61983J0103

ECSC - PRODUCTION - STEEL PRODUCTION QUOTA SYSTEM - UNDERTAKINGS REFERRED TO - GROUP OF CONCENTRATED UNDERTAKINGS - CONCEPT - REFERENCE TO ARTICLE 66 OF THE TREATY - WHETHER PERMISSIBLE - ENTITY TO WHICH QUOTAS TO BE ALLOCATED - UNDERTAKING WHICH DIRECTS GROUP ' S PRODUCTION ACTIVITIES

( ECSC TREATY , ARTS . 58 , 66 AND 80 ; GENERAL DECISION NO 1696/82 , ART . 2 ( 4 ))

THE COMMISSION HAS NOT EXCEEDED THE POWER OF ASSESSMENT GRANTED TO IT BY ARTICLE 58 OF THE ECSC TREATY BY DECIDING , FOR PRACTICAL REASONS , TO CHOOSE , AS THE PERSON TO WHOM QUOTAS WERE TO BE ALLOCATED , THE UNDERTAKING WHICH DIRECTS THE PRODUCTION ACTIVITIES OF A GROUP OF UNDERTAKINGS , SUCH A METHOD PERMITTING THE UNDERTAKING MOREOVER TO DIVIDE UP THE QUOTAS WITHIN THE GROUP IN A WAY WHICH MOST CLOSELY CORRESPONDS TO THE NEEDS OF EFFICIENT MANAGEMENT OF PRODUCTION . BY THUS CHOOSING TO ALLOCATE QUOTAS UNDER DECISION NO 1696/82 TO THE GROUP OF CONCENTRATED UNDERTAKINGS WITHIN THE MEANING OF ARTICLE 66 OF THE ECSC TREATY , THE COMMISSION WAS IN NO SENSE ACTING IN A WAY WHICH WAS CONTRARY TO THE DEFINITION OF AN UNDERTAKING LAID DOWN IN ARTICLE 80 OF THE ECSC TREATY , AS IT HAS BEEN INTERPRETED , IN PARTICULAR , IN THE COURT ' S CASE-LAW , SINCE NEITHER THE DISTINCT LEGAL PERSONALITY OF THE UNDERTAKINGS IN THE GROUP NOR THEIR CAPACITY TO BRING ACTIONS INDIVIDUALLY IN REGARD TO MATTERS WHICH CONCERN THEM , IS AFFECTED BY SUCH A DECISION .

IN CASE 103/83

UNION SIDERURGIQUE DU NORD ET DE L ' EST DE LA FRANCE ( USINOR ), 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 ,

APPLICATION FOR A DECLARATION THAT THE COMMISSION ' S REFUSAL TO INCREASE THE APPLICANT ' S QUOTA IN RESPECT OF PRODUCTS IN CATEGORY V AND CATEGORY ID FOR THE SECOND QUARTER OF 1983 IS VOID ,

1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 3 JUNE 1983 , THE UNION SIDERURGIQUE DU NORD ET DE L ' EST DE LA FRANCE ( USINOR ) BROUGHT PROCEEDINGS UNDER ARTICLE 33 OF THE ECSC TREATY FOR A DECLARATION THAT THE COMMISSION ' S DECISION OF 27 APRIL 1983 FIXING THE APPLICANT ' S PRODUCTION AND DELIVERY QUOTAS FOR THE SECOND QUARTER OF 1983 , IN SO FAR AS THAT DECISION CONCERNS PRODUCTS IN CATEGORY ID AND CATEGORY V , IS VOID .

2 THE APPLICANT RELIES ESSENTIALLY UPON TWO SUBMISSIONS IN CONTESTING THE COMMISSION ' S DECISION . THE FIRST SUBMISSION CONCERNS PRODUCTS IN CATEGORY V ( CONCRETE REINFORCING BARS ), IN REGARD TO WHICH THE COMMISSION , IN THE APPLICANT ' S VIEW , WRONGLY ATTRIBUTED THE REFERENCE PRODUCTION TO THE USIONOR GROUP AS SUCH AND NOT TO ITS SUBSIDIARY , ALPA . THE SECOND SUBMISSION CONCERNS PRODUCTS IN CATEGORY ID , IN REGARD TO WHICH THE COMMISSION IS ALLEGED TO HAVE FIXED AN INSUFFICIENT QUOTA , REGARD BEING HAD TO THE INCREASED DEMAND ON THE MARKET .

1 . PRODUCTS IN CATEGORY V

3 USINOR IS A GROUP OF COMPANIES OF WHICH ALPA , A DISTINCT LEGAL PERSON IN FRENCH LAW , IS A WHOLLY-OWNED SUBSIDIARY . ALPA IS THE ONLY UNDERTAKING IN THE GROUP MANUFACTURING PRODUCTS IN CATEGORY V ( CONCRETE REINFORCING BARS ).

4 ACCORDING TO ARTICLE 2 ( 4 ) OF DECISION NO 1696/82/ECSC OF 30 JUNE 1982 ( OFFICIAL JOURNAL L 191 , P . 1 ), ' ' ANY GROUP OF CONCENTRATED UNDERTAKINGS WITHIN THE MEANING OF ARTICLE 66 OF THE TREATY SHALL BE REGARDED AS A SINGLE UNDERTAKING ' ' FOR THE PURPOSES OF THAT DECISION . BY LETTER OF 27 APRIL 1983 , WHICH IS AT THE ORIGIN OF THESE PROCEEDINGS , THE COMMISSION , CONSIDERING THAT ARTICLE 2 ( 4 ) OF DECISION NO 1696/82 APPLIED TO THE USINOR GROUP AS SUCH , ALLOCATED AN AGGREGATE QUOTA TO THE LATTER WITHOUT BREAKING IT DOWN BETWEEN THE VARIOUS SUBSIDIARIES OF THE GROUP .

5 THE APPLICANT CONSIDERS ON THE OTHER HAND THAT ANY DECISION ALLOCATING QUOTAS IN REGARD TO PRODUCTS IN CATEGORY V SHOULD BE DIRECTLY ADDRESSED TO ITS SUBSIDIARY ALPA AND CONTENDS IN THAT REGARD THAT THE COMMISSION ' S DECISION IS BASED ON TWO UNLAWFUL PROVISIONS , NAMELY , ARTICLE 2 ( 4 ) OF DECISION NO 1696/82 WHICH WRONGLY PERMITS ASSIMILATION OF A SUBSIDIARY TO THE GROUP OF WHICH IT IS A PART AND ARTICLE 14 OF THE SAME DECISION WHICH , BY ALLOWING ONLY THE GROUP ITSELF , IN THE CASE OF CONCENTRATED UNDERTAKINGS , THE CHANCE TO HAVE ITS QUOTAS ADJUSTED , CONSTITUTES DISCRIMINATION AS BETWEEN UNDERTAKINGS FORMING PART OF SUCH A GROUP AND THOSE WHICH ARE INDEPENDENT .

6 THE APPLICANT IS THUS PRIMARILY CONTESTING THE LEGALITY OF ARTICLE 2 ( 4 ) OF DECISION NO 1696/82 ON THE GROUND THAT THE COMMISSION IS NEITHER ENTITLED TO OPERATE ON THE BASIS OF THE DEFINITION OF A GROUP OF UNDERTAKINGS LAID DOWN IN THE TREATY IN THE CONTEXT OF THE RULES ON MERGERS AND CONCENTRATIONS IN SITUATIONS OTHER THAN THOSE REFERRED TO IN ARTICLE 66 OF THE ECSC TREATY NOR THUS TO IGNORE THE DEFINITION OF AN UNDERTAKING LAID DOWN IN ARTICLE 80 OF THE ECSC TREATY . THE APPLICANT POINTS OUT THAT THE CONCEPT OF AN UNDERTAKING WITHIN THE MEANING OF THE TREATY IS TO BE IDENTIFIED WITH THAT OF A NATURAL OR LEGAL PERSON ( JUDGMENT OF 22 . 3 . 1961 , JOINED CASES 42 AND 49/59 SNUPAT V HIGH AUTHORITY ( 1961 ) ECR 53 ).

7 THAT SUBMISSION MUST BE REJECTED . THE COMMISSION HAS NOT IN FACT EXCEEDED THE POWER OF ASSESSMENT GRANTED TO IT BY ARTICLE 58 OF THE ECSC TREATY BY DECIDING , FOR PRACTICAL REASONS , TO CHOOSE , AS THE PERSON TO WHOM QUOTAS WERE TO BE ALLOCATED , THE UNDERTAKING WHICH DIRECTS THE GROUP ' S PRODUCTION ACTIVITIES , SUCH A METHOD PERMITTING THE UNDERTAKING MOREOVER TO DIVIDE UP THE QUOTAS WITHIN THE GROUP IN A WAY WHICH MOST CLOSELY CORRESPONDS TO THE NEEDS EFFICIENT MANAGEMENT OF PRODUCTION . BY THUS CHOOSING TO ALLOCATE QUOTAS UNDER DECISION NO 1696/82 TO THE GROUP OF CONCENTRATED UNDERTAKINGS WITHIN THE MEANING OF ARTICLE 66 OF THE ECSC TREATY , THE COMMISSION WAS IN NO SENSE ACTING IN A WAY WHICH WAS CONTRARY TO THE DEFINITION OF AN UNDERTAKING LAID DOWN IN ARTICLE 80 OF THE ECSC TREATY , AS IT HAS BEEN INTERPRETED , IN PARTICULAR , IN THE COURT ' S CASE-LAW , SINCE NEITHER THE DISTINCT LEGAL PERSONALITY OF THE UNDERTAKINGS IN THE GROUP NOR THEIR CAPACITY TO BRING ACTIONS INDIVIDUALLY IN REGARD TO MATTERS WHICH CONCERN THEM , IS AFFECTED BY SUCH A DECISION .

8 SECONDLY , THE APPLICANT CONTENDS THAT THE COMMISSION , WHEN EXAMINING APPLICATIONS FOR AN ADJUSTMENT OF QUOTAS WITHIN THE MEANING OF ARTICLE 14 OF DECISION NO 1696/82 , MUST TAKE ACCOUNT OF THE POSITION OF EACH UNDERTAKING IN THE GROUP SEPARATELY AND NOT OF THAT OF THE ENTIRE GROUP OF CONCENTRATED UNDERTAKINGS WITHIN THE MEANING OF ARTICLE 66 OF THE ECSC TREATY .

9 ARTICLE 14 OF DECISION NO 1696/82 , 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 IN THEIR QUOTA FOR PRODUCTS IN CATEGORY V IF , INTER ALIA , THE TOTAL PRODUCTION OF THE PRODUCTS LISTED IN ARTICLE 1 DID NOT EXCEED 700 000 TONNES IN 1981 , AND IF PRODUCTION IN CATEGORIES IV , V AND VI REPRESENTS A LARGE PROPORTION OF THE UNDERTAKING ' S PRODUCTION .

10 IT IS NOT DISPUTED IN THAT REGARD THAT THE USINOR GROUP , WHOSE PRODUCTION IS MORE THAN 700 000 TONNES , CANNOT HAVE THE BENEFIT OF AN ADJUSTMENT OF ITS REFERENCE PRODUCTION FOR PRODUCTS IN CATEGORY V . ON THE OTHER HAND , ITS SUBSIDIARY , ALPA , CONSIDERED THAT IT MET ALL THE CONDITIONS LAID DOWN BY ARTICLE 14 AND THEREFORE APPLIED , BY REGISTERED LETTER OF 26 MAY 1983 , TO BE ALLOWED TO BENEFIT FROM THAT PROVISION . HOWEVER , THE COMMISSION REJECTED THAT APPLICATION ON THE GROUND THAT ALPA WAS A CONCENTRATED UNDERTAKING WITHIN THE USINOR GROUP , WHICH WAS THE SOLE ADDRESSEE OF THE QUOTAS AND WHICH WAS CONSEQUENTLY THE ONLY PERSON ENTITLED TO APPLY TO HAVE THE PROVISIONS OF DECISION NO 1696/82 APPLIED TO IT .

11 ACCORDING TO THE APPLICANT , THE DEFENDANT THUS CREATED UNLAWFUL DISCRIMINATION BETWEEN CONCENTRATED UNDERTAKINGS AND INDEPENDENT UNDERTAKINGS BY NOT TAKING ACCOUNT OF ALPA ' S SPECIFIC SITUATION ON THE SOLE GROUND THAT IT WAS A SUBSIDIARY OF USINOR .

12 THAT SECOND PART OF THE FIRST SUBMISSION MUST ALSO BE REJECTED . THIS APPLICATION IS NOT CONCERNED WITH THE DECISION TAKEN BY THE COMMISSION ON THE APPLICATION MADE BY ALPA ON 26 MAY 1983 BUT SOLELY WITH THE COMMISSION ' S DECISION OF 27 APRIL 1983 ALLOCATING QUOTAS TO THE USINOR GROUP . IT SHOULD ALSO BE POINTED OUT THAT WHEN THE DECISION WAS TAKEN , NO APPLICATION FOR AN ADJUSTMENT OF QUOTA HAD BEEN MADE EITHER BY THE APPLICANT OR BY ALPA . THE COMMISSION CANNOT THEREFORE BE CRITICIZED FOR NOT HAVING MADE AN ADJUSTMENT AT THAT TIME . AS REGARDS ALPA ' S SITUATION , THE COURT REFERS TO THE CONSIDERATIONS SET OUT IN ITS JUDGMENT OF THE SAME DATE IN CASE 151/83 ( ALPA V COMMISSION ( 1984 ) ECR 3519 ).

2 . PRODUCTS IN CATEGORY ID

13 THE APPLICANT CONTENDS THAT IT MANUFACTURES A NEW PRODUCT , MONOGAL , WHICH IS COVERED BY CATEGORY ID AND WHICH IS INCREASINGLY USED , IN PARTICULAR IN THE MOTOR INDUSTRY , AS A REPLACEMENT FOR COLD-ROLLED SHEET COVERED BY CATEGORY IB . BECAUSE OF THE CONSIDERABLE INCREASE IN DEMAND , THE PRESENT QUOTAS , WHICH WERE FIXED ON THE BASIS OF EARLIER REFERENCES , ARE TOTALLY OUT OF TUNE WITH PRESENT NEEDS . HOWEVER , ARTICLE 18 OF DECISION NO 1696/82 REQUIRES THE COMMISSION TO CARRY OUT THE NECESSARY ADJUSTMENTS BY GENERAL DECISION ' ' IF RADICAL CHANGES OCCUR ON THE IRON AND STEEL MARKET OR IF THE APPLICATION OF THIS DECISION ENCOUNTERS ANY UNFORESEEN DIFFICULTIES ' ' . BY NOT TAKING ACCOUNT OF THE GROWTH IN DEMAND , THE COMMISSION , IN THE APPLICANT ' S VIEW , HAS FAILED TO RESPECT THAT PROVISION .

14 THAT SUBMISSION MUST BE REJECTED . IN SO FAR AS THE INCREASE IN DEMAND FOR PRODUCTS IN CATEGORY ID WAS THE RESULT OF A REDUCTION IN THE DEMAND FOR THOSE IN CATEGORY ID , WAS THE RESULT OF A REDUCTION IN THE DEMAND FOR THOSE IN CATEGORY IB , THE COMMISSION WAS ENTITLED TO CONSIDER THAT IT WAS NOT APPROPRIATE MERELY TO ADJUST THE QUOTAS LAID DOWN FOR PRODUCTS IN CATEGORY ID , WITHOUT PROVIDING FOR A SIMULTANEOUS REDUCTION IN THE QUOTAS LAID DOWN FOR PRODUCTS IN CATEGORY IB . HOWEVER , SUCH MACHINERY COULD BE ESTABLISHED ONLY BY A SPECIAL DECISION OF THE COMMISSION , TAKEN AFTER A THOROUGH STUDY OF ACTUAL MARKET TRENDS AND AFTER CONSULTATION WITH INDUSTRY . IT SHOULD BE POINTED OUT IN THAT CONNECTION THAT THE COMMISSION , BY DECISION NO 1619/83 OF 8 JUNE 1983 ( OFFICIAL JOURNAL L 159 , P . 56 ), INSERTED A NEW ARTICLE ( ARTICLE 17A ) IN DECISION NO 1696/82 , ALLOWING IT TO GRANT A PARTIAL TRANSFER TO CATEGORY ID OF PRODUCTION AND DELIVERY QUOTAS FOR CATEGORY IB OR IC WHERE AN UNDERTAKING SHOWS THAT THIS IS NECESSARY AND IN SO FAR AS SUCH A TRANSFER DOES NOT INTERFERE WITH THE WORKING OF THE SYSTEM . EVEN THOUGH THAT DECISION WAS ADOPTED ROUGHLY A YEAR AND A HALF AFTER THE INDUSTRY HAD DRAWN THE ATTENTION OF THE COMMISSION TO THE EARLY DIFFICULTIES ENCOUNTERED IN REGARD TO PRODUCTS IN CATEGORY ID , THE INTERVENING PERIOD CANNOT BE REGARDED AS EXCESSIVE , REGARD BEING HAD TO ALL THE FACTOR KNOWN TO THE COURT .

COSTS

15 UNDER THE TERMS OF ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS . SINCE THE APPLICANT HAS FAILED IN ITS SUBMISSIONS , IT MUST BE ORDERED TO PAY THE COSTS .

ON THOSE GROUNDS ,

THE COURT ( FIRST CHAMBER )

HEREBY :

1 . DISMISSES THE APPLICATION ;

2 . ORDERS THE APPLICANT TO PAY THE COSTS .