JUDGMENT OF 8. 7. 1965 — JOINED CASES 3 AND 4/64 SIDÉRURGIE FRANÇAISE v HIGH AUTHORITY
In Joined Cases
THE COURT composed of: Ch. L. Hammes, President, A. M. Donner and R. Lecourt, Presidents of Chambers, L. Delvaux (Rapporteur), A. Trabucchi, W. Strauß and R. Monaco, Judges,, Advocate-General: K. Roemer Registrar: A. Van Houtte
gives the following
JUDGMENT
Issues of fact and of law
I — Summary of the facts
II — Conclusions of the parties
A. The applicants claim:
B. The defendant contends that the Court should:
III — Submissions and arguments of the parties
A — Admissibility
As to (1) The submission with regard to acting by means of a decision and not by means of a recommendation
As to (2) The submission of discrimination as between Community producers
As to (3) With regard to the allegation of serious lack of care amounting to a disregard for the purpose of the law
B — The substance of the case
1. First aspect of misuse of powers: the High Authority took a decision when it was only empowered to make a recommendation (misuse of procedure)
2. Second aspect of the misuse of powers: the contested decisions entail a discrimination as between the producers of the Community
3. The allegation of grave lack of care amounting to a disregard for the purpose of the law
IV — Procedure
Grounds of judgment
I — Admissibility
II — Costs
I —. Summary of the facts
(a). undertakings must frame their conditions of sale in such a way that their customers and commission agents acting on their behalf shall be under an obligation to comply with the rules made by the High Authority in application of the previous Articles (first subparagraph of Article 63 (2)).
(b). undertakings shall be held responsible for infringements of this obligation by their direct agents or by commission agents acting on their behalf (Article 63 (2) (b)).
1. Decision No 30/53 of 2 May 1953 amended by Decision No. 1/54 of 7 January 1954;
2. Decision No 31/53 of 2 May 1953 supplemented by Decision No 32/53 of 20 May 1953 and amended by Decision No 2/54 of 7 January 1954 and by Decision No 32/56 of 21 November 1956;
3. Decision No 37/54 of 29 July 1954 supplemented by Decision No 33/58 of 1 December 1958.
(a). All distributors were subjected to the same rules, without distinguishing between agents acting on their own behalf and middlemen acting for producer undertakings. Selling agencies were treated on a par with distributor undertakings, but were not defined.
(b). Distributor undertakings merely subject to the obligation not to discriminate among their customers remained free to apply whatever conditions they wished provided these were also applied to all comparable transactions. It was therefore possible for the published price lists to differ from those of the producer undertakings whose products the distributor undertakings sold.
1. No 19/63 of 11 December 1963 (Official Journal, 1963, p. 2969) amending the text of Decisions Nos 30/53 and 1/54 (practices prohibited by Article 60 (1));
2. No 20/63 of 11 December 1963 (Official Journal, 1963, p. 2972) amending the text of Decisions Nos 31/53 supplemented or amended by Decisions Nos 32/53, 2/54, 32/56 (publication of price lists for ordinary steel);
3. No 21/63 of 11 December 1963 amending the text of Decision No 37/54 supplemented by Decision No 33/58 (publication of price lists for special steels).
II —. Conclusions of the parties
A. The applicants claim:
(a). In Application 3/64:
(b). In Application 4/64:
B. The defendant contends that the Court should:
III —. Submissions and arguments of the parties
A —. Admissibility
1. The submission that the High Authority acted by means of a decision and not by means of a recommendation is inadmissible in support of an application against misuse of powers in so far as it really constitutes a plea of lack of competence or of acting ultra vires;
2. Misuse of powers is not convincingly evidenced in so far as the plea of discrimination among producers of the Community is concerned;
3. The argument based on the serious lack of care amounting to a disregard for the purpose of the law is first of no intrinsic value to the extent that it is based on what it has to prove and secondly it is unconvincing to the extent that it is based on alleged uncertainties.
As to (1). The submission with regard to acting by means of a decision and not by means of a recommendation
(a). According to the first hypothesis, the applicants allege the High Authority's lack of competence, and not a misuse of powers. In fact, a power can only be misused if it exists and confers something more than a mere fettered discretion.
(b). According to the second hypothesis, if the limits of a power which exists are exceeded, this constitutes an ultra vires act and not misuse of powers.
(c). If the applicants are arguing for a misuse of procedure, they must clarify their argument.
As to (2). The submission of discrimination as between Community producers
(a). With regard to Article 3 (b), referring to the equal access of all consumers to the sources of production the defendant alleges that the submissions do not indicate how the contested decisions compromised this access for the applicants. Moreover, according to the defendant, the infringement of Article 3 (b) at the most could only constitute a discrimination against the consumers and not against the producers whom it is not the purpose of this provision to protect.
(b). With regard to Article 5, referring to the conditions under which the High Authority must carry out its task, the defendant alleges that although the applicants claim that the contested decisions infringe that provision, they have failed to give any information with regard to this, either on the particular provisions which they consider were infringed or on how that infringement took place. Furthermore, the defendant claims that there is no connexion between the infringement of Article 5 and the complaint of discrimination.
(c). With regard to Article 4, the defendant admits that, since subparagraph (b) thereof refers to measures discriminating between producers, an infringement of that provision could support a plea of discrimination. But it adds that this infringement could not serve as a ground for a submission of misuse of powers. In fact it says that Article 4 contains prohibitions which leave no margin of discretion to the High Authority.
(a). With regard to Article 3 (b), the distinction which the defendant makes between the position of consumers and that of producers is arbitrary because competition between producers emerges precisely at the stage when the consumer places an order. The fact that it is impossible for the consumers to have equal access to all the sources of production principally affects producer undertakings, whose customers may be alienated by the differences in the sale price to the consumer.
(b). With regard to Article 5 the question of misuse of powers arises from the fact that the contested decisions, far from being intended to guarantee the maintenance and observance of normal competitive conditions, seek to establish a system which has the effect of distorting the equilibrium in that these decisions subject middlemen, whose commercial function is identical, to a different system solely because of their different legal structure.
(c). With regard to Article 4, the applicants state that in Germany an agent (Direkthändler) has the status of a purchaser for resale, even when steel is sent directly from the forge to the consumer, and is not subject to supervision by the High Authority and that the large German iron and steel groups have commercial companies with the status of Direkthändler and, consequently, of a middleman not subject to supervision. The French steel works are unable, owing to their position under internal law, to make such a system obligatory. According to the applicants, it follows that the contested decisions put them on an unequal footing in relation to the German sales networks.
As to (3). With regard to the allegation of serious lack of care amounting to a disregard for the purpose of the law
(a). The defendant observes in the first place that the serious lack of care cannot constitute an argument in favour of the two submissions of having acted by means of a decision and of committing a discrimination between producers in the Community. In fact, it states, these are precisely the two submissions which the applicants employ in support of their complaint of a grave lack of care.
(b). With regard to the alleged imprecision in defining selling agencies, the defendant contends that the terms employed in the contested decisions appear unequivocal. It states furthermore that any general law leads the persons concerned to wonder whether it applies to them or not, but such an uncertainty cannot form the basis for the complaint of serious lack of care.
(c). With regard to the uncertainty over the application of Article 47 of the Treaty, which allows the High Authority to address itself directly to selling agencies, the defendant contends that a glance at the text of the contested decisions shows that they are not based on Article 47 of the Treaty, to which a formal reference would have been required, and the allegation of uncertainty is therefore unconvincing.
B —. The substance of the case
1. First aspect of misuse of powers: the High Authority took a decision when it was only empowered to make a recommendation (misuse of procedure)
(a). The contested decisions did not, and moreover could not, have as their purpose to settle the general problem of supervision. Article 8 (3) of the revised Decision No 30/53, as appears from the contested decisions, indeed provides that the producers shall furnish the High Authority with all particulars of the commercial operations of the middlemen who are either their employees or direct agents or their authorized agents. But this is not an obligation imposed under Article 47 or the fourth paragraph of Article 83 of the Treaty, but merely a corollary of Article 63 (2) (b), which provides that undertakings shall be held responsible for infringements by their direct agents or by commission agents acting on their behalf. The obligations provided for in Article 8 (3) of Decision No 30/53 (as now amended) are simply intended to facilitate establishing these infringements. They are thus concerned with the implementation of Article 63 (2) (b).
(b). Article 1 (2) of Decision No 19/63 whose annulment is requested provides that in certain specified cases selling agencies shall be treated as distribution departments of the producers The aim of this assimilation is to bring the legal position into line with facts, and to put all producers on the same footing with regard to the application of Article 60. The assimilation was effected under this Article. On this point the contested decision refers to distribution by the producers themselves.
2. Second aspect of the misuse of powers: the contested decisions entail a discrimination as between the producers of the Community
(a). With regard to supervision the disparity between the situation of the trade and that of the selling agencies and of the commission agents derives from the particular situation of the trade under the Treaty.
(b). The difference in the situations of the selling agencies and the trade is to be explained by the different economic functions performed by these two forms of distribution. In the first instance, there is distribution by the undertakings themselves, in the second there are purchasers for resale independent of the producers and acting on their own behalf. In treating certain selling agencies in the same way as a distribution department of the producer undertakings, the High Authority has reestablished proper observance of Article 60 by abolishing, as it is obliged to do, a discrimination between two categories of producers, the one continuing to carry out all functions of producers under one and the same name and the other separating the producers' functions of distribution from production properly so-called.
(c). The different system to which dealers as opposed to commission agents are subjected is also to be explained by the particular situation in which the trade is placed by the Treaty of Paris. The dual nature of the system of which the applicants complain was not created by the contested decisions. What the applicants describe as arbitrariness contrary to the essential purposes of the Treaty arises directly from the latter.
3. The allegation of grave lack of care amounting to a disregard for the purpose of the law
(a). from the fact that the High Authority acted by means of a decision where it ought to have employed the means Of a recommendation;
(b). from the alleged discriminations;
(c). from the uncertainties deriving from the definition of selling agencies within the meaning of the contested decisions;
(d). from the uncertainties resulting from an obscurity as to whether the High Authority intends to apply directly to the selling agencies the powers deriving from Article 47 of the Treaty.
IV —. Procedure
I —. Admissibility
II —. 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 the Treaty establishing the European Coal and Steel Community, especially Articles 2, 3, 4, 5, 14, 15, 33, 47, 60, 63, 64, 65, 80, 86, 95 and 96; 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 Communities; Having regard to Decision Nos 30/53, 31/53, 32/53, 1/54, 2/54, 37/54, 32/56, 33/58, 19/63, 20/63, and 21/63 of the High Authority; THE COURT hereby:
1 Dismisses Applications 3/64 and 4/64 as inadmissible;
2 Orders the applicants to pay the costs of the action.