Report for the Hearing delivered in Case 32/86

I — Facts and procedure

1. By a letter of 11 October 1983, the Commission informed the applicant, Società industrie siderurgiche meccaniche e affini SpA (Sisma), a steel undertaking whose registered office is in Milan, of its production quotas for the fourth quarter of 1983 and that part of those quotas which could be delivered in the common market.

2. By letter of 10 February 1984, the applicant applied to the Commission for additional quotas for the first quarter of 1984 under Article 14C of Commission Decision No 234/84 of 31 January 1984 (Official Journal 1984, L 29, p. 1) extending the system of monitoring and production quotas, which is drafted in similar terms to the aforementioned Article 14C of Decision No 2177/83. The ground for the applicant's request was the fact that it had received an order for 4452 tonnes of rolled products coming within category VI to be delivered to the USSR during the first quarter of 1984 that is to say, a quantity exceeding by over 10% the part of the quota which the applicant was not authorized to deliver in the common market.

3. By letter of 14 February 1984, the Commission informed the applicant of its production quotas for the first quarter of 1984 and of the part of those quotas which it was authorized to deliver in the common market. It is common ground that, in that decision, the Commission did not take account of the request made by the applicant in its abovementioned letter of 10 February 1984.

4. In a letter of 19 March 1984, the applicant informed the Commission that in order to relieve the pressure of sales on the Community market, it had Obtained an order from the Soviet Union, to be delivered by 15 April 1984 for 1428 tonnes of hot rolled sections having all the characteristics required to be regarded as special sections. According to the applicant, such special sections were are not manufactured by any other Community producer and were not therefore likely to give rise to any disturbance of the Community steel market. Consequently, according to the applicant, the sections involved should not be subject to the production quota system established by the aforementioned Decision No 234/84 and, as such, should be exempt from any Community obligation since they are to be delivered to a nonmember country.

5. In a letter of 17 April 1984, the Commission replied to the applicant's request of 10 February 1984 without taking account of the letter of 19 March 1984. The Commission stated, inter alia, that the applicant fulfilled all the conditions required by Article 14C of Decision No 2177/83, that the applicant had obtained exceptional orders for exports of special products to the Soviet Union which [were] of a certain interest to the Community and that the total quantity of products in category VI ordered exceeded by over 10% the part of the quota which the applicant was not authorized to deliver in the common market. Therefore, pursuant to Article 14C of Decision No 234/84, the Commission granted the applicant an additional production quota in respect of category VI for the first quarter of 1984 of 610 tonnes.

6. In a letter of 22 May 1984, the Commission replied to the applicant's letter of 19 March 1984. In that letter, the Commission informed the applicant that having regard to the quantities to be exported, Article 14C of Decision No 234/84 could not be applied to the case in question. Moreover, it stated that with regard to the characteristics of the products in question and the particular use to which they were to be put, even special products developed by a very small number of undertakings for very specific uses [are] subject to the quota system even to the extent that [Article 10 (2) of Decision No 234/8.4] provides for the allocation of additional quotas to undertakings if special products represent at least 50% by weight of their production in the category or categories in question. Consequently, in the Commission's view, the quantities of special sections at issue must be included in the declarations required to be made to the Commission under the quota system.

7. In a letter of 14 August 1984, the Commission complained that the. applicant had exceeded its production quotas for the fourth quarter of 1983 in respect of categories IV and VI by 660 and 462 tonnes respectively. More particularly, that letter stated the following:

8. In the meantime, in a letter of 27 November 1984, the Commission informed the applicant of its finding that even after taking account of the additional quota of 610 tonnes in respect of category VI, the applicant had exceeded its production quotas for the first quarter of 1984 by 51 and 3375 tonnes for categories IV and VI respectively.

9. By a decision of 18 June 1985, the Commission imposed on the applicant a fine of 27850 ECU for exceeding its production quota for the fourth quarter of 1983 by 652 tonnes in respect of category IV and 462 tonnes in respect of category VI.

10. Finally, by a letter of 27 December 1985, which was received by the applicant on 8 January 1986, the Commission transmitted a copy of the decision which the Commission adopted on 20 December 1985 and which imposed on the applicant a fine of 85650 ECU for having exceeded the production quota for the first quarter of 1984 by 51 tonnes for category IV and by 3375 tonnes for category VI.

11. By an application lodged at the Court Registry on 7 February 1986 the applicant brought the present action under Article 36 of the ECSC Treaty for a declaration that the Commission's decision of 20 or 27 December 1985 is void.

12. 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. However, the Court called upon the Commission to produce certain documents.

13. By decision of 5 November 1986, the Court assigned the case to the Second Chamber.

II — Conclusions of the parties

1. The applicant claims that the Court should :

2. The Commission contends that the Court should:

III — Submissions and arguments of the parties

The applicant advances three submissions:

A — Breach of essential procedural requirements

1. In the applicant's view, the breach of essential procedural requirements must be considered from two aspects, the formal breach itself, and the insufficient or contradictory statement of the reasons for the contested measure.

2. In the first place, the Commission explains that the decision at issue was adopted on 20 December 1985 (as was indicated in the communication in the Official Journal, C series, of 31.12. 1985) and that the error in the copy transmitted to the applicant is merely a clerical error which does not affect the substance of the measure. In this case, the error could not have caused any difficulties for the applicant since the time-limit for bringing an action begins not on the date on which a decision is adopted but on the date on which the decision is notified to the addressee, in this instance, therefore 8 January 1986. Secondly, the Commission emphasizes that Decision No 2760/85 was cited in the contested decision merely because it was the most recent amendment of the underlying general Decision (No 234/84) to which the contested decision refers.

B — Infringement of the Treaty and its implementing rules

1. In the applicant's view, this submission involves two separate infringements:

2. (a) The Commission points out, on the one hand, that the letter of 29 December 1983 expressly indicated that the 1491 tonnes were granted in respect of the fourth quarter of 1983 and, on the other, that it had taken account of that additional quota in calculating the excess for the said quarter, which made it possible to reduce the excess in respect of category VI. Moreover, the Commission considers that there is nothing contradictory in its position concerning the 1428 tonnes for the Soviet market. As a result of an express request from the applicant, the Commission adopted a decision, communicated by letter of 29 December 1983, to the effect that the conditions laid down in Article 14C of Decision No 2177/83 had been fulfilled and that therefore an additional production quota of 1491 tonnes could be allocated to the applicant in respect of the fourth quarter of 1983. However, the 1428 tonnes referred to in the applicant's letter of 19 March 1984 constituted too small a quantity compared to the quotas allocated tó the applicant to bring into operation the mechanism provided for in Article 14C. Similarly, Article 10 (2) of Decision No 234/84 merely provides that the Commission may, but is not required to, allocate additional quotas if the undertaking fulfils certain conditions and if the specific nature of the products in question is not such as to remove them completely from the scope of Community rules, as the applicant claimed in its letter of 19 March 1984. Finally, the Commission points out that in that letter the applicant indicated that the products were to be delivered during the second quarter of 1984. However, in those circumstances, the order in question could not have any influence on the applicant's quota for the first quarter of 1984 and that also invalidates the applicant's argument to the effect that if the 1428 tonnes and the 1491 tonnes were attributed to the first quarter of 1984, the excess for that quarter which is the object of the dispute would be practically eliminated. (b) Finally, the Commission rejects the second limb of the appliant's submission. What the applicant regards as a tendency to act automatically is merely the normal form of words used in all decisions imposing penalties. In actual fact, in this case, the applicant received better treatment than that to which it was entitled since the statement of the reasons on which the contested decision is based includes a passage which grants it for the second time, that is to say, for two consecutive quarters, a reduction in the rate of fine on the basis of a single omission on the part of the Commission.

C — The existence of exceptional circumstances

1. In the applicant's opinion, if the complaints set out above do not justify the contested decision being declared void, they should be taken into account as factors demonstrating the existence of exceptional circumstances, that is to say, of such a nature as to justify a merely nominal fine.

2. The Commission merely points out that if exceptional circumstances actually exist, account may be taken of them when the applicant comes to pay the fine, if the latter makes an appropriate application to the Commission.

1 Language of the Case: Italian.