JUDGMENT OF 10. 12. 1969 — JOINED CASES 10 AND 18/68 ERIDANIA v COMMISSION
In Joined Cases 10/68 and 18/68
THE COURT composed of: R. Lecourt, President, R. Monaco and P. Pescatore, Presidents of Chambers, A. M. Donner (Rapporteur), A. Trabucchi, W. Strauß and J. Mertens de Wilmars, Judges, Advocate-General: K. Roemer Registrar: A. Van Houtte
gives the following
JUDGMENT
Issues of fact and of law
I — Facts and procedure
II — Conclusions of the parties
Case 10/68
Case 18/68
III — Submissions and arguments of the parties
Admissibility of the application
A — Case 10/68
1. Time-limits
2. Capacity to act
B — Case 18/68
The substance of the case
A — Case 10/68
Complaints common to the three decisions
1. Infringement of Articles 11(1)(c) and 12(3) of Regulation No 17/64
2. Infringement of Articles 14 and 15(1) of Regulation No 17/64
3. Infringement of Articles 92 and 93 of the EEC Treaty
4. Infringement of the general principle of law which allows persons having a contrary interest the right to be heard before a decision is taken
Complaints peculiar to the decisions of of 27 July 1967 and 2 October 1967
1. Infringement of Article 11(2) and Article 20 of Regulation No 17/64 by the decision of 27 July 1967
2. Misuse of powers and incorrect, inadequate, ambiguous and contradictory reasoning of the decision of 27 July 1967
3. Infringement of Article 1(2) of Regulation No 206/66 by the decision of 2 October 1967
B — Case 18/68
Grounds of judgment
Admissibility of Application 10/68
Admissibility of Application 18/68
Costs
I —. Facts and procedure
II —. Conclusions of the parties
—. after recognizing the admissibility of this application and entertaining it, annul the disputed measures with all the consequences thereby entailed and with the benefit of costs and expenses.
—. declare that the application is inadmissible and in any event dismiss it;
—. order the applicants to pay the costs .
—. join this application to Application 10/68 which is pending between the same parties; entertain it after holding it to be admissible, annul the implied decision of rejection of the formal request made on 13 May 1968 (resulting from the silence of the Commission of the EC), with all the consequences thereby entailed, and with the benefit of costs and expenses.
—. declare that the application is inadmissible and in any event dismiss it;
—. order the applicants to pay the costs.
III —. Submissions and arguments of the parties
A —. Case 10/68
1. Time-limits
2. Capacity to act
(1). that it follows from the case-law of the Court that it is the basic scope of a decision which determines the admissibility of applications from third parties which are affected; that the inadmissibility of the application in Case 1/64, for example, was due to the fact that the contested decision had a scope which was clearly general but that in the present case it is a matter of purely individual decisions and thus of a new question;
(2). that, although it is true that the authors of the Treaty wished to exclude the possibility of any form of action open to all against the legislative measures of the Community, it is unacceptable that third parties should have the right to act only against individual decisions which are clearly addressed to them; that it is the effect of a decision which is more important than the person to whom it is addressed and that if a third party can prove that his individual rights or interests suffer direct damage he proves by that very fact that the contested measure is of direct and individual concern to him;
(3). that this interpretation of Article 173 supports the case-law of the Court, inasmuch as it holds applications from individuals against decisions addressed to Member States, which although not being regulations nevertheless have a general scope, to be inadmissible; such actions may be classified as uti cives actions and the person concerned suffers direct damage only at the time of the concrete application of the general decision, so that the indirect protection of Articles 177 and 184 of the Treaty remains available to him and that in the present case the situation is completely different, in view of the fact that the decisions in question have had their final effects both with regard to the persons to whom they were addressed and to the applicants;
(4). that the defendant s statement that decisions are of individual concern only to the persons to whom they are addressed is in contradiction to the case-law of the Court regarding the second paragraph of Article 33 of the ECSC Treaty and that in respect of the concept of a sufficient interest to take proceedings the only difference between Article 33 of the ECSC Treaty and Article 173 of the EEC Treaty lies in the fact that the wording of the latter article is more precise:
(5). that the fact that the applicants belong to an abstract category does not exclude the possibility of concrete and immediate damage to their individual rights and interests and that by way of example one may quote the system established by Article 85 and by Regulation No 17 which allows a right of appeal against a decision authorizing a cartel for third-party undertakings suffering injury to their rights and interests;
(6). in reply to the arguments of the defendant that the regulations concerning the common organization of the market in sugar would not cause a reduction in the production of sugar and that the proportional distribution of the increase provided for is not guaranteed to previously existing undertakings:
(1). that the interpretation of the second paragraph of Article 173 suggested by the applicants and based exclusively on the general or individual nature of the disputed decision is wrong; that both in the case of a decision addressed to a Member State, which moreover is of an individual nature, and in that of a decision addressed to an individual, the interest in instituting proceedings accepted by the case-law on the second paragraph of Article 33 of the ECSC Treaty is insufficient (see the opinion in Joined Cases 16 and 17/62 and Case 25/62); that it is necessary, on the other hand, to require a substantial link with the decision such as that which the Court has defined by the words affects them by reason of certain attributes which are peculiar to them, or by reason of circumstances in which they are differentiated from all other persons, and by virtue of these factors distinguishes them individually just as in the case of the person addressed and that it follows from this that it is not the general or individual nature of the measure in itself but its effects with regard to the applicant which are decisive;
(2). that it follows that the present case cannot be put forward as new and that there is no reason to reconsider the previous case-law, as the legal protection which it grants is inferior to that of the Member States;
(3). in reply to the support given by the applicants for the case-law of the Court, to the extent to which it holds applications by third parties concerned against decisions of general scope to be inadmissible:
(4). that the distribution of production quotas depends upon the exclusive, and to a large extent discretionary, power of the Italian Government as the applicants themselves recognized by disputing that distribution before the Italian Consiglio di Stato without asking for a reference under Article 177 of the Treaty; that, furthermore, even if the distribution carried out had been a consequence of the contested decisions, those decisions caused effects not in respect of the applicants, but in respect of the whole of the undefined group of undertakings eligible to receive a quota.
(1). that the problem of interpretation of the second paragraph of Article 173 cannot be solved on the basis of the compulsory effect of the decision in respect of its addressee; that, in fact, decisions which do not impose an obligation to do or to give, but by which requests from addresses are fulfilled, have no compulsory effect in respect of the latter; that consequently an application from addressees against such a decision is inadmissible for lack of interest; that, on the other hand, such a decision requires third parties concerned to accept the effects of it which are detrimental to them and which may be regarded in a certain sense as obligations; and that because of this third parties suffering damage from such a decision have an interest to act and consequently have the capacity to make an application;
(2). that there is direct and immediate damage, even if the injurious effects can occur only in the future, as soon as it appears that they follow inevitably from the contested measures.
B —. Case 18/68
(1). that reliance on the principle ne bis in idem in the present case disregards the alternative and subsidiary scope of Application 18/68;
(2). that the Commission is not absolved from its obligation to define its position on the formal request because it lodged a statement of defence in Case 10/68;
(3). that — even accepting that the withdrawal of a decision following a reexamination sought by way of an extra-judicial request amounts only to a discretion — failure to exercise that discretion, when the circumstances which allow it to be used are present, is vitiated by misuse of powers.
A —. Case 10/68
(1). On the one hand, the aid granted by the three contested decisions cannot contribute to the improvement of agricultural production.
(2). On the other hand, the contradiction between the grant of aid and the whole Community policy on sugar is undeniable.
(3). Lastly, the aid undeniably interferes with competition in this sector, and in so doing infringes one of the fundamental principles of the Treaty which is repeated verbatim by Article 17 of Regulation No 17/64.
1. Infringement of Articles 11(1)(c) and 12(3) of Regulation No 17/64
2. Infringement of Articles 14 and 15(1) of Regulation No 17/64
(1). states that action by the Guidance Section of the Fund falls within the framework of Community structural policy, which is based upon the objectives of Article 39 of the Treaty the necessity for which has been recognized by the Parliament as well as by the Council and the Commission;
(2). alleges that Regulation No 1009/67, by providing in Article 34 for the granting of adaptation subsidies by the Italian Republic to its beet producers as well as the processing industry, shows the intention not of limiting the increase in Italian production but of encouraging it reasonably and of contributing to structural improvements;
(3). disputes the figures put forward by the applicants, according to which in areas in question the processing industry already has a surplus and maintains, on the one hand, that the allegation of the applicants that the improvement of means of transport would permit the producers to send products to a more distant destination does not take into account the advantages for the farmer of a nearer processing plant, that is to say the possibility of dealing with the whole production of sugar-beet in good time, leading to a greater quantity and a better quality of sugar and, consequently, the earning of a higher income and, further, that the disadvantage of a working period which for climatic reasons is shorter than elsewhere may be compensated for by the increase in the capacity of the plants in order to increase daily production;
(4). replies to the applicants’ allegation that the productivity of the sugar refineries cannot be improved by increasing their number by maintaining that in the present case it is a problem of structural policy to be resolved by the Community and the Member State concerned, which may distribute according to its free discretion, the margin which is granted to it by Regulations Nos 1009/67 and 1027/67.
(1). that the production figures provided by the intervener itself show that the increased production in 1967 was due only to the floods of that year which had destroyed the cereal seedlings and cannot be regarded as an indication of a normal increase in sugar-beet cultivation;
(2). that in the absence of sufficient production of sugar-beet in the actual area, the sugar refinery of Castiglion Fiorentino had to obtain supplies from distant areas, which fact, moreover, contradicts the statements concerning the gravity of the problem of the distance between fields and the processing undertaking;
(3). that if the sugar crisis is, in fact, of a qualitative nature and necessitates a complete re-structuring of undertakings, this problem, which is essentially industrial, is a problem which the sugar refineries not receiving aid from the EAGGF must also face, at their own expense, which constitutes unjustifiable discrimination.
3. Infringement of Articles 92 and 93 of the EEC Treaty
4. Infringement of the general principle of law which allows persons having a contrary interest the right to be heard before a decision is taken
1. Infringement of Article 11(2) and Article 20 of Regulation No 17/64 by the decision of 27 July 1967
2. Misuse of powers and incorrect, inadequate, ambiguous and contradictory reasoning of the decision of 27 July 1967
3. Infringement of Article 1(2) of Regulation No 206/66 by the decision of 2 October 1967
B —. Case 18/68
1. By Application 10/68 lodged at the Court Registry on 10 May 1968, the applicants requested the annulment of Decisions of the Commission Nos 1/22/66 of 27 July 1967, 1/17/INON of 2 October 1967 and 1/73/67 of 7 March 1968, granting aid from the European Agricultural Guidance and Guarantee Fund to certain sugar refineries established in Italy.
2. By Application 18/68 made under Article 175 of the Treaty and lodged at the Court Registry on 1 August 1968, the same applicants contested the implied decision of rejection which, according to them results from the silence maintained by the Commission in respect of an extra-judicial request by which they had sought the revocation of the abovementioned decisions.
3. By order of 25 October 1968 the Court joined the two cases for the purposes of judgment.
4. The defendant and the interveners dispute the admissibility of Application 10/68 by asserting, on the one hand, that it is out of time, in so far as it is directed against the first two contested decisions the adoption of which was made public by notices published in the Official Journal on 4 August and 7 October 1967 respectively, and on the other hand, that the applicants, who are not addressees of the contested measures, are not directly and individually concerned by them and consequently cannot request their annulment.
5. Under Article 173 of the Treaty any natural or legal person may institute proceedings against a decision addressed to that person or against a decision which, although in the form of a regulation or a decision addressed to another person, is of direct individual concern to the former.
6. The applicants consider that this is so in their case by reason of the fact that, as the aids granted are likely to affect competitive relationships on the Italian sugar market, they suffer damage by the advantage thus given to the addressees of the contested decisions, with whom they are in competition; particularly because of the introduction of the quota system provided for in Regulation No 1009/67 EEC of the Council of 18 December 1967, on the common organization of the market in sugar (OJ No 308) and by Regulation
7. The mere fact that a measure may exercise an influence on the competitive relationships existing on the market in question cannot suffice to allow any trader in any competitive relationship whatever with the addressee of the measure to be regarded as directly and individually concerned by that measure.
8. The allegation of the applicants that the contested decisions have a direct effect upon their situation in the system of distribution of quotas provided for by Regulations Nos 1009/67 and 1027/67 tends to show the existence of such specific circumstances in respect of them.
9. In order to prevent surplus production and to promote regional specialization of production, the aforementioned regulations have for a transitional period established a system of quotas consisting in the allocation to each sugar undertaking or factory of a basic quota for which the price and sales guarantee is borne by the Community, such guarantee being limited or excluded for quantities manufactured above the quota.
10. By a Ministerial Decree of 26 February 1968, the Italian Government adopted, in respect of the distribution of 10 % of the basic quantity, criteria which allowed only undertakings satisfying certain general conditions and objectives to obtain within previously fixed limits, and leaving aside one exception irrelevant to the present case, an automatic increase of their basic quota.
11. It appears from these facts that such EAGGF aid as that granted by the contested decisions has no influence upon the distribution of quotas except to the extent to which the criteria adopted by the governments allow it.
12. The applicants have further alleged that the contested decisions, and in particular that concerning the Castiglion Fiorentino sugar refinery, influenced the distribution of the basic quantity by the Italian Government, by reason of the fact that they made the payment of aid subject to an undertaking from the said Government to allocate to the recipients a basic quota corresponding to their increased capacity.
13. Nevertheless, the condition mentioned cannot be regarded as having determined the content of the criteria for distribution adopted by the Italian Government.
14. The circumstances relied upon by the applicants do not, therefore, establish that the contested decisions were of direct and individual concern to them.
15. This application concerns the annulment of the implied decision of rejection resulting from the silence maintained by the Commission in respect of the request addressed to it by the applicants seeking the annulment or revocation of the three disputed decisions for illegality or otherwise because they are inappropriate.
16. The action provided for in Article 175 is intended to establish an illegal omission as appears from that article, which refers to a failure to act in infringement of this Treaty and from Article 176 which refers to a failure to act declared to be contrary to this Treaty.
17. The Treaty provides, however, particularly in Article 173, other methods of recourse by which an allegedly illegal Community measure may be disputed and if necessary annulled on the application of a duly qualified party.
18. This application does not therefore satisfy the requirements of Article 175 of the Treaty and must thus be held to be inadmissible.
19. Under Article 69(2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs. As the applications of the applicants are inadmissible, it is appropriate to order them to pay the costs, including those of the interventions;
On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon bearing the opinion or the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Articles 173 and 175; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, THE COURT hereby;
1 Dismisses Applications 10/68 and 18/68 as inadmissible;
2 Orders the applicants to pay the costs, including those of the interventions.