61982J0265

1 . OBJECTION OF ILLEGALITY - MEASURES AGAINST WHICH AN OBJECTION OF ILLEGALITY MAY BE RAISED - INDIVIDUAL DECISIONS - EXCLUDED

( ECSC TREATY , ART . 36 , THIRD PARA .)

2.ECSC - PRODUCTION - SYSTEM OF STEEL PRODUCTION QUOTAS - GENERAL DECISION NO 1831/81 - ADJUSTMENT OF QUOTAS - PURPOSE AND DETAILED RULES

( GENERAL DECISION NO 1831/81/ECSC , ART . 10 )

1 . AN APPLICANT CANNOT , IN AN APPLICATION FOR A DECLARATION THAT AN INDIVIDUAL DECISION IS VOID , RAISE AN OBJECTION OF ILLEGALITY RELATING TO ANOTHER INDIVIDUAL DECISION ADDRESSED TO HIM WHICH HAS BECOME FINAL .

2.SINCE THE AIM OF ARTICLE 10 OF GENERAL DECISION NO 1831/81/ECSC , WHICH PERMITS THE ADJUSTMENT OF STEEL PRODUCTION QUOTAS , IS TO PERMIT IRON AND STEEL UNDERTAKINGS TO PRODUCE CERTAIN STEELS FOR THE PRODUCTION OF SMALL TUBES WITHOUT RUNNING THE RISK OF EXCEEDING THEIR QUOTAS AND WITHOUT BEING COMPELLED TO REDUCE PRODUCTION INTENDED FOR PROCESSING INTO OTHER FINISHED PRODUCTS , AND SINCE CHECKS TO ENSURE THAT THE CONDITIONS OF ARTICLE 10 ARE MET AND THE ALLOCATION OF ADDITIONAL QUOTAS NECESSARILY TAKE PLACE AFTER COMPLETION OF THE PRODUCTION IN QUESTION , THE ADJUSTMENT OF THE QUOTA OF AN UNDERTAKING WHICH HAS BEEN ABLE TO DEMONSTRATE THAT ITS PRODUCTION WAS USED IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 10 MUST BE GRANTED FOR THE QUARTER IN WHICH THE STEEL WAS PRODUCED , REGARDLESS OF THE QUARTER IN WHICH IT WAS DELIVERED .

IN CASE 265/82

UNION SIDERURGIQUE DU NORD ET DE L ' EST DE LA FRANCE ( USINOR ), REPRESENTED BY L . 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 ITS LEGAL ADVISER , ETIENNE LASNET , ACTING AS AGENT , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ORESTE MONTALTO , JEAN MONNET BUILDING , KIRCHBERG ,

DEFENDANT ,

APPLICATION FOR A DECLARATION THAT THE DECISION OF THE COMMISSION OF 13 AUGUST 1982 CONCERNING A FINE IMPOSED PURSUANT TO ARTICLE 58 OF THE ECSC TREATY IS VOID ,

1 BY AN APPLICATION LODGED AT THE COURT REGISTRY ON 27 SEPTEMBER 1982 UNION SIDERURGIQUE DU NORD ET DE L ' EST DE LA FRANCE ( USINOR ) APPEALED UNDER THE SECOND PARAGRAPH OF ARTICLE 36 OF THE ECSC TREATY , WHICH GIVES THE COURT UNLIMITED JURISDICTION , AGAINST THE COMMISSION ' S DECISION OF 13 AUGUST 1982 IMPOSING UPON THE APPLICANT A FINE OF FF 4 215 404 FOR EXCEEDING ITS PRODUCTION QUOTA FOR THE THIRD QUARTER OF 1981 .

2 THE DISPUTE BETWEEN THE PARTIES RESULTED FROM DIFFERENT VIEWS AS TO THE INTERPRETATION OF ARTICLE 10 OF DECISION NO 1831/81/ECSC OF 24 JUNE 1981 , A GENERAL DECISION ' ' ESTABLISHING FOR UNDERTAKINGS IN THE IRON AND STEEL INDUSTRY A MONITORING SYSTEM AND A NEW SYSTEM OF PRODUCTION QUOTAS IN RESPECT OF CERTAIN PRODUCTS ' ' ( OFFICIAL JOURNAL 1981 , L 180 , P . 1 ). ARTICLE 10 OF THAT DECISION ALLOWS FOR ADJUSTMENTS OF PRODUCTION QUOTAS FOR PRODUCTS IN CATEGORY IA INTENDED FOR THE MANUFACTURE OF SMALL TUBES . ACCORDING TO THE RECITALS IN THE PREAMBLE TO THAT DECISION , THOSE TUBES ARE IN ACTIVE DEMAND , MAINLY IN THE ENERGY SECTOR . FOR STATISTICAL PURPOSES THEY ARE , HOWEVER , DIFFICULT TO DISTINGUISH FROM ANY OTHER SMALL WELDED TUBE . CONSEQUENTLY THE QUOTAS FOR UNDERTAKINGS MUST BE ADJUSTED AT THEIR REQUEST AND ON PRESENTATION OF SUPPORTING DOCUMENTS , IN ORDER TO ALLOW PRODUCTION OF SUCH TUBES TO PROCEED . ON THE BASIS OF THOSE RECITALS , ARTICLE 10 PROVIDES THAT :

' ' WITH REGARD TO PRODUCTS OF CATEGORY IA WHICH ARE USED IN THE FORM OF HOT-ROLLED PRODUCTS FOR THE PRODUCTION IN THE COMMUNITY OF WELDED TUBES WITH A DIAMETER NOT LARGER THAN 406.4 MM , THE COMMISSION SHALL , AT THE UNDERTAKING ' S REQUEST ACCOMPANIED BY PROOF OF USE FOR SUCH A PURPOSE , ADJUST THE QUOTA AND AUTHORIZE THE RELEVANT DELIVERIES . ' '

3 THE APPLICANT REQUESTED THE BENEFIT OF THAT PROVISION IN ORDER TO MEET AN ORDER FROM CORINTH PIPEWORKS SA , RECEIVED ON 13 JULY 1981 AND ACCEPTED ON 20 AUGUST 1981 . THE ROLLED PRODUCTS ORDERED WERE PRODUCED IN SEPTEMBER 1981 , THAT IS TO SAY DURING THE THIRD QUARTER OF 1981 . THEY WERE SHIPPED ON 14 AND 26 OCTOBER 1981 , DURING THE FOURTH QUARTER OF 1981 , ON DATES DETERMINED BY THE SHIP ' S TIMETABLE .

4 THE COMMISSION DID NOT DENY THAT THAT PRODUCTION WAS USED FOR PURPOSES WHICH ENTITLED THE APPLICANT TO AN ADJUSTMENT OF ITS QUOTA , BUT IT NEVERTHELESS CONSIDERED THAT THE ADJUSTMENT SHOULD BE MADE BY INCREASING THE PRODUCTION QUOTA FOR THE QUARTER IN WHICH DELIVERY , AND NOT PRODUCTION , TOOK PLACE .

5 CONSEQUENTLY , THE APPLICANT ' S QUOTA FOR THE THIRD QUARTER WAS INCREASED BY DECISION OF 23 DECEMBER 1981 TO 671 852 TONNES FOR PRODUCTS OF CATEGORY IA , TAKING INTO ACCOUNT SOLELY THE DELIVERIES EFFECTED DURING THAT QUARTER . THE APPLICANT DID NOT INSTITUTE PROCEEDINGS BEFORE THE COURT CHALLENGING THAT DECISION WITHIN THE PRESCRIBED PERIOD . SINCE THE APPLICANT ' S PRODUCTION AMOUNTED TO 685 950 TONNES - AN EXCESS OF 8 556 TONNES TAKING INTO ACCOUNT A TOLERANCE OF 3 % - THE COMMISSION ADOPTED THE CONTESTED DECISION IMPOSING UPON THE APPLICANT A FINE CALCULATED IN ACCORDANCE WITH ARTICLE 12 OF DECISION NO 1831/81/ECSC BY MULTIPLYING THE NUMBER OF TONNES OF EXCESS BY 75 ECU .

6 THE APPLICANT CLAIMS THAT THE COMMISSION ' S DECISION OF 13 AUGUST 1982 SHOULD BE DECLARED VOID IN SO FAR AS IT DECLARES IN ARTICLE 1 THAT THE APPLICANT EXCEEDED ITS PRODUCTION QUOTA BY 8 556 TONNES FOR PRODUCTS IN CATEGORY IA IN THE THIRD QUARTER OF 1981 AND THEREFORE IMPOSES IN ARTICLE 2 A FINE OF 641 700 ECU ( FF 4 215 404 ).

7 IN SUPPORT OF ITS SUBMISSIONS CHALLENGING ARTICLE 1 OF THE CONTESTED DECISION , THE APPLICANT DOES NOT DENY THAT THE QUOTA WAS ACTUALLY EXCEEDED BUT RELIES UPON ARGUMENTS WHICH IN EFFECT CHALLENGE THE LEGALITY OF THE DECISION OF 23 DECEMBER 1981 BY WHICH THE COMMISSION FIXED ITS QUOTA FOR THE THIRD QUARTER OF 1981 . THAT DECISION BECAME FINAL WHEN IT WAS NOT CONTESTED WITHIN THE PERIOD PRESCRIBED BY THE TREATY . IT IS WELL-ESTABLISHED CASE-LAW THAT AN APPLICANT CANNOT , IN AN APPLICATION FOR A DECLARATION THAT AN INDIVIDUAL DECISION IS VOID , RAISE AN OBJECTION OF ILLEGALITY RELATING TO ANOTHER INDIVIDUAL DECISION ADDRESSED TO HIM WHICH HAS BECOME FINAL . THAT BEING SO , THE APPLICANT CANNOT EFFECTIVELY RELY UPON THE ILLEGALITY OF THE ABOVE-MENTIONED COMMISSION DECISION WHICH FIXED ITS QUOTA FOR THE THIRD QUARTER OF 1981 , AND THE SUBMISSIONS REFERRED TO ABOVE MUST BE REJECTED .

8 ON THE OTHER HAND , AS REGARDS THE SUBMISSIONS CHALLENGING ARTICLE 2 OF THE CONTESTED DECISION IT IS COMMON GROUND THAT IF THE COMMISSION HAD INCLUDED THE PRODUCTION FOR THE ORDER FROM CORINTH PIPEWORKS SA IN ADJUSTING THE QUOTA FOR THE THIRD QUARTER OF 1981 , THE APPLICANT ' S PRODUCTION WOULD NOT HAVE EXCEEDED THE QUOTA IMPOSED .

9 THE COMMISSION , HOWEVER , CONSIDERED THAT THE ADJUSTMENT OF QUOTAS HAD TO BE GIVEN FOR THE QUARTER IN WHICH DELIVERY , NOT PRODUCTION , OF THE ROLLED PRODUCTS OCCURRED .

10 IT SHOULD BE OBSERVED IN THAT REGARD THAT THE AIM OF ARTICLE 10 OF DECISION NO 1831/81/ECSC IS TO PERMIT IRON AND STEEL UNDERTAKINGS TO PRODUCE CERTAIN STEELS FOR THE PRODUCTION OF SMALL TUBES WITHOUT RUNNING THE RISK OF EXCEEDING THEIR QUOTAS AND WITHOUT BEING COMPELLED TO REDUCE PRODUCTION INTENDED FOR PROCESSING INTO OTHER FINISHED PRODUCTS . CHECKS TO ENSURE THAT THE CONDITIONS OF ARTICLE 10 ARE MET AND THE ALLOCATION OF ADDITIONAL QUOTAS NECESSARILY TAKE PLACE AFTER COMPLETION OF THE PRODUCTION IN QUESTION . THUS THE UNDERTAKING WHICH PRODUCES MORE THAN ITS ORIGINAL QUOTA MUST BE ABLE TO PROVE SUBSEQUENTLY THAT ITS ADDITIONAL PRODUCTION WAS ACTUALLY USED FOR THE PURPOSES LAID DOWN IN ARTICLE 10 .

11 IT IS THUS CLEAR THAT THE ADJUSTMENT TO THE QUOTA OF AN UNDERTAKING WHICH HAS BEEN ABLE TO DEMONSTRATE THAT ITS PRODUCTION WAS USED IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 10 AS CITED ABOVE MUST BE GRANTED FOR THE QUARTER IN WHICH THE ROLLED PRODUCTS WERE PRODUCED , REGARDLESS OF THE QUARTER IN WHICH THE ROLLED PRODUCTS WERE PRODUCED , REGARDLESS OF THE QUARTER IN WHICH THEY WERE DELIVERED . THE COMMISSION ' S INTERPRETATION , WHICH SEEKS TO ADJUST QUOTAS FOR THE QUARTER OF DELIVERY , IN FACT PRODUCES RESULTS WHICH ARE INCOMPATIBLE WITH THE AIMS OF ARTICLE 10 , AS IS SHOWN IN PARTICULAR BY THE CIRCUMSTANCES OF THIS CASE . THUS PRODUCTION WHICH IS EFFECTED AT THE END OF A QUARTER AND WHICH CANNOT BE DELIVERED BEFORE THE BEGINNING OF THE FOLLOWING QUARTER CANNOT BE REGARDED - IN THE EVENT OF ADJUSTMENT - AS EXCEEDING THE QUOTA PURELY BECAUSE THE UNDERTAKING HAS EXHAUSTED ITS ORIGINAL QUOTA .

12 EQUALLY MISTAKEN IS THE ARGUMENT PUT FORWARD BY THE COMMISSION AT THE HEARING TO THE EFFECT THAT AN UNDERTAKING IN THE APPLICANT ' S SITUATION SHOULD NOT DECLARE THE EXCESS PRODUCTION IN ONE QUARTER UNTIL THE FOLLOWING QUARTER . SUCH A SOLUTION AMOUNTS IN PRACTICE TO INCITING THE UNDERTAKING TO SUBMIT TO THE COMMISSION , IN BREACH OF THE RELEVANT PROVISIONS , INACCURATE DECLARATIONS , WHICH SUFFICES TO SHOW THAT THE INTERPRETATION SUGGESTED BY THE COMMISSION IS MANIFESTLY IMPRACTICABLE .

13 IN THE CIRCUMSTANCES , THE COURT IS OF THE OPINION THAT THE INFRINGEMENT OF WHICH THE APPLICANT IS ACCUSED ON THE GROUND THAT IT EXCEEDED THE QUOTA FIXED FOR THE THIRD QUARTER IS PURELY FORMAL AND THAT THE COURT SHOULD , IN THE EXERCISE OF THE UNLIMITED JURISDICTION CONFERRED UPON IT BY THE SECOND PARAGRAPH OF ARTICLE 36 OF THE ECSC TREATY , ANNUL THE FINE IMPOSED BY THE COMMISSION .

14 AT THE SITTING , COUNSEL FOR THE APPLICANT REQUESTED THE REIMBURSEMENT OF THE EXPENSES INCURRED BY THE APPLICANT IN ORDER TO FURNISH THE COMMISSION WITH A BANK GUARANTEE TO SECURE THE SUSPENSION OF THE FINE . THE REQUEST WAS OUT OF TIME , HOWEVER , AND THE COMMISSION DID NOT HAVE AN OPPORTUNITY OF EFFECTIVELY FORMULATING ITS DEFENCE IN THAT REGARD . THAT CLAIM MUST CONSEQUENTLY BE DISMISSED .

COSTS

15 ACCORDING TO ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE , THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS . SINCE THE COMMISSION HAS IN THE MAIN BEEN UNSUCCESSFUL IN ITS ARGUMENTS , IT SHOULD BE ORDERED TO PAY THE WHOLE OF THE COSTS .

ON THOSE GROUNDS ,

THE COURT ( FIFTH CHAMBER )

HEREBY DECLARES :

1 . ARTICLE 2 OF THE COMMISSION ' S DECISION OF 13 AUGUST 1982 IMPOSING A FINE OF 641 700 ECU ON THE APPLICANT IS VOID ;

2 . THE REMAINDER OF THE APPLICATION IS DISMISSED ;

3 . THE COMMISSION IS ORDERED TO PAY THE COSTS .