61986C0032

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Mr President,

Members of the Court,

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, ( 1 ) a fine of 85 650 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 27 850 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";

( ii ) on the other hand, if the decision was actually adopted on 27 December 1985, that is to say, between the Christmas and New Year holidays, "the question arises as to whether it was lawful for the Commission, a collective body, to abandon the exercise of one of its powers, if in fact it did so, by delegating it to third parties ."

That line of argument cannot be accepted .

It is clear first from the documents on the file and, in particular, from an extract from the Official Journal, ( 2 ) that the contested decision was actually adopted on 20 December 1985 .

Even if it had been adopted on 27 December, that is to say, if the written procedure had been completed on that day, it would be difficult for the applicant to establish that during the entire period in which the written procedure was being carried out, the Members of the Commission did not have an opportunity of examining the proposal and, if necessary, putting forward objections in regard to it .

In the judgment of 28 May 1984, ( 3 ) relied on by the applicant, the question was whether the Commission, as a collective body, was still entitled to impose a fine in regard to prices on the basis of Article 64 of the ECSC Treaty after it had delegated its powers in that regard, subject to certain conditions and limits, to the Member responsible for such matters . The Court did indeed expressly decide that the relevant rules on the delegation of authority did not involve any abandonment by the Commission of its collective powers . However, it did not cast doubt on those rules themselves . In its judgment of 23 September 1986 in Case 5/85 AKZO v Commission (( 1986 )) ECR 2585 ), it even expressly decided that such rules on the delegation of authority were compatible with the principle of collective responsibility . A fortiori, there can be no objection to rules which provide for the participation of all the Members of the Commission in the adoption of a decision, albeit in the context of an accelerated and simplified written procedure .

In the second place, the aforementioned discrepancy in the dates in no way adversely affected the applicant . Under the second paragraph of Article 15 of the ECSC Treaty, an individual decision takes effect only upon being notified . The period of time allowed for commencing proceedings only begins to run from "the day following the receipt by the person concerned of notification of the measure" ( Article 81 ( 1 ) of the Rules of Procedure of the Court ).

However, in this case, the decision was not sent until 2 January 1986 and the Commission has made no suggestion that Sisma' s action is out of time .

During the oral procedure, the applicant also claimed that the "sanction procedures" approved by the Commission on 5 September 1984 ( Doc . SEC(84 ) 1365 ) did not permit the latter to adopt by an accelerated and simplified written procedure decisions fixing fines for quota infringements .

It is plain that the part of that decision dealing with sanctions in the context of the quota system is badly drafted and ambiguous .

In Part 1, which specifies the infringements which may be sanctioned by the accelerated and simplied procedure, the decision does not mention the exceeding of quotas as such but merely cites very specific cases, namely a refusal to submit to investigations, false declarations, absence of technical and accounting documents which are required to be kept and refusal to communicate those documents .

On the other hand, however, point 2 ( b ) of the same section fixes the rate ( per tonne ) of the fine for exceeding quotas by referring to the articles of the five successive Commission decisions providing for such fines . They include Article 12 of Decision No 234/84/ECSC which is, along with Article 58, also cited in the passage in question, the basis of the contested decision .

Finally, the actual title of the document in question is as follows :

"Sanctions procedure in the context of the steel production quotas system and anti-crisis measures 1983/84 - Exceeding of quotas/Failure to observe minimum prices, other price rules and the system of putting up security .

Recovery of fines imposed under Articles 58 and 64 of the ECSC Treaty ."

Despite the ambiguity pointed out above, it therefore seems to be sufficiently clear that the Commission also intended to apply the accelerated and simplified procedure to decisions fixing fines for the exceeding of quotas . The contested decision could therefore validly be adopted on that basis .

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" ( 4 ) 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 .

It seems to me to be almost otiose to point out that the general practice is to indicate the most recent amendment of the general decision referred to in any individual decision adopted on the basis thereof . That in no way means that in this case the Commission applied Decision No 2760/85/ECSC retroactively to events which occurred before its entry into force . The contested decision is based more particularly on Article 12 of Decision No 234/84/ECSC, which fixes the rate of fines to be imposed . However, that article has remained unchanged since Decision No 2760/85/ECSC merely inserted an Article 14D into Decision No 234/84/ECSC .

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 .

It is insufficient because it fails to indicate both the production quotas allocated and the arithmetical calculation of the excess complained of .

It must however be noted that the contested decision expressly refers to the letters in which the quotas and the excesses for the first quarter of 1984 were communicated to Sisma and it also indicates both the amount of the excesses complained of and the rate of fine applied . Furthermore, Sisma could have obtained more precise information at any time during the administrative procedure which followed the communication of the letter of complaint, and, in particular, during the hearing which took place on 26 April 1985 .

However, a statement of reasons of that type has already been held to be adequate by the Court, in particular in the judgment of 28 March 1984 ( Bertoli, cited above, paragraphs 12 to 17 ).

Furthermore, the Court generally accepts that the statement of the reasons on which a decision imposing a fine is based, although succinct, must be considered to be sufficient if the undertaking to which it was addressed participated in the procedure whereby it was drawn up and was informed of the methods of calculation used . ( 5 )

Sisma also alleges that the statement of reasons is contradictory in so far as it makes the unsupported statement that Sisma had exceeded its production quotas during the fourth quarter of 1983 and that the additional quota of 1 491 tonnes allocated in a letter dated 29 December 1983, but which reached Sisma on 9 January 1984, must be included in the quota for the last quarter of 1983 .

That line of argument is not borne out by the facts since a fine actually was imposed on Sisma for exceeding its production quotas during the fourth quarter of 1983 . The question of whether the Commission was entitled to include the additional quota at issue in the quota for the said quarter and whether it actually did so is linked to the substance of this case .

None of the objections as to form raised by the applicant can therefore be accepted .

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 the period in question, that is to say, the first quarter of 1984 .

In respect of products in category VI, those quotas amounted to 26 563 tonnes, subsequently increased by 610 tonnes allocated under Article 14C of Decision No 234/84/ECSC for the purpose of covering exceptional orders for the export of special products to the Soviet Union .

Sisma claims that those amounts should be increased by two other quantities also intended to be delivered to the Soviet market, namely the 1 491 tonnes mentioned earlier and 1 428 tonnes corresponding to an orderfor special sections . According to the applicant, that type of product is not subject to the quota system .

As I have already indicated, the additional quota of 1 491 tonnes was indeed allocated to the applicant, but for the fourth quarter of 1983 . However, the Commission' s decision, contained in a letter of 29 December 1983, did not reach the applicant until 9 January 1984 .

The applicant alleges that for that reason it was entitled to "carry over" that quota to the first quarter of 1984 .

In so far as that argument implies that the Commission was not entitled to allocate, at a date so close to the end of the quarter concerned, an additional quota for that same quarter but ought to have allocated it for the following quarter, it amounts to a challenge to the validity of the decision of 29 December 1983, which has become definitive because it was not contested within the prescribed time-limits . However, "it follows from settled case-law that an applicant may not, in the context of an application for annulment directed against an individual decision, raise by way of objection of illegality other individual decisions addressed to it which have become definitive" ( 6 )

It also does not appear to me to be necessary to consider the applicant' s argument to the effect that in regard to the allocation of quotas, reference must be made to the quarter in which production takes place and not that in which the products are delivered ( reply, p . 8 ). Furthermore, Sisma has not shown that it did not actually produce the said quantity of 1 491 tonnes during the fourth quarter of 1983, whereas in its letter of 15 September 1983, it applied for that quantity in respect of the fourth quarter . On the contrary, the fact that it exceeded its production quota during that quarter tends rather to suggest that it anticipated the Commission' s decision of 29 December 1983 .

With regard to whether the applicant was entitled to itself "carry over" the quota in question to the first quarter of 1984 notwithstanding the Commission' s decision of 29 December 1983, it must be noted that the various hypotheses provided for in Article 11 ( 3 ) of Decision No 234/84/ECSC permit only production quotas which have not been entirely exhausted to be carried over .

However, it should again be observed that during the fourth quarter of 1983, Sisma not only used up its production quotas, including the additional quota of 1 491 tonnes, but even allowing for the permitted tolerance of 3%, exceeded them by 462 tonnes . The Commission' s decision of 18 June 1985 imposing a fine on it on that basis has become definitive since no application was made to have it declared void .

Furthermore, in its reply of 18 September 1984 to the Commission' s letter of complaint concerning that infringement, the applicant expressly admitted that "that excess production actually occurred ". It is true that in the same letter, as well as at the hearing on 14 December 1984, it sought to explain the infringements by saying that it believed it was automatically entitled to carry over, under Article 11 ( 3 ) ( d ) of Decision No 2177/83/ECSC, ( 7 ) which was in force at the time and corresponds to the same article in Decision No 234/84/ECSC, the quantities allocated in respect of the preceding quarter and not used up because some of its plant had been closed for restructuring . Moreover, leaving aside the fact that Article 11 ( 3 ) ( d ) does not apply to such a case, it is for the Commission to expressly authorize a carryover under that provision .

Let me also point out that the reference made by the applicant in its reply ( p . 7 ) to the judgment of 16 November 1983 in Thyssen ( 8 ) is not relevant to this case . In that case, the Court also decided that the rules in force at the material time limited the cases in which unused production quotas could be transferred ( paragraph 8 ). Moreover, the decisive reason why it was prepared to reduce the fine to a symbolic amount was that the "delay in notifying the definitive quota to Thyssen prevented it from producing in the final quarter of 1980 the quantity which it was entitled to produce" ( paragraph 21 ), including the 3% tolerance margin . I also note that even the fact that the latter was admittedly in an "exceptional situation" was not sufficient to cause the Court to declare void the Commission' s decision imposing a fine for exceeding the quota in the following quarter, but merely justified "a different assessment from that made by the Commission as regards the gravity of the infringement and the fixing of the amount of the fine" ( paragraph 22 ).

In a more recent case, Case 41/85 Sideradria v Commission, ( 9 ) the Court, in the exercise of its unlimited jurisdiction under the second paragraph of Article 36 of the ECSC Treaty, considered it equitable to quash a fine imposed for exceeding a production quota during the fourth quarter of 1982 on the ground that the applicant had only one month during the preceding quarter to use the additional quotas allocated very late by the Commission, namely by a decision of 19 August 1982 ( paragraph 12 ). It must also be noted that that decision in fact allocated a retroactive increase in the production quotas granted for the entire period from the third quarter of 1981 to the third quarter of 1982 inclusive and at the same time, limited the possibility of carryover to the third quarter of 1982 . In that case also, the applicant was unable, by reason of the late communication of the Commission' s decision, to use all the additional quotas allocated .

On the other hand, Sisma, as I have just pointed out, actually exceeded during the fourth quarter of 1983 the whole of its production quota and the additional quota allocated by the decision of 29 September 1983, increased by the tolerance margin of 3%; furthermore, as can be seen from the documents produced by the Commission at the Court' s request, the Commission also took account of that additional quota in calculating the said excess which, otherwise, would have been even larger .

In those circumstances, the Commission was in no way required to take account of the same additional quota of 1 491 tonnes a second time in calculating the excess for the first quarter of 1984 .

With regard to the quantity of 1 428 tonnes of special sections, the situation seems to me to be equally clear .

Sisma never applied for an additional quota for that quantity under Article 14C of Decision No 234/84/ECSC . In its letter of 19 March 1984 it merely informed the Commission of the order it had received and expressed the view that the manufacture of those special sections should fall entirely outside the quota system .

The Commission was therefore able to limit its reply to saying, in a letter of 22 May 1984 signed by the Director of the Steel Directorate, which neither party regarded as a decision in the correct form, that in any event the 1 428 tonnes represented too small a quantity compared to the quota allocated to the applicant to bring Article 14C into play and, moreover, no section, however special, could fall outside the quota system altogether .

In that regard, it is wrong to claim, as the applicant does at pp . 7 and 9 of its application, that the Commission' s conduct was inconsistent in the sense that in December 1983, it regarded the sections to be delivered to the USSR as special products in respect of which additional quotas could be granted but refused to treat later exports of similar products in the same way .

In fact, the Commission' s attitude has not varied . Even in December 1983, it regarded special products as coming within the quota system; otherwise, it would not have been able, nor would it have felt it necessary, to grant an additional quota . In May 1984, it refused - even supposing that its Director' s letter is to be regarded as a genuine decision, quod non - to grant such a quota because in its view, the conditions laid down in Article 14C had not been fulfilled .

Furthermore, I do not see how the applicant' s cause is served by putting forward such a contradiction . If it wishes to claim that it was entitled to an additional quota in respect of the 1 428 tonnes as it had been for the 1 491 tonnes it should have submitted an express application or at the very least regarded the Commission' s letter of 22 May 1984 as a decision refusing such a quota and contested it before the Court . However, it did neither . ( 10 )

It is probably for that reason that the applicant, in its reply, no longer lays any emphasis on that alleged contradiction but takes up the argument contained in its letter of 19 March 1984 to the effect that it should have been able to produce the 1 428 tonnes of special sections freely, outside the quota system, or at the very least have been entitled to an additional quota under Article 10 ( 2 ) of Decision No 234/84/ECSC ( p . 9 ). In its abovementioned letter of 22 May 1984, the Commission relied on that article as the principal argument for "emphasizing that even special products manufactured by a very small number of undertakings for very specific purposes are subject to the quota system ".

However, on the one hand, Article 4 ( 1 ) of Decision No 234/84/ECSC expressly provides that the production quota system for the categories referred to applies "irrespective of quality or choice ".

On the other hand, Article 10 ( 2 ) provides that the Commission may ( but is not required to, as the applicant claims ) allocate additional quotas which may be delivered in the common market to undertakings which seek them and fulfil the conditions therein laid down . Since Sisma has not made such an application and, furthermore, does not appear to fulfil those conditions, it is not in any event entitled to such additional quotas .

The Commission was, therefore, not required to take account of the 1 428 tonnes of special sections in calculating Sisma' s excess of its production quotas during the first quarter of 1984 .

For the sake of completeness, let me say once again that in its reply ( p . 9 ), the applicant also complains that the Commission granted its application of 10 February 1984 concerning 4 452 tonnes only on 17 April 1984, by the allocation of a supplementary quota of 610 tonnes for the first quarter of 1984 . It seems to conclude that because of that delay, it could not allocate those 610 tonnes to the first quarter of 1984 but was legitimately entitled to use them during the following quarter .

Leaving aside the fact that the taking into account of those 610 tonnes was raised for the first time in the reply and that it amounts to challenging an individual decision which had already become definitive, I must admit that I find that argument somewhat puzzling . Sisma' s application expressly indicated that the delivery was intended to take place during the first quarter of 1984 and dealt with the allocation of additional quotas for that quarter . The allocation of the said quota, even if it was only communicated to Sisma during the second quarter of 1984, thus served in reality to cover part of the production during the first quarter which was to be delivered to the Soviet Union during that same quarter .

Moreover, if the 610 tonnes are to be attributed to the second quarter of 1984, the excess for the first quarter of 1984 will increase accordingly .

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 .

It is true, as the applicant emphasizes, that the first four indents of the fourth recital in the preamble to the contested decision are identical word for word to those of the decision of 18 June 1985, except for the indication of the quarter to which they refer . However, there is nothing abnormal in that because they merely refer to the legal basis of the fines and the determination of the rate to be applied per tonne of excess .

On the other hand, the second and third recitals in the preamble to the two Commission decisions reproduce the various arguments advanced by Sisma in its defence in the respective cases and express a view in regard to each point . It does not seem to me therefore that the procedure was in any way "automatic ".

It must be noted that in the contested decision the Commission took account, among those points, of the fact that it did not inform Sisma in time that its interpretation of Article 11 ( 3 ) ( d ) of Decision No 234/84/ECSC was wrong . For that reason, it reduced the rate of fine from 50% to 25% of the standard rate of 100 ECU per tonne of excess, provided for in the first paragraph of Article 12 of Decision No 234/84 .

However, independently of the fact that the conditions for the application of Article 11 ( 3 ) ( d ) were in any event not fulfilled, the Commission was in no way obliged to do so . The article in question presupposes a prior authorization from the Commission for an undertaking to carry over quantities as provided for therein and Sisma made no such application .

Furthermore, even if there was negligence on the part of the Commission, it must be emphasized "that a wrongful act on the part of the Commission cannot justify a breach of Community law by an undertaking" ( 11 ) and that even "a concession on the part of the authorities cannot make an infringement legitimate ". ( 12 )

In its judgment of 21 March 1985 ( 13 ) the Court expressly decided that although such omissions on the part of the Commission "do not alter the fact that the quota excess in question constitutes an infringement of the Community rules and cannot therefore justify the annulment of the contested decision, they may be grounds for reducing the fine" ( paragraph 22 ).

At the very most, therefore, it is for the determination of the rate of fine that account must be taken of that part of the applicant' s second submission - which was indeed done, as we shall see .

The substantive submissions raised by the applicant are not enough for the Court to declare outright that the contested decision is void .

Finally, it remains for me to consider the third submission advanced in the alternative in support of a reduction of the fine, namely that the Commission failed to take account of the existence of exceptional circumstances which justified a different assessment of the seriousness of the infringement and therefore, a merely symbolic fine .

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 1 491 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 1 428 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 26 563 tonnes and the part of that quota which could be delivered in the common market was fixed at 23 070 tonnes . However, under the said provisions, the additional quota cannot be greater than the difference between the quantity of the orders intended for 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 4 452 tonnes ordered and the threshhold thus fixed ( 3 493 + 349 = 3 842 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", ( 14 ) 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 8 000 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, ( 15 ) "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 ). ( 16 )

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 undertakings 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 .

(*) Translated from the French .

( 1 ) 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 ).

( 2 ) OJ C 347, 31.12.1985, p . 1 .

( 3 ) Case 8/83 Bertoli v Commission (( 1984 )) ECR 1649, in particular paragraphs 24 to 26 .

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

( 5 ) See, for example, the judgment of 11 December 1980 in Case 1252/79 Lucchini v Commission (( 1980 )) ECR 3753, paragraph 14 .

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

( 7 ) 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 ).

( 8 ) Case 188/82 Thyssen v Commission (( 1983 )) ECR 3721 .

( 9 ) Judgment of 10 December 1986, (( 1986 )) ECR 3917 .

( 10 ) 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 Boël v Commission (( 1984 )) ECR 859, paragraph 11 ).

( 11 ) See the judgment in Case 188/82 Thyssen v Commission (( 1983 )) ECR 3721, paragraph 10 .

( 12 ) See the judgment in Case 8/83 Bertoli v Commission (( 1984 )) ECR 1649, paragraph 21 .

( 13 ) Case 66/84 Ferriere di Borgaro SpA v Commission, (( 1985 )) ECR 927 .

( 14 ) 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 .

( 15 ) Case 179/82 Lucchini v Commission (( 1983 )) ECR 3083 .

( 16 ) See also the judgment of 14 February 1984 in Case 2/83 Alfer v Commission (( 1984 )) ECR 799, paragraph 12 .