JUDGMENT OF 18. 3. 1980 — JOINED CASES 26 AND 86/79 FORGES DE THYMARCINELLE ET MONCEAU v COMMISSION
In Joined Cases 26 and 86/79
THE COURT composed of: H. Kutscher, President, A. O'Keeffe and A. Touffait, Presidents of Chambers, J. Mertens de Wilmars, P. Pescatore, Lord Mackenzie Stuart, G. Bosco, T. Koopmans and O. Due, Judges, Advocate General: F. Capotorti Registrar: A. Van Houtte
gives the following
JUDGMENT
Facts and Issues
I — Facts and procedure
II — Conclusions of the parties
Ill — Summary of the submissions and arguments of the parties
A — As to the infringement of Decision No 962/77/ECSC fixing minimum prices
(a) Concerning the sales in Belgium
1. The transaction with Etablissements /ouret
2. The transaction with Dema S.A.
(b) Concerning the sales in France
1. The transactions with Etablissements Champion
2. The transactions with Etablissements Davum
B — As to the validity of Decision No 962/77/ECSC fixing minimum prices
1. Admissibility
2. Breach of the principle of proportionality
3. Breach of the principle of nondiscrimination According to the applicant Decision No 962/77/ECSC constitutes clear discrimination against undertakings in the Common Market bound by the minimum prices system whereas undertakings of nonmember countries could act in complete freedom. Up to 31 December 1977 there was therefore a breach of the principle of nondiscrimination which constitutes a fundamental right (judgment in Joined Cases 124/76 and 20/77 of 19 October 1977, ECR 1795).
C — The amount of the fine
D — The necessity for Application No 86/79
IV — Oral procedure
Decision
A — The objection of unlawfulness raised against General Decision No 962/77/ECSC
(a) Admissibility
(b) The objection of lack of proportionality
(c) The objection of discrimination
B — The annulment of the individual decisions imposing fines on the applicant
C — The amount of the fine
Costs
I —. Facts and procedure
II —. Conclusions of the parties
1. Annul the individual decision of the Commission of 10 January 1979 concerning the applicant company, with or without a prior declaration that Decision No 962/77/ECSC of 4 May 1977 (Official Journal L 114 of 5 May 1977, p. 1) is illegal;
2. Order the Commission to pay the costs.
1. Dismiss the application as unfounded;
2. Order the applicant to pay the costs.
—. Declare the application admissible and unfounded in regard to the first submission in so far as it seeks a declaration that there has been no breach of Decision No 962/77/ECSC fixing minimum prices;
—. Declare the application inadmissible and in any event unfounded in regard to the second submission in so far as it seeks the annulment of Decision No 962/77/ECSC.
1. Annul the individual decision of the Commission of 2 May 1979 regarding the applicant company, with or without a prior declaration of the illegality of Decision No 962/77/ECSC of 4 May 1977 (Official Journal L 114 of 5 May 1977, p. 1);
2. In the alternative, reduce the fine imposed by the Commission on the applicant by the decision of 10 January 1979 in proportion to the reduced amount of any sales which may be found to be irregular;
3. Order the Commission to pay the costs.
1. Declare the application unfounded to the extent to which it seeks the annulment of the decision of 2 May 1979;
2. Declare the application inadmissible and in any event unfounded to the extent to which it claims that Decision No 962/77/ECSC of the Commission is illegal;
3. Declare the application unfounded to the extent to which it seeks a reduction of the fine in proportion to the amount of the irregular sales;
4. Order the applicant to pay the costs.
Ill —. Summary of the submissions and arguments of the parties
A —. As to the infringement of Decision No 962/77/ECSC fixing minimum prices
(a). Concerning the sales in Belgium
1. The transaction with Etablissements /ouret
2. The transaction with Dema S.A.
(b). Concerning the sales in France
1. The transactions with Etablissements Champion
2. The transactions with Etablissements Davum
B —. As to the validity of Decision No 962/77/ECSC fixing minimum prices
1. Admissibility
2. Breach of the principle of proportionality
3. Breach of the principle of nondiscrimination According to the applicant Decision No 962/77/ECSC constitutes clear discrimination against undertakings in the Common Market bound by the minimum prices system whereas undertakings of nonmember countries could act in complete freedom. Up to 31 December 1977 there was therefore a breach of the principle of nondiscrimination which constitutes a fundamental right (judgment in Joined Cases 124/76 and 20/77 of 19 October 1977, ECR 1795).
C —. The amount of the fine
D —. The necessity for Application No 86/79
IV —. Oral procedure
1. By a first application received at the Court Registry on 15 February 1979 the applicant company, Forges de Thy-Marcinelle et Monceau S.A., challenged on the basis of Article 36 of the ECSC Treaty an individual decision of the Commission of 10 January 1979 ordering it to pay a fine of 35794 European units of account, that is Bfr 1425000, for irregular sales of concrete reinforcement bars at prices lower than the minimum prices fixed by General Decision No 962/77/ECSC of 4 May 1977 (Official Journal L 114, p. 1) adopted pursuant to subparagraph (b) of the first paragraph of Article 61 of. the ECSC Treaty. In that decision of 10 January 1979 the Commission assessed the value of the disputed sales at Bfr 127614446 and the extent of the underpricing in relation to the minimum prices at Bfr 14241366 in respect of the sale of 11977.48 tonnes of concrete reinforcement bars. The fine was thus fixed at 10% of the extent of the underpricing estimated by the Commission at that time.
2. The decision of 10 January 1979 was amended by the Commission by a new decision of 2 May 1979 which reduced the fine to 32471 European units of account, that is Bfr 1305000, pursuant to observations by the applicant which showed that the extent of the underpricing was only Bfr 13052510 in respect of 9424.85 tonnes, the value of the irregular sales being reduced to Bfr 103477579.
3. By a second application received àt the Court Registry on 31 May 1979 the applicant company challenged the amending decision of 2 May 1979. The two cases were joined by order of 13 June 1979 for the purposes of the procedure and of judgment.
A —. The objection of unlawfulness raised against General Decision No 962/77/ECSC
(a). Admissibility
4. In its first application, to challenge the lawfulness of Decision No 962/77/ECSC of 4 May 1977 fixing the minimum prices for concrete reinforcement bars, the applicant confined itself to alluding to various reasons without mentioning them. Such a statement of reasons does not satisfy Article 38 (1) (c) of the Rules of Procedure of the Court which requires that the application should state the grounds on which the application is based. On the other hand, the second application meets that requirement, clarifying the same submission by reliance on an infringement of the principles of nondiscrimination and of proportionality. As the two cases are joined, the admissibility of the second application covers any inadmissibility of the first and the arguments put forward in support of the submission in the reply in Case 26/79 must therefore be taken into consideration in deciding the joined cases.
(b). The objection of lack of proportionality
5. The applicant argues that to the extent to which Decision No 962/77 was not replaced by Decision No 3000/77 of 28 December 1977 (Official Journal L 352, p. 1) which was accompanied by the introduction of basic prices applicable to imports from nonmember countries (Commission statement published in Official Journal L 353 of 31 December 1977), it was unavailing, not to say damaging, and was an extreme case of violation of the principle of proportionality. Whilst, according to the applicant, Decision No 962/77 was intended to remedy the collapse of the market for concrete reinforcement bars and the deteriorating financial position of undertakings, the means used were wholly inadequate.
6. In its judgment of 24 October 1973 (Case 5/73 Balkan [1973] ECR at p. 1111) the Court has already acknowledged that although in exercising their powers the Institutions must ensure that the burdens which commercial operators are required to bear are no greater than is required to achieve the aim which the authorities are to accomplish, it does not necessarily follow that that obligation must be measured in relation to the individual situation of any one particular group of operators. Even if it may be admitted that General Decision No 962/77 was defective and insufficient in regard to the matter of imports from nonmember countries, there is no evidence in the applicant's arguments to show that those rules imposed restrictions which were out of keeping with the common interest and that they constituted a disproportionate measure in relation to the aim which they sought to achieve. In those circumstances that objection can only be dismissed.
(c). The objection of discrimination
7. Relying on the facts described above, the applicant argues that the Community undertakings bound by Decision No 962/77 suffered discrimination in relation to undertakings in nonmember countries which were able to act in complete freedom up to 31 December 1977. It believes that it has thus been a victim of that form of discrimination consisting of treating similar situations unequally.
8. There is however no similarity of situation here; Decision No 962/77 of itself covers only the prices to be charged by Community undertakings, which are the only ones referred to by the said decision, in regard to sales to be effected within the Community.
9. The applicant also referred to the temporary lacuna in the rules in that they did not apply to producers in nonmember countries.
10. It has not however proved that those producers actually took advantage of that lacuna in order to influence the market to the point of appreciably worsening its financial situation. Consequently, even if the measure in dispute did require sacrifices of certain undertakings for the sake of Community solidarity, it did not cause them undue hardship. That objection must therefore be dismissed also.
B —. The annulment of the individual decisions imposing fines on the applicant
11. There are no grounds for distinguishing the decision of 10 January 1979 from the amending decision of 2 May 1979. The position of the applicant should be considered in the light of those two decisions after the amendment was made.
12. The objection made by the applicant against the individual decisions in suit is that it is not possible to apply General Decision No 962/77 to transactions effected before the date of application of the said decision, which states that the minimum prices are compulsory for transactions effected on or after the third day following (its) entry into force. According to the applicant, it was only the delivery of the concrete reinforcement bars which was subsequent to that date since the transactions themselves, that is to say the contracts, had been concluded prior to the entry into force of the general decision. That argument, the applicant says, applies equally to the transactions concluded with the Belgian firms Jouret and Dema and to those concluded with the French firm Davum, which the applicant says it effected on 21 April 1977, 22 April 1977 and 5 and 6 May 1977 respectively, those dates being the ones on the order forms. Those four transactions, in which the agreed price was the list price in force at the time of despatch, were therefore effected, it argues, before 8 May 1977, the date on which Decision No 962/77 entered into force, and the actual price was therefore determined in advance by reference to a price list in force.
13. That line of argument just be rejected. A transaction is not effected within the meaning of Article 2 of Decision No 962/77, which is intended to prohibit all transactions below a minimum price from 8 May 1977 throughout the Community, until the exact price actually charged is fixed. If the price remains uncertain, as is the case here, because there is no price indicated in the contract or because reference is made to list prices in force at the time of despatch, the transaction cannot be regarded as having been effected within the meaning of Article 2 of Decision No 962/77.
14. To that first finding must be added the fact that the price actually paid by the buyers further involved a rebate as against the list price in force at the time of despatch.
15. It should be noted that under a system of minimum prices transactions which are still to be concluded or completed must all comply with the requirement inherent in the imposition of such prices, so that any practice, such as in this case, entailing rebates and credit notes devoid of any real substance cannot be relied on to justify sales at prices lower than the minimum prices imposed. Whatever method of calculation is used, the actual price, calculated after the entry into force of Decision No 962/77, may not therefore be lower than the minimum prices.
16. The applications for annulment should consequently be dismissed.
C —. The amount of the fine
17. After establishing that the applicant was experiencing difficulties of an economic and social nature, and in view of its financial position, the Commission imposed upon it only a fine equivalent to 10% of the underpricing practised. Equitable account was therefore taken of the position in which the applicant found itself.
18. In Case 86/79 the applicant challenged the calculation of the fine reduced by the amending decision of 2 May 1979; it argues that instead of being proportional to the amount of the underpricing that reduction of the fine should be proportional to the amount of the irregular transactions. It should be noted in regard to this matter that the criticized method of calculation was used by the Commission in connexion with all the infringements of General Decision No 962/77 committed by average-sized undertakings operating at a loss and that it was approved by the Court.
19. Having substantially failed in its submissions the applicant must be ordered to pay the costs.
On those grounds, THE COURT hereby:
1 Dismisses the applications;
2 Orders the applicant to pay the costs.