Opinion of Advocate General
Mr President,
Members of the Court,
1. On 27 June 1991 the Court of First Instance delivered judgment in an action brought by the undertaking Stahlwerke Peine-Salzgitter AG (hereinafter Peine-Salzgitter) against the Commission. By that judgment the Commission was found liable to pay the undertaking damages. In this appeal the Commission has claimed:
The facts of the case
2. Article 58 of the ECSC Treaty provides that the Commission may establish a system of production quotas for products covered by the Treaty if it considers that the Community is confronted with a period of manifest crisis. At the beginning of the 1980s the Community was confronted, as far as certain products covered by the Treaty were concerned, with such a period of manifest crisis and the Commission therefore felt obliged to establish a system of production quotas within the sector. The system, the legal basis of which was a series of general Commission decisions with a limited period of validity, underwent certain alterations during its existence and came to an end on 30 June 1988. The Court of Justice is well acquainted with the system, since it has given rise to a considerable amount of case-law.
3. It was a strongly interventionist system and decisively affected the undertakings' freedom of action. Its main features throughout the whole period were as follows:
4. It is uncontested in this case that Peine-Salzgitter was among the undertakings in the sector, which moreover were relatively few, for which the I: P ratio, both in absolute terms and in comparison with the Community average, was very unfavourable for several categories of products. It is also uncontested that changes in the pattern of trade and in the relationships between prices on the common market and those on third-country markets in the years after the introduction of the quota system meant that undertakings with unfavourable I: P ratios were exposed to special difficulties.
5. However, there was in the Commission's general decisions an equity clause which made it possible, according to the circumstances, to adjust the effects of the other provisions of the general decisions. The application of that provision in the period which is relevant here — Article 14 of Decision No 234/84 — was conditional upon the quota system, as a result of the scale of the abatement rate set for a given quarter for a certain category of products, creating exceptional difficulties for an undertaking which, during the 12 months preceding the quarter in question had not received aids authorized by the Commission with a view to covering operating losses.
6. The Commission had stated on several occasions that it was necessary to make certain adaptations to reference production figures and reference quantities and thus also to the I: P ratio. That point of view was inter alia expressed in the Commission communication of 25 September 1985 to the Council concerning the continuation of the quota system after 31 December 1985. In Section VII of the communication the Commission stated that it seemed indispensable to adjust the references and continued:
7. Peine-Salzgitter brought an action against the Commission in which it claimed first that Article 5 of the relevant general Commission decision — that is, the provision containing the general rules for fixing production and delivery quotas — should be declared void and secondly that the Commission's individual decisions concerning the first two quarters of 1986 should also be declared void in so far as they laid down the undertaking's delivery quotas for products in Categories la, lb, Ic and III. In its judgment in Joined Cases 33/86, 44/86, 110/86, 226/86 and 285/86 (also delivered on 14 July 1988) the Court of Justice upheld Peine-Salzgitter's application. It emphasized that the I: P ratio for the relevant categories of products was exceptionally unfavourable for Peine-Salzgitter and decided that Article 5 of the Commission's general decision must be declared void in so far as it did not enable delivery quotas to be fixed on a basis which the Commission considered fair for undertakings having ratios between their delivery quotas and production quotas which were significantly lower than the Community average. At the same time the Court declared void the individual decisions adopted in relation to Peine-Salzgitter in so far as they fixed its delivery quotas for Categories la, lb, Ic and III for the first two quarters of 1986.
8. The Commission was therefore obliged, in pursuance of Article 34 of the ECSC Treaty, to take the necessary steps to comply with the two judgments declaring its decisions void. At the time of the delivery of the said judgments the quota system had just come to an end. It was therefore impossible for the Commission to comply with the judgments, as would have been the case according to the information available, in similar cases, namely by granting the undertaking increased quotas. The undertaking therefore sought damages from the Commission. As the two parties could not agree on the matter, the undertaking brought this action for damages.
9. Peine-Salzgitter claimed that during the period 1 January 1985 to 30 June 1988 — that is, 14 quarters in all — the Commission had adopted illegal decisions and thus rendered itself liable to pay damages. Its final application for damages is for more than DM 77 million, together with interest. The harm consists in the difference between the income the undertaking would have received if the Commission had allocated to the applicant a higher delivery quota for the common market and the income it actually received because it was required to sell at lower prices in third countries.
10. In its judgment of 27 June 1991 the Court of First Instance declared inter alia:
Procedural matters
11. Peine-Salzgitter's application was brought primarily under Article 34 and in the alternative under Article 40 of the ECSC Treaty. Article 34 provides:
12. The Commission claimed at first instance that Peine-Salzgitter's claim for damages should be partially rejected as inadmissible.
13. That question is treated in great depth by Judge Biancarelli in his Opinion. His view is basically that Article 34 cannot be used as a basis for proceedings for damages in relation to decisions which have not been declared void. On the other hand he considers that Article 40 may be used as a basis for proceedings for damages even where the injury alleged has been caused by a decision which has not been declared void. However, he regarded it as necessary in such cases to interpret Article 40 in accordance with the conditions of Article 34, so that in such cases under Article 40 too the Court must restrict itself to first determining the Commission's liability and give it the opportunity subsequently to take the necessary steps to ensure equitable redress for the claimant or where necessary to pay damages.
14. The Court of First Instance rejected the Commission's objection but for reasons other than those given by Judge Biancarelli. Its reasoning originated with the judgment of the Court of Justice in Joined Cases 97/86, 193/86, 99/86 and 215/86 Asteris v Commission. The facts of that case were, briefly, that the Commission had adopted for the marketing year 1983/84 a regulation fixing the coefficients to be applied to the production aid for tomato concentrates. The Court, in its judgment in Case 192/83, had declared that regulation void in so far as it led to discriminatory treatment between producers in Greece and those in other Member States. To comply with the judgment the Commission adopted a new regulation applying to the 1983/84 marketing year. However, the Commission saw no reason to repeal regulations with a content entirely similar to the regulation declared void for marketing years subsequent to 1983/84. The Court took the view that as a result the Commission was failing to comply with its obligations under Article 176 of the EEC Treaty. The relevant paragraphs of the grounds of judgment are as follows:
15. The Commission claimed in that respect that the Court of First Instance had given to the solution selected by the Court of Justice in the judgment in Joined Cases 97/86, 193/86, 99/86 and 215/86 a wider scope than that decision could justify. Article 176 of the EEC Treaty, in the Commission's view, can only be equated with the second sentence in the first paragraph of Article 34 of the ECSC Treaty, concerning the Commission's duty to take the necessary steps to comply with the judgment declaring a decision void. On the other hand Article 176 differs from the third sentence of the first paragraph of Article 34 concerning the conditions for the admissibility of an application for damages to make good the harm suffered.
16. I shall not disguise the fact that I find it hard to show any understanding of the Commission's view regarding this objection of inadmissibility. It seems clear to me that Peine-Salzgitter must have a right to consideration of the substance of its claim for damages for the harm it alleges it has suffered during the whole period from 1985 to the middle of 1988.
17. In my view it is possible to admit a claim for damages on the basis of both Article 34 and Article 40.
18. I might also mention that Advocate General Van Gerven, in his Opinion in the Finsider case, expressed the view that in this case the Court of First Instance had correctly applied the case-law arising from the Asteris judgment. He was aware of the Commission's appeal against the judgment of the Court of First Instance in this case but did not think it necessary to discuss the Commission's objection to that Court's decision on this question, since his view was that the claim for damages was in any case admissible under Article 40.
19. There is therefore no doubt that the result arrived at by the Court of First Instance — that is, to regard Peine-Salzgitter's claim for damages as wholly admissible — was correct. The opposite result moreover would have conflicted with the fundamental requirement, consistently expressed in the Court's case-law in various fields, of appropriate protection by the courts.
20. As far as I can see it is not a matter of very great practical importance whether one provision or the other is used as the legal basis in a case such as this. In my view the Court was showing in its Finsider judgment that the choice has no practical importance as far as concerns the principles for establishing liability. In addition, if the Court were to find that Article 40 is the correct basis, I should be inclined to agree with Judge Biancarelli that it must follow from a reasonable interpretation of that provision in the light of Article 34 that in a case where the reparation is based on identical decisions, some of which are declared void and others not, the position must be that the procedural requirements of Article 34 must be fully applicable, that is, also for that part of the claim for damages concerning decisions not declared void.
21. Moreover the Court should, in my view, accept the reasoning of the Court of First Instance in regarding Peine-Salzgitter's claim for damages as fully admissible on the basis of Article 34.
22. The Commission also criticizes the reasoning of the judgment of the Court of First Instance inasmuch as, in its opinion, the Court wrongly interpreted the exchange of correspondence between Peine-Salzgitter and the Commission on the basis of which Peine-Salzgitter refrained from bringing an action for a declaration that the individual decisions were all void.
The substance
23. The parties discussed in detail before the Court of First Instance how best to describe the standard which should apply to the Community's liability for damages. The question is dealt with in paragraphs 71 to 78 of the contested judgment and the decision at which the Court of First Instance arrived was that the standard developed in the field of the EEC Treaty on the basis of the second paragraph of Article 215 should also apply in the context of the ECSC Treaty.
24. The Commission agrees with the Court of First Instance in its decision as to the standard applicable for liability, but has claimed that the Court applied it wrongly on several points.
25. However, there is no reason to consider whether the Court of First Instance was right in applying the standard of liability laid down in the case-law of the Court of Justice regarding the second paragraph of Article 215 of the EEC Treaty, since it is clear that in the meantime the Court has given its view on this question. It did so in the judgment in Joined Cases C-363/88 and 364/88, Finsider, previously cited, in which the Court of Justice laid down the standard of liability in the context of the ECSC Treaty in a manner different from the view of the Court of First Instance. It may be advisable to quote the following paragraphs from the judgment:
26. It is thus on the basis of that determination of the standard of liability that it is necessary to enquire whether the Community has incurred liability towards Peine-Salzgitter. It is thus already clear before the substance of the case is considered that the ground of judgment set out in the contested judgment cannot be fully upheld.
27. In my opinion the basic premise of the arguments Peine-Salzgitter has put forward in support of its claim for damages is that under the second paragraph of Article 58 of the ECSC Treaty the Commission has an express and fundamental duty, in a system of quotas, to fix the undertakings' quotas on an equitable basis with due regard to the principles set out in Articles 2, 3 and 4 — including in particular the principle of equal treatment of producers — and the Commission's breach of that duty entails the obligation to ensure redress.
28. If that is the basic premise it is appropriate to consider first of all what the Court of Justice has laid down, as regards the Commission's duties, in its judgment in Joined Cases 33/86, 44/86, 110/86, 226/86 and 285/86 which, by reference to Article 58, declared void inter alia Article 5 of the general Decision No 3485/85.
29. According to the Commission the fault which it committed in assuming that the Council's assent was necessary for a modification of the I: P ratio was not a grave one. The Commission claims that it acted in good faith as far as concerns the need to obtain the Council's assent and that a misconception concerning a procedural rule of that nature cannot involve a liability to pay damages.
30. I may say that Advocate General Mischo, in his Opinion relating to Joined Cases 33/86, 44/86, 110/86, 226/86 and 285/86, gave quite convincing reasons for the view that the general Decision No 3485/85 and the individual decisions adopted on the basis thereof should be declared void even if the Council's assent to a modification of the I: P ratio had been required. Advocate General Mischo's main argument was that the rule set out in Article 58(2) was so basic that a disregard thereof must in any event be disapproved by the Court in pursuance inter alia of Article 31 of the ECSC Treaty. That article provides that in the interpretation and application of the Treaty the Court shall ensure that the law is observed. Just as any requirement to obtain the Council's assent could not prevent a declaration that a decision of the Commission was void, similarly that could not, as I see it, exclude a liability for damages. The rule laid down in Article 58(2) with regard to equitable quotas is an expression of a basic principle in ECSC law to the effect that there must be no discrimination against undertakings. In its case-law the Court of Justice has consistently attached decisive importance to the Commission's compliance with that duty. It is obvious that compliance with the obligation under Article 58(2) is decisive for the acceptance, by those affected by the scheme, of the rules adopted and is also the cornerstone of the whole quota system. The fact that the rule infringed is a basic rule of law means, I am sure, that liability for damages is involved whether or not the Council's assent was required.
31. That was the basis on which the Court of First Instance, rightly, I think, declared:
32. The Commission has contended that it would be an unreasonable failure to appreciate the discretion available to the Commission if the Court of Justice were to hold it liable. There can be no doubt that the Commission has a considerable discretion with regard to the detailed determination of what constitutes equitable quotas. However, the position in this case is that the Commission had exercised its discretion as to what was equitable and had found that an adjustment of the I: P ratio was indispensable to preserve equity. The Commission has not denied that; it has not subsequently indicated or explained that its discretion thus exercised was mistaken. When the Court of Justice therefore declares that Peine-Salzgitter's I: P ratio was exceptionally unfavourable there is no question of disapproving the Commission's discretion but of following it. The fact that the contested rule thus leaves the Commission freedom of assessment does not in this specific case detract from the Commission's liability for damages.
33. In addition, the rule regarding the fixing of quotas on an equitable basis clearly aims at protecting the individual undertaking. It is natural that such protection should also involve an entitlement to compensation, the more so as, according to the information available, it may be assumed that Peine-Salzgitter, as already mentioned, would have received one form or another of compensation in kind by the allocation of larger quotas if the quota system had still been in force at the time of the Court's declaration that the Commission's decisions were void.
34. When account is taken of the factual and legal background to the Commission's decisions and to the limited margin of discretion available to the Commission in the specific situation, my opinion is that in adopting the decisions in question the Commission committed a serious illegality in relation to Peine-Salzgitter.
35. The reasoning leading to this conclusion applies to a considerable extent also to the individual decisions for 1985, which were declared void by the Court in its judgment in Case 103/85 or the illegality of which directly follows from that judgment. As mentioned, that judgment concerned the Commission's refusal to give Peine-Salzgitter additional quotas in spite of the fact that the undertaking's I: P ratio was at that time too incontestably exceptionally unfavourable as regards products in Category III. The general Decision No 234/84 which was applicable at that time contained, as already stated, authority in Article 14 to give an undertaking additional quotas in so far as it was in exceptional difficulties. According to the Court's judgment in Case 14/81 Alpha Steel the precise purpose of Article 14 was to be an equity clause making it possible to alleviate the effects of the general decision's other provisions. Nevertheless the Commission refused to allow Peine-Salzgitter additional quotas.
36. It is true that the Commission has emphatically contended that the error of law which it made in respect of the refusal to grant Peine-Salzgitter additional quotas was excusable, particularly as regards that part of the reasoning on which the refusal was based, according to which Article 14 could not apply because Peine-Salzgitter as a whole was showing a profit. The Commission points out that it cannot be blamed for not taking the Court's judgment in Case 317/82 Usines Gustave Boël v Commission into account in deciding whether there were exceptional difficulties. According to the Commission it was only in the Court's judgment in Case 103/85 that the Court specified that account was not to be taken of the situation with regard to other categories of products which might contribute to the undertaking as a whole yielding a profit. The Commission further claims that the reasoning in question was in agreement with its consistent administrative practice according to which, in the application of Article 14, account was taken of the undertaking's situation as a whole because inter alia it was not a matter of overcoming the crisis for certain markets but for all the European iron and steel undertakings.
37. Thus as regards the Commission decisions concerning 1985 there is no reason, either, to change the decision at which the Court of First Instance arrived in its judgment.
38. Finally we must consider whether Peine-Salzgitter suffered direct and special harm, as required by Article 34 of the ECSC Treaty. The Court of First Instance found that that was undoubtedly the case. I agree with that assessment and regard the Commission's arguments to the contrary as untenable.
39. To sum up, I shall therefore propose that the Court of Justice confirm the contested judgment and order the Commission to pay the costs of the appeal.
1 Original language: Danish.
2 Case T-120/89 [1991] ECR II-279.
3 For a survey of the case-law see Charles Funck: Le régime de crise de la CECA dans les arrêts de la Cour de Justice des Communautés Européennes, Cahier de Droit Européen, 1989, No 3/4, p. 251.
4 See Decision No 2794/80 of 31 October 1980 establishing a system of steel production quotas for undertakings in the iron and steel industry, point 6 of the preamble (OJ 1980 L 291, p. 1).
5 [1988] ECR 4131.
6 Doc. COM(85)509. The Danish version of the communication is dated 8 October 1985.
7 See Decision No 3485/85, OJ 1985 L 340, p. 5.
8 [1988] ECR 4309.
9 Subsequently the Court also declared void Article 5 of the general Decision No 194/88, which superseded the said Decision No 3485/85 and the period of validity of which was the first six months of 1988; see the judgment in Joined Cases 218/87 and 223/87 and 72/88 and 92/88 Hoogovens Groep and Others v Commission [1989] ECR 1711.
10 In this connection see Judge Biancarclli's Opinion in Case T-120/89, where it is stated, towards the end of Part I: Throughout the currency of the quota system, situations of that kind were resolved fairly simply by the Commission's granting additional quotas to companies which had successfully pleaded their cases before the Court of Justice. That restitution in kind, moreover, is in conformity with the concept of equitable redress referred to in the first paragraph of Article 34 of the Treaty.
11 [1988] ECR 2181.
12 See paragraph 47 as regards the 1985 decisions not annulled. Paragraph 58 contains corresponding reasoning as regards the 1986 to 1988 decisions not annulled.
13 [1992] ECR I-359.
14 See section 17 of his Opinion. At the end of section 19 he said: Contrary to the Commission, I think that an action for damages under the first paragraph of Article 40 may be brought to make good an injury which has been caused by a decision, recommendation or an implied decision of refusal not declared void by the Court. Contrary to the Commission's contention, the saving clause contained in the first paragraph of Article 40 regarding the provisions of the first paragraph of Article 34 relates solely to the harm caused by the measures declared void, which are mentioned therein. With regard to measures which have not been declared void (except for measures assimilated to those declared void) that saving clause does not apply and the provisions of the first paragraph of Article 40 — of which it may be stated that in ECSC matters it contains the common rules of law as regards liability of the Community — is applicable in its entirety.
15 See section 20 of Advocate General Van Gerven's Opinion in the Finsider case.
16 See the judgment in Case C-30/91 P Lesteile [1992] ECR I-3755.
17 See paragraph 43 et seq. of that Opinion, at p. 4329.
18 In his Opinion Judge Biancarelli summarized the case-law of the Court as follows: Referring to settled case-law and relying in particular on Articles 3, 4 and 5 of the ECSC Treaty, which prohibit all discrimination as between the undertakings covered by the Treaty, the Court of Justice stressed the need, in a period of crisis, where, as a result of administrative control, quantitative competition between undertakings is de facto eliminated and where an artificial balance is created between supply of and demand for steel, to respect in full the principle of fairness laid down in Article 58 of the Treaty. As early as 1961 in its judgment in Meroni et Cie and Others v High Authority (Joined Cases 14/60, 16/60, 17/60, 20/60, 24/60, 26/60 and 27/60 and 1/61, [1961] ECR 161), the Court held that the High Authority must take particular care to ensure that the principle of equality in the field of public charges is always most scrupulously observed and from this it is inferred that the High Authority had been right to give precedence to the principle of distributive justice rather than to that of legal certainty. Similarly, in its judgment of 3 March 1982 (Case 14/81 Alpha Steel v Commission [1982] ECR 749), the Court recognized the Commission's freedom of choice concerning determination of the reference period, whilst at the same time making it clear that such a choice must not lead to breach of the principle whereby total production must be shared on an equitable basis between the various Community undertakings. That finding was confirmed by the judgment of 19 September 1985 (Joined Cases 63/84 and 147/84 Finsider v Commission [1985] ECR 2857) in which the Court laid particular emphasis on the criterion of equitable distribution of the production and delivery quotas between the various Community undertakings, by the judgment of the Court of 21 February 1984 Coined Cases 140/82, 146/82, 221/82 and 226/82 (Walzstahl-Vereinigung and Thyssen v Commission [1984] ECR 951) and, finally, by the judgment of 6 July 1988 (Case 236/86 Dillinger Hüttenwerke v Commission [1988] ECR 3761) in which the Court held expressly that the purpose of the quota system ... is ... to spread in the most equitable manner possible amongst all undertakings the limitations on production required by the steel crisis.
19 [1982] ECR 749.
20 [1983] ECR 2041.