61987J0218

++++

1 . ECSC - Production - System of production and delivery quotas for steel - Determination on an equitable basis - Adjustment of ratio between production quota and delivery quota - Adoption by the Commission of provisions not corresponding to what is judged to be necessary by the Commission itself - Misuse of powers - Unlawfulness

( ECSC Treaty, Art . 58(2 ); General Decisions 1433/87 and 194/88, Arts 5 and 17 )

2 . ECSC - Production - System of production and delivery quotas for steel - Transfer of reference production and reference quantities - Alteration of the relative market position of undertakings - Provisions adopted in favour of monoproducers to enable them to safeguard their position - Extension to other categories of undertaking - Obligation on the part of the Commission - None

( General Decision 194/88, Art . 6(2 ) )

1 . Article 58(2 ) of the ECSC Treaty empowers the Commission to adjust the ratio between the production quotas and the proportion of those quotas which may be delivered in the common market if a particularly unfavourable development on the export market makes such adjustment necessary in order to ensure an allocation of those quotas on an equitable basis . By failing, when it adopted the decisions extending the quota system, to undertake an alteration of that ratio which the Commission itself considered necessary in view of the situation on the export markets and of that of the undertakings concerned, the Commission pursued a purpose different from that laid down for it by the aforesaid article ( see judgment of 14 July 1988 in Joined Cases 33, 44, 110, 226 and 285/86 Peine-Salzgitter and Others v Commission ( 1988 ) ECR 4309 ). Article 5 of Decision 194/88 is therefore vitiated by misuse of powers and must be declared void .

Such is also the case as regards Decision 1433/87 and Article 17 of Decision 194/88 which, although they adjust the said ratio by authorizing the conversion of part of the production quotas into delivery quotas, do not however correspond to what, on the Commission' s own admission, was necessary in order to ensure an equitable allocation .

2 . Since the system of production and delivery quotas for steel is founded on a cooperative effort by the undertakings to meet the crisis caused by the reduction in demand, it is not accompanied by any guarantee against the consequences of the options chosen by the undertakings prior to its introduction ( see judgments of 7 July 1982 in Case 119/82 Kloeckner-Werke v Commission (( 1982 )) ECR 2627 and of 11 May 1983 in Case 244/81 Kloeckner-Werke v Commission (( 1983 )) ECR 1451 ). Under that system the inevitable result of the transfers of references from one category to another, authorized by the successive general decisions on the matter, was a change in the relative market position of the undertakings in the categories of products affected by the transfers .

Monoproducers who cannot, like the producers who manufacture more than one product, have recourse to those transfers or can do so only to a very limited extent are in a special situation . That situation justifies the derogation from the general system of quotas, a derogation which Article 6(2 ) of Decision 194/88 established in favour of those producers by providing that the Commission is to grant them the necessary adjustments if, as a result of transfers of references, it finds that their relative market position has deteriorated .

No such justification exists in the case of undertakings which do not satisfy the special conditions that are characteristic of the situation of the monoproducer, so that the Commission was under no obligation to extend the guarantee of the relative market position to undertakings 90% of whose total reference production is in two categories of products .

In Joined Cases 218 and 223/87 and 72 and 92/88

( 1 ) Hoogovens Groep BV, a limited liability company incorporated under Netherlands law, whose registered office in is Ijmuiden ( Netherlands ), represented by B . H . ter Kuile, F . O . W . Vogelaar and L . H . van Lennep, all of the Hague Bar, with an address for service in Luxembourg at the Chambers of Jacques Loesch, 8 rue Zithe ( Cases 218/87 and 72/88 ),

( 2 ) Federacciai ( Federazione imprese siderurgiche italiane ), formerly Assider-Associazione industrie siderurgiche italiane, an association incorporated under Italian law, whose registered office is in Milan ( Italy ), represented by Cesare Grassetti and Guido Greco, both of the Milan Bar, with an address for service in Luxembourg at the Chambers of Nico Schaeffer, 12 avenue de la Porte-Neuve ( Cases 223/87 and 92/88 ),

applicants,

v

Commission of the European Communities, represented by its Legal Adviser, Rolf Waegenbaur, acting as Agent, with an address for service in Luxembourg at the office of Georgios Kremlis, a member of its Legal Department, Wagner Centre, Kirchberg,

defendant,

APPLICATION,in Cases 218 and 223/87, for a declaration that Commission Decision No 1433/87/ECSC of 20 May 1987 on converting a proportion of the production quotas into quotas for delivery in the common market is void; in Case 72/88 for a declaration that Articles 5, 6 and 17 of Commission Decision 194/88/ECSC of 6 January 1988 on the extension of the system of monitoring and production quotas for certain products of undertakings in the steel induistry is void; in Case 92/88, for a declaration that Article 17 of Decision No 194/88/ECSC is void;

THE COURT ( Sixth Chamber ),

composed of T . Koopmans, President of the Chamber, T . F . O' Higgins, G . F . Mancini, F . A . Schockweiler and M . Díez de Velasco, Judges,

( the grounds of the judgment are not reproduced )

hereby :

( 1 ) Declares that Commission Decision No 1433/87/ECSC of 20 May 1987 on converting a proportion of the production quotas into quotas for delivery in the Common Market is void;

( 2 ) Declares that Articles 5 and 17 of Commission Decision No 194/88/ECSC of 6 January 1988 on the extension of the system of monitoring and production quotas for certain products of undertakings in the steel industry are void;

( 3 ) Dismisses the application in Case 72/88 in so far as it seeks a declaration that Article 6 of Decision No 194/88/ECSC is void;

( 4 ) Orders the Commission to pay the costs in Cases 218/87, 223/87 and 92/88;

( 5 ) Orders the parties to bear their own costs in Case 72/88 .