61958J0019

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1 . FUNDAMENTAL AND PERSISTENT DISTURBANCES - ACTION BY THE HIGH AUTHORITY - CONCEPT

( ECSC TREATY, ARTICLE 37 )

2 . TRANSPORT - PRINCIPLE OF NON-DISCRIMINATION - CONCEPT OF COMPARABILITY

( ECSC TREATY, ARTICLE 70 )

3 . TRANSPORT - SPECIAL INTERNAL RATES AND CONDITIONS - CRITERIA

( ECSC TREATY, ARTICLE 70 )

4 . TRANSPORT - SPECIAL INTERNAL RATES AND CONDITIONS - ADVERSE EFFECT - ABSENCE - AUTHORIZATION NOT JUSTIFIED

( ECSC TREATY, ARTICLES 2, 3, 70 )

5 . TRANSPORT - SPECIAL INTERNAL RATES AND CONDITIONS - EXCEPTIONAL NATURE - CIRCUMSTANCES JUSTIFYING APPROVAL

( ECSC TREATY, ARTICLE 70 )

1 . ACTION ON THE PART OF THE HIGH AUTHORITY WITHIN THE MEANING OF THE FIRST PARAGRAPH OF ARTICLE 37 MUST BE INTERPRETED AS REFERRING ONLY TO AN ACTION WHICH HAS ALREADY OCCURRED AND NOT A DECISION WHICH THE HIGH AUTHORITY HAS THE AS YET UNRESOLVED INTENTION OF ADOPTING .

2 . CF . SUMMARY OF JOINED CASES 3 TO 18, 25 AND 26/58, N . 2 .

THE CASE OF DISCRIMINATION COVERED BY THE FIRST PARAGRAPH OF ARTICLE 70 REFERS EXCLUSIVELY TO CONDITIONS OF TRANSPORT AND THEREFORE TO THE COMPARABILITY OF DIFFERENT ROUTES AND LOCATIONS FROM THE POINT OF VIEW OF TRANSPORT .

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3 . SPECIAL RATES AND CONDITIONS WITHIN THE MEANING OF THE FOURTH PARAGRAPH OF ARTICLE 70 ARE NOT ONLY THOSE ADOPTED IN THE INTEREST OF UNDERTAKINGS, BUT ALSO THOSE WHICH ARE ADVANTAGEOUS TO THEM . THEREFORE EVEN REASONS FOR THEIR ADOPTION WHICH ARE ENTIRELY FOREIGN TO THE INTERESTS OF AN UNDERTAKING RECEIVING AN ADVANTAGE CANNOT EXCLUDE OR RESTRICT THE APPLICATION OF THE ABOVEMENTIONED PROVISION .

4 . CF . SUMMARY OF JOINED CASES 3 TO 18, 25 AND 26/58, N . 5 .

THE ADVERSE EFFECT ON THE PROFITABILITY OF AN UNDERTAKING OF THE LACK OF SPECIAL RATES AND CONDITIONS DOES NOT RENDER THOSE RATES AND CONDITIONS CONSONANT WITH THE PRINCIPLES OF THE TREATY AND THEREFORE DOES NOT, IN CASES WHERE THE FOURTH PARAGRAPH OF ARTICLE 70 APPLIES, PUT THE HIGH AUTHORITY UNDER AN OBLIGATION BASED ON ARTICLES 2 AND 3 .

*/ 658J0003 /*.

5 . CF . SUMMARY OF JOINED CASES 3 TO 18, 25 AND 26/58, N . 6 .

A PROTECTIVE RATE IS COMPATIBLE WITH THE TREATY ONLY IN EXCEPTIONAL CASES, NOTABLY WHERE THE UNDERTAKING RECEIVING ASSISTANCE IS EXPERIENCING DISADVANTAGES CREATED BY FACTORS OTHER THAN THOSE OF AN ECONOMIC NATURE; SUCH A RATE IS LEGITIMATE ONLY IN SO FAR AS IT IS NECESSARY IN ORDER TO ENABLE THE UNDERTAKING TO ADAPT ITSELF TO NEW CONDITIONS OR TO SURVIVE AN ACCIDENTAL DISADVANTAGE .

*/ 658J0003 /*.

IN CASE 19/58

GOVERNMENT OF THE FEDERAL REPUBLIC OF GERMANY, REPRESENTED BY WERNER VON SIMSON; ADVOCATE AT THE OBERLANDESGERICHT DUSSELDORF, AND PROFESSOR PHILIPP MOHRING, ADVOCATE AT THE BUNDESGERICHTSHOF KARLSRUHE, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF WERNER VON SIMSON, BERTRANGE, APPLICANT,

V

HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, WALTER MUCH, ACTING AS AGENT, ASSISTED BY HANS PETER IPSEN, PROFESSOR AT THE UNIVERSITY OF HAMBURG, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS SEAT 2 PLACE DE METZ, DEFENDANT,

APPLICATION FOR THE ANNULMENT OF CERTAIN PARTS OF THE DECISIONS OF THE HIGH AUTHORITY OF 9 FEBRUARY 1958 ( JO OF 3.3.1958 ) NOTIFIED BY LETTERS T/10.202 AND T/10.203 OF 12 FEBRUARY 1958,

P . 232

THE NATURE OF THE APPLICATION

THE APPLICANT CLAIMS THAT ITS APPLICATION IS BASED ON ARTICLE 37 AND ON THE SECOND PARAGRAPH OF ARTICLE 88 AS WELL AS ON ARTICLE 33 OF THE TREATY .

THE CONTESTED DECISIONS, BEING DECISIONS ADOPTED IN APPLICATION OF THE SEVENTH PARAGRAPH OF ARTICLE 10 OF THE CONVENTION, CANNOT BE CONSIDERED AS ORDERS FOR COMPLIANCE UNDER ARTICLE 88 . THEREFORE THE APPLICATION, IN SO FAR AS IT IS BASED ON THAT PROVISION, IS WHOLLY UNFOUNDED .

IT ALSO APPEARS FROM THE CONTENT AND FROM THE HISTORY OF THE SAID DECISIONS THAT THEY DO NOT CONSTITUTE FINDINGS THAT THE APPLICANT HAS FAILED TO FULFIL ITS OBLIGATIONS . IN FACT, IT APPEARS FROM A READING OF THE SEVENTH PARAGRAPH OF ARTICLE 10 OF THE CONVENTION THAT SPECIAL RATES AND CONDITIONS IN FORCE UPON THE ESTABLISHMENT OF THE COMMUNITY WERE TO BE CONSIDERED AS LEGAL UNTIL SUCH TIME AS THE HIGH AUTHORITY HAD TAKEN A DECISION CONCERNING THEM . THEREFORE A DECISION UNDER ARTICLE 88, INVOLVING A FINDING THAT THE APPLICANT GOVERNMENT HAD FAILED TO FULFIL AN OBLIGATION WAS INCONCEIVABLE DURING THAT INITIAL PERIOD .

AS REGARDS THE APPLICABILITY OF ARTICLE 37, THE APPLICANT HAS ALLEGED AND OFFERED TO PROVE THAT BOTH BEFORE AND AFTER THE ADOPTION OF THE CONTESTED DECISIONS IT DREW THE ATTENTION OF THE HIGH AUTHORITY TO THE FACT THAT, IN ITS OPINION, THE RULES ENVISAGED MIGHT PROVOKE FUNDAMENTAL AND PERSISTENT DISTURBANCES IN THE GERMAN ECONOMY .

P . 233

HOWEVER, IT DOES NOT FOLLOW FROM THIS THAT THE REQUIREMENTS AS TO THE ADMISSIBILITY OF AN APPLICATION BASED ON ARTICLE 37 ARE FULFILLED IN THE PRESENT CASE . FOR THE OBSERVATIONS WHICH THE APPLICANT MAY HAVE MADE TO THE HIGH AUTHORITY BEFORE THE CONTESTED DECISIONS WERE ADOPTED DID NOT REFER TO AN 'ACTION' ON THE PART OF THE HIGH AUTHORITY WITHIN THE MEANING OF THE FIRST PARAGRAPH OF THE SAID ARTICLE, SINCE THAT TERM MUST BE INTERPRETED AS REFERRING ONLY TO AN ACTION WHICH HAS ALREADY OCCURRED AND NOT A DECISION WHICH THE HIGH AUTHORITY HAS THE AS YET UNRESOLVED INTENTION OF ADOPTING . MOREOVER, AS REGARDS THE OBSERVATIONS WHICH THE APPLICANT MAY HAVE MADE AFTER THE DECISIONS WERE ADOPTED, IT SHOULD BE NOTED THAT ACCORDING TO THE FIRST THREE PARAGRAPHS OF ARTICLE 37 AN APPLICATION BASED ON THAT ARTICLE CANNOT BE BROUGHT AGAINST A DECISION WHICH IS ALLEGED BY A STATE TO HAVE CAUSED SUCH DISTRUBANCES, BUT ONLY AGAINST ANY SUBSEQUENT DECISION REFUSING TO RECOGNIZE THE EXISTENCE THEREOF .

THUS THE APPLICATION IS TO BE CONSIDERED AS AN APPLICATION FOR ANNULMENT UNDER ARTICLE 33 . IT HAS BEEN LODGED WITHIN DUE TIME AND IS THEREFORE ADMISSIBLE .

JURISDICTION

THE APPLICANT, POINTING OUT THAT THE POWER CONFERRED ON THE HIGH AUTHORITY BY THE SEVENTH PARAGRAPH OF ARTICLE 10 OF THE CONVENTION EXPIRED ON 9 FEBRUARY 1958, HAS RAISED THE QUESTION WHETHER THE DECISIONS WHICH WERE COMMUNICATED BY LETTER DATED 12 FEBRUARY AND RECEIVED ON 14 FEBRUARY 1958 WERE ADOPTED WITHIN DUE TIME .

ALTHOUGH IT IS TRUE THAT THIS COMPLAINT WAS NOT FORMALLY SET OUT IN THE APPLICATION OR IN THE REPLY, IT IS APPROPRIATE TO EXAMINE IT .

IT APPEARS FROM THE ORAL ARGUMENTS AND FROM THE EXPLANATIONS FURNISHED AT THE HEARING THAT THE DECISIONS COMMUNICATED BY LETTER OF 12 FEBRUARY WERE ADOPTED ON THE EVENING OF 9 FEBRUARY 1958 AND THAT ALL THE DETAILS OF THE DECISIONS WERE FIXED ON THAT DATE, AS IS PROVED BY THE PRODUCTION OF THE DRAFTS DISCUSSED AT THAT MEETING AND BY THE MINUTES THEREOF .

IT ALSO APPEARS FROM INFORMATION PRODUCED BY THE PARTIES THAT THE FACT THAT THOSE DECISIONS WERE ADOPTED ONLY ON THE LAST POSSIBLE DATE IS TO BE EXPLAINED BY A LAST MINUTE APPROACH BY THE FEDERAL GOVERNMENT, THE APPLICANT IN THIS CASE, ASKING THE HIGH AUTHORITY TO RECONSIDER ITS POSITION, WHICH WAS ALREADY WELL KNOWN, AND BY THE DESIRE ON THE PART OF THE HIGH AUTHORITY NOT TO FAIL IN ITS DUTIES IN RESPECT OF THAT GOVERNMENT, WHICH LED IT TO POSTPONE THE FORMAL ADOPTION OF THOSE DECISIONS SO AS TO BE ABLE TO DELIBERATE UPON THEM AFRESH .

P . 234

IN ORDER TO ENTER INTO FORCE, THOSE DECISIONS HAD TO BE NOTIFIED TO THE FEDERAL GOVERNMENT AND, IN ACCORDANCE WITH THE RULES OF GOOD ADMINISTRATION, NOTIFIED AS QUICKLY AS POSSIBLE - WHICH WAS DONE . NEVERTHELESS, THAT DOES NOT IN ANY WAY ALTER THE FACT THAT IN THIS CASE THE DECISIONS WERE ADOPTED DURING THE TRANSITIONAL PERIOD .

THUS THERE IS NO DOUBT THAT THE CONTESTED DECISIONS WERE TAKEN WITHIN DUE TIME .

THE SUBMISSION AS TO INFRINGEMENT OF THE TREATY

1 . THE APPLICANT ALLEGES THAT THE HIGH AUTHORITY, IN APPLYING THE SEVENTH PARAGRAPH OF ARTICLE 10 OF THE CONVENTION, HAS MIS - INTERPRETED ARTICLE 70 OF THE TREATY TO WHICH ARTICLE 10 REFERS .

IN THE FIRST PLACE, THE APPLICANT CHALLENGES THE INTERPRETATION PUT BY THE HIGH AUTHORITY UPON THE FIRST PARAGRAPH OF ARTICLE 70, WHICH STATES THAT COMPARABLE RATES AND CONDITIONS ARE TO BE OFFERED TO COMPARABLY PLACED CONSUMERS . IT ALLEGES - CONTRARY TO THE POINT OF VIEW OF THE HIGH AUTHORITY, WHICH ONLY CONSIDERED THE CRITERION OF COMPARABILITY 'FROM THE POINT OF VIEW OF TRANSPORT' - THAT COMPARISON BETWEEN UNDERTAKINGS MUST TAKE INTO ACCOUNT ALL THE CIRCUMSTANCES IN WHICH THEY ARE PLACED, IN PARTICULAR THE PLACE OF PRODUCTION, THE PROFITABILITY OF DEPOSITS WORKED AND THE FACT OF BEING LOCATED IN A LESS FAVOURED REGION .

HOWEVER, THIS ARGUMENT MUST BE REJECTED .

FIRST OF ALL, THE ABOVEMENTIONED PROVISION APPEARS IN THE CHAPTER HEADED 'TRANSPORT '. IT IS THEREFORE NECESSARY TO INTERPRET THE PHRASE 'COMPARABLY PLACED' AS REFERRING, AT LEAST IN PRINCIPLE, TO THE COMPARABILITY OF SITUATIONS FROM THE POINT OF VIEW OF TRANSPORT .

MOREOVER, THE OPINION THAT ANY COMPARISON BETWEEN SEVERAL UNDERTAKINGS MUST TAKE INTO ACCOUNT ALL THE CIRCUMSTANCES IN WHICH THEY ARE PLACED WOULD LEAD TO THE RESULT THAT AN UNDERTAKING IS ONLY COMPARABLE WITH ITSELF, AND THE CONCEPT 'COMPARABLY PLACED' AND, THEREFORE, THAT OF 'DISCRIMINATION' WOULD THUS BECOME DEVOID OF ALL MEANING .

IT APPEARS FROM ARTICLE 4 OF THE TREATY THAT IN ARTICLE 70 THE INTENTION OF THE AUTHORS OF THE TREATY WAS TO ELIMINATE DISTORTIONS IN THE COMMON MARKET BY THE HARMONIZATION OF TRANSPORT RATES AND CONDITIONS AND THUS TO ENSURE THAT THE COMMON MARKET WOULD FUNCTION ACCORDING TO THE PRINCIPLES ESTABLISHED BY THE TREATY .

IN GIVING EXPRESSION TO THAT INTENTION, THEY CANNOT HAVE BEEN UNAWARE THAT THE TRANSPORT INDUSTRY CONSTITUTES A BRANCH OF INDUSTRY WHICH IS INDEPENDENT OF THAT OF THE PRODUCTION OF COAL AND OF STEEL AND THAT IT HAS ITS OWN PROBLEMS, NEEDS AND PROCEDURES . NOR CAN THEY HAVE FAILED TO UNDERSTAND THAT SO LONG AS THAT INDUSTRY HAS NOT BEEN INTEGRATED INTO THE COMMON MARKET, ITS DISTINCT NATURE MUST BE RESPECTED AND THAT MEASURES TAKEN MUST BE CONFINED TO THOSE NECESSARY TO PREVENT IT FROM JEOPARDIZING THE OBJECTIVES OF THE TREATY BY ITS ACTIONS .

P . 235

ACCORDINGLY, AS REGARDS INTERNATIONAL TRANSPORT, ARTICLE 70 WHILST ENVISAGING THE ULTIMATE HARMONIZATION OF NATIONAL RATES AND CONDITIONS, LEAVES TARIFF POLICY UNCONTROLLED AND CONFINES ITSELF TO THE REQUIREMENT THAT WITHIN EACH NATIONAL SYSTEM ANY DISCRIMINATION BASED ON THE POINT OF DEPARTURE OR DESTINATION MUST BE ABOLISHED .

SIMILARLY - AS IS SHOWN BY THE FIFTH PARAGRAPH - IN RESPECT OF INTERNAL TRANSPORT, MEMBER STATES ARE FREE TO PRACTISE THEIR OWN COMMERCIAL POLICY, SUBJECT TO THE PROVISIONS OF THE TREATY .

THERE CAN BE NO DOUBT THAT THE STATES OR TRANSPORT UNDERTAKINGS WOULD COME INTO CONFLICT WITH THOSE PROVISIONS IF, IN SETTING THEIR RATES AND CONDITIONS, THEY TOOK INTO ACCOUNT THE ADVANTAGES AND DISADVANTAGES OF THE LOCATION OF UNDERTAKINGS PRODUCING COAL AND STEEL OR OF THE QUALITY OF THE DEPOSITS WORKED .

THE TREATY REQUIRES RATHER THAN IN DRAWING UP THEIR TARIFF PROVISIONS THE STATES SHOULD CONSIDER TRANSPORT CONDITIONS ALONE AND, THEREFORE, THE COMPARABILITY OF THE DIFFERENT ROUTES AND LOCATIONS FROM THE POINT OF VIEW OF TRANSPORT .

2 . THE FOURTH PARAGRAPH OF ARTICLE 70 PROVIDES THAT THE APPLICATION OF SPECIAL INTERNAL RATES AND CONDITIONS IN THE INTEREST OF ONE OR MORE COAL - OR STEEL-PRODUCING UNDERTAKINGS SHALL REQUIRE THE PRIOR AGREEMENT OF THE HIGH AUTHORITY .

CONTRARY TO VARIOUS OPINIONS PUT FORWARD DURING THE COURSE OF THE PROCEDURE, IT IS TO BE NOTED THAT THE WORDING OF THIS PROVISION COVERS NOT ONLY RATES SPECIALLY ADOPTED IN THE INTEREST OF CERTAIN UNDERTAKINGS ( A SUBJECTIVE CRITERION ), BUT ALSO ALL SPECIAL RATES WHICH, WHATEVER THE REASON FOR THEIR INTRODUCTION, ARE ADVANTAGEOUS TO ONE OR MORE UNDERTAKINGS ( AN OBJECTIVE CRITERION ). THUS THE FACT THAT A SPECIAL RATE HAS BEEN ADOPTED FOR REASONS WHICH ARE ENTIRELY FOREIGN TO THE INTERESTS OF THE UNDERTAKING DERIVING AN ADVANTAGE CANNOT IN ANY WAY EXCLUDE OR RESTRICT THE APPLICATION OF THE FOURTH PARAGRAPH .

WHERE THE SPECIAL RATES AND CONDITIONS ARE IN ACCORDANCE WITH THE PRINCIPLES OF THE TREATY THE HIGH AUTHORITY CANNOT WITHHOLD ITS AGREEMENT .

SUCH CONFORMITY MUST, AS THE HIGH AUTHORITY HAS CORRECTLY UNDERSTOOD, BE PRESUMED IN EACH CASE IN SO FAR AS THE SPECIAL RATE IS JUSTIFIED BY SPECIFIC CONDITIONS RELATING TO THE TRANSPORT MARKET .

3 . THE APPLICANT COMPLAINS THAT THE HIGH AUTHORITY DID NOT ALSO TAKE INTO ACCOUNT CONSIDERATIONS OF GENERAL ECONOMIC POLICY SUCH AS WHETHER IT WAS EXPEDIENT TO APPROVE PROTECTIVE MEASURES WHICH MIGHT APPEAR DESIRABLE IN FAVOUR OF CRITICAL AREAS AND UNDER-PRIVILEGED REGIONS . IN SUPPORT OF ITS ARGUMENTS IT POINTS TO THE PROVISIONS OF THE SECOND PARAGRAPH OF ARTICLE 2 AND ARTICLE 3 ( A ), ( D ), ( E ) AND ( G ).

P . 236

THE FIFTH PARAGRAPH OF ARTICLE 70 DOES INDEED ENSURE RESPECT FOR THE SOVEREIGNTY OF THE MEMBER STATES AS REGARDS THEIR GENERAL POLICY ON TRANSPORT . HOWEVER, THE PROVISIONS OF ARTICLE 4 AND ALSO THE OTHER PARAGRAPHS OF ARTICLE 70 RUN DIRECTLY COUNTER TO THE IDEA THAT THE MEMBER STATES ARE FREE TO INCLUDE THE COAL AND STEEL INDUSTRY IN ANY POLICY FOR THE SITING OF INDUSTRIES OR TO CONTINUE THE PRACTICE OF SUBSIDIES IN THE FORM OF THE GRANT OF SPECIAL RATES AND CONDITIONS TO UNDERTAKINGS PRODUCING COAL AND STEEL . FOR IF THIS POWER REMAINED AVAILABLE TO THE SIX MEMBER STATES IT COULD PREVENT THE ESTABLISHMENT OF THE COMMON MARKET, PARTICULARLY SINCE THE PRINCIPLES OF GENERAL TRANSPORT POLICY ADOPTED IN THE SIX COUNTRIES ARE DIFFERENT .

THE APPLICANT HAS ALSO REFERRED TO ARTICLE 2 OF THE TREATY, WHICH PROVIDES THAT 'THE COMMUNITY SHALL PROGRESSIVELY BRING ABOUT CONDITIONS WHICH WILL OF THEMSELVES ENSURE THE MOST RATIONAL DISTRIBUTION OF PRODUCTION AT THE HIGHEST POSSIBLE LEVEL OF PRODUCTIVITY, WHILE SAFEGUARDING CONTINUITY OF EMPLOYMENT AND TAKING CARE NOT TO PROVOKE FUNDAMENTAL AND PERSISTENT DISTURBANCES IN THE ECONOMIES OF MEMBER STATES '.

THIS PROVISION, WHILE EXPRESSING TWO RESERVATIONS, CLEARLY STATES THE ESSENTIAL OBJECTIVE OF THE COMMON MARKET, ACCORDING TO WHICH THE GENERAL POLICY OF THE HIGH AUTHORITY MUST BE TO PROMOTE - AND THIS ALSO APPLIES IN THE APPLICATION OF ARTICLE 70 - THE PROGRESSIVE ESTABLISHMENT OF CONDITIONS WHICH WILL OF THEMSELVES ENSURE THE MOST RATIONAL DISTRIBUTION OF PRODUCTION .

THE AUTHORS OF THE TREATY REALIZED THAT THIS POLICY COULD HAVE THE RESULT THAT CERTAIN UNDERTAKINGS MIGHT BE FORCED TO CEASE OR CHANGE THEIR ACTIVITY . THIS APPEARS IN PARTICULAR FROM THE CONVENTION ON THE TRANSITIONAL PROVISIONS, OF WHICH THE SEVENTH PARAGRAPH OF ARTICLE 10 HAS BEEN APPLIED IN THE PRESENT CASE .

THE CONVENTION MAKES PROVISION BOTH FOR ESTABLISHING THE COMMON MARKET BY PUTTING AN END TO SITUATIONS WHICH ARE INCOMPATIBLE WITH THE PRINCIPLES OF THE MARKET AND ARE OF SUCH A NATURE AS TO JEOPARDIZE THE ACHIEVEMENT OF THE OBJECTIVES DEFINED NOTABLY IN ARTICLES 2 AND 3, AND FOR REMEDYING THE DISADVANTAGEOUS CONSEQUENCES WHICH THE ESTABLISHMENT OF THE COMMON MARKET COULD HAVE IN CERTAIN CASES .

IT EXPRESSLY PROVIDES, IN ARTICLE 23 IN PARTICULAR, FOR MEASURES OF READAPTATION, WHICH CAN EVEN TAKE THE FORM OF THE SETTING UP OF NEW UNDERTAKINGS NOT SUBJECT TO THE TREATY, AND FOR ASSISTANCE BOTH TO UNDERTAKINGS AND TO WORKERS .

P . 237

THE FACT THAT THE CONTESTED DECISIONS MIGHT RESULT IN A TEMPORARY REDUCTION IN EMPLOYMENT AND IN THE CLOSURE OF SOME UNDERTAKINGS CANNOT RENDER THESE DECISIONS ILLEGAL ON GROUNDS OF INFRINGEMENT OF ARTICLES 2 AND 3 . IT COULD EVEN BE ARGUED THAT, ON THE CONTRARY, SUCH MEASURES ARE NECESSARY IN ORDER TO ENABLE THE COMMON MARKET TO ACHIEVE ITS STATED OBJECTIVES, SINCE THE DISAPPEARANCE OF UNDERTAKINGS WHICH COULD NOT CONTINUE TO EXIST BY THEIR OWN UNAIDED EFFORTS BUT ONLY WITH THE HELP OF CONSTANT AND MASSIVE SUBSIDIES, WOULD STRENGTHEN ITS RESISTANCE TO CRISES .

HOWEVER, THE FIGURES AND CALCULATIONS SUBMITTED TO THE COURT DO NOT PROVIDE SUFFICIENT EVIDENCE AT LAW FOR THE PROPOSITION THAT FULL EMPLOYMENT AND THE PROFITABILITY OF THE UNDERTAKINGS ARE SERIOUSLY THREATENED BY THE CONTESTED DECISIONS . MOREOVER, NOTHING IN THOSE DECISIONS STANDS IN THE WAY OF A NEW REQUEST BASED DIRECTLY ON THE FOURTH PARAGRAPH OF ARTICLE 70 IF, BEFORE THE EXPIRY OF THE PERIODS LAID DOWN, THE CIRCUMSTANCES JUSTIFY A NEW SPECIAL RATE .

IT WOULD IN ANY CASE BE CONTRARY TO THE MEANING OF THE TREATY TO AUTHORIZE EXISTING SPECIAL RATES ON THE SOLE GROUND THAT IT WOULD BE DIFFICULT OR IMPOSSIBLE FOR THE UNDERTAKINGS CONCERNED TO ADAPT THEMSELVES TO THE COMMON MARKET .

IF SUCH WERE INDEED THE POSITION, IT WOULD AT THE MOST HAVE BEEN OPEN TO THE HIGH AUTHORITY TO LAY DOWN LONGER PERIODS, BUT THE APPLICANT DOES NOT EVEN SET OUT ANY REASONS FOR A COMPLAINT THAT THE CONTESTED DECISIONS SET PERIODS WHICH WERE TOO SHORT .

THEREFORE, NEITHER ARTICLE 2 NOR ARTICLE 3 OF THE TREATY MAY BE RELIED UPON IN SUPPORT OF THE PROPOSITION THAT, IN APPLYING THE FOURTH PARAGRAPH OF ARTICLE 70, THE HIGH AUTHORITY IS REQUIRED, AS A GENERAL RULE, TO AUTHORIZE SPECIAL RATES WHEN THE PROFITABILITY OF AN UNDERTAKING MIGHT BE ADVERSELY AFFECTED IF SUCH RATES DID NOT EXIST .

4 . ON THE CONTRARY, WHEN ECONOMIC CONDITIONS IN THE TRANSPORT SECTOR DO NOT REQUIRE OR JUSTIFY SPECIAL RATES ( WHICH IS THE CASE NOTABLY WHEN COMPETITION FROM ANOTHER MEANS OF TRANSPORT MUST BE COUNTERACTED ), IT IS ONLY IN EXCEPTIONAL CASES THAT A SPECIAL RATE CAN BE CONSIDERED TO BE IN ACCORDANCE WITH THE PRINCIPLES OF THE TREATY .

THE HIGH AUTHORITY HAS RECOGNIZED THE EXISTENCE OF SUCH AN EXCEPTIONAL CASE AS REGARDS CERTAIN UNDERTAKINGS SITUATED NEAR THE INTERZONAL FRONTIER .

IN THAT CASE, THE DISADVANTAGES ARE CREATED BY FACTORS WHICH ARE NOT OF AN ECONOMIC NATURE, AND IN PARTICULAR BY POLITICAL CONTINGENCIES WHICH HAVE SEPARATED THESE UNDERTAKINGS FROM THEIR NATURAL MARKET, WITH THE RESULT THAT THEY REQUIRE SUPPORT EITHER TO BE ABLE TO ADJUST THEMSELVES TO THE NEW CONDITIONS, OR TO BE ABLE TO OVERCOME THIS ACCIDENTAL DISADVANTAGE .

P . 238

HOWEVER, THE HIGH AUTHORITY WAS RIGHT, IN VIEW OF THE EXCEPTIONAL NATURE OF THAT ASSISTANCE, TO HAVE EXAMINED CLOSELY, BEFORE GIVING ITS APPROVAL TO THOSE SPECIAL RATES, THE QUESTION WHETHER IN THAT CASE THE UNDERTAKINGS CONCERNED DID OR DID NOT NEED SUPPORT AND TO HAVE BASED ITS DECISIONS ON THE RESULTS OF THAT EXAMINATION .

THEREFORE IT IS NECESSARY TO REJECT THE OFFER MADE BY THE APPLICANT TO PRODUCE EVIDENCE ESTABLISHING THAT THE DAMAGE SUFFERED IN PARTICULAR BY THE MAXIMILIANSHUTTE AND LUITPOLDHUTTE UNDERTAKINGS SINCE THE ESTABLISHMENT OF THE INTERZONAL FRONTIER GREATLY OUTWEIGHS THE ADVANTAGE RECEIVED FROM THE REDUCTIONS IN RATES GRANTED UNTIL THE PRESENT AND THEREFORE EXCEEDS BY AN EVEN GREATER MARGIN THE ADVANTAGE OF THE REDUCTION GRANTED TO THOSE UNDERTAKINGS BY THE CONTESTED DECISION .

FOR THAT OFFER TO PRODUCE EVIDENCE IS BASED ON THE BELIEF THAT COMPENSATION SHOULD BE FORTHCOMING FOR THE WHOLE OF THE LOSS OCCASIONED BY THE ESTABLISHMENT OF THE INTERZONAL FRONTIER .

AS HAS BEEN EXPLAINED ABOVE, THAT BELIEF IS ERRONEOUS BECAUSE IT FAILS TO UNDERSTAND THE EXCEPTIONAL CHARACTER OF THE ASSISTANCE WHICH MAY BE GRANTED UNDER THE FOURTH PARAGRAPH OF ARTICLE 70 .

THE APPLICANT ALSO ALLEGES THAT THE DECISIONS TAKEN IN RESPECT OF THE TWO UNDERTAKINGS MENTIONED ABOVE CONSTITUTE AN ARBITRARY MEASURE IN THAT THE HIGH AUTHORITY DEDUCTED FROM THE 21% REDUCTION PREVIOUSLY GRANTED THE 13% REDUCTION ALREADY IN FORCE BEFORE THE LAST WORLD WAR, WHICH UNDENIABLY CONSTITUTED A PROTECTIVE MEASURE .

THE COURT IS NOT OF THE OPINION THAT THIS APPROACH IS IRREGULAR, IN VIEW OF THE FACTS, FIRST, THAT OTHER UNDERTAKINGS LOCATED IN THE SAME REGIONS ENJOY A REDUCTION OF ABOUT 8% AND, SECONDLY, THAT IN ITS DECISIONS THE HIGH AUTHORITY HAS MADE PROVISION FOR A CORRECTIVE MARGIN OF 4 %.

THE SUBMISSION AS TO INFRINGEMENT OF ESSENTIAL PROCEDURAL REQUIREMENTS

THE APPLICANT ALLEGES THAT INSUFFICIENT REASONS ARE GIVEN FOR THE DECISIONS IN THAT, FIRST, THEY SET THE TARIFF REDUCTION FOR THE UNDERTAKINGS OF THE UPPER-PALATINATE AT 8% AND THAT, SECONDLY, THEY DID NOT TAKE INTO CONSIDERATION THE FACT THAT THE STEEL WORKS AT PEINE AND SALZGITTER ARE SITUATED NEAR TO THE EASTERN ZONE, A CRITERION WHICH WAS APPLIED IN RESPECT OF THE UNDERTAKINGS OF THE UPPER-PALATINATE .

THESE ALLEGATIONS CANNOT BE ACCEPTED .

AS REGARDS THE FIRST POINT, SUFFICIENT REASONS ARE GIVEN FOR THE DECISION BY THE REFERENCE TO THE COMPARISON ESTABLISHED BETWEEN THE SPECIAL RATES IN FORCE BEFORE AND AFTER THE WAR .

P . 239

AS REGARDS THE SECOND POINT, THE COMPLAINT APPEARS TO REQUIRE THAT THE HIGH AUTHORITY, HAVING ACCEPTED A REASON FOR GRANTING A SPECIAL RATE IN AN INDIVIDUAL CASE, SHOULD EXPLAIN, IN ANY OTHER CASE, WHY IT HAS NOT ACCEPTED THAT REASON .

THAT REQUIREMENT CANNOT BE JUSTIFIED FROM THE POINT OF VIEW OF THE STATEMENT OF SUFFICIENT REASONS AND IT MUST THEREFORE BE REJECTED .

THE SUBMISSION AS TO MISUSE OF POWERS

THE APPLICANT HAS ALSO BASED ITS APPLICATION ON THE SUBMISSION THAT THERE HAS BEEN A MISUSE OF POWERS 'IN SO FAR AS THERE HAS BEEN A DEPARTURE FROM THE LEGITIMATE OBJECTIVES OF THE TREATY '.

A COMPLAINT STATED IN SUCH VAGUE TERMS WHICH IS NOT BASED ON ANY SPECIFIC ARGUMENT MUST BE REJECTED AT ONCE .

IN ITS REPLY, THE APPLICANT HAS, IN ADDITION, PUT FORWARD A SECOND COMPLAINT OF MISUSE OF POWERS, ALLEGING THAT THE HIGH AUTHORITY SHOULD HAVE APPLIED ARTICLE 67 OF THE TREATY INSTEAD OF THE SEVENTH PARAGRAPH OF ARTICLE 10 OF THE CONVENTION .

SINCE THE SUBMISSION OF MISUSE OF POWERS HAD ALREADY BEEN RAISED, THIS SECOND COMPLAINT COULD LEGITIMATELY APPEAR FOR THE FIRST TIME IN THE REPLY . HOWEVER, IT MUST BE REJECTED FOR THE SAME REASONS AS THE FIRST .

THEREFORE THE APPLICATION SUBMITTED AGAINST THE DECISIONS OF 9 FEBRUARY 1958 MUST BE DISMISSED .

THE APPLICANT HAS FAILED IN ALL ITS SUBMISSIONS AND MUST THEREFORE BEAR ALL THE COSTS .

THE COURT

HEREBY :

1 . DISMISSES THE APPLICATION AS UNFOUNDED;

2 . ORDERS THE APPLICANT TO BEAR THE COSTS .