JUDGMENT OF 5. 12 1978 — CASE 14/78 DENKAVIT v COMMISSION

In Case 14/78

THE COURT composed of: H. Kutscher, President, J. Mertens de Wilmars and Lord Mackenzie Stuart (Presidents of Chambers), A. M. Donner, P. Pescatore, M. Sørensen, A. O'Keeffe, G. Bosco and A. Touffait, Judges, Advocate General: H. Mayras Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

I — Facts and procedure

II — Conclusions of the parties

III — Submissions and arguments of the parties

Admissibility

The substance

A — The evaluation of the Commission's conduct

B — Compensation of damage

The order applied for

Compensation

Decision

Costs

I —. Facts and procedure

1. Council Directive No 74/63/EEC of 17 December 1973 (Official Journal 1974, L 38, p. 31) fixes maximum permitted levels for undesirable substances and products in feeding-stuffs which are tolerated in those feeding-stuffs only under the conditions set out in the annex to that directive (Article 3). Feeding-stuffs which conform to the provisions of that directive may no longer be subject to any other marketing restrictions as regards the presence of undesirable substances and products (Article 7). However, pursuant to Article 5 of the directive Member States may, if a product not listed in the annex presents a danger to animal or human health, forbid by a immediately applicable measures the presence of that product in feeding-stuffs or fix maximum permitted levels. If the Member State concerned makes use of this power it must advise the other Member States and the Commission without delay of the content of and the reasons for the measure which it has adopted, and Article 5 (2) further provides that:

2. On 7 September 1976 the Italian Government, in exercise of the power provided by Article 5 of the directive, by an urgent note (biglietto urgente) of the Minister of Health prohibited the marketing of feeding-stuffs containing powdered milk or powdered whey having a nitrate content exceeding 30 and 50 parts per million (milligrammes per kilogramme) respectively. That prohibition caused the detention in September 1976 at the Italian frontier of a delivery of feedings-stuffs by the undertaking Denkavit B.V. to the undertaking Tedeschi and gave rise to an action before the Pretura di Lodi and to a reference to the Court for a preliminary ruling pursuant to Article 177 of the EEC Treaty (Case 5/77, Carlo Tedeschi v Denkavit Commerciale s.r.l. [1977] ECR 1555).

3. The Court in its judgment of 5 October 1977 acknowledged that Article 5 of the above-mentioned directive was valid and, in so far as the prohibition of the marketing of products which did not comply with the criteria laid down by the provisional national measure was concerned, held that: For products coming from other Member States such prohibition on marketing may take the form of a prohibition on importation.

4. In the meantime, in pursuance of Article 10 of the directive, the interim Italian measure was submitted, first to the Standing Committee for Feeding-stuffs set up by Council Decision No 70/372/EEC of 20 July 1970 (Official Journal L 170, p. 1) and then to the Scientific Committee for Feeding-stuffs set up by Commission Decision No 76/791/EEC of 24 September 1976 (Official Journal L 279, p. 35), for the purpose of providing opinions on scientific and technical questions relating to the nutrition and health of animals in general and on additives, substances and products which might be considered undesirable in feeding-stuffs in particular (Article 2). However, at the date when the present proceedings were commenced these consultations had not resulted in a decision being taken either by the Commission or by the Council on the question whether or not nitrates should be included in the list of undesirable products annexed to Directive No 74/63/EEC.

5. On 9 November 1977 a consignment of feeding-stuffs, of which the potassium nitrate content exceeded the level permitted by the Italian measure and which Denkavit Commerciale, the first applicant in these proceedings, had intended to import once again into Italy from the Netherlands was stopped at the frontier.

6. Upon hearing the views of the Advocate General the Court decided to open the oral procedure without any preparatory inquiry.

II —. Conclusions of the parties

1. Declare that the Commission had acted unlawfully in that it failed to adopt a measure in respect of the Italian State requiring it to revoke the urgent note of 7 September 1976 as regards feeding-stuffs for calves and declare that the retention of the note was unlawful with effect from, principally,7 October 1976 (thirtieth and last day of the period for the emergency procedure under Article 10 of Directive No 74/63/EEC) or, in the alternative,5 November 1977 (thirtieth and last day of the period for the said emergency procedure as from the date on which judgment was delivered in Case 5/77);

2. In any event order the Commission, so as to avoid aggravation of the injury, to take measures urgently on the basis of the combined provisions of Articles 5 and 10 of Directive No 74/63/EEC in order to re-establish the free movement into Italy of feeding-stuffs for calves which is obstructed by the urgent note of 7 September 1976;

3. Consequently order the European Economic Community and, on its behalf, the Commission of the EEC to refund to the applicants by way of compensation for the injury such sums as shall be determined in the course of the proceedings and which are derived:

4. Order the Commission to pay the costs of the proceedings.

III —. Submissions and arguments of the parties

A —. The evaluation of the Commission's conduct

(1). Principally, in that the Commission failed to carry through the procedure laid down in Articles 5 and 10 of Directive No 74/63/EEC in such a way that it resulted in the Italian Government's being forbidden to maintain in force the measure at issue within 30 days from the date when the urgent note (biglietto urgente) of 7 September 1976 was brought to its notice.

(2). In the alternative, in that the Commission did not issue the said prohibition, at least within 30 days from the date of the judgment delivered by the Court of Justice on 5 October 1977 in Case 5/77 (Carlo Tedeschi v Denkavit s.r.l., mentioned above).

B —. Compensation of damage

1. The purpose of the application, which was received at the Court Registry on 13 February 1978, according to its wording, and on the basis of Article 215 of the Treaty, is:

2. The first claim relates not to the subject-matter of the application but to the legal foundation which may justify the two other claims, so that the examination of that claim involves consideration of the other two.

3. As far as concerns the second claim in this application, the Commission by Decision No 78/523/EEC of 30 May 1978 (Official Journal L 159, p. 45) — adopted during these proceedings — decided on the basis of Council Directive No 74/63/EEC of 17 December 1973 on the fixing of maximum permitted levels for undesirable substances and products in feeding-stuffs that it was unnecessary to fix maximum permitted levels for nitrates in feeding-stuffs (Article 1) and that the Italian Republic should take the measure necessary to comply with that decision within one month of its notification (Article 2), which means that the Government of that Member State was required to repeal the urgent note (biglietto urgente) at issue within the period specified.

4. Consequently this claim no longer has any purpose.

5. The third claim in the application is for compensation for the damage which the applicants claim to have suffered by reason of the fact that deliveries of feeding-stuffs by Denkavit Nederland — the second applicant — to its Italian subsidiary, Denkavit Commerciale — the first applicant — and in particular one delivery of 12 tonnes which arrived at the Italian frontier on 9 November 1977, were stopped at the said frontier because their potassium nitrate content was higher than that permitted by the urgent note issued by the Italian Minister of Health on 7 September 1976.

6. It is the applicants' view that the Commission, by failing, as from 7 October 1976 — being one month after the adoption of the urgent note — and in any event as from 5 November 1977 — being one month after the judgment of the Court of 5 October 1977 in Case 5/77, Carlo Tedeschi V Denkavit Commerciale s.r.l. [1977] ECR 1555 — to require the Italian Government to repeal the measure complained of, has acted in such a way as to incur liability within the meaning of the second paragraph of Article 215 of the Treaty.

7. A period of nearly 21 months elapsed between the date of the Italian measure — 7 September 1976 — and the date when the Commission adopted the decision requiring the Government concerned to withdraw it — 30 May 1978.

8. Consequently, taking into account the fact that the measure at issue was an obstacle to trade between Member States, it is necessary to consider whether the Commission, by conduct for which there was no justification, did not improperly contribute to the maintenance of that obstacle and thereby incur liability.

9. When the Italian Government adopted the measure complained of on 7 September 1976 it was a matter of uncertainty at law whether that measure's legal foundation was Council Directive No 70/524 of 23 November 1970 concerning additives in feeding-stuffs (Official Journal, English Special Edition 1970 (III), p. 840) — in which case it was definitive, subject to a review of its legality — or Council Directive No 74/63/EEC of 17 December 1973 on the fixing of maximum permitted levels for undesirable substances and products in feeding-stuffs — in which case it was merely a provisional measure adopted in exercice of the emergency powers conferred upon Member States by Article 5 of the directive, in anticipation of the Commission's decision, in accordance with the procedure laid down in Article 10 of the said directive, as to whether or not it was necessary to add nitrates to the list of undesirable substances and products.

10. This state of uncertainty was not brought to an end until, on 5 October 1977, in response to a request for a preliminary ruling, the Court of Justice delivered a judgment in which it held that the Italian measure came within the field of application of Directive No 74/63/EEC, so that it is only as from that date that it would be reasonable to require the Commission to have set in motion the procedure laid down in Article 10 of that directive.

11. Pursuant to Article 5 of Directive No 74/63/EEC, if a Member State adopts a provisional measure which restricts the free movement of goods, on the specific ground that the presence in certain feeding-stuffs of substances or products, which it considers are undesirable and of which the permissible level has not yet been determined by the directive, is detrimental to animal or human health, an immediate decision shall be made, in accordance with the procedure laid down in Article 10 of the directive, as to whether or not the annex to that directive should be supplemented or modified.

12. In the meantime the Member State may maintain, on a provisional basis, the measure which it has implemented.

13. Article 10 of Directive No 74/63/EEC provides that the decision as to whether or not to enter the substance in question on the list of undesirable products shall be adopted by the Commission provided that the latter complies in this connexion with the opinion previously delivered by a Standing Committee for Feeding-stuffs (hereinafter referred to as the Standing Committee).

14. If, on the other hand, the Commission wishes to depart from that opinion it must confine itself to submitting a proposal to the Council which must make the decision, the Commission regaining some of its freedom of action only if the Council has not reached a decision within 15 days.

15. On 7 September 1976 the matter was brought before the Standing Committee, which decided at its first meeting on that date that the question whether nitrates in feeding-stuffs may be harmful should be referred to a Scientific Committee for Feeding-stuffs which it wished to have set up.

16. On 24 September 1976 the Commission set up that Scientific Committee which met nine times during the years 1976 to 1978 before, as is shown by the minutes of its meetings on 8 December 1977 and 19 April 1978, being in a position to prepare a definitive opinion to the effect that nitrates in feeding-stuffs are harmless.

17. The Standing Committee for its pan had recorded on 27 February 1978 in one of its minutes that eight delegations are opposed to any modification of the annex to Directive No 74/63/EEC and went on to state that consequently the Commission's departments shall endeavour to find a satisfactory solution and in this way refrained from adopting an unambiguous attitude.

18. A sufficiently explicit opinion against the addition of nitrates to the annex to Directive No 74/63/EEC only appears, in the combined minutes of the meetings of the Standing Committee on 3 and 11 May 1978.

19. Immediately afterwards, that is on 30 May 1978, the Commission adopted a decision in accordance with the assessment of the Standing Committee and the Scientific Committee.

20. In those circumstances the Commission cannot be blamed for having waited until it was fully informed before adopting a decision on a matter as complex as the presence in feeding-stuffs of substances which might prove to be undesirable from the point of view of human or animal health.

21. The applicants also submit that the lengthy procedure which was followed was of no avail because it was clear at the outset that the presence of potassium nitrate was harmless.

22. This assertion is refuted both by the refusal of the Scientific Committee to express an opinion before it had carried out experiments and also by the fact that the Commission had drawn up a proposal limiting the potassium nitrate content, at least in the case of feeding-stuffs for certain animals.

23. Furthermore, the applicants overlook the fact that the Commission's responsibilities in this field are of a different kind to those of a trader who, in the case culminating in the judgment of 5 October 1977 (Case 5/77, cited above), conceded that powdered whey with a high nitrate content, which had previously been regarded as industrial waste, was added to feeding-stuffs not in order to improve their quality but for reasons connected with the economies which that operation made possible.

24. The certain knowledge throughout the Community that the institutions of the Community are vigilant to ensure that the free movement of goods cannot have any harmful effects on human or animal health is a factor which encourages that freedom of movement.

25. It follows from the above considerations that the conduct of the Commission is not such that it has incurred liability, so that the application must be dismissed.

26. Under the terms of Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs.

27. The applicants have failed in their submissions and must therefore be ordered to pay the costs.

On those grounds, THE COURT, hereby:

1 Dismisses the application;

2 Orders the applicants to pay the costs.