JUDGMENT OF 4. 4. 1960 — JOINED CASES 4 TO 13/59 MANNESMANN v HIGH AUTHORITY
In Joined Cases
THE COURT composed of: A. M. Donner, President L. Delvaux, President of Chamber, O. Riese, Ch. L. Hammer (Rapporteur) and N. Catalano, Judges, Advocate-General: K. Roemer Registrar: A. Van Houtte
gives the following
JUDGMENT
Issues of fact and of law
I — Statement of the facts
A — The bases of the equalization scheme
B — The actual situation
II — Conclusions of the parties
III — Submissions and arguments of the parties
A — Lack of competence of the High A Authority to take decisions under Article 92 of the ECSC Treaty
B — Misuse of powers
C — Infringement of an essential procedural requirement
D — Infringement of the Treaty
1. Did the applicants receive a payment?
as to (aa)
as to (bb)
2. Were the applicants entitled to equalization payments?
3. Does the High Authority possess a right as against the applicants to reclaim overpayments?
4. What scrap was delivered to the applicants?
E — Infringement of the principle of good faith
F- Set-off
IV — Procedure
Grounds of judgment
I — Admissibility of the applications
II — Substance of the applications
1. The submission based on lack of competence
2. The merits of the High Authority's claims
Costs
I —. Statement of the facts
A —. The bases of the equalization scheme
1. The situation of the market in ferrous scrap in the Community, which is marked by the fact that the Community's internal resources in scrap are insufficient to cover the requirements of current consumption and at the same time to build up stocks to a level compatible with the undertakings' normal operation, makes it necessary to import scrap from third countries.
2. Since a first voluntary equalization scheme had proved inadequate, the High Authority, acting under Article 53 (b) of the ECSC Treaty, by Decision No 22/54 of 26 March 1954 (Journal Officiel de la CECA, 1954, No 4, p. 286), itself made a financial arrangement for the equalization of scrap imported from third countries, which was made compulsory for all scrap-consuming undertakings in the Community.
3. By these decisions, the High Authority:
4. In 1953 the governments of the six Member States enacted a general prohibition on exporting scrap; in the following year, they made an exception to it for such shipyard scrap as, after being compulsorily offered to the Joint Bureau, was not bought by the Joint Bureau for the Community.
5. Under the general decisions quoted above, the scrap-consuming undertakings enjoyed an equalization between the (higher) price of scrap imported from third countries or scrap treated as such, on the one hand, and the price of Community scrap, on the other.
6. Under Decisions Nos 22/54, 14/55 and 2/57, the functioning of the equalization scheme was entrusted, under the responsibility of the High Authority, to the Joint Bureau of Ferrous Scrap Consumers (Office commun des consommateurs de ferraille, or OCCF) (hereinafter referred to as the Joint Bureau) and to the Imported Ferrous Scrap Equalization Fund (Caisse de péréquation des ferrailles importées, or CPFI) (hereinafter referred to as the Fund), which are cooperative associations incorporated under Belgian law in 1953 by twenty-two Community steel producers.
7. In each of the Member States regional offices existed, as auxiliaries to the equalization scheme, which:
8. In Germany, the regional office was the Deutsche Schrottverbraucher-Gemeinschaft GmbH (DSVG). In addition to its activites described above, in the service of the financial arrangement, the DSVG was also entrusted with acting for the scrap-consuming undertakings in the execution of contracts prepared or concluded by the Joint Bureau with the scrap suppliers; in particular it paid the seller for the account of the buyers.
B —. The actual situation
1. During the period from 31 August 1956 to 8 July 1957, the Joint Bureau concluded six general agreements with the company Hansa Rohstoffverwertung GmbH, Düsseldorf (hereinafter referred to as Hansa) for the account of undertakings to be subsequently named. These agreements are annexed to the Court's file (and are referred to in the Joint Bureau's letters as contracts). Confirmed by the Joint Bureau as constituting a purchase, these agreements contain details on the quantity, price and provenance of the scrap. As far as provenance is concerned, the letters indicate Iceland, England and other territories outside the Community.
2. The contracts of purchase expressly refer to the general provisions of the Joint Bureau's contract, which stipulate inter alia:
3. In accordance with the provisions of the contract, the DSVG named the applicants as undertakings entitled to check, accept and sign for the scrap in question; during the following months, Hansa made various deliveries to scrap-consuming undertakings. The deliveries to the consumer undertakings were in each case preceded by notices of allocation from the DSVG to the undertakings which were to receive the goods; after taking delivery of the scrap, the undertakings sent acknowledgements of re-ceipt to Hansa and scrap accounts to the DSVG. According to a customary practice, Hansa's invoices were addressed to the DSVG. The DSVG gave the recipient undertakings notice to settle their debts (based on the internal price of scrap, that is, net of equalization). This was done, according to a clearing scheme, by transfer of amounts for which the scrap-consuming undertaking was liable in respect of purchase of scrap or in respect of equalization contributions to the account of a scrap seller named by the DSVG. This seller could be, but was not necessarily, the one who had delivered the scrap to the undertaking which was making the payment; in that case, the undertaking was credited by the DSVG with the payment made against the sums for which it was liable in other respects. The sums to which each undertaking acquiring scrap was entitled in respect of equalization, on the basis of the details which it gave to the fund, were paid by the DSVG not to that undertaking itself, but directly to the seller of the scrap in part of the purchase price.
4. The certificates sent by a Netherlands seller of scrap, the Zeeuwse Metaalmaatschappij, to Hansa and by Hansa to the DSVG to prove entitlement to equalization were declarations signed by the head of the Iron and Steel Division of the Netherlands Ministry for Economic Affairs.
5. The ships specified in these declarations were either not handed over for breaking or had at that time already been broken; a quantity of shipbreaking scrap corresponding to the tonnage indicated in the declarations was not therefore available.
6. By a letter of 27 November 1958, the High Authority informed the applicants that the payments in respect of equalization with which their accounts had been credited had been made in error and invited them to repay amounts equivalent thereto to the financial arrangement.
7. This repayment was refused, and the High Authority took the contested individual decisions of 6 January 1959, by which the applicants were ordered to repay certain amounts to the Imported Ferrous Scrap Equalization Fund in Brussels or to the Deutsche Schrottverbraucher-Gemeinschaft in Düsseldorf, on behalf of the Fund, before 31 January 1959. These decisionsshall be enforceable within the meaning of Article 92 of the ECSC Treaty.
8. On 14 February 1959, the ten applicant undertakings brought identical actions against these decisions.
II —. Conclusions of the parties
1. Claim that the Court should:
2. In the alternative, suggest that the case be adjourned until such time as the organs of the financial arrangement have submitted their final accounts, and that, if necessary, time-limits be laid down for this purpose;
3. In the further alternative, should the claims of the High Authority be upheld, assert, if and in so far as appropriate, rights to a set-off based on an action for damages against the High Authority for wrongful acts or omissions by its organs.
(a). Dismiss the actions as unfounded;
(b). Dismiss the claim for a set-off as inadmissible, or at all events as unfounded;
(c). Dismiss the claim for adjournment of the case as unfounded;
(d). Order the applicants to bear the costs.
III —. Submissions and arguments of the parties
A —. Lack of competence of the High A Authority to take decisions under Article 92 of the ECSC Treaty
1. The applicants criticize the fact that the contested decisions were taken in the form of enforceable decisions within the meaning of Article 92 of the ECSC Treaty.
2. The applicants are likewise of the opinion that the High Authority can also not base its purported right to take a decision establishing the existence of pecuniary obligations upon Article 53 of the ECSC Treaty.
3. The applicants also advance the argument that, in many cases, any repayment of overpayments in respect of equalization would have to be demanded from a scrap dealer who is not among the undertakings referred to in Article 80 of the Treaty and who therefore cannot be the subject of an administrative decision.
4. Under the submissions of the High Authority's lack of competence, the applicants further assert that the decisions under Article 92 should at all events establish:
5. Inasmuch as the High Authority bases its competence on unjustified enrichment of the applicants, the applicants maintain that they could not be enriched by the payment made by the DSVG to Hansa; indeed, for scrap of whatever provenance, they have only to pay the internal price.
6. As regards the content of the contested decisions, the applicants criticize the fact that the High Authority decided that a contract existed between themselves and Hansa. It was not, however, competent to do so; by its decisions, it can only regulate the applicants' public law relations with the Community, but cannot make findings in the field of private law concerning a purported contract between Hansa and the applicants in order to justify its claims.
B —. Misuse of powers
1. The applicants maintain that the High Authority misused its powers through a misuse of procedure in purporting, in the absence of any already existing pecuniary obligation directly resulting from the functioning of the financial arrangement, to create such an obligation by the contested decisions themselves, and in employing to that end the summary procedure which is open to it only for ascertaining and putting into effect obligations the legal foundation of which is clearly derived from the Treaty.
2. The applicants also consider as constituting a misuse of procedure the fact that the High Authority used the medium of an administrative decision to give the impression that the complex involving both public law and private law justifies its claims, by asserting as facts in the contested decisions matters involving private law, such as the applicants received payments or the equalization benefited them. This cannot result in a final settlement of the complex in dispute. The contested decisions are essentially based on the assessment of a civil law relationship. The High Authority seeks, however, to deny the applicants any objections relating to the civil law relationship, with the argument that its debt comes under public law alone.
C —. Infringement of an essential procedural requirement
D —. Infringement of the Treaty
1. Payments were made to them;
2. Those payments were wrongly made;
3. Repayment may therefore be required of them;
4. The identity of the scrap delivered to them is definitely established.
1. Did the applicants receive a payment?
(a). The applicants point out — and the defendants do not deny — that no payment was made directly to them, although the wording of the contested decisions might give the impression of a direct payment.
(b). Likewise the applicants maintain that they did not receive any indirect payment; the final result of the payment of the equalization amounts to a third party cannot have been that the applicants received it and that it benefited them, for the following reasons:
(i). The applicants state that they can only have acquired the scrap in dispute on the basis of a contract concluded between the Joint Bureau and the scrap sellers; the applicants did not themselves buy the goods.
(ii). The applicants also maintain that a purchasing order, which governs the internal relations between the Joint Bureau and the applicants, could not amount to a power of agency or make the applicants, through the medium of the Joint Bureau, the direct contracting partners of Hansa. Therefore, the Joint Bureau did not purchase in the name of the applicants and never received any such power of agency in relation to Hansa.
(iii). In support of their statement that they did not buy the scrap in dispute, the applicants further assert that they were not aware of and were never informed of the details of the contract, in particular of the total quantities bought, of the agreed import price or of the fact that the delivery of substitute scrap was allowed.
(iv). Finally, the applicants take the view that they cannot have been liable for the purchase price in the event of the scrap's not qualifying for equalization, and that they cannot have been relieved of an obligation by the wrongly-made payment of that price.
2. Were the applicants entitled to equalization payments?
(a). The applicants indicate that equalization was available inter alia to scrap stored within the Community which the competent government frees for export in the event of the Community's deciding not to exercise its option to purchase. In the present action, the sellers produced a certificate from the Netherlands Government under which that scrap would be authorized to be exported if the Joint Bureau did not claim, it. The scrap thus became capable of constituting the subject-matter of equalization, and any examination as to whether the certificate from the Netherlands Government was delivered rightly or wrongly is immaterial for that purpose.
(b). The applicants maintain that the equalization scheme, that is, the Brussels organization, the Fund, the Joint Bureau and the regional offices, constitute one unit and that all the quantities bought by the Joint Bureau therefore qualify for equalization.
(c). The applicants point out that in two of the six general agreements in question the scrap was expressly described as being substitute scrap; they take the view that the other agreements also concerned substitute scrap. This is Community scrap which, on the footing of a substitution in advance for shipyard scrap to be recovered subsequently, is privileged by the grant of export rights upon examination of the certificates drawn up by the national governments, and which may therefore be sold at the higher price of imported scrap. The High Authority seems to be unaware that, by virtue of the government certificates, substitute scrap, which is in itself community scrap, becomes highly-priced scrap treated as scrap coming from third countries and therefore qualifies for equalization.
3. Does the High Authority possess a right as against the applicants to reclaim overpayments?
(a). The organs of the High Authority concluded the contract for the delivery of scrap and. agreed on the conditions under which the seller was to be entitled to the part of the purchase price represented by the equalization. It was the task of the Fund in particular to verify the certificates documenting the right to equalization.
(b). The applicants maintain that there can be no question of a repayment based on unjustified enrichment, since there is no enrichment; the price for scrap, whatever its provenance, is always the internal price.
(c). Basing their argument on the idea that the equalization of scrap does not benefit the undertakings individually, but scrap consumers as a whole, the applicants take the view that any harmful consequences which may arise from the scheme must not be borne by such undertakings as happen to receive the scrap in dispute, but by all the consumers taking part in the equalization scheme, that is by the Fund itself; the loss must therefore be borne by the Fund.
4. What scrap was delivered to the applicants?
(a). Finally, the applicants point out that the condition precedent to any recovery sought from them is that the scrap which was in fact delivered to them should be identical with that which, according to the High Authority, did not qualify for equalization. Such identity is not established; the information sent to the Fund by the DSVG is incorrect. The DSVG was not able to establish on the basis of its own papers what quantities of scrap allegedly not qualifying for equalization were delivered in performance of each of the contracts, or which recipient of material from Hansa received a specified part of that scrap.
(b). The applicants maintain that the amounts demanded are not accurate. They point to certain discrepancies; in the absence of an opportunity to check the figures, they consider that they must dispute the accurary of the amounts claimed and demand proof from the defendant that they are justified.
(c). The applicants criticize the fact that their own share through the payment of contributions in the equalization amounts in dispute was not taken into account in any of the decisions on repayment.
E —. Infringement of the principle of good faith
F-. Set-off
IV —. Procedure
I —. Admissibility of the applications
II —. Substance of the applications
1. The submission based on lack of competence
(a). The applicants allege that the High Authority is wrong in inferring from Article 92 of the ECSC Treaty its formal competence to take the contested decisions.
(b). On the substance of the decisions, as regard the competence of the High Authority, the applicants allege that the High Authority used the power to take an enforceable administrative decision provided for in Article 92 of the Treaty in order to create a claim for itself in private law.
2. The merits of the High Authority's claims
(a). the applicants incurred a liability in respect of the payment of equalization, or if
(b). in in the alternative, they bore the risk of such payment, or else
(c). if they benefited from any unjustified enrichment.
(a). It emerges from the documents produced before the Court, and more particularly from the correspondence between the Joint Bureau and Hansa confirming the general agreements, which documents, moreover, are not challenged by the parties, that it was the Joint Bureau, an organ of the High Authority, which entered into the agreements with Hansa dealing with the purchase and delivery of scrap.
(b). As regards the payment of equalization by the Fund, it should be pointed out that under the aforementioned general conditions, in particular the last paragraph of Article 4, the Fund, on the order of the Joint Bureau, was to make such payment only after carrying out the duties of supervision incumbent upon it, as has just been explained, provided, still under the general conditions, that such payment was to be suspended if the least doubt existed as to the authenticity of the documents establishing the scrap's qualifying for equalization.
(c). Moreover, it cannot be argued that any unjustified enrichment on the part of the applicants exists.
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 15, 33, 53, 80 and 92 of the Treaty establishing the European Coal and Steel Community; 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, THE COURT hereby:
1 Annuls the decisions of the High Authority of 6 January 1959, concerning the repayment of provisional equalization payments made by the Imported Ferrous Scrap Equalization Fund to the undertakings Mannesmann-Hüttenwerke AG, Hahnsche Werke AG, Ruhrstahl AG, Gußstahlwerk Gelsenkirchen AG, Gußstahlwerk Witten AG, Niederrheinische Hütte AG, Bochumer Verein für Gußstahlfabrikation AG, Stahlwerke Bochum AG, August Thyssen-Hütte AG, Hüttenwerk Oberhausen AG and Phoenix-Rheinrohr AG;
2 Orders the High Authority to pay the costs.