Report for the Hearing in Joined Cases C-363/88 and C-364/88

I — Facts and procedure

1. Having regard to the persistence of the crisis in the European iron and steel sector, the Commission adopted, at the end of 1983 and the beginning of 1984, a series of decisions intended to strengthen the effect of the measures previously adopted and consisting essentially of the rules for aids (Commission Decision No 2320/81/ECSC of 7 August 1981, Official Journal 1981 L 228, p. 14) and the system of production quotas (Commission Decision No 2177/83/ECSC of 28 July 1983, Official Journal 1983 L 208, p. 1); these decisions were amended on a number of occasions.

2. For the purposes of these proceedings it should be mentioned that an association of steelmaking undertakings, EISA, had asked the Court, by way of interim decision, to suspend the operation of Article 15B of Decision No 234/84. By order in Case 45/84R EISA v Commission [1984] ECR 1759, that application was dismissed. In the order the Court stated that the condition of urgency for granting the suspension would normally be considered to have been met, but that nevertheless the commitments given by the Commission with regard to the way in which it intended to apply Article 15B removed the threat to the undertakings, which might have justified the suspension of operation. In fact during the interlocutory proceedings the Commission had made the commitments set out as follows in the order: first, Article 15B will not be applied simply because an alteration in traditional deliveries has been observed; it will only be applied where the change in traditional deliveries may be ascribed to the action of undertakings engaging in practices which are contrary to Community law; secondly, the mere fact that the undertaking concerned is in receipt of aid authorized by the Commission may not give rise to a quota reduction pursuant to Article 15B; thirdly, if the Commission's inquiry reveals infringements of other provisions of Community law such as those on prices, quotas, competition or State aid, it will first of all apply the sanctions provided for those infringements.

3. By letters sent to the Commission between 30 November 1984 and 25 February 1985, the Italian Government asked the Commission to take the corrective measures provided for in Article 15B of Decision No 234/84, previously cited, by reason of the significant alteration in deliveries of steel products in Italy during the various quarters of 1984 compared with traditional deliveries. The Associazione Industrie Siderurgiche Italiane (hereinafter referred to as Assider) made the same request by letter of 18 February 1985.

4. Following that judgment, Assider and its associates (namely the Italsidcr-Finsider group and the Falck company) requested the Commission to make good the damage they claimed they had suffered owing to the non-application of Article 15B, not only during 1984 but also during 1985 and 1986 when the Commission, according to the applicants, took no action even though the significant alteration in traditional deliveries persisted. That request, contained in a letter of 29 May 1987, was repeated on 30 July 1987. A similar request was made by the Italian Government by letters of 8 Juh/, 30 October and 7 and 10 November 1987.

5. The applications, which were lodged at the Court Registry on 14 December 1988, were brought under the second paragraph of Article 34 and the first paragraph of Article 40 of the ECSC Treaty.

II — Forms of order sought by the parties

1. The applicant companies claim that the Court should:

2. The Commission contends that the Court should :

III — Picas in law and arguments of the parties

A— The circumstances underlying the proceedings

1. The applicants point out that the system of preserving traditional patterns of delivery, laid down by Article 15B of Decision No 234/84 was arranged in such a way that conformity with the system and its operation depended exclusively on the Commission. Only the Commission could have at its disposal the complete picture of deliveries of ECSC undertakings on a given national market and implement the necessary means to reestablish any traditional patterns which might have been exceeded in the course of the preceding quarter or quarters. Although, during 1984, 1985 and 1986, the Commission had noted that deliveries on the Italian market had been exceeded to a considerable extent, it applied neither the measures provided for in Article 15B(4), which are not in the nature of a penalty, or a fortiori the sanctions provided for by Article 15B(5).

2. The Commission starts by pointing out that it was the order in Case 45/84 R, previously cited, in which the Court had expressed doubts as to the legality of Article 15B, which had prompted it to apply the anide prudently. Moreover the Commission itself was convinced that there was a possibility that it was illegal and had indicated during the preliminary stages of the case in which the order was given that Article 15B served the purpose of a deterrent, to be used as a last resort. That was also the view of the Council, which at its 901st meeting, stated that, if the traditional patterns of trade changed, the Commission could make the necessary corrections in so far as no other solution has been found, that is, if the sanctions applied to the undertakings concerned proved ineffective. The Commission therefore denies the defendants' charges. It neither totally neglected to apply Article 15B — since it pressed on with investigations at the outcome of which it applied sanctions to the undertakings responsible for disregarding the pricing rules — nor did it make an incorrect interpretation, either reductive or invalidatory, of that article, since it simply took into account the suggestions made by the Court itself in the said order. According to the Commission the Court did not, in the judgment in Joined Cases 167 and 212/85, undertake an interpretation of Article 15B as a whole.

B — The basis of the applications

1. The applicants claim that their applications are based on the second paragraph of Article 34 and the first paragraph of Article 40 of the ECSC Treaty and not only on Article 34.

2. In its defences the Commission claims that the applicants have not specified precisely enough in their applications the legal rules on which they base their claim for compensation. Its view is that the claim could fall only within the scope of the second paragraph of Article 34 of the ECSC Treaty because the reservation in favour of that article in the first paragraph of Article 40 implies that redress for the harm resulting from a decision or a recommendation can be demanded only on the basis of Article 34. It adds that in this case the applicants' claim can relate only to any consequences of the declaration by the judgment in Joined Cases 167/85 and 212/85 that the Commission decision refusing to take the measures provided for in Article 15B(4) was void and not to those of the alleged disregard of Article 15B(5) to which the judgment did not relate (judgment in Joined Cases 81/85 and 119/85 Usinor, previously cited).

C— The Commission's wrongful conduct

1. According to the applicants, the Commission's wrongful conduct results both from its failure to act and from the steps it actually took.

2. The Commission claims, first of all, that the fault, and consequently the right to redress cannot follow automatically from a judgment by the Court declaring a measure void. In fact not every illegality constitutes a fault.

D — The characteristics of the damage

1. According to the applicants, the existence of damage was recognized by the Court's judgment in Joined Cases 167/85 and 212/85 and by the Advocate General in his Opinion prior to that judgment. It was abo recognized by the Commission in several documents, and in particular in the report of a meeting of 8 January 1988 drawn up by the Commission's Directorate General for the Internal Market and Industrial Affairs.

2. The Commission points out that an action for damages must be based on the existence of present damage resulting from an unlawful act or omission (judgment in Case 13/69 Van Eick v Commission [1970] ECR 3) the actual existence of which must be etablished (in particular, judgment in Case 26/74 Roquette v Commission [1970] ECR 677 and the Opinion of the Advocate General).

E — The causai link

1. The applicants claim that a causal link has been established between the Commission's conduct and the damage suffered.

2. The Commission stresses that, to give rise to damages, the harm must be direct, that is, that there must be a direct causal link between the fault and the damage (see Mr Lagrange's Opinion in the judgment in Joined Cases 29/63, 31/63, 36/63, 39/63 to 47/63, 50/63 and 51/63 Usines de la Providence v High Authority [1965] ECR 911). There is no causal link giving rise to liability where the same result would have occurred in an identical manner even if the administration had not disregarded its obligations (judgment in Joined Cases 5/66, 7/66 and 13/66 to 24/66 Kampffmeyer v Commission [1967] ECR 245). The Court has given its views to this effect on many occasions (judgments in Case 18/60 Worms v High Authority [1962] ECR 195; in Joined Cases 64/76 and 113/76, 167/78 and 239/78 and 27/79, 28/79 and 45/79 Dumortier Frères v Council [1979] ECR 3091; and in Joined Cases 197/80 to 200/80, 243/80, 245/80 and 247/80 Ludwigshafener Walzmühle v Council and Commission [1981] ECR 3211).

F— The amount of the damage

1. In this respect the applicants sute that they are restricting themselves to ceruin essential information, reserving the right to supply more deuiled explanations either on the occasion of fresh proceedings relating to the amount of damage or to any expert inquiry which might be ordered by the Court.

2. The Commission discusses the amount of damage only in the alternative.

1 Language of the case: Italian.