Opinion of Mr Advocate General Mischo

In an action brought under the second paragraph of Article 36 of the ECSC Treaty, the Società industrie siderurgiche meccaniche e affini SpA (hereinafter referred to as Sisma) is seeking a declaration that an individual decision of the Commission imposing on it, under Article 58 (4) of the ECSC Treaty and Article 12 of Commission Decision No 234/84/ECSC, a fine of 85650 ECU for exceeding its production quotas in respect of categories IV and VI during the first quarter of 1984 is void, or the amendment of the said decision.

A fine of 27850 ECU had previously been imposed on Sisma, by a decision of 18 June 1985 for exceeding its production quotas in respect of the same categories during the last quarter of 1983. Although that decision is not the subject of this action, it plays an important role in the parties' arguments and, therefore, in the resolution of the dispute.

Let me also point out that the amount by which the production quota in respect of category IV was exceeded, approximately 51 tonnes, is not really in dispute and is referred to only incidentally in so far as the applicant's submissions concern the contested decision as a whole.

Having made those general remarks I shall defer any further consideration of the facts and arguments until they arise in discussing the submissions put forward by the applicant.

There are three such submissions. I propose to consider them in the order in which they were presented.

I —

Breach of essential procedural requirements

1. The applicant emphasizes that the letter of notification indicates that the contested decision was adopted on 20 December 1985 although the copy enclosed therewith bears the date of 27 December 1985. It draws from that two conclusions:

(i). on the one hand, uncertainty as to dates and time-limits, which is so often fatal for undertakings, should also be fatal for the Commission;

2. The applicant also complains that in the contested decision, the Commission referred to Decision No 234/84/ECSC ... as last amended by Commission Decision No 2760/85/ECSC although the latter had not yet come into force at the time of the excess complained of and has absolutely nothing to do with that excess.

3. Finally, the applicant claims that the contested decision should be declared void on the ground that the statement of the reasons on which it is based is both insufficient and contradictory.

II — Breach of the Treaty and of Decision No 234/84/ECSC

1. In the first place, the applicant complains that the Commission did not take into consideration, when calculating the excess complained of all the production quotas to which it was entitled during thé period in question, that is to say, the first quarter of 1984.

2. The applicant's second complaint is that the Commission adopted the contested decision automatically without considering in detail the special features of the case and the position of the undertaking at issue. Furthermore, it claims that irregularities in the Commission's conduct not only led to a state of uncertainty but also caused the applicant to make errors in respect of which sanctions should not be imposed on it. It is referring there to the fact that the Commission informed it at a very late stage that it could not carry over quantities pursuant to Article 11 (3) (d) of Decision No 234/84/ECSC, which is applicable only if production quotas have not been used by reason of force majeure or of a shutdown for repairs.

III — Failure to take account of exceptional circumstances

Finally, the applicant claims that if its complaints are not sufficient to cause the contested decision to be declared void, they should however be taken into account as factors proving the existence of exceptional circumstances justifying a merely symbolic fine.

I must therefore also consider the applicant's complaints from that point of view, which unfortunately cannot be done without a certain amount of repetition.

I would first reiterate that the delay in communicating the Commission's decisions allocating additional quotas and the time taken by the Commission to reply to the applicant's letter of 19 March 1984, although regrettable, did not prevent Sisma from pursuing its activities to the extent of exceeding its production quotas, including the additional quotas themselves, both during the fourth quarter of 1983 and the first quarter of 1984.

In particular, with regard to the quota of 1491 tonnes allocated for the fourth quarter of 1983, it must - therefore be considered that the applicant in fact anticipated the decision of 29 December 1983.

With regard to the quantity of 1428 tonnes, even if the time taken to reply might appear excessive, it must be noted once again that no specific application was made to the Commission. If the applicant wished to produce the said quantity of special sections outside the quota system, it had to bear the consequences of its error, particularly since additional quotas had been allocated to it in the past for similar products. But if it hoped to obtain such quotas, it should, if it was to be faithful to its own logic, have awaited the reaction of the Commission before commencing production. However, such a reaction could hardly have been given before the end of the current quarter since Sisma's letter informing the Commission of the receipt of the order in question was dated only 19 March 1984.

Finally, it seems to me that the alleged delay on the part of the Commission could only have been damaging to the applicant in regard to the 610 tonnes allocated for the first quarter of 1984 itself. The application was dated 10 February 1984 and sought the allocation of additional quotas for the first quarter of 1984. However, the Commission's decision allocating those quotas was adopted only on 17 April 1984 and thus applied retroactively to the first quarter of 1984. It was therefore possible that, while awaiting that allocation, Sisma produced more than was finally allocated to it.

However, the applicant did not put forward that argument. On the contrary, as the Court has seen, it relied on that delay to claim that it could no longer attribute the 610 tonnes to the first quarter of 1984. Rather strangely, however, it adds the detail that the goods had already been despatched during the month of March (p. 8 of the reply).

On the other hand, a simple calculation on the basis of the indications contained in Article 14C (1) and (2) should have been sufficient to convince it that there was no possibility of obtaining an additional quota greater than 610 tonnes.

By decision of 14 February 1984, the production quota for the first quarter of 1984 was initially fixed at 26563 tonnes and the part of that quota which could be delivered in the common market was fixed at 23070 tonnes. However, under the said provisions, the additional quota cannot be greater than the difference between the quantity of the orders intended for the non-member countries and the part of the quotas which the undertaking is not authorized to deliver in the common market, increased by 10%. In this case, it could therefore in no circumstances be greater than 610 tonnes, which corresponds to the difference between the 4452 tonnes ordered and the threshold thus fixed (3493 + 349 = 3842 tonnes).

Consequently, the delay in communicating the decision of 17 April 1984 would have justified an excess only if the quota finally allocated had been less than 610 tonnes, which could not automatically be excluded if it had proved to be necessary to apply the second and third sentences of Article 14C (2).

In those circumstances, since the delays on the part of the Commission, even though repeated, neither prevented the applicant from producing during the first quarter of 1984 the quantity in respect of which it could be allocated quotas nor made it impossible for the applicant to plan its production correctly so as to avoid exceeding the quota allocated to it for the quarter in question, the Commission was not bound for equitable reasons to take account of them in fixing the rate of the fine.

In the second place, in regard to the Commission's failure to give the applicant due notice of the correct interpretation of Article 11 (3) (d) of Decision No 234/84/ECSC, I would point out that it took account of that fact by reducing the rate of fine from 50 to 25 ECU per tonne of excess.

What is more, it had already taken account of that same fact when fixing the fine for the excess found to exist in respect of the fourth quarter of 1983.

However, while the Commission may have taken an equitable approach to that infringement, nothing obliged it to show the same clemency a second time in regard to the infringement concerning the first quarter of 1984. The installations in question were closed from 13 August to 3 October 1983, that is to say, during the third quarter of 1983. A carryover to the first quarter of 1984 was therefore also impossible on that basis. Moreover, it was by letter of 3 November 1983 that Sisma informed the Commission that it was going to carry over certain quantities and by letter of 6 February 1984 that it informed the Commission that it had done so. In those circumstances, the possibility of carryover was limited to the fourth quarter of 1983.

The applicant also complains that the Commission did not take account of the fact that, following the abovementioned. restructuring work, which necessitated the temporary shutdown of certain installations, it had been unable to use approximately 8000 tonnes of production quotas allocated to it during 1983.

However, since the applicant's misinterpretation of Article 11 (3) (d) consisted precisely in the belief that it could carry over quantities on the basis of that provision by reason of the restructuring work carried out during the third quarter of 1983, the reduction in the fine granted on that basis may also be regarded as covering the exceptional circumstances resulting from that work, which explained in part why the applicant was unable to use during 1983 all the production quotas which had been allocated to it.

In general terms, furthermore, as the Court emphasized in its judgment of 19 October 1983, the quarterly nature of the quota system... is an essential element of the scheme (paragraph 20).

The Court concluded that a reduction in the production for a subsequent quarter is not capable of correcting a previous irregularity (paragraph 22).

It is-true that in that case the Court reduced the fine to take account of the fact that, on the one hand, the applicant had offered in advance to offset the excess and voluntarily reduced its production (paragraph 26) and, on the other, that the Commission left the applicant in doubt as to whether it accepted its offer (paragraph 27).

In this case, the events which occurred were exactly the reverse. Sisma seeks to justify exceeding its quotas for the first quarter of 1984 by the fact that it had not exhausted all the quotas allocated to it during the successive quarters of 1983. (Far from penalizing itself, it sought justice for itself, so to speak.)

However, in order to take account of difficulties which undertakings might face if the quarterly nature of the scheme were adhered to too rigidly, the quota system contains several express provisions permitting a certain flexibility.

Thus, for example, it can be seen from the letter of complaint concerning the excess in respect of the fourth quarter of 1983 that the Commission did in fact take account of certain parts of quotas carried over from the third quarter of 1983 under Article 11 (3) (a) of Commission Decision No 2177/83/ECSC of 28 July 1983 (Official Journal 1983, L 208, p. 1).

During that third quarter, Sisma could also have availed itself of Article 11 (4) of the same decision, which provides that: Undertakings may, each of the under-. takings concerned having made a prior declaration to the Commission, enter into arrangements with other undertakings during the current quarter for the exchange or sale of quotas or the parts of quotas which may be delivered in the common market pertaining to that quarter.

The same possibility was available to it during the first two quarters of 1983 under Commission Decision No 1696/82/ECSC of 30 June 1982 (Official Journal 1982, L 191, p. 1).

In those circumstances, I do not consider that the Commission made a wrongful use of its discretion in regard to fixing the fine and in particular that it did not take sufficient account of the exceptional situation confronting the applicant.

Conclusion

It follows from the foregoing considerations that the applicant has not succeeded in showing that the contested decision of the Commission is unlawful or, at least, inequitable. I therefore suggest that the Court dismiss the application and order the applicant to pay the costs.

1 Translated from the French.

2 Commission Decision No 234/84/ECSC of 31 January 1984 on the extension of the system of monitoring and production quotas for certain products of undertakings in the steel industry (OJ 1984, L 29, p. 1).

3 OJ C 347, 31.12.1985, p. 1.

4 Case 8/83 Bertolt v Commiiiion [1984] ECR 1649, in particular paragraphs 24 to 26.

5 Commission Decision No 2760/85/ECSC of 30 September 1985 amending Decision No 234/84/ECSC (OJ 1985, L 260, p. 7).

6 See, for example, the judgment of 11 December 1980 in Case 1252/79 Luobini v Commission [1980] ECR 3753, paragraph 14.

7 See, for example, the judgment of 10 December 1986 in Case 41/85 Sideradria v Commission [1986] ECR 3917, paragraphs 5 and 10.

8 Commission Decision No 2177/83/ECSC of 28 July 1983 on the extension of the system of monitoring and production quotas for. certain products of undertakings in the steel industry (OJ 1983, L 208, p. 1).

9 Case 188/82 Tbyilcnv Commiuion [1983] ECR 3721.

10 Judgment of 10 December 1986, [1986] ECR 3917.

11 Let me point out, incidentally, that the Commission's failure to reply to an application for adjustment can be treated only as an implied decision of refusal and not as tacit consent to the adjustment (cf. judgment of 16 February 1984 in Case 76/83 Boil v Commission [1984] ECR 859, paragraph 11).

12 See the judgment in Case 188/82 Thyssen v Commission [1983] ECR 3721, paragraph 10.

13 See the judgment in Case 8/83 Btrtolii Commission [1984] ECR 1649, paragraph 21.

14 Case 66/84 Ferriere di Borgaro SpA v Commission, [1985] ECR 927.

15 That ground justified a reduction in the fine in the judgment of 21 March 1985 in Case 66/84 Ferriere di Borgaro SpA v Commission [1985] ECR 927, paragraphs 21 to 23.

16 Case 179/82 Luabiniv Commission [1983] ECR 3083.

17 See also the judgment of 14 Febniary 1984 in Case 2/83 Alftrv Commission [1984] ECR 799, paragraph 12.