JUDGMENT OF 12.7.1962 — CASE 14/61 HOOGOVENS v HIGH AUTHORITY
In Case 14/61
THE COURT composed of: A. M. Donner, President, O. Riese (Rapporteur) and R. Rossi (Presidents of Chambers), L. Delvaux, Ch. L. Hammes, A. Trabucchi and R. Lecourt, Judges, Advocate-General: M. Lagrange Registrar: A. Van Houtte
gives the following
JUDGMENT
Issues of fact and of law
I — Statement of facts
II — Conclusions of the parties
III — Submissions and arguments of the parties
1. In general
2. On the infringement of an essential procedural requirement
3. On infringement of the Treaty and of the rules of law relating to its application
A — On the balance of interests involved
B — On the possibility of inexact or incomplete information
C — On a reasonable period of time
D — On the responsibility of the High Authority
4. Production of documents relating to the case; offers of proof
IV — Procedure
Grounds of judgment
Admissibility
I — On the scope of the judgment of 22 March 1961
II — Complaints based on infringement of the Treaty and of the rules of law relating to its application and on misuse of powers
III — The reasons given for the contested Decision
IV — Costs
I —. Statement of facts
II —. Conclusions of the parties
III —. Submissions and arguments of the parties
1. In general
2. On the infringement of an essential procedural requirement
(a). To the extent to which the Decision is based on the consideration that
(b). To the extent to which the contested Decision is based on the consideration that
(c). Although the defendant, as a defence against the plea of insufficiency of reasoning, observes that the contested Decision falls within its discretionary power, it must be objected that this opinion is only partially correct. On the one hand, the High Authority did not have such a power with regard to the expediency of the withdrawal; in fact, after weighing up the interests, it was bound to draw the resultant conclusion. On the other hand, it is doubtful whether this power exists with regard to the final appraisal of the respective weight of the interests in question and the seriousness of the damage which one or other of the possible solutions will cause to those interests; as the judgment of the Court declares that such appraisal in the first place falls within the competence of the High Authority, this implies that legal supervision of this appraisal is not outside the jurisdiction of the Court.
ad a). The defendant does not put forward any special arguments with regard to this, but it may be considered that the statements above under 1 constitute, in part, a reply to the complaints of the applicant.
ad b). The argument adduced from the slight effect which the contributions required would have on equalization as a whole does not take account of the authority of the SNUPAT judgment. In fact, the Court declared that the SNUPAT application was admissible and, therefore, recognized that that company had an interest to act in spite of the modest financial advantage to be expected if it were successful. In addition, the judgment also found it necessary to ensure that other contributors do not permanently suffer the financial consequences of an exemption illegally granted to their competitors.
ad c). The defendant does not dispute that the question of the validity of the contested Decision falls within the jurisdiction of the Court, but it maintains on the other hand that, although that Decision is based on an appraisal, it falls within the discretionary power of the High Authority. The SNUPAT judgment required it to withdraw the exemptions and the only question was the choice between withdrawal ex nunc and ex tunc. In order to be able to choose, it was necessary for the High Authority to make an appraisal of all the actual circumstances of the case, a discretionary operation which does not however preclude review of possible illegalities; on the other hand, once the appraisal was carried out, the High Authority was bound to deduce all the legal consequences therefrom.
3. On infringement of the Treaty and of the rules of law relating to its application
A —. On the balance of interests involved
(a). The applicant maintains in the first place that the preamble to the contested Decision, when it states that the interest of other undertakings … consists… in seeing that each competing undertaking bears a share of the total burden proportionate to its consumption of bought ferrous scrap,
(b). According to the applicant, the High Authority is in error in balancing the interests one against the other, since it wrongly invokes the principle of non-discrimination. In fact, the maintaining of past effects does not constitute discrimination; on the contrary, in the case of a retroactive withdrawal there would be a real loss to Hoogovens and an advantage without reasonable basis for other undertakings.
(c). The applicant states that the discrimination against it is all the clearer if account is taken of the fact that the overwhelming majority of its real competitors did not have to pay equalization. In fact, the products in which Hoogovens competed with other undertakings are the thin sheets produced by the Hoog-ovens-Breedband group; 97 % of these products are manufactured by undertakings which combine in a single legal entity a steel works and a wide-strip mill and are consequently not subject to equalization. The contested Decision is therefore wrong in taking into account the effects which the maintenance of the past exemption would have on the conditions of competition.
(d). According to the applicant, the argument based on the amount of the applicant's turnover and profits for the years 1958 to 1960 is out of time, since it does not appear in the contested Decision. In addition, it is inadmissible to make the extent to which the applicant's legitimate confidence in the acts of a public authority must be protected dependent on the success of the party concerned. In any event, this argument would carry weight only if the High Authority had also appraised the financial positions of other undertakings — which is not the case. Finally, the defendant fails to take account of the fact that the data in question incorporate ancillary activities having no bearing on the problem of the balance of interests of Hoogovens and its competitors in relation to the imposition of the equalization levy. Moreover, the profits appearing in the balance sheets are not directly comparable between one country and another and certain adjustments must be made for the differences in calculation of cost prices in the conception of profit and in the taxation system.
B —. On the possibility of inexact or incomplete information
C —. On a reasonable period of time
(a). The applicant refers to the case of Algera and Others v Common Assembly of the ECSC (Rec. 1957, pp. 89 et seq.) and rejects the concept that the idea of a reasonable period of time was binding only in the case of decisions relating to officials of the Community.
(b). According to the applicant, a period of limitation is not concerned here, contrary to what is maintained in the contested Decision. The applicant is not in the position of a tax payer who has failed to pay a tax which was owing or which the administration has failed to charge. In this case, the competent authority took a decision expressly declaring that the levy should not apply, that is to say a decision conferring a subjective right. What is therefore concerned here is' definitely legal certainty and the inviolability of individual measures giving rise to rights and not the extinction of a tax debt by means of a period of limitation.
(c). In connexion with the point from which to calculate the reasonable period of time, the applicant considers it necessary to go back to 1954, for the exemptions have been in force since that time. When the Société fiduciaire suisse raised the problem, the applicant requested both the High Authority and the Equalization Fund to confirm that their opinion on the nature of own arisings of the ferrous scrap in question accorded with that of the applicant. All the views and subsequent decisions both of the agencies in Brussels and of the High Authority only served to reinforce that conviction. The letter of 18 December 1957 (Official Journal of 1 February 1958, pp. 45 et seq.), whereby the High Authority withdrew the reservations previously expressed by its representative with regard to the exemptions granted both to the applicant and to the Breda Siderurgica company, was by its very nature retroactive to the point when the equalization scheme began to function.
(d). The applicant rejects the argument that the applications made by other undertakings after the granting of the exemptions should have shaken its confidence in the validity of those exemptions. In fact, those disputes were based on the notion that the interpretation of the High Authority was not too wide, but too narrow; they could therefore only reinforce the opinion of the applicant. In the second SNUPAT application (Joined Cases 42 and 49/59), the High Authority itself defended the legality of the exemptions, and it even maintained that, on the supposition that the exemption were illegal, it was no longer possible to withdraw it since the reasonable period of time was long past. Why should the applicant have had less faith than the High Authority in the validity of the High Authority's arguments?
D —. On the responsibility of the High Authority
4. Production of documents relating to the case; offers of proof
IV —. Procedure
I —. On the scope of the judgment of 22 March 1961
1. In its judgment of 22 March 1961 in Joined Cases 42 and 49/59 Société Nouvelle des usines de Pontlieue — Aciéries du Temple (SNUPAT) v High Authority (Rec. 1961, pp. 109 et seq.) (hereinafter referred to as the SNUPAT judgment) the Court held that the High Authority, in continuing to regard local integration between the undertakings concerned as a ground for not applying the equalization levy, had misinterpreted the Treaty and the basic Decisions on the equalization scheme for imported ferrous scrap and that, in consequence, the High Authority had misinterpreted the Court's judgment of 17 July 1959, in Joined Cases 32 and 33/58 (SNUPAT v High Authority, Rec. 1958/1959, p. 275) which declared group ferrous scrap to be subject to the said equalization.
2. Consequently, the defendant's argument that the Court, in its earlier judgment, had already ordered the retroactive withdrawal of the disputed exemptions, or had already decided that a withdrawal with retroactive effect was necessary in this case, must be dismissed.
3. The High Authority has argued that the SNUPAT judgment recognized its discretionary power to withdraw exemptions with retroactive effect; this argument is correct in the sense that the judgment referred back to the High Authority the appraisal of the facts. However, this does not mean, as is apparent moreover from the SNUPAT judgment, that the legality of the Decision cannot be reviewed by the Court, as it has been in the present application.
II —. Complaints based on infringement of the Treaty and of the rules of law relating to its application and on misuse of powers
1. The High Authority was satisfied, on investigation of the facts, that the applicant could not be charged with having given any false or incomplete information; it follows that such a charge must be excluded from consideration and is not to be taken into account as justifying the disputed Decision.
2. The applicant impugns the defendant's evaluation of the conflicting interests involved, alleging that the High Authority has not taken proper account of the financial interests in question, in that it has not compared the burden imposed on the applicant by a retroactive withdrawal of exemption with the total amount of the equalization contributions.
3. The applicant alleges that the defendant has failed to appreciate that the withdrawal ex tunc involves a real loss for Hoogovens and an advantage without reasonable foundation for other undertakings. According to the applicant, the period during which it enjoyed exemption was a period of favourable market conditions, which enabled equalization contributors to pass on the burden in the last resort to their customers, whilst now there has been a change in the structure of the thin sheet market which would make it impossible for the applicant to do likewise.
4. The applicant further complains that the defendant did not limit its comparative investigation only to those undertakings which produce slabs for the manufacture of wide-strip rolled sheets; if it had so limited its investigation to the undertakings in direct competition with Hoogovens, which were set out in the list annexed to the application, it would have been revealed that 97.3 % of them are integrated undertakings not subject to equalization. The continuance of exemption as far as the past is concerned would therefore have caused them no injury.
5. The applicant alleges more generally that the defendant failed to make an appraisal of Hoogovens' actual and particular situation, as required by the SNUPAT judgment.
6. The applicant repeats the argument that a retroactive withdrawal would not be permissible in this case because the reasonable period of time within which such a withdrawal would be possible had long since expired.
7. The applicant alleges that the defendant did not take into consideration its own responsibility, arising from the fact that the High Authority had (wrongly) recognized that the ferrous scrap in question was not assessable and continued to maintain this position in the SNUPAT case.
8. It is evident from the considerations set out above that the disputed Decision correctly weighed the public interest against the private interests involved.
III —. The reasons given for the contested Decision
IV —. Costs
On those grounds, 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 and 34 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 judgment of the Court of 22 March 1961; Having regard to the Rules of Procedure of the Court; THE COURT hereby:
1 Dismisses the application as unfounded;
2 Orders the applicant to pay the costs, including those of the intervention.