Opinion of Mr advocate-general Roemer

Mr President,

Members of the Court,

In connexion with the winding-up of the scheme for the equalization of ferrous scrap, we are concerned with another action arising from the decisions of the High Authority, whereby an undertaking's consumption of ferrous scrap was the subject of an estimated assessment by the High Authority and the amount of contributions owed by it was established.

We are concerned with an Italian steel undertaking which was engaged in producing steel but which had to cease production at the end of February 1957. Its economic difficulties in the first instance led to proceedings for a scheme of arrangement and to the acceptance of a proposed arrangement which was approved by a court order of 21 December 1957. As the periods for payment were not complied with an order was made for the arrangement proceedings to be closed and for consequential windingup proceedings to be commenced (judgment of 20 February 1960). Within the framework of the winding-up proceedings a compulsory scheme of arrangement was approved by the court by orders of 4 August and 4 September 1961, under which the preferential creditors were to be paid in full and the ordinary creditors at 40 %.

The High Authority participated in these proceedings, and first of all put forward a provisional demand for the payment of equalization contributions, calculated on the basis of the undertaking's declaration of consumption of ferrous scrap. Checks which it caused to be carried out on the applicant's premises in September 1958 led to the finding, reached by way of calculations and estimates, that the consumption of ferrous scrap was higher than that declared. The amount of the contributions originally fixed was therefore amended. Subsequent general decisions relating to the equalization of ferrous scrap brought about further increases culminating in two decisions of 30 October 1963 which at the same time revoked a decision of 25 July 1962, and which established on the basis of General Decision No 7/63 the quantities of ferrous scrap consumed by the applicant and fixed the claim for the corresponding contribution.

These two decisions of 30 October 1963 form the subject of the present proceedings. It must now be considered whether they should be annulled on the grounds indicated by the applicant, in accordance with the conclusions in the application.

I — Remarks on the procedure

The High Authority raised procedural objections in connexion with two of the applicant's statements, that is to say, its reply to the statement of defence and a note submitted at the same time as the replies to the questions put by the Court.

With regard to the reply, Counsel for the applicant merely submitted a statement drafted by the applicant itself, stating in a separate document that the applicant's note should be considered an integral part of the reply. This mode of procedure is certainly not free from objection, even if it has formally complied with Article 37 (1) of the Rules of Procedure, since Counsel signed the applicant's note. It might in fact be maintained that the obligation imposed on individuals by the Protocol on the Statute of the Court of Justice to be assisted by a lawyer has as its aim that there shall be submitted to the Court only legal opinions and explanations of fact which, having been examined by a lawyer are considered by him as fit to be put forward. This did not happen in the present case as Counsel expressly admits. On the other hand we find that Counsel adopted the applicant's note as his own. Thus this mode of procedure, properly understood, is perhaps essentially a case of negligence by the lawyer in his conduct of the proceedings, which might perhaps be considered as incompatible with the dignity of the Court within the meaning of Article 35 of the Rules of Procedure, rather than that of an inadmissible pleading. However these grounds do not lead me to refrain entirely from examining the statement in question. To what extent it should not be taken into account for other reasons (production out of time), is a question which I shall consider in each of the submissions in respect of which it arises.

The note submitted by the applicant containing the replies to the Court's questions should also be treated in the same way. It contains in part comments on the replies and to that extent it may be considered as an admissible pleading. I shall only consider in a subsequent context whether it contains inadmissible fresh arguments and to what extent.

II — On the individual submissions

1. Infringement of the Italian Bankruptcy Law of 16 March 1942 in so far as the decision on the amount of the contributions due from the applicant does not take account of the dividend of 40 % established under the compulsory scheme of arrangement

In this connexion the applicant states that under Article 135 of the Italian Bankruptcy Law the compulsory scheme of arrangement approved by the court has the effect that all the creditors of the insolvent party (including those whose debts have not been proved and those whose claims have not been notified) may press their claims only within the limits of the dividend fixed in the arrangement. By establishing an enforceable title, after the approval of the compulsory scheme of arrangement, for all the equalization contributions owed by the applicant, the High Authority infringed that law.

The High Authority rightly objects that it cannot be its task, far less that of the Court, to take account of the national bankruptcy law and to adjudicate on the difficult question of the legal consequences of a compulsory scheme of arrangement, which could have the effect that the claims against the debtor were in part extinguished, but might also result in the entire debt being claimed if the conditions laid down in the said arrangement are not complied with. In this connexion it refers to the case-law of the Court (Case 1/58) according to which the High Authority is not in principle obliged to apply national law.

In fact the task of the High Authority can only be to establish a claim, arising from Community law, and to leave the rest of the enforcement procedure to take place under the national law of the debtor in accordance with Article 92 of the Treaty. In the course of the enforcement procedure, it may be objected that it is impossible to try to obtain payment in full, by enforcement, of the existing debts of a given debtor. It has not been proved to our satisfaction that there are no ways or means of arguing such objections under Italian law. Moreover the applicant is not limited to these possibilities as the High Authority has given an express assurance that, with regard to the applicant, it does not intend to enforce its claim to the contributions in full.

It is thus impossible to annul the decision on the extent of the applicant's obligation to contribute on the ground of infringement of the Italian law on bankruptcy.

2. Infringement of Article 55 of the Italian Bankruptcy Law

In the statement of the applicant, which it describes as a reply, it is argued that the High Authority's enforceable decision is also illegal to the extent that, in addition to the equalization contributions, it also includes interest for failure to comply with the periods for payment, which is also prohibited by the Italian law on bankruptcy.

This argument must in any event be left out of account even if the applicant's statement is not as a matter of principle excluded from the procedure. Article 42 (2) of the Rules of Procedure and the decisions of the Court as a whole point to this interpretation, since this is obviously a fresh issue in the course of proceedings which has not even been referred to in the application.

Even if a more lenient view is taken because, as has been pointed out in the application, possibilities of enforcement are more limited under the Italian Bankruptcy Law, the question might first of all be asked whether the Italian Bankruptcy Law makes any provision for interest of the kind due under the equalization scheme or only to interest for delay in payment. The High Authority has informed us that the figures appearing in the contribution owed are not due because of delays in payment and that they are not calculated in respect of the amount of each debt, but represent sums attributed to the equalization creditors and to undertakings which have paid their equalization debts punctually. The High Authority takes the view that this is something in the nature of interest for capital advanced and used temporarily under the equalization scheme, that is to say, of expenses which by reason of their nature came rather within the category of administrative expenses.

But, ultimately, this question may be left open. In fact the arguments put forward with regard to the first submission are also valid in this case: the High Authority and the Court are not required to consider the application of the Italian law on bankruptcy. It is not their business to inquire into what types of interest are excluded from enforcement in the Italian law on bankruptcy and whether that rule is also to be applied in a compulsory arrangement. The problem of interest, which comes within the framework of enforcement under Italian law on bankruptcy, ought rather to be regarded as relating to the enforcement procedure and left to the national legal authorities charged with its enforcement. Consequently the second submission can no more bring about the annulment of the contested decision than can the first submission.

3. Failure to state reasons

The applicant has been unable to find any clear and detailed statement of reasons either in the decision relating to the determination by induction of its consumption of ferrous scrap or in the decision fixing the amount of its debt by way of contributions. It considers this an infringement of Article 15 of the Treaty, which must entail the annulment of the two decisions.

In a relatively recent decision in 1963 (Case 24/62, E.C.R. 69 [1963]) concerning the EEC Treaty the Court set forth clearly how the obligation to state reasons is to be understood. No other solution can be valid for the system of law of the ECSC. In order to comply with this obligation a decision must set out, in a concise but clear and relevant manner, the principal issues of law and of fact upon which it is based and which are necessary in order that the reasoning which has led the Commission to its Decision may be understood.

If the two contested decisions are examined in the light of this passage, it will be found that they contain the following particulars:

The first decision

This gives precise information as to the legal bases on which it is founded (Articles of the Treaty, general decisions on the equalization of ferrous scrap); it states that when the High Authority's inspectors carried out a check, the applicant failed to produce clearly specified documents which meant that its consumption of ferrous scrap had to be estimated. The assessment was made in terms of the consumption of electricity which was deduced partly from certain documents, and was in part established by reckoning on the basis of the applicant's electricity bills as extracted from its books of account. The consumption of electricity made it possible to deduce the production of steel and thereby the necessary input of ferrous scrap (consumption of ferrous scrap) by a parameter ascertained by experts. The findings thus made were checked and confirmed by factors based on the productive capacity of the applicant's blast furnaces which the High Authority had moreover admitted were not operating at full capacity.

The second decision

This also gives precise information as to the legal basis on which it is founded, and it relates in particular to the general decisions on the equalization of ferrous scrap, establishing the provisional rates of contribution, the parities of currencies and the rules on interest, and finally to Decision No 7/63 which is of decisive importance. The contribution owed by the applicant arises from the multiplication of the quantities of ferrous scrap calculated in the first decision by the rates of contribution mentioned for the different periods of contribution.

That, in my opinion, is in both cases sufficient to comply with any sensibly conceived obligation to state reasons, which should never be understood as an obligation to give detailed explanations in the manner of pleadings.

Nor am I able to discover any infringement of the obligation to state reasons as the result of some additional arguments which only appeared in the reply.

During the discussions of the inductive method applied by the High Authority to find the consumption of ferrous scrap, the applicant criticized the fact that the chief criteria applied by the above-mentioned committee of experts to determine the ratio between the consumption of current and the consumption of ferrous scrap had not been brought to its notice. In fact, the first decision contains nothing more than the formula applied. However I consider that it would exceed the bounds of an obligation to give reasons if it were necessary to give what is virtually a scientific dissertation on the technical questions implied in ascertaining the consumption of ferrous scrap and fixing an order for payment in respect of certain undertakings. It is sufficient that the High Authority has mentioned the decisive formula. Furthermore, the question of the basis on which and the technical deductions from which the formula was drawn up may be the subject of argument in litigation.

In its reply, the applicant also criticizes the fact that in the Annexes to the various general decisions on ferrous scrap, the expenses of administration and checking were assessed at different figures and that the reserves for contributions not promptly paid were for different amounts, without these differences being explained.

These criticisms may be passed over without examination since it is claimed that they fall quite outside the complaint of failure to state reasons raised in the application, as the complaint only refers to disputed individual decisions. In comparison with this complaint, the case-law of the Court regards them as fresh issues which, under Article 42 (2) of the Rules of Procedure, may no longer be raised in the reply. Moreover they are certainly unfounded as, on any fair view, general decisions cannot be required to provide detailed calculations with specific comments on each entry contained in them, as this would amount to giving reasons for a statement of reasons.

In sum, the third submission, with all its special aspects, is sufficient to bring about the annulment of the contested decision.

4. Inadmissibility of new charges

In a fourth complaint, the applicant criticizes the fact that the contribution owed by it increased from the original 102000000 lire (in 1960) to 313000000 lire (in the contested decision), as the High Authority had originally proceeded on the basis of the consumption of ferrous scrap as declared, but had subsequently twice altered the declarations by increases. All this occurred after the applicant ceased to operate its business in 1957, which aggravated its difficulties in furnishing evidence.

As it appears in the application, this complaint may be understood in various ways.

5. Inaccurate assessment of the consumption of ferrous scrap

This submission embraces several complaints some of which were already raised in Case 18/62 (Barge v High Authority) where they were dismissed by the Count.

6. Illegal determination of the rate of contribution for the purposes of the ferrous scrap equalization scheme

The applicant's sixth complaint is to state that the fixing of the rates of contribution applicable to its consumption of ferrous scrap is illegal, because it was done not by the High Authority, but by the agencies in Brussels, and that these rates reached unduly high levels in the interests of their members.

With regard to the question of jurisdiction thus raised, it is evident that this complaint is unfounded. It cannot be said that after adopting its Decision No 13/58, that is to say, after the reorganization of the equalization scheme, the High Authority simply adopted the decisions of the agencies in Brussels. On the contrary, Decision No 13/58 expressly provides the means for the checking and revocation of earlier decisions. In fact, this method has to a large extent been employed, as is evidenced by the extensive checks carried out by the High Authority since 1958 and the numerous decisions which it took itself after that date.

With regard to the rate of contributions which in the applicant's case rose from 1.65 lire to 13 lire per kilogramme, the High Authority notes that this is not incomprehensible, having regard to the increase in the production of steel and imports of ferrous scrap which characterizes the period in question and taking account of the determinative prices within the Common Market and of imports and of the costs of administering the equalization scheme. It must also be pointed out, in connexion with legal proceedings, that deciding what is a reasonable level of the rates of contributions for the ferrous scrap equalization scheme includes, within the meaning of Article 33 of the Treaty, the evaluation of the situation resulting from economic facts or circumstances which the Court may examine only if the High Authority is alleged to have committed a misuse of powers or manifestly failed to observe the provisions of the Treaty. In the present case the applicant has failed to submit a sufficiently detailed and relevant case, in particular when the arguments of the High Authority are contrasted with the complaints of the applicant, so that the Court is not entitled to undertake that evaluation and even less to annul the contested decision on the grounds of the submissions put forward by the applicant.

7. Misuse of powers

Finally, according to the applicant, the High Authority committed a misuse of powers by failing to oppose the large industrial combines' attempts to keep the rate of contribution as high as possible. They had thus the opportunity of importing ferrous scrap on favourable conditions discriminating against the small undertakings who were obliged to purchase ferrous scrap within the Common Market. In particular, through their subsidiary commercial undertakings, the large industrial undertakings succeeded in keeping the price of ferrous scrap within the Common Market artificially low, lower than the real market price, and thus they obtained bigger refunds on ferrous scrap purchased abroad.

When in this connexion the applicant points to some decisions on equalization according additional advantages to importers of ferrous scrap (in all, as inducements to import and for special expenses, 1.5 units of account), the High Authority replies that these advantages, which moreover were only in force for some months, were necessary to increase imports and to ease the situation in the Common Market. It follows from this that, as in the case of the rates of contribution in the case of die preceding complaint, the Court can only check the economic expediency of the measures in question to a limited extent, within the framework of Article 33. Furthermore it is not clear that these measures were necessarily discriminatory. Apart from the fact that in order to avoid complaints of discrimination, the High Authority cannot take account of the particular position of each enterprise, even of the smallest, it is certain, according to its explanations, that even undertakings smaller than the applicant could enjoy the advantages of imported ferrous scrap. They had only to notify their requirements with regard to ferrous scrap to the office in Brussels which organized imports.

With regard to the complaint that the large industrial undertakings kept the equalization price artificially low in order to obtain higher refunds for their ferrous scrap purchased abroad, the applicant has only been able to cite the purchase price allegedly paid within the Common Market by various Italian undertakings which it knew, and these prices were below the average prices in the Community. But as account had only been taken, for the purposes of the equalization scheme, of the average prices in the Community, these figures, even assuming that they are correct, cannot be regarded as even an indication, much less as proof, of alleged improper practices by large industrial undertakings tolerated by the High Authority or the agencies in Brussels.

Consequently the last complaint of misuse of powers is not an argument capable of bringing about the annulment of the contested decisions.

III — Summary and conclusion

In the light of the foregoing, I am of the opinion that the application of the Merlini company, a limited liability company in liquidation, should be dismissed as unfounded, and that it should be ordered to bear the costs of the proceedings.

1 Translated from the German.