Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
1 . OBJECTION OF ILLEGALITY - MEASURES WHICH MAY BE ALLEGED TO BE ILLEGAL - PROVISIONS OF ECSC GENERAL DECISIONS - PROVISIONS CONSTITUTING THE BASIS OF THE CONTESTED INDIVIDUAL DECISION
( ECSC TREATY , ART . 36 , THIRD PARA .)
2 . ECSC - PRODUCTION - SYSTEM OF STEEL PRODUCTION QUOTAS - UNDERTAKINGS CONCERNED - GROUPS OF CONCENTRATED UNDERTAKINGS - CONCEPT - REFERENCE TO ARTICLE 66 OF THE TREATY - WHETHER PERMISSIBLE - ENTITY TO WHICH QUOTAS ARE ALLOCATED - UNDERTAKING WHICH DIRECTS THE PRODUCTION OPERATIONS IN THE GROUP
( ECSC TREATY , ARTS 58 , 66 AND 80 ; DECISION NO 1696/82/ECSC , ART . 2 ( 4 ))
3 . ECSC - PRODUCTION - SYSTEM OF STEEL PRODUCTION QUOTAS - ADJUSTMENT OF QUOTAS FIXED FOR A GROUP OF UNDERTAKINGS - REFERENCE PRODUCTION
( DECISION NO 1696/82/ECSC , ARTS 2 ( 4 ) AND 14 )
Summary
1 . ALTHOUGH IN AN ACTION FOR A DECLARATION THAT AN INDIVIDUAL DECISION IS VOID THE APPLICANT MAY ALLEGE THAT CERTAIN PROVISIONS OF THE GENERAL DECISIONS WHICH THE CONTESTED DECISION IMPLEMENTS ARE ILLEGAL , THE APPLICANT MAY DO SO ONLY IF THE INDIVIDUAL DECISION IS BASED ON THE RULES ALLEGED TO BE ILLEGAL .
2 . THE COMMISSION , BY DECIDING FOR PRACTICAL REASONS TO ALLOCATE THE PRODUCTION QUOTAS TO THE UNDERTAKING WHICH DIRECTS THE PRODUCTION OPERATIONS IN THE GROUP , HAS NOT EXCEEDED THE DISCRETIONARY POWER CONFERRED UPON IT BY ARTICLE 58 OF THE ECSC TREATY , SINCE A METHOD OF THAT KIND ALSO ENABLES THE UNDERTAKING TO SUB DIVIDE THE QUOTAS WITHIN THE GROUP IN A MANNER WHICH IS MOST CONDUCIVE TO THE EFFICIENT MANAGEMENT OF PRODUCTION . MOREOVER , BY THUS SELECTING , AS THE ENTITY TO WHICH THE QUOTA SYSTEM IS TO BE APPLIED PURSUANT TO DECISION NO 1696/82 , A GROUP OF CONCENTRATED UNDERTAKINGS OF THE KIND REFERRED TO IN ARTICLE 66 OF THE ECSC TREATY , THE COMMISSION HAS IN NO WAY UNDERMINED THE VALIDITY OF THE DEFINITION OF AN UNDERTAKING CONTAINED IN ARTICLE 80 OF THE ECSC TREATY , AS CLARIFIED IN PARTICULAR BY THE CASE-LAW OF THE COURT , SINCE NEITHER THE DISTINCT LEGAL PERSONALITY OF THE UNDERTAKINGS FORMING PART OF THE GROUP NOR THEIR INDIVIDUAL RIGHT TO INSTITUTE PROCEEDINGS IN MATTERS CON CERNING THEM IS AFFECTED BY SUCH A DECISION .
3 . IN SO FAR AS THE COMMISSION APPLIED ARTICLE 2 ( 4 ) CORRECTLY WHEN IT FIXED A TOTAL QUOTA FOR A GROUP OF UNDERTAKINGS , IT WAS NECESSARILY ENTITLED TO TAKE ACCOUNT OF THE RESULTS OF THE GROUP AS A WHOLE IN DECIDING WHETHER TO REFUSE OR TO GRANT THE QUOTA ADJUSTMENTS APPLIED FOR UNDER ARTICLE 14 OF THE AFORESAID DECISION . IN TAKING THAT APPROACH , THE COMMISSION ' S SOLE AIM WAS TO ACCORD IDENTICAL TREATMENT TO GROUPS OF INTEGRATED UNDERTAKINGS IN COMPARISON WITH SINGLE UNDERTAKINGS POSSESSING SEVERAL PRODUCTION ESTABLISHMENTS .
Parties
IN CASE 151/83
SOCIETE ACIERIES ET LAMINOIRS DE PARIS ( ALPA ), REPRESENTED BY LISE FUNCK-BRENTANO , OF THE PARIS BAR , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF MARLYSE NEUEN-KAUFFMAN , 21 RUE PHILIPPE-II ,
APPLICANT ,
V
COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY FRANK BENYON , A MEMBER OF ITS LEGAL DEPARTMENT , ACTING AS AGENT , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ORESTE MONTALTO , JEAN MONNET BUILDING , KIRCHBERG ,
DEFENDANT ,
Subject of the case
APPLICATION FOR A DECLARATION THAT THE COMMISSION ' S REFUSAL TO REGARD THE APPLICANT AS AN UNDERTAKING FOR THE PURPOSES OF THE SYSTEM OF PRODUCTION QUOTAS IS VOID ,
Grounds
1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 25 JULY 1983 , SOCIETE ACIERIES ET LAMINOIRS DE PARIS ( ALPA ) ( HEREINAFTER REFERRED TO AS ' ' ALPA ' ' ) BROUGHT AN ACTION UNDER ARTICLE 33 OF THE ECSC TREATY FOR A DECLARATION THAT THE COMMISSION DECISION NOTIFIED TO ALPA BY LETTER OF 22 JUNE 1983 REFUSING TO REGARD THE APPLICANT AS AN UNDERTAKING FOR THE PURPOSES OF THE SYSTEM OF PRODUCTION QUOTAS AND REJECTING ON THAT GROUND AN APPLICATION BY ALPA FOR THE ADJUSTMENT OF ITS PRODUCTION QUOTAS IS VOID .
2 ARTICLE 14 OF DECISION NO 1696/82/ECSC ( OFFICIAL JOURNAL , L 191 , P . 1 ), AS AMENDED BY DECISION NO 2751/82/ECSC OF 6 OCTOBER 1982 ( OFFICIAL JOURNAL , L 291 , P . 8 ), PROVIDES THAT UNDERTAKINGS MAY APPLY FOR AN ADJUSTMENT OF THEIR QUOTA IN RESPECT OF PRODUCTS IN CATEGORY V IF , INTER ALIA , TOTAL PRODUCTION OF THE PRODUCTS LISTED IN ARTICLE 1 DID NOT EXCEED 700 000 TONNES IN 1981 AND PRODUCTION IN CATEGORIES IV , V AND VI REPRESENTS A SUBSTANTIAL PROPORTION OF THE TOTAL PRODUCTION OF THE UNDERTAKING IN QUESTION .
3 IN THAT REGARD IT IS COMMON GROUND THAT THE USINOR GROUP , WHOSE PRODUCTION IS IN EXCESS OF 700 000 TONNES , WAS UNABLE TO QUALIFY FOR AN ADJUSTMENT OF ITS REFERENCE PRODUCTION FOR PRODUCTS IN CATEGORY V . ITS SUBSIDIARY ALPA ON THE OTHER HAND CONSIDERED THAT IT SATISFIED ALL THE REQUIREMENTS OF ARTICLE 14 AND THEREFORE BY REGISTERED LETTER OF 26 MAY 1983 IT REQUESTED THE APPLICATION OF THAT PROVISION . THE COMMISSION HOWEVER REFUSED TO ACCEDE TO THAT REQUEST ON THE GROUND THAT ALPA WAS A CONCENTRATED UNDERTAKING WITHIN THE USINOR GROUP , THAT QUOTAS WERE ALLOCATED TO USINOR ALONE AND THAT , CONSEQUENTLY , ONLY USINOR WAS AUTHORIZED TO REQUEST THE APPLICATION OF THE PROVISIONS OF DECISION NO 1696/82 .
4 IN THESE PROCEEDINGS THE APPLICANT SEEKS A DECLARATION THAT THE ABOVE-MENTIONED COMMISSION DECISION , WHICH WAS NOTIFIED TO IT ON 22 JUNE 1983 , IS VOID .
5 ACCORDING TO THE APPLICANT , THE COMMISSION INCORRECTLY APPLIED ARTICLE 2 ( 4 ) OF DECISION NO 1696/82 OF 30 JUNE 1982 WHICH PROVIDES THAT ' ' FOR THE PURPOSES OF THIS DECISION , ANY GROUP OF CONCENTRATED UNDERTAKINGS WITHIN THE MEANING OF ARTICLE 66 OF THE TREATY SHALL BE REGARDED AS A SINGLE UNDERTAKING . . . ' ' .
6 THE APPLICANT IS A WHOLLY-OWNED SUBSIDIARY OF USINOR , ALTHOUGH IT HAS LEGAL PERSONALITY UNDER FRENCH LAW . IT IS THE ONLY UNDERTAKING IN THE USINOR GROUP TO MANUFACTURE PRODUCTS IN CATEGORY V ( CONCRETE REINFORCING BARS ).
7 THE APPLICANT CLAIMS THAT THE COMMISSION SHOULD , WHEN CONSIDERING APPLICATIONS FOR THE ADJUSTMENT OF QUOTAS UNDER ARTICLE 14 OF DECISION NO 1696/82 , TAKE ACCOUNT OF THE INDIVIDUAL POSITION OF EACH UNDERTAKING FORMING PART OF THE GROUP AND NOT OF THE WHOLE GROUP OF CONCENTRATED UNDERTAKINGS , AS REFERRED TO IN ARTICLE 66 OF THE ECSC TREATY .
ADMISSIBILITY OF THE APPLICATION
8 THE COMMISSION CONTESTS THE ADMISSIBILITY OF THE APPLICATION ON THE GROUND THAT THE LETTER OF 22 JUNE 1983 DOES NOT CONSTITUTE A DECISION AGAINST WHICH AN ACTION FOR A DECLARATION OF NULLITY MAY BE BROUGHT BUT RATHER AN EXPLANATORY MEMORANDUM STATING THE REASON FOR WHICH ALPA ' S REQUEST COULD NOT BE GRANTED . FURTHERMORE , THE APPLICATION IS INADMISSIBLE , IN THE COMMISSION ' S VIEW , IN SO FAR AS IT IS BASED ON THE CONTENTION THAT ARTICLES 2 ( 4 ) AND 14 OF THE GENERAL DECISION ARE UNLAWFUL , SINCE THE COMMISSION ' S LETTER OF 22 JUNE 1983 IS NOT CONCERNED WITH THE APPLICATION OF EITHER OF THOSE TWO PROVISIONS .
9 THOSE ARGUMENTS MUST BE REJECTED . IT IS INDISPUTABLE THAT IN ITS LETTER OF 22 JUNE 1983 THE COMMISSION IN FACT STATED ITS POSITION WITH REGARD TO THE APPLICANT ' S REQUEST THAT ARTICLE 14 OF DECISION NO 1696/82 BE APPLIED TO IT . IT IS ALSO TRUE , AS THE COURT HELD IN ITS JUDGMENT OF 28 OCTOBER 1981 IN JOINED CASES 275/80 AND 24/81 KRUPP V COMMISSION ( 1981 ) ECR 2489 , THAT ALTHOUGH IN AN ACTION FOR A DECLARATION THAT AN INDIVIDUAL DECISION IS VOID THE APPLICANT MAY ALLEGE THAT CERTAIN PROVISIONS OF THE GENERAL DECISIONS WHICH THE CONTESTED DECISION IMPLEMENTS ARE ILLEGAL , THE APPLICANT MAY DO SO ONLY IF THE INDIVIDUAL DECISION IS BASED ON THE RULES ALLEGED TO BE ILLEGAL . IN THE PRESENT CASE , HOWEVER , IT IS UNDENIABLE THAT THE INDIVIDUAL DECISION IN RESPECT OF WHICH THE APPLICANT SEEKS A DECLARATION OF NULLITY IS BASED , AT LEAST IN PART , ON THE CONTESTED PROVISIONS OF THE GENERAL DECISION .
10 THE APPLICATION IS THEREFORE ADMISSIBLE .
SUBSTANCE
11 THE APPLICANT CONTENDS THAT THE CONTESTED DECISION MUST BE DECLARED VOID IN SO FAR AS IT IS BASED ON TWO UNLAWFUL PROVISIONS , NAMELY ARTICLE 2 ( 4 ) OF DECISION NO 1696/82 WHICH WRONGLY PERMITS A SUBSIDIARY TO BE ASSIMILATED TO THE GROUP OF WHICH IT FORMS PART , AND ARTICLE 14 OF THE SAME DECISION WHICH , BY PROVIDING IN THE CASE OF CONCENTRATED UNDERTAKINGS FOR THE POSSIBILITY OF QUOTA ADJUSTMENTS ONLY FOR THE GROUP ITSELF , DISCRIMINATES BETWEEN UNDERTAKINGS FORMING PART OF SUCH A GROUP AND INDEPENDENT UNDERTAKINGS .
12 THE APPLICANT THEREFORE CALLS IN QUESTION IN THE FIRST PLACE THE LEGALITY OF ARTICLE 2 ( 4 ) OF DECISION NO 1696/82 ON THE GROUND THAT THE COMMISSION IS NOT AUTHORIZED TO TAKE AS A BASIS IN CONNECTION WITH SITUATIONS OTHER THAN THOSE LISTED IN ARTICLE 66 OF THE ECSC TREATY THE DEFINITION OF A GROUP OF UNDERTAKINGS WHICH IS USED IN THE TREATY IN RELATION TO THE RULES ON MERGERS AND CONCENTRATIONS , OR CONSEQUENTLY TO DISREGARD THE DEFINITION OF AN UNDERTAKING CONTAINED IN ARTICLE 80 OF THE ECSC TREATY . THE APPLICANT RECALLS THAT THE CONCEPT OF AN UNDERTAKING WITHIN THE MEANING OF THE TREATY COINCIDES WITH THE CONCEPT OF A NATURAL OR LEGAL PERSON ( JUDGMENT OF THE COURT OF 22 . 3 . 1961 IN JOINED CASES 42 AND 49/59 SNUPAT V HIGH AUTHORITY ( 1961 ) ECR 53 ).
13 THAT SUBMISSION MUST BE REJECTED . THE COMMISSION BY DECIDING FOR PRACTICAL REASONS TO ALLOCATE THE QUOTAS TO THE UNDERTAKING WHICH DIRECTS THE PRODUCTION OPERATIONS IN THE GROUP , HAS NOT EXCEEDED THE DISCRETIONARY POWER CONFERRED UPON IT BY ARTICLE 58 OF THE ECSC TREATY SINCE A METHOD OF THAT KIND ALSO ENABLES THE UNDERTAKING TO SUBDIVIDE THE QUOTAS WITHIN THE GROUP IN A MANNER WHICH IS MOST CONDUCIVE TO THE EFFICIENT MANAGEMENT OF PRODUCTION . MOREOVER , BY THUS SELECTING , AS THE ENTITY TO WHICH THE QUOTA SYSTEM IS TO BE APPLIED PURSUANT TO DECISION NO 1696/82 , A GROUP OF CONCENTRATED UNDERTAKINGS OF THE KIND REFERRED TO IN ARTICLE 66 OF THE ECSC TREATY , THE COMMISSION HAS IN NO WAY UNDERMINED THE VALIDITY OF THE DEFINITION OF AN UNDERTAKING CONTAINED IN ARTICLE 80 OF THE ECSC TREATY , AS CLARIFIED IN PARTICULAR BY THE CASE-LAW OF THE COURT , SINCE NEITHER THE DISTINCT LEGAL PERSONALITY OF THE UNDERTAKINGS FORMING PART OF THE GROUP NOR THEIR INDIVIDUAL RIGHT TO INSTITUTE PROCEEDINGS IN MATTERS CONCERNING THEM IS AFFECTED BY SUCH A DECISION .
14 SECONDLY , THE APPLICANT CONTENDS THAT THE COMMISSION SHOULD , IN CONSIDERING APPLICATIONS FOR QUOTA ADJUSTMENTS SUBMITTED UNDER ARTICLE 14 OF DECISION NO 1696/82 , TAKE ACCOUNT OF THE INDIVIDUAL POSITION OF EACH UNDERTAKING FORMING PART OF THE GROUP AND NOT OF THE WHOLE GROUP OF CONCENTRATED UNDERTAKINGS , AS REFERRED TO IN ARTICLE 66 OF THE ECSC TREATY . IN THE APPLICANT ' S VIEW , THE SYSTEM ADVOCATED BY THE COMMISSION CREATES DISCRIMINATION BETWEEN INTEGRATED UNDERTAKINGS AND INDEPENDENT UNDERTAKINGS . THE SYSTEM ALSO PENALIZES UNDERTAKINGS WHICH HAVE ADOPTED A RESTRUCTURING PROGRAMME , INCLUDING THE USINOR GROUP WHOSE SHARE OF THE MARKET HAS DECLINED AS AGAINST ITS COMPETITORS .
15 THE APPLICANT THEREFORE CONSIDERS THAT EITHER IT SHOULD BE ENTITLED TO APPLY FOR AN ADJUSTMENT IN THE SAME WAY AS AN INDEPENDENT UNDERTAKING OR THAT THE PRODUCTION LIMIT OF 700 000 TONNES PROVIDED FOR IN ARTICLE 14 SHOULD BE REPEALED IN ORDER TO ENABLE THE USINOR GROUP TO BENEFIT THEREFROM .
16 THAT SUBMISSION ALSO MUST BE REJECTED . IN SO FAR AS THE COMMISSION APPLIED ARTICLE 2 ( 4 ) CORRECTLY WHEN IT FIXED THE TOTAL QUOTA FOR THE USINOR GROUP , IT WAS NECESSARILY ENTITLED TO TAKE ACCOUNT OF THE RESULTS OF THE GROUP AS A WHOLE IN DECIDING WHETHER TO REFUSE OR TO GRANT THE QUOTA ADJUSTMENTS APPLIED FOR . IN TAKING THAT APPROACH , THE COMMISSION ' S SOLE AIM WAS TO ACCORD IDENTICAL TREATMENT TO GROUPS OF INTEGRATED UNDERTAKINGS IN COMPARISON WITH SINGLE UNDERTAKINGS POSSESSING SEVERAL PRODUCTION ESTABLISHMENTS .
17 FURTHERMORE , THE COMMISSION IS ENTITLED IN CONNECTION WITH THE EXAMINATION IN INDIVIDUAL CASES OF THE NEED FOR ADJUSTMENT OF THE REFERENCE PRODUCTION OR THE REFERENCE QUANTITIES OF EACH UNDERTAKING PURSUANT TO ARTICLE 14 OF DECISION NO 1696/82 , TO DRAW A DISTINCTION BETWEEN UNDERTAKINGS ACCORDING TO THEIR SIZE , BY FIXING A PRODUCTION LIMIT FOR THE PURPOSE OF DEFINING UNDERTAKINGS WHICH MAY BENEFIT FROM THE SCHEME IN QUESTION . SMALL AND MEDIUM-SIZED UNDERTAKINGS WHICH MANUFACTURE EXCLUSIVELY PRODUCTS IN CATEGORIES IV , V AND VI MAY EXPERIENCE MORE SERIOUS DIFFICULTIES IN THEIR EFFORTS TO SURVIVE IN THE PRESENT ECONOMIC SITUATION THAN UNDERTAKINGS WHICH ARE ABLE BY MANUFACTURING OTHER PRODUCTS , TO OFFSET THE DIFFICULTIES ENCOUNTERED IN RELATION TO PRODUCTS IN CATEGORY V .
Decision on costs
COSTS
18 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE , THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS . SINCE THE APPLICANT HAS BEEN UNSUCCESSFUL IN ITS SUBMISSIONS , IT MUST BE ORDERED TO PAY THE COSTS .
Operative part
ON THOSE GROUNDS ,
THE COURT ( FIRST CHAMBER )
HEREBY :
1 . DISMISSES THE APPLICATION ;
2 . ORDERS THE APPLICANT TO PAY THE COSTS .
Full & Egal Universal Law Academy