Report for the Hearing delivered in Case 281/84

I — Facts and issues

1. The common organization of the markets in the sugar sector, which has existed since 1968 in the European Economic Community and on which the most recent Council Regulation is Regulation No 1785/81 of 30 June 1981 (Official Journal 1981, L 177, p. 4), provides for a combined price and quota system, in which a basic quota, the A quota, and an additional quota, the B quota, are allotted to each sugar undertaking. Together the two quotas are the maximum quota which may be freely marketed in the common market and which can count on a guaranteed market.

2. The various sugar prices, like all the other prices under the common organization of the agricultural markets, were originally fixed in units of account (ECU since 1979) and then converted into national currency on the basis of fixed parities declared and accepted by the International Monetary Fund.

3. To overcome the difficulties caused by monetary compensatory amounts and to reintegrate the agricultural sector into the general economy by aligning the representative rates on the actual rates (the central rates), the Council adopted Regulation No 855/84 of 31 March 1984 on the calculation and dismantlement of the monetary compensatory amounts applying to certain agricultural products. That regulation provided on the one hand for changes in the calculation of the monetary compensatory amounts (Article 1) and on the other for alteration of the representative rates and compensatory measures (Articles 2 to 6).

4. The financial effects of Regulation No 855/84 of 31 March 1984 in the sugar sector must be considered at the same time as the decisions adopted on the same day in relation to prices. Article 1 (2) of Council Regulation No 1105/84 of 31 March 1984 fixing for the 1984/85 marketing year the sugar prices and standard quality of beet (Official Journal 1984, L 113, p. 12) fixed the intervention price for white sugar at 53.47 ECU per 100 kg; applying the representative rate in force until then, that amounts to 134.45 DM per 100 kg but to only 127.53 DM per 100 kg applying the rate in force from 1 January 1985, that is to say there was a reduction in the net intervention price of DM 6.92 per 100 kg.

5. By two identical letters of 9 August 1984 sent respectively to the Council and to the Commission, the three applicants, Zuckerfabrik Bedburg AG, Lehrter Zucker AG and Lippe-Weser Zucker AG, requested the Community under the second paragraph of Article 215 of the Treaty to make good the damage which they had already suffered and would suffer as a result of the price reduction. In that respect the two letters state inter alia:

6. The applicants' request was rejected by the Council and the Commission by letters dated respectively 25 September and 1 October 1984, both referring to the transitional measures which had in the meantime been adopted by Commission Regulation No 2677/84 of 20 September 1984 on transitional measures in readiness for the revaluation of the representative rate for the German mark on 1 January 1985, which was published in the Officiai Journal of 21 September 1984 (L 253, p. 31) and entered into force the same day.

II — Written procedure and conclusions of the parties

1. By an application received at the Court Registry on 27 November 1984 the applicants commenced the present action.

2. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry. The parties were invited to answer in writing certain questions.

3. The applicants claim that the Court should:

4. The European Economic Community, represented by the Council and the Commission, contends that the Court should:

III — Submissions and arguments of the parties

A — Admissibility

1. The Council and the Commission consider that the application is inadmissible.

2. The applicants deny that the action is inadmissible.

B — Substance

(i) Liability of the Community

1. The applicants claim that the provisions of Regulations Nos 855/84 and 2677/84 infringe superior rules of law intended to protect individuals which are sufficiently specific to render the Community liable according to the case-law of the Court. The applicants claim that Regulation No 855/84 is unlawful on the following grounds:

2. The Council and the Commission observe that the conditions for non-contractual liability of the Community for an unlawful legislative measure are that there must be a sufficiently serious breach of a superior rule of law protecting individuals, that is to say that the institution concerned must have so patently and seriously exceeded the limits to the exercise of its powers that it may be said to have acted almost arbitrarily. The Council and the Commission consider that those conditions are not satisfied in the present case, either in respect of Regulation No 855/84 or, in the Commission's view, in respect of Regulation No 2677/84.

(ii) The causal link between Regulation No 855/84 and the alleged damage

1. The Council denies that there is any causal link between the legal measure it adopted, namely Regulation No 855/84, and the alleged damage. Thus the applicants apparently admit that Article 7 of the regulation would have allowed the Commission to adopt a measure providing for a complete compensation such as that recommended by the applicants. If that were so, Regulation No 855/84 could not be the direct cause of the alleged damage.

2. In so far as the Council contends that Article 7 of Regulation No 855/84 allowed the Commission to grant compensation for the fall in prices, the applicants refer to the contentions of the Council and the Commission that Article 7 contains no such power and that the Council has not mentioned or decided any such compensation for the fall in prices.

(iii) Damage

1. The applicants observe that their claim is not concerned with any losses for the last months of 1984 but with the reduction or loss of income from the stocks held on 31 December 1984 due to the measures adopted by the Council and the Commission. The applicants' information concerning the prices they obtained during the last quarter of 1984 and also the sale prices of undertakings published by the German Federal Statistical Office clearly show that sugar manufacturers were not able to maintain the market prices of previous months; on the contrary market prices fell very rapidly in 1984 and from January to March 1985 slipped almost to the level of the new intervention price.

2. The Council considers that the applicants have suffered no damage for which compensation is payable under Article 215 of the Treaty.

3. The Commission takes the view that the applicants are unable to establish damage whatever way the question is considered. The only acceptable method is to make a specific calculation based on the position of the applicant undertakings under Regulation No 2677/84, taking into account actual sales during the last quarter of 1984 and 1985 at the monthly market prices actually charged in so far as such figures are already available. That calculation shows that the applicants, as producers, have suffered no damage attributable to the Commission. A calculation on the basis of the actual sales in 1984 and sales in 1985 (partly based on estimates) and on the basis of the (ex-factory) prices actually charged on the market compared with the intervention price expressed in German marks shows a loss or profit on the processing margin as follows:

IV — Questions put to the parties

The Court requested:

1. the German Government to produce a table showing

2. the applicants to submit a calculation or estimate, supported by evidence, of the losses they suffered (or any gains they made) as a result of the revaluation of the green German mark as from 1 January 1985 either without or with the benefit of the transitional measures under Regulation No 2677/84 by comparison with the situation if the new green rate had taken effect in respect of all the common prices at issue as from 1 July 1984;

3. the Commission to explain in detail the basis of its calculations and figures in the annex to its rejoinder.

1 Language of the Case: German.

2 The market and intervention prices given for sugar relate solely to white sugar since unrefined sugar was not the subject of any commercial dealings in the Federal Republic'of Germany. The market price of white sugar includes the charge for storage costs payable by the seller. Besides the intervention price the table thus also shows in brackets the intervention price increased by the said charge.

3 There is no market price for sugarbeet sold to sugar refineries at a price fixed before the harvest.

4 The minimum prices of A and B sugarbeet are average prices obtained by weighting the various conversion rates in force.