferrous scrap used comes from the Régie Nationale des Usines Renault (National Renault Factories (Administration) (hereinafter referred to as Régie Renault) at Billancourt (Seine), which is also the principal user of the steel produced by the applicant.
2. From 1921 onwards, the factories at Saint-Michel and the workshops at Billancourt belonged to two distinct legal persons, but constituted a single industrial and commercial group, belonging to Louis Renault or controlled by him.
3. The applicant, considering that the ferrous scrap received from the workshops of Régie Renault was not bought from a third party, but constituted own resources, did not declare it to the CPFI. The latter was informed thereof by its inspectors in 1956 as regards the declarations for the years 1955 and 1956.
4. In its aforementioned letter of 18 December 1957, the High Authority, withdrawing its earlier reservations, had in addition approved two exemptions to the scheme resulting from its definition of own resources in favour of Breda Siderurgica S.p.A. of Sesto San Giovanni (Italy), and Koninklijke Nederlandse Hoogovens en Staalfabrieken NV of IJmuiden (the Netherlands), hereinafter referred to as Breda and Hoogovens. In a letter addressed to the OCCF on 17 April 1958 and published in the Journal Officiel of 13 May 1958, p. 30 et seq., it explained that those exemptions had been granted because the works of the undertakings concerned are integrated locally with … works not belonging to them, in which the ferrous scrap is recovered. That local integration results from the fact that the works (in question) form … a single industrial group. However, it added: Although organic ties exist between the undertakings owning the works at Sesto San Giovanni and IJmuiden, the granting of the exemptions has been based exclusively on the criterion of local integration.
5. By letters of 31 March 1958, addressed respectively to the OCCF and to the CPFI, the applicant sought a total exemption from the application to (itself) of the equalization levy (ferrous scrap), arguing that it was in a situation analogous to that of Breda and Hoogovens.
III —. Submissions and arguments of the parties
1. Admissibility (Case 32/58)
A —. Was the application against the letter of the CPFI of 12 May 1958 lodged within due time?
B —. Do the respective letters of the DPFI of 12 May 1958 and of the OCCF of 2 June 1958 constitute decisions?
(a). The letter of 12 May does no more than point out the binding nature of general decisions of the High Authority, in particular the letter of 18 December 1957, and invites the applicant to comply with those decisions. It cannot, therefore, have created an obligation for the applicant.
(b). As the letter of 2 June, its significance consists simply in the fact that the OCCF thought that it should wait for the judgments of the Court before taking a decision on the requests for an exemption, and that in the meantime it was asking the applicant to rectify its declarations in accordance with the rules in force. It is impossible to find any element of compulsion in this.
(a). The letter of 12 May does indeed constitute a decision. It is an imperative order stating in precise terms the amount to be paid.
(b). The letter of 2 June also contains a decision: it suspends the granting of an exemption until the decisions of the Court are known, and it invites the applicant to rectify its declarations. Were the applicant not to do so, a decision ordering compliance could have been sent to it.
2. The substance of Cases 32/58 and 33/58
A —. Case 32/58: Action for failure to act
(a). It was not obliged to grant the exemption, because the applicant is not in the same situation as Breda and Hoogovens, since its works are not integrated locally with those of Régie Renault.
(b). The application does not contain any element calculated to show that the High Authority has committed a misuse of powers affecting the applicant. In fact, since the letter of 18 December 1957, the High Authority has not adopted a position on any request for exemption. Therefore the applicant has not been subjected to any special treatment. Moreover, until such time as the High Authority adopts a decision ordering the applicant to comply, the witholding of a decision on the request for exemption cannot prejudice the applicant.
B —. Case 32/58: The applications for annulment and the objections of illegality
(a). The application of the concept of bought ferrous scrap to the tonnages delivered by Régie Renault is erroneous. The truth is that there is no purchase and sale, but rather an exchange. In the relationships between the two undertakings, the purchase and sale prices are merely prices fixed for convenience. They can even be fixed arbitrarily and on a flat-rate basis at a given rate in no way connected with the real market rate.
(b). The restrictive interpretation which the defendant gives to the concept of company name in its letter of 18 December 1957 is contrary to the aims of the Treaty which refers primarily to economic market concepts and does not intend to hamper industrial groups. Furthermore, the defendant realized this, for in its letter of 17 April 1958, it abandoned the company name criterion in favour of the criterion of local integration. That decision does not involve a mere tidying up of the rule laid down in the letter of 18 December 1957, but it is an addition to it that it takes industrial groups into account. However, it is vitiated by illegality because it is too limited.
(c). The defendant has not taken the applicant's particular position into account. Having established itself in the Alps in order to benefit from the supply of cheap energy, it has to bear high transport costs. The defendant is wrong in asserting that here are an advantage and a disadvantage which cancel each other out. From the time of the nationalization of the production of electricity in France, and from the time when the reduced rates for the carriage of ferrous scrap were withdrawn at the instigation of the High Authority, the applicant has been put at a serious disadvantage. The equalization levy can only make matters worse. The applicant might have to close down and dismiss 700 workers. Yet the purposes of the European Treaties are directed to preventing the phenomenon of underdeveloped regions.
(a). The applicant and Régie Renault are two different legal persons. Therefore movements of goods occurring between them require contracts which contain all the elements of a contract of purchase. They are made at a given price. If this were only a price of convenience the productivity of the applicant's factory could not be established on a realistic basis, although to do so was, as the applicant has itself admitted, one of the very purposes of its legal separation from Régie Renault.
(b). The same is true of the letter of 17 April 1958. The applicant is wrong in interpreting it as a rectification which substitutes for or adds to the criterion of the company name that of the industrial group. The purpose of the letter was simply to state the reasons which justified the exemptions granted to Breda and Hoogovens, namely the fact of local integration. It even takes the care to state that it is not economic integration as such which is decisive. Although the expression industrial Group was used, this was exclusively in the geographical sense. There is no contradiction between the two letters, for the second constitutes an exception which confirms the rule adopted in the first. Furthermore, this exception is perfectly justified. Unity of plant location is a criterion which is easy to test and easy to apply. The criterion also accords entirely with common sense, because the works in question form a compact block without its being possible to distinguish where the property of one owner begins and that of another ends.
(c). The defendant does not deny that the applicant's working conditions involve certain disadvantages. But that is the consequence of its own organization and, in any event, of circumstances foreign to the matter in dispute. The applicant itself admits that Régie Renault expected certain advantages from giving it legal autonomy. It is natural for the parties concerned to bear the disadvantages also.
C —. Special features of Case 33/58
(a). Discussion of the subject-matter of the dispute
(b). Discussion as to substance
1. Do the exemptions granted to Breda and Hoogovens proceed from an idea which would also apply to the applicant's case?
2. Are the said exemptions themselves justified?
3. Does the granting of those exemptions involve repercussions on competition in respect of the applicant such that there can be seen therein the first elements of proof of a misuse of powers affecting the applicant?
1. The letter from the CPFI of 12 May 1958
(a). Was the application against that letter lodged within the prescribed period?
(b). Does the letter of 12 May 1958 constitute a decision?
1. The letter of 12 May 1958 invites the applicant to pay a sum by way of equalization levy on ferrous scrap and to draw up its returns in accordance with the letter of the High Authority of 18 December 1957.
2. Article 33 of the ECSC Treaty only provides for actions against decisions of the High Authority. It is therefore necessary to examine whether decisions adopted by the CPFI are equivalent to decisions of the High Authority.
2. The action for failure to act
3. The application against the letter from the OCCF of 2 June 1958
1. Can the applicant raise an objection of illegality against the letters of the High Authority of 18 December 1957 and 17 April 1958?
(a). Does the letter of 18 December 1957 constitute a decision?
(b). Does the letter of 17 April 1958 constitute a decision?
2. May the Court examine the legality of the principles set out in the letters of 18 December 1957 and 17 April 1958?
3. Is it legal to subject group ferrous scrap to equalization?
(a). Article 2 of Decision No 2/57 provides that undertakings of the kind described in Article 80 of the Treaty which consume ferrous scrap shall be assessable to payment of contributions under the equalization scheme.
(b). As appears from a reading of the letter of 18 December 1957, the High Authority interprets the concept of own resources as meaning that it is only scrap recovered by an undertaking in its own establishments bearing the same company name that is considered as own resources, whereas scrap supplied by a works run under another company name is considered as bought scrap, even in the case where close financial or administrative links exist between the supplier and the user.
(c). However, it is necessary to examine whether the assessing of group scrap to the levy—and the exemption for own arisings—is compatible with the purposes of the financial arrangement constituted by the equalization system.
(d). The reasoning set out above is confirmed by the concept of discrimination as it appears in particular from the second paragraph of Article 2 and Articles 3 (b), 60 and 67 of the Treaty.
(e). It would be manifestly contrary to the requirements of the Treaty if, as a result of an intervention on the part of the High Authority, the production costs of steel manufactured in whole or in part from ferrous scrap were to depend on the legal, administrative or financial structure of industrial groups.
(f). For all these reasons, although the exoneration of own arisings is compatible with the provisions of the Treaty, an exoneration for group scrap would bring about discrimination prohibited by Article 4 of the Treaty.
4. Is the action for failure to act well founded?
Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to Articles 2, 3, 4, 15, 33, 35, 53, 59, 60, 67 and 80 of the ECSC Treaty and Annex II thereto; 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 ECSC, in particular Articles 60 and 85, THE COURT hereby:
1 In Case 32/58:
1 Dismisses the application directed against the implied decision of refusal resulting from the absence of a reply for more than two months by the defendant to the request for exemption addressed to the Office Commun des Consommateurs de Ferraille (Joint Bureau of Ferrous Scrap Consumers) and to the Caisse de Péréquation des Ferrailles Importées (Ferrous Scrap Equalization Fund) by the applicant's letters of 31 March 1958 as unfounded;
2 Dismisses the application directed against the letter of 12 May 1958 from the Caisse de Péréquation des Ferrailles Importées (Imported Ferrous Scrap Equalization Fund) as unfounded;
3 Orders the applicant to bear the costs.
2 In Case 33/58:
1 Dismisses the application as inadmissible;
2 Orders the applicant to bear the costs.