JUDGMENT OF 9. 12. 1965 — JOINED CASES 29, 31, 36, 39-47, 50 and 51/63 USINES DE LA PROVIDENCE v HIGH AUTHORITY
In Joined Cases
THE COURT composed of: Ch. L. Hammes, President, L. Delvaux (Rapporteur), President of Chamber, A. M. Donner, A. Trabucchi and R. Lecourt, Judges, Advocate-General: M. Lagrange (until 7 October 1964) and K. Roemer (from 8 October 1964) Registrar: A. Van Houtte
gives the following
JUDGMENT
Issues of fact and of law
I — Facts
II — Conclusions of the parties
III — Submissions and arguments of the parties
A — Admissibility
B — On the substance
1. The wrongful act or omission on the part of the Community
(1) The High Authority is not guilty of a wrongful act or omission giving rise to a right to reparation
(2) Recognition of a right to reparation meets with an insurmountable legal obstacle
2. The existence and the amount of the damage
(1) The existence of damage
(2) The amount of the damage
(a) General criticism of the applicants' evidence
(b) Criticism of the evidence adduced by each individual applicant
(3) The causal connexion between the wrongful act or omission and the damage
IV — Procedure
Grounds of judgment
A — Admissibility
B — The substance of the cases
1. As to the wrongful act or omission attributed to the defendant
2. The objections of a general nature raised by the defendant
3. The damage alleged by the applicant undertakings
I —. Facts
II —. Conclusions of the parties
A —. The applicants claim that the Court should:
B —. The defendant contends that :
III —. Submissions and arguments of the parties
A —. Admissibility
1. It alleges however that in the applications the applicants have indeed shown the calculations whereby they endeavour to prove the amount of their damage, but that although they declare that they are able to supply the figures on which the said calculations are based, they have not done so: the applicants have thereby failed to comply with the requirements of Articles 38 to 42 of the Rules of Procedure. The applicants reply that there is absolutely no question of deliberately withholding supporting documents: the figures vary considerably from one application to the other, and the prolixity of the various documents to be collected meant that it was in practice impossible to produce them on the date for lodging the applications. They add that the necessary documents are appended to their reply.
2. In its rejoinder, the defendant observes that in their reply the applicants have adopted a new method of calculating the alleged damage, equal to the difference between the cost price of the tonnage of ferrous scrap acquired by them from ship-breakers' yards and the cost price of the same tonnage of imported ferrous scrap. They were obliged to change their method because the defendant had put forward the objection that the calculations effected in the applications amounted to claiming the actual sum of the transport parity grant wrongly drawn by them and the reimbursement of which had been claimed by the High Authority.
3. The defendant summarizes its line of argument on the admissibility of the applications as follows.
B —. On the substance
1. The wrongful act or omission on the part of the Community
(1). The High Authority is not guilty of a wrongful act or omission giving rise to a right to reparation
(2). Recognition of a right to reparation meets with an insurmountable legal obstacle
2. The existence and the amount of the damage
(1). The existence of damage
(a). ferrous scrap originating in third countries, especially the United States;
(b). sea-freight space;
(c). sufficient capacity of machinery for warehousing and unloading in the usual ports of importation;
(d). foreign exchange for French undertakings.
As to (a). The figures produced by the applicants are intended to establish that the stocks of ferrous scrap had increased from 1954 to 1958, that the tonnage of shipyard scrap for which the transport parity grants were given represents only 2.2 % of deliveries from third countries and that the supply of this additional tonnage could not present any difficulty.
As to (b). The applicants produce (Schedule 1 in all the applications) an attestation from the SITAM (Société Internationale de Transports Affrètements Manutensions Transit) dated 30 December 1962; from this they deduce that it was possible to freight an additional 160000 metric tons of imported ferrous scrap for the French undertakings as a whole.
As to (c). The applicants produce certificates from the harbour masters concerned (Schedules 8 to 19 of all the applications).
As to (d). The applicants argue that each metric ton of imported ferrous scrap made available a metric ton of shipyard scrap which could have been exported, resulting in an equivalent return in foreign exchange.
(a). The argument based on the increase in stocks is not conclusive, since the tonnage of stocks corresponds to a specified period of consumption and, if the consumption is increased, a proportional increase in stocks must follow accordingly.
(b). The defendant then argues that, even if the total resources of imported ferrous scrap had been sufficient, as the applicants allege, the latter could not choose between shipyard scrap and imported ferrous scrap. To this end the defendant quotes the opinion of Mr Advocate-General Roemer in Joined Cases 19/60, 21/60, 2/61 and 3/61, Fives-Lille-Cail and others v High Authority :
(c). With regard to the doubt as to the damage, the defendant further alleges that the importation of ferrous scrap involves hazards which do not exist in the purchase of shipyard scrap.
(a). With regard to the stocks, they maintain that it follows from the documents published by the High Authority, especially its Tenth General Report, that the requirements of imported ferrous scrap have always been covered to a large extent. Shipyard scrap consumed by the applicants represented 30000 to 40000 metric tons per year, that is to say, only 1 to 2 % of the amount of the imported tonnages; it would therefore have been no problem to replace it with imported ferrous scrap.
(b). The defendant's reasoning, which endeavours to deduce from the special powers of the Brussels agencies an argument to establish the uncertainty of the damage suffered, is unfounded in fact and in law. In fact the Brussels agencies were regularly informed by their regional offices (in Germany, France, etc.) of the aggregate amount of the various countries' requirements. With regard to resources, on the basis of its periodic inquiries undertaken in the large producing markets (USA, North Africa, etc.), the OCCF drew up and submitted for the CPFI's approval a general statement of purchases to be negotiated by the OCCF on the various markets. All this work was of course carried out under the supervision of the High Authority. The total available tonnage was then distributed among the various countries, the distribution in each country being carried out by the regional office, according to the requirements made known by the various undertakings. No problem had ever been raised in this connexion between a specific firm and the Brussels agencies. The contracts concluded with the suppliers had in fact always met the stated requirements; in fact the question of an obligatory distribution, on the High Authority's own initiative, has thus never been raised.
(c). The difficulties in connexion with the quality of imported ferrous scrap referred to by the defendant especially concern that of non-American origin. Deliveries from the USA, which constitute 76 % of the ferrous scrap received from 1955 to 1958, contain a high proportion of good quality ferrous scrap; this involves moreover a marking up of prices which has never given rise to dispute.
(a). that at the same time scrap was not purchased on the internal market at prices, free works, equal to or higher than those of the shipyard scrap in dispute;
(b). that other scrap, treated as imported ferrous scrap, was not purchased from places equidistant to or further from the works than those in which the disputed ferrous scrap from ship-breakers' yards originated;
(c). that no purchases were made of other shipyard scrap originating in places equidistant to or further from those in which the disputed scrap originates;
(d). no purchases were in fact made of imported ferrous scrap at prices, free works after equalization, equal to or higher than those for the disputed shipyard scrap;
(e). since only a difference in the transport costs was initially invoked, that no imported scrap was purchased which was delivered to the same ports as those from which the disputed shipyard scrap originates.
As to (a). In order to explain the defendant's allegation, it should be noted here that in its rejoinder (p. 39) the defendant pointed out that the equalization price was calculated on the basis of the prices actually prevailing within the Common Market, in the course of the month of delivery.
As to (b). The defendant points out that the applicants bought ferrous scrap from American military bases, without putting forward the slightest objection with regard to the transport costs, although they were equal to those of the shipyard scrap in dispute.
As to (c). The defendant observes that the applicant in Case No 51/63 (Forges d'Hennebont) accepted, without requesting the transport parity, considerable tonnages of ferrous scrap from the same ship-breaking yards as those which supplied the scrap in dispute, and that this took place every month without exception from February 1955 to December 1958.
As to (d). The defendant argues that, according to Schedules 83 to 105 to the rejoinder, the applicants themselves admit that they purchased imported ferrous scrap at a cost free works in excess of that of the disputed shipyard scrap.
As to (e). The defendant alleges (Schedule 50 to the reply) that the applicant in Case No 51/63 (Forges d'Hennebont) accepted the imported ferrous scrap which it purchased in 1956 at exactly the same ports as those in which the disputed shipyard scrap emanated.
(2). The amount of the damage
(a). The cost price of the imported ferrous scrap, free on board ship to the port of delivery, is equal to the equalization price increased by the cost of transhipment from the ship into the wagon or barge and by the cost of transport from the usual port of importation up to the consumer's works. The transhipment costs are estimated at 2 dollars per metric ton as is noted in Decision No 18/63.
(b). The applicants state that they are in a position to supply all the documents to prove the correctness of the foregoing calculations, that is :
(c). The applicants submit that the foregoing evidence, which will be supplemented to the extent that the Court deems it useful, completely proves, in accordance with the judgment of 15 December 1961 (Fives-Lille-Cail), the existence of the damage and quantifies it precisely.
(a). The calculation effected by the applicants consists in subtracting the cost price of the imported ferrous scrap (equalization price, plus 2 dollars for transhipment costs, plus the cost of transport from the port to the works) from the cost price of the shipyard scrap (the equalization price, identical with the foregoing, plus 2 dollars, plus the cost of transport from the breaker's yard to the works), which results in claiming as damages the same amount as the transport parity. The judgment of 15 December 1961 (Fives-Lille-Cail) expressly laid down that it was inadmissible to identify the damage sustained with the amount of the transport parity promised or paid (Rec. 1961, p. 592). Consequently the applicants have quite failed to establish that the purchase of shipyard scrap in respect of which no transport parity grant is available would have been … more expensive than simply purchasing imported ferrous scrap (Rec. 1961, p. 593) or how much more expensive it would have been.
(b). The aforementioned calculations have been prepared on the basis of figures which have not been proved and, although the applicants have declared that they are able to supply proof of them, they have at any rate failed to do so.
(c). The defendant then alleges that the lump-sum of 2 dollars, granted to purchasers of imported ferrous scrap for the cost of transhipment from the ship to the wagon or barge, is far removed from a true estimate of the said costs, being merely in the nature of a grant, intended to compensate a part of the transhipment costs. These were at the expense of the purchasers of imported ferrous scrap, save for the deduction of the lump-sum of 2 dollars, since—with the exception of the period when Decision No 34/56 was in force, when the equalization price was calculated free on rail or barge—the equalization price was always calculated delivered cif port of entry, that is to say, on board ship to the dock at the port of importation.
(a). With regard to the documentary evidence, they allege that the abundance and diversity of the documents to be collected made it impossible to gather them by the date when the applications were submitted; they declare that the required documents are annexed to their reply.
(b). With regard to the methods of taking account of the costs of transhipment at the sea port, they allege that the problem of the lump sum of 2 dollars is much more complex than the defendant states. They refrain from broaching the question whether the lump-sum of 2 dollars is in the nature of a grant, intended to compensate part of the transhipment costs, or whether it is a realistic estimate of the said costs, or whether it is a realistic estimate of the said costs. They merely observe that if the equalization agencies, when they adopted from the beginning the lump-sum of 2 dollars in their negotiations with the undertakings as they did in all their accounting, might legitimately admit that this value represented the approximate average of the actual costs of transhipment, the undertakings, for their part, could thus only conform to a practice not of their making but established by the Community agencies.
(c). The applicants find that as a consequence of the defendant's objections the problem is presented to them in an entirely different light. The High Authority considers that, in comparing the prices free works of the shipyard scrap in dispute and of the imported ferrous scrap, it is important to insert, instead of the lump-sum of 2 dollars, the amount of the actual costs of transhipment. The question of choice of the port of importation is consequently raised. In the method of calculation adopted in the applications, this choice made no difference, since the rate of 2 dollars had been adopted uniformly for all the ports of importation. Under the new method of calculation required as a result of the defendant's objection, the port to be selected, for the comparison to be valid, must be the one most frequently used by each of the applicants.
(a). General criticism of the applicants' evidence
1. Choice of the port of importation—At the outset, the defendant observes that in their reply all the applicants—with the exception of the applicant in Case No 50/63, Forges d'Hennebont—endeavour to prove the damage caused to them on the basis of ports other than those proposed to them by the Union de Consommateurs de Ferrailles de France (the French Association of Ferrous Scrap Consumers) (UCFF) when the contracts were concluded, or indeed other than those which they mentioned in their applications.
2. Calculation of the costs of unloading in the ports of importation—The tables which make up Schedules 23 to 36 to the reply, as well as Schedule 64A, give the details of the stevedorage costs etc., together with the total cost per metric ton. Schedule 37 to the reply forms the yearly summary of the tonnages of imported ferrous scrap unloaded in each of the ports. Schedules 38 and 39 to the reply are the summaries by port and by year of the arithmetical average of the net costs per metric ton, in dollars (Schedule 38) and in old French francs (Schedule 39).
3. Choice of the method of transport from the port to the factory.—The defendant alleges mat in their comparison the applicants on the one hand keep strictly to the means of transporting the shipyard scrap which they actually used, whereas, on the other hand, for imported ferrous scrap nine of the applicants systematically choose the means of internal transport (water or rail) more favourable to them. This is why in the schedules to the rejoinder the defendant ascertained the means of transport actually used by the applicants for their imported ferrous scrap. Finally, the defendant observes mat the applicant in Case No 42/63 (Hauts Fourneaux de Rouen) alleges that it has sustained damage in connexion with scrap from the ship-breakers' yard in Grand-Quevilly, which is the very place in which the works are situated. It tries to prove that the cost of transporting imported ferrous scrap from the port of Rouen to the works is less than those from the ship-breaker's yard to the works. In fact, the applicant had the scrap from the ship-breaker's yard in Petit-Quevilly sent for preparation and subsequently returned to the works. Since according to the contract the shipyard scrap in question was of the same quality as the imported ferrous scrap, the latter must also have made the double journey, breaking bulk, necessitated by preparation.
4. Calculation of the costs of transport from the port to the works—These calculations appear in Schedules 65 to 82 to the reply.
5. The final calculation effected by the applicants—The defendant alleges that in Schedules 83 to 105 to the reply, which assess the damage, the applicants combine and of necessity multiply all the abovementioned errors of principle and of calculation.
(b). Criticism of the evidence adduced by each individual applicant
1. Application 29/63 (Forges de la Providence)—The applicant alleges that it has suffered damage in respect of shipyard scrap costing less, free works, than the average price of internal ferrous scrap which it received in the same month (Schedule 3 to the rejoinder).
2. Application 31/63 (Fabriques de Fer de Maubeuge)—The alleged damage relates exclusively to contract 302/DN, carried out in April 1956. At that time the applicant received a quantity of imported ferrous scrap seven times greater through the port of Dunkirk, at a price free factory equivalent to that of the disputed shipyard scrap (Annex 6 to the rejoinder).
3. Application 36/63 (Saulnes et Gorcy) —Schedules 8 and 90 to the reply contain errors and omissions (Schedules 13 and 14 to the rejoinder).
4. Application 39/63 (Firminy)—The applicant alleges that it has suffered damage as regards shipyard scrap costing, free works, less than the average price of internal ferrous scrap which it received in the same month (Schedule 17 to the rejoinder).
5. Application 40/63 (Aciéries de Pompey)—The applicant bases its calculations on the port of Ghent, although the transport parities related to Dunkirk and Antwerp. Moreover the alleged damage does not concern the years 1954 and 1955 and Antwerp was in 1954 its only port and in 1955 its main port of importation (Schedule 20 to the rejoinder).
6. Application 41/63 (Beautor)—The applicant alleges that it has suffered damage as regards shipyard scrap costing, free works, less than the average price of internal ferrous scrap which it received in the same month (Schedule 22 to the rejoinder).
7. Application 42/63 (Hauts Fourneaux de Rouen)—The applicant alleges that it has sustained damage as regards shipyard scrap costing less, free works, than the average price of internal ferrous scrap which it received in the same month (Schedule 25 to the rejoinder).
8. Application 43/63 (Usines de Saint-Jacques)—Schedule 14 to the reply contains errors and omissions (Schedule 26 to the rejoinder).
9. Application 44/63 (Forges de Châtillon, Commentry et Neuves-Maisons)—Schedules 15 and 98 to the reply contain errors and omissions (Schedules 29 and 30 to the rejoinder). The applicant alleges that it has sustained damage as regards shipyard scrap costing, free factory, less than the average price of internal ferrous scrap which it received in the same month (Schedule 31 to the rejoinder).
10. Application 45/63 (H. K. Porter-France)—Schedule 16 to the reply contains errors and omissions (Schedule 34 to the rejoinder).
11. Application 46/63 Union des Consommateurs)—The applicant bases its calculations on the port of Ghent, although the transport parities related to Dunkirk or Antwerp and in 1954, the only year in respect of which it alleges that it has sustained damage, all its ferrous scrap came through Antwerp (Schedule 37 to the rejoinder).
12. Application 47/63 (Fives-Lille-Cail) —The applicant bases its calculations on the port of Ghent, although the transport parities related to Dunkirk and Antwerp and although it received 24 % of its imported ferrous scrap through the port of Dunkirk where the costs of unloading were much higher than at Ghent.
13. Application 50/63 (Usinor)—Schedules 24 and 104 to the reply contain errors and omissions (Schedules 41, 42 and 43 to the rejoinder).
14. Application 51/63 (Forges d'Hennebont)—Schedule 22 to the reply contains errors and omissions (Schedule 49 to the rejoinder).
(3). The causal connexion between the wrongful act or omission and the damage
1. Nine applicants discontinued their applications because they realized that shipyard scrap, even without the transport parity reimbursement, cost them less than the imported ferrous scrap. The defendant says that it follows from this that the acceptance of the contracts with regard to the disputed shipyard scrap was not, as the applicants allege, conditional on the certainty of paying a price corresponding to that of imported ferrous scrap, and that it is by no means established that without this certainty the applicants would have refrained from concluding these contracts.
2. The defendant goes on to observe that in the reply two undertakings (Providence and Usinor) claim compensation of 430066.76 new French francs and consequently consider that they have suffered damage to this extent, although the transport parity reimbursement (the amount of their claim in the applications) only amounted to 411802.26 new French francs.
IV —. Procedure
A —. Admissibility
1. The defendant argues that in their applications the applicants did not produce the figures on which they based their calculations of the amount of the damage allegedly suffered and that therefore they did not comply with the requirements of Article 38 of the Rules of Procedure. The applicants reply that it was not possible for them to produce their documentary evidence before the lodging of their reply, since the figures varied considerably from one claim to another and also because of the abundance of the various documents which had to be collected.
2. The defendant then argues that the applicants infringed Articles 38 and 42 of the Rules of Procedure in that their reply replaces the method of calculating the alleged damage used in their applications by an entirely different method. According to the defendant the calculations in the application resulted in a claim for the very amount represented by the transport parity improperly received, whereas in the reply the claim for the transport parity reimbursement has been transformed into action for reparation based on the existence of damage equal to the difference between the cost price of the tonnage of shipyard scrap acquired and the cost price of the same tonnage of imported ferrous scrap.
3. In its written observations on the expert's report, lodged at the Registry on 14 June 1965, the defendant alleges that in assessing the damage alleged by the applicants there should be taken into account the increase in the ferrous scrap equalization contribution which would have been demanded of the applicants if they had chosen to buy imported ferrous scrap instead of the shipyard scrap which they did in fact obtain. During the hearing in open court on 28 September 1965, the applicants put forward the view that this line of reasoning on the part of the defendant should be declared inadmissible having regard to Article 42 (2) of the Rules of Procedure.
4. Therefore the applications are admissible.
B —. The substance of the cases
1. As to the wrongful act or omission attributed to the defendant
2. The objections of a general nature raised by the defendant
(a). The defendant argues that the alleged damage cannot be assessed.
(b). The defendant alleges that the undertakings were not free to choose at will between shipyard scrap and scrap exported to the Community, and could not therefore be sure of obtaining the latter instead of the former. It is further asserted that the CPFI had the power to determine the quantities of ferrous scrap accepted for equalization, and in particular to put shipyard scrap in a privileged position in this respect.
(c). The defendant also asserts that the quality of shipyard scrap has always been considered better than that of imported ferrous scrap and that therefore the applicant undertakings would have taken supplies of shipyard scrap even without the transport parity grant.
(d). Finally the defendant objects that when consumers placed their orders for imported ferrous scrap they did not know what the final cost of these orders would be, because the equalization price was calculated on the basis of the prices actually quoted on the Community market during the month when delivery took place. According to the defendant the promise with regard to the transport parity could not, therefore, have been the decisive factor, as the applicants allege, in their choice between shipyard scrap and imported ferrous scrap. The defendant says that the undertakings' uncertainty as to the final cost of their orders for ferrous scrap is confirmed by the fact that the applicants in Cases 29/63 (Providence) and 50/63 (Usinor) each claimed in their reply damage amounting to FF 211264.14 and FF 218802.62 respectively, although the sums which they received in respect of the transport parity grant were not more than FF 200369.71 and FF 211432.55. According to the defendant this calculation made by the applicants shows that the transport parity grant was not a compensation for the loss which these undertakings suffered because of the preference given to shipyard scrap over imported ferrous scrap.
3. The damage alleged by the applicant undertakings
On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinions of Mr Advocate-General Lagrange and of Mr Advocate-General Roemer successively; Having regard to Articles 40 and 53 of the Treaty establishing the ECSC; Having regard to the Protocol on the Statute of the Court of Justice of the ECSC; Having regard to the Rules of Procedure of the Court, especially Articles 38, 42, 43, 49 to 54, 60 and 69; THE COURT by way of preliminary judgment, and without prejudice to any of the rights of the parties:
1 Requires the parties to produce to the Court, within three months from the date when this judgment is delivered, the figures of any agreed damages;
2 Requires the parties in default of agreement to lodge with the Court, within the same period of three months, submissions containing their separate figures;
3 Reserves the costs.