OPINION OF MR ADVOCATE GENERAL LAGRANGE

of 12 June 1956 ( 1 )

Summary

	Introduction
	I — The texts
	II — The contested decisions
	III — The conclusions contained in the applications
	IV — The submissions relied on in the applications
	V — The admissibility of the applications from the point of view of Article 33
	Nature of the letter of 28 May 1955 as a decision in so far as it refers to the withdrawal of equalization
	Nature of the contested decisions as ‘individual decisions concerning’ the applicants
	Nature of the contested decisions as ‘decisions involving a misuse of powers affecting’ the applicants
	General considerations
	Application in this instance
	VI — Discussion of the substance
	The unilateral imposition of prices
	The fixing of reduced prices
	The severence of the relationship between prices and equalization payments, and the problem of selectivity
	The threat to withdraw equalization payments
	The determination of the ruling common market prices, the objective of alignment
	The determination of estimated production costs at the end of the transitional period, the limit of alignment
	Misuse of powers
	VII — Final conclusions

Mr President,

Members of the Court,

Before beginning my consideration of the points at issue today allow me to express my sincere thanks to the lawyers who have spoken in this case, not only for their seriousness, conscientiousness and talent — which was to be excepted — but also for the really exceptional way in which they have succeeded, when presenting argument based on a file which is as dry as it is comprehensive and, as a result, in spite of the quality of the written statements, somewhat difficult to absorb, in clarifying the points at issue, enabling attention to be concentrated on the essential questions, reducing the number of points in dispute while defining them more clearly and, finally, and this I consider to be the most remarkable result, in bringing about a close and lasting confrontation between even the most profound legal arguments and the real nature of the problems by making the test of the value of those arguments their ability to adjust themselves to that reality. That is, as we are all aware, the role of the judge, whose task is not to put forward theories but to dispense justice. That somewhat worn expression ‘servants of justice’ has rarely been more merited than by the advisers of the two parties in this difficult case.

That ‘state of affairs’ which I am merely ‘noting’ — which does not prevent me from ‘acknowledging’ its true worth — will simplify my task considerably and, to begin with, will render it. unnecessary for me to give a general picture of the problem of the integration of the Belgian collieries into the common market.

I — The texts

By way of introduction I shall merely outline the principal provisions adopted in the Convention on the Transitional Provisions in order to deal with that problem, which include Article 26 (2)(a), the interpretation of which has given rise to the present case.

They are:

1.

The general provisions concerning readaptation contained in Article 23 which, in the first place, permit the financing of programmes for the conversion of undertakings or the creation of new activities and the provision of non-repayable aid towards the resettlement and vocational retraining of workers under conditions which are wider than those provided for by the Treaty and, secondly, in certain circumstances, provide non-repayable aid to undertakings which have to close as a result of the establishment of the common market.

2.

The special provisions applying to coal contained in Article 24 which, first, extend the scope of the rules concerning methods of quotation and allow zone prices to be applied in cases not covered by the Treaty and, secondly, authorize the retention or institution of national equalization schemes or arrangements financed by a levy on home production.

3.

Finally, the special provisions also applying to coal and of particular relevance to Belgium and Italy contained in Articles 25, 26 and 27. They may be summarized as follows: (a) an assurance given to Belgium that its net coal production need not be reduced each year by more than 3 % as compared with the level of the preceding year (unless a correction is made as a result of a reduction in the overall level of coal production in the Community brought about by the economic situation); (b) the possibility (but not an obligation) for the Belgian Government to decide to insulate the Belgian coal market by means of machinery operating under the supervision of the High Authority, which involves an obligation on the Belgian Government to decide, in agreement with the High Authority, what arrangements are to be made to cause the possible shifts in production levels recognized as possible by the High Authority to come about within the guaranteed limit of 3 %; (c) finally, the establishment of equalization machinery on a Community basis which is to be financed by a levy on the coal production of those countries whose average cost prices are below the weighted average of the Community, that is, on the German and Dutch collieries. The conditions of assessment of the levy are fixed by Article 25 but the conditions of its distribution are nowhere laid down. Its purpose is alone defined in a fairly precise manner by Article 26 (2) as regards Belgium and Article 27 (1) as regards Italy. It should be noted that here again the Convention indirectly but clearly subjects the working of the machinery to the agreement of the government concerned since, first, the “outside” aid, that is, aid derived from the equalization levy, cannot exceed the amount of the government subsidy which must be related to it and, secondly, “the Governments may, but need not grant subsidies”. If, therefore, the government pays nothing, there is no equalization.

The Court is aware that in fact the Belgian Government has so far not wished to resort to the insulation of its coal market but that by means of the payment of subsidies it has, on the other hand, allowed the equalization system to function to the benefit of Belgium, with the result that it became compulsory for the High Authority to continue the system.

The Court is also aware that, of the two types of “additional equalization payments” provided for in Article 26 (2) (which are known as the “equalization arrangements under subparagraphs (b) and (c)”), the “equalization arrangements under subparagraph (b)”, which are intended to enable the Belgian steel industry to enter the common market without suffering as a result of the special arrangements for Belgian coal, have not been applied and that the “equalization arrangements under subparagraph (c)” provided for in favour of exports of Belgian coal within the common market have alone been implemented, although in circumstances which are outside the scope of the present action. There remain, therefore, the “equalization arrangements under subparagraph (a)”, which “shall be designed, from the beginning of the transitional period… to enable all consumers of Belgian coal within the common market to be charged prices more nearly in line with the ruling common market prices, reducing Belgian prices to the approximate figure of the estimated production costs at the end of the transitional period”. The text adds that “the price list so fixed shall not be changed without the agreement of the High Authority”.

That is all I wish to say about the texts.

II — The decisions

I would also like to recall the essential points of the decisions.

A —

By Decision No 1/53 of 7 February 1953 (published in the Journal Officiel of 10 February 1953) the High Authority fixed the mode of assessment and collection of the equalization levy provided for in Article 25 of the Convention. By a letter of the same date published in the same copy of the Journal Officiel the High Authority informed the Governments of the Member States of the Community that the equalization scheme had been set up. Notification is a very important formality since, under Article 8 of the Convention, it marks the date of opening of the common market in coal and as a result, under the terms of Article 1 (4) of the same Convention, the beginning of the transitional period.

B —

The Journal Officiel of 13 March 1953 contains a series of decisions relating to the price of coal in the Community which fix maximum prices and, in certain cases, zone prices. Two of those decisions concern Belgian coal: (a) Decision No 24/53 of 8 March 1953“on the establishment of price lists for undertakings in the Belgian coalfields”. The decision is based both on Article 26 of the Convention and on Article 61 of the Treaty. It fixes a table of maximum prices per category on the dual ground, set out in the “recitals” of the preamble to the decision that “a price list making it possible to bring the price of Belgian coal into line with the prices in the common market, so as to reduce the latter to approximately the estimated production costs at the end of the transitional period, must be established in order to calculate the equalization required” and that “the equalization payments and related subsidies would not fulfil their purpose if the level of prices resulting from that list could be exceeded by the undertakings”; (b) A letter of 8 March 1953 addressed to the Belgian Government which indicates, in accordance with the results of the “conversations” which had taken place between the departments of the High Authority, the representatives of the producers and the Belgian authorities, the arrangements for the aids to the Belgian collieries which the High Authority proposes to apply. They “are made up, first, of subsidies amounting to 200 million francs granted with immediate effect by the Belgian Government to certain collieries” (the so-called “conventional” subsidies) and “secondly, of the sum of 29 francs per metric ton extracted, which represents the difference between the prices in the list of prices for accounting purposes, which would maintain the present level of receipts of the collieries, and those fixed in the list of selling prices at which the collieries will sell their production” (and which is merely the price list fixed by the first decision). A table annexed to the letter, drawn up in two columns for each category and type, illustrates the system which, let us note, showns wide variations in the differences between the prices of the various types. Thus, for bituminous schlamms there is a difference of 43 francs (378 francs on the list of prices for accounting purposes and 335 francs on the list of selling prices), while for a whole series of semi-bituminous and low volatile coals the difference between the prices falls to zero, which means that there is no equalization for those types, although a maximum price applies. The figure of 29 francs is, therefore, only an average. Furthermore, let us also note that in fact the figure of 29 francs represents a reduction for the consumer of only 19 francs since it is accompanied by the abolition of a double price incompatible with the Treaty. That is the system within which, with the exception of a few minor modifications, the equalization scheme operated until it was profoundly modified by the entry into force of the decisions of 28 May 1955.

C —

Those decisions, which are published in the Journal Officiel of 31 May 1955, are, like those to which I have referred, two in number: (a) Decision No 22/55, on the establishment of price lists for undertakings in the Belgian coalfields, which on this occasion determines not maximum prices but fixed prices which are either unchanged or lower than the earlier prices (if one disregards a general increase of 3 francs intended to take account of a recent pay increase) and which — and this is another difference — is no longer based on Article 61 of the Treaty but solely on Article 26 (2)(a) of the Convention. Finally, the prices of certain types (house coals), many of which did not benefit from equalization payments, are simply liberalized; (b) A letter addressed to the Belgian Government “relating to the adjustment of the equalization system”.

The first paragraph of that letter recalls the setting-up, in agreement with the Belgian Government, of a “joint committee” which had been given the task of studying all aspects of the problem posed by the integration of the Belgian collieries into the common market at the end of the transitional period, the attitude of the Belgian Government to the conclusions of the committee and the agreement reached between that Government and the High Authority on the content of the measures to be adopted to bring about integration under the conditions and within the time-limits laid down by the Convention on the Transitional Provisions.

In the second paragraph the High Authority states that: “It is therefore recognized that the aid granted to the Belgian collieries through the equalization payments must be accompanied by a series of measures to be adopted by the Belgian Government. The High Authority considers in particular that revision of the equalization measures must be conditional upon action by your Government of the type described below …”. There follows a list of four measures of which the first two are financial in nature, the third relates to the creation or extension of pithead power stations and the fourth (which I shall quote, since it is one of the points in dispute) requires the Belgian Government to act:

“With the agreement of the High Authority, to withdraw equalization subsidies from undertakings which are not making the effort to re-equip considered possible and necessary, as well as from those which are refusing to carry out the transfers or exchanges of deposits which are regarded as indispensable for a better development of the mining areas”.

The third paragraph concerns the new rules for the adjustment of the equalization system. By a constant mixture of commentary and such provisions as properly speaking are in the nature of decisions, which together are characteristic of the “decisions” adopted in the form of letters and published only under the heading “Information” which are highly favoured by the High Authority, that body sets out the aims of its new policy: to bring the prices of Belgian coal more into line with those of the common market and to ensure a better utilization of the sums resulting from the equalization levy, which must diminish each year in accordance with the sliding scale referred to in Article 25 of the Convention. It explains why it has modified the price list, which was the purpose of Decision No 22/55, and why and how it intends to carry out the gradual abolition of equalization with respect, first, to certain types (house coals) for which demand, which is “constantly much higher than supply in the common market, ensures a lasting market without the need for any equalization payments” and, secondly, to certain undertakings, namely the mines in the Campine, “whose favourable situation and reserves which are workable for several years enable all the mining to be concentrated on one level and in one pit”. The mines in question are referred to by name “on the basis (according to the High Authority) of information provided by your Government” : they are the three applicant undertakings in Case 9/55.

Finally, after several more provisions, one of which brings to an end the special allocation of 200 million francs of conventional subsidy, the High Authority refers (in paragraph 4 of the letter) to Decision No 22/55 fixing selling prices and announces the table of equalization rates published in an annex to the letter. That table shows the abandonment of the earlier system under which equalization payments corresponded to the difference between the list of prices for accounting purposes and the list of selling prices. The new table merely fixes the rate of equalization per metric ton for each type and category. For the types released from the system and for the undertakings which receive no equalization, the figure falls to O.

Those are the two decisions submitted to you by way of an application for annulment under Article 33 of the Treaty by, first, the Federation Charbonnière de Belgique or Fédéchar (Application 8/55) and, secondly, the three companies referred to in paragraph 3 (b) of the letter of 28 May: the Société des Charbonnages de Beeringen, the Société des Charbonnages de Houthalen and the Société des Charbonnages de Helchteren et Zolder (Application 9/55).

III — Conclusions contained in the applications

A — Application 8/55 brought by the Federation Charbonnière de Belgique

claims:

1.	The annulment of Decision No 22/55 (and of the price list annexed thereto) “in so far as it fixes reduced prices for certain types of coal”;

2.

The annulment of the decision contained in the letter of 28 May 1955 (and in the table of equalization rates annexed to that letter), in so far as: (a) it leads to discrimination between producers of identical types of coal ; (b) it provides that in the future equalization payments will be or may be withdrawn from certain undertakings on the ground that they are not making the effort to re-equip considered possible and necessary or are refusing to carry out the transfers or exchanges of deposits which are regarded as indispensable for a better development of the mining areas ; (c) it fixes rates of equalization in accordance with the new price list.

B — Although the conclusions contained in Application 9/55 are rather different in form from those contained in Application 8/55 and emphasize that part of the decision which applies directly to the applicants, their subject-matter is in fact the same as those contained in the aforementioned application.

IV — The submissions relied on in the applications

I consider it unnecessary to refer in detail to the list of submissions contained in the application, especially as I will have to come back to them. Let me merely point out that one of them is very different in nature from all the others: it is a submission of misuse of powers based on the fact that the contested decision (that is, Decision No 22/55) was adopted “as a result of intervention by the Belgian Government in order to advance the aims of its own economic policy”. All the other submissions relate to the infringement of provisions of the Treaty or of the Convention and especially of Articles 24, 25 and 26 of the Convention, which, as we have seen, form the basis of the action, Articles 5 and 57 of the Treaty, under which the High Authority shall carry out its task with a limited measure of intervention and shall give preference to the indirect means of action at its disposal, and Article 4 (b) of the Treaty which prohibits discrimination. Those other submissions are also coupled with an allegation of misuse of powers which relates directly to a failure to observe the terms of the texts referred to.

I will, however, point out that among the submissions put forward two which appear in Application 8/55 do not appear in Application 9/55, that is:

1.	The submission based on the fact that, contrary to Article 26 (2)(a) of the Convention, the contested decision (that is, Decision No 22/55) fixed prices without taking account of the estimated production costs at the end of the transitional period (Application 8/55, I(3)).

2.	The submission of misuse of powers.

It was only in their reply that the applicant companies brought their position entirely into line with that of the Fédéchar and put those two submissions forward on their own account. In fact, as the Court is aware, a statement of the grounds on which the application is based, even if only of a summary nature, must appear with the conclusions in the application, which must be submitted within a strict time-limit (Article 22 of the Statute of the Court of Justice).

As regards the first of those two submissions, it is just possible to maintain (although it is still open to argument) that by relying on an infringement of the provisions of Article 26 (2)(a), even if in relation to other matters, the companies satisfied the formal requirements of Article 22. However, it is clear that such an argument cannot be put forward in relation to the submission of misuse of powers. I shall therefore suggest that you dismiss the latter submission as inadmissible as regards Application 9/55. That does not matter in practice, since you will have to deal with the same submission in the course of hearing Application 8/55.

As a final point in my consideration of the submissions I must refer briefly to a question raised by the High Authority in its defence to Application 9/55 (paragraph 9, page 12): the High Authority states that “The Court will observe that as regards Decision No 22/55 the applicants are content either to plead “the unlawful nature” of the decision — without its being possible to deduce therefrom which of the submissions referred to in Article 33 is involved — or to refer to the application brought by a third party, the Federation Charbonnière de Belgique, against the same decision. The admissibility of that part of the application from the point of view of Article 29 of the Rules of Procedure is therefore doubtful. The High Authority leaves that question to the wisdom of the Court”.

As regards the reference to Application 8/55 I consider that it is admissible in this instance. The two applications are in fact closely connected: they were lodged on the same day, have the same subject-matter and, subject to what I have just said, are based on the same submissions. Furthermore, the applicants in Application 9/55 form apart of the Federation Charbonnière de Belgique, which brought Application 8/55. The Court has itself ordered the joinder of the two cases for the purposes of the hearings and it is not impossible that that joinder may even extend to the judgment. That is merely a question of expediency and it is clear that there is no legal obstacle to it. It may therefore be accepted that a statement of submission may be replaced by a reference expressis verbis by one application to another, provided that a clear description of that submission appears in the application. On the other hand, where such a description does not even appear in the application, that is, where the application is entirely silent on that subject, there is a clear infringement of Article 22 of the Statute and of Article 29 of the Rules of Procedure of the Court which repeats it. However, as I have already said, it is my opinion that the foregoing only applies to the submission of misuse of powers and perhaps (although on that point I am very doubtful) to the submission that Decision No 22/55 did not take account of the estimated production costs at the end of the transitional period.

V — Admissibility of the applications from the point of view of Articles 33

I now come to the more important questions of admissibility which are raised in relation to the second paragraph of Article 33 of the Treaty.

Let me cite the text once again: ‘Undertakings or the associations referred to in Article 48 may, under the same conditions’ (that is, under the conditions which have just been fixed in the first paragraph), ‘institute proceedings against decisions or recommendations concerning them which are individual in character or against general decisions or recommendations which they consider to involve a misuse of powers affecting them’.

The three companies which are the applicants in Case 9/55 are undertakings within the meaning of Article 80 of the Treaty.

The Federation Charbonnière de Belgique is an association of undertakings within the meaning of Article 48. The capacity of the applicants to institute proceedings is thus well established. However, three questions must be considered which concern the admissibility of the applications, even if only in part. They are as follows:

1.	Is that part of the letter of 28 May which threatens to withdraw the equalization payments in the nature of a ‘decision’ or, at the least, of a ‘recommendation’?

2.	Are the two contested decisions wholly or in part in the nature of'individual decisions affecting the applicants?

3.	If they should not be regarded as being individual in character do they ‘involve a misuse of powers affecting them’?

If the first of those questions concerns only the present case, the same does not apply to the other two, which involve the interpretation of Article 33 in relation to points which have so far been only partially resolved by the case-law of the Court.

Is the passage contained in the letter of 28 May 1955 which threatens to withdraw equalization payments in the nature of a decision (or a recommendation)?

One might be surprised to learn that the High Authority, which, moreover, raised this question only at the hearing, is itself not very sure whether or not it intended to adopt a decision on that point. One is, however, less surprised that the lawyers who represent that body before the Court should have had certain doubts in that respect and should have expressed them, since it must be acknowledged that the question is very doubtful.

I consider, first, that it is at all events not a “recommendation” within the meaning given to that word by Article 14 of the Treaty, that is, a decision as to the aims to be pursued which leaves the choice of the appropriate methods for achieving those aims to those to whom it is addressed. In fact in this case the methods are clearly defined. Is it, however, a decision?

The form of the letter on this point would lead one to reply in the negative. You will remember that the sentence begins with the words: “The High Authority considers in particular that revision of the equalization measures must be conditional upon action by your Government of the type described below …”. Thus, on the one hand it is an opinion and on the other hand it concerns action to be taken by the Belgian Government.

Nevertheless, I consider that it is in reality a decision, that is, a measure involving or likely to involve legal consequences or, to adopt a phrase which is widely used in disputes involving administrative law, an act “adversely affecting” or capable of adversely affecting the applicant.

In tact, as the Court has observed, if it is an opinion, it contains the word “must” (must be conditional upon …). Furthermore, unlike the other modes of action indicated by the letter the fourth, which is at issue here, does not depend for its performance on the Belgian Government alone but on a measure to be implemented by that government acting “with the agreement of the High Authority”. Finally, in a later paragraph, the letter states that “The High Authority reserves the right to take up the matter with the Belgian Government in order to follow the implementation of current re-equipment programmes as well as of any measure intended to bring about the rationalization and improvement of the Belgian coal industry”. That clearly shows the intention of the High Authority to participate in reviewing the measures which the undertakings must carry out and whose proper implementation, in the opinion of the High Authority, is a condition for the payment of equalization to those undertakings. If, therefore, having carried out such a review, the High Authority was, at some future date, to consider it necessary to cease equalization payments and obtained the agreement of the Belgian Government to that effect, there is no doubt that it could find the legal basis for such action in that passage of the letter. If, therefore, one applies a material and not merely a procedural criterion, as I believe one must do, the letter in question clearly constitutes a “decision” within the meaning of Article 14 of the Treaty which may be contested by means of an application under Article 33.

Are the two contested decisions in the nature of “individual decisions concerning” the applicants?

As the Court is aware, the parties are in agreement on two points. First, the High Authority accepts, with the applicants, the individual nature of the decision contained in the letter of 28 May in so far as it withdraws equalization from, or makes only a reduced payment to, the three collieries of the Campine which are referred to by name therein. Secondly, the applicants have stated, at least in their pleadings, that they agree with the High Authority that the decision (if decision there is, which I believe) relating to the threat to withdraw equalization is general in nature.

It is, however, self-evident that the agreement of the parties on that point is not binding on the Court, which alone is empowered to define the true legal nature of the decisions submitted to it, and that the question must be considered as a whole.

On that point I find the recent judgment of 23 April 1956 in Joined Cases 7 and 9/54, Groupement des Industries Sidérurgiques Luxembourgeoises v High Authority, and the opinion of my colleague Advocate General Roemer in that case of interest.

The judgment is in part a judgment on the facts. Nevertheless, on one important point it constitutes a judgment on principle, when it decides that “in these circumstances, it is sufficient, in order that an undertaking or association may be able to institute proceedings against a decision or recommendation, for that decision or recommendation to be not general, but individual in character and it is not necessary for the decision to manifest this character in relation to the applicant.” In short, that is a wide interpretation of the expression “concerning them” which is not synonymous with “which is addressed to them”. As Mr Roemer had observed in his opinion, the narrow view would have led to unsatisfactory results because it disregards the material content of the decision. For example, the decision of annulment of a special charge is formally addressed to a person upon whom the charge has hitherto been imposed but it in fact concerns the person who has hitherto benefited therefrom. In that case the contrary situation obtained: the contested implied decision refused to abolish a charge which, in the applicant's view, was an unlawful special charge and to which it was one of the chief contributors: it is clear that the parties really concerned were those on whom the charge was imposed and not those who benefited therefrom. It is for that reason that the Court accepted that the decision, which was individual in nature, “concerned” the applicant although the latter was not the addressee.

A narrow and rigid interpretation of the text has thus been discounted and I do not think that on this occasion the applicants will make any complaint. It has been discounted in order to make way for an interpretation which seeks to emphasize the concept of legal interest which, as I recalled in my opinion in Cases 3/54 and 4/54 (Rec. 1954-1955, Vol. I at p. 174) is inherent in an application for annulment. It is clear that it is not simply any legal interest which is involved and, as I also said, rather than leave to the Court the task of establishing case-law which is suited to a variety of individual cases, the Treaty preferred to settle the question on its own authority. As Mr Roemer has shown in a penetrating analysis in the opinion already cited, it did so either by drawing up a list of persons entitled to bring actions (the first paragraph of Article 33 gives an unlimited right of action to the Member States and the Council) or by defining the legal interest, thereby giving it concrete form (as it did in the case of the undertakings or associations referred to in the second paragraph of the same article, which have such a legal interest only in relation to “decisions … concerning them which are individual in character”). My colleague recalled that the latter method is to be found in certain national legislative systems, in particular in German law (which goes so far as to re-quire that a right should have been adversely affected).

Although the Treaty has thus provided for the situation by means of a list or a definition in terms which bind the Court, nevertheless, in interpreting a text the latter is entitled — I will even say compelled — to have recourse to the underlying basic concept, that is, the concept of legal interest, in so far as any measure of uncertainty re-mains. I consider that that view remains within the limits of a sensible principle of textual interpretation — even of international texts — and is in line with your judgment of 23 April 1956.

The problem is therefore to know what constitutes an individual decision and what a general decision. As my colleague Advocate General Roemer — whose view I again fully share — observed in his opinion in the Luxembourg cases, it is only with extensive reservations that reference may be made to national systems of law, for the double reason that they generally take into account factors other than those with which the Treaty is concerned, and that under those same systems the criteria for arriving at that distinction are often obscure.

What is relatively clear is the distinction between, on the one hand, the regulation, that is, a measure which is intended to regulate a general and impersonal situation by means of legislative provisions and which, at least as regards the substance, resembles the law which it is generally intended to supplement, and, on the other hand, the individual measure, the purpose of which is to apply the rule to a specific person (for example, a sanction, an authorization or a refusal of authorization). The difficulty arises from the fact that between those two extremes there is a whole series of intermediate cases. For certain of those the choice is easy: for example, collective decisions are in reality only the juxtaposition of individual decisions (for example, a table governing the promotion of officials). In other cases, however, there is greater difficulty: for example, where a decision regulates a specific situation directly but without naming the persons to whom it refers, or without enabling those to whom it refers to be ascertained other than by a special examination of the individual cases.

In support of a narrow interpretation of the concept of an individual decision one might be tempted to appeal to Article 15 of the Treaty which states that: “Where decisions and recommendations are individual in character, they shall become binding upon being notified to the party concerned”, although “In all other cases, they shall take effect by the mere fact of publication”. However, I agree with Mr Roemer, who also considered that point, that the basic purpose of that provision is to make it clear when publication is sufficient for the decision to become binding. That concerns particularly the time limits for lodging applications.

I believe that in order to resolve the difficulty caused by what I have termed the “intermediate cases” it is necessary to apply, if only as a secondary consideration, a subjective criterion of relativity. By that I mean that a decision which, ex hypothesi, is not legislative in character and is intended to govern a specific situation directly may be regarded as an individual decision with regard to the persons (undertakings or associations) which are immediately and directly referred to by that decision considered as a whole. On the other hand, the same decision cannot be regarded as having individual character in relation to persons who are not directly concerned thereby or who are only partly concerned. The idea is to establish a correlation, not mathematical of course but nevertheless rather close, between the area of application of the decision and the area of interests represented by the person who institutes proceedings against it.

I consider such a procedure to be justified on two grounds. First, it enables the interpretation of Article 33 to be based essentially on the concept of legal interest which, as I have said, underlies the whole article and clearly also inspired your judgment of 23 April 1956. Moreover, the concept of interest is by its nature relative.

Secondly, that procedure opens the door of this Court to associations of producers under Article 48, and I regard that as necessary. Associations represent collective interests and too great a restriction of the concept of the individual decision would in most cases render it impossible for them to make use of the right of action which is available under Article 33. They would be able to institute proceedings against general decisions only in the case of a “misuse of powers affecting them” and they would not be able to contest individual decisions in the narrow sense (for example, a sanction or an authorization) since it is, as I believe, a generally accepted principle that a legal person such as an association or a union cannot take the place of one of its members in an action which should properly be brought by that member. At the most such a body has a right to intervene in support of such an action. On that point let me refer, for example, to the well established case-law of the French Conseil d'Etat (referred to by Odent in “Contentieux Administratif”, 1953-1954, Vol. III, pp. 542-543).

The associations of undertaking provided for in Article 48 play an important role in the Treaty, which is defined by Article 48 itself. It appears to me to be indispensable that that role should extend also to the defence before the Court of the collective interests for which they are responsible, in particular because, as experience has shown, certain of the decisions adopted by the High Authority may damage those interests without any Member State's considering it appropriate to bring proceedings. It may even be said that as regards coal that is almost the normal situation since, as a general rule and especially where prices are concerned, the interests of the coal-mining undertakings are in conflict with the High Authority, whose task is “to ensure the establishment of the lowest prices” (Article 3 (c)), with all consumers, especially the iron and steel producers, and with the governments, whose general economic policy also seeks, in most cases, to keep down the prices of that basic product. Let me now try to apply those few ideas to the present case.

First, I consider that, even from a legal point of view, Decision No 22/55 and the letter form an inseparable whole, since it is impossible to conceive of the one without the other. They both have the same aim, that is, to ensure the application of the provisions concerning equalization contained in Article 26 (2)(a), and the fixing of selling prices, which forms the subject-matter of Decision No 22/55, has no purpose if it is not accompanied by the determination of equalization rates which results from the table annexed to the letter.

Furthermore, the decision has no legislative function. A perfect example of a decision which is not a regulation but is nevertheless general in nature, in that it fixes the principles on which future implementing decisions are to be based, is to be found in Decision No 6/53 of 5 March 1953, regarding the principles for fixing maximum prices for coal within the common market. Such a decision is not a regulation, since its main object is to fix maximum prices for coal “under present circumstances”, but it is clearly a general decision of a legislative nature, which lays down on a general and impersonal level detailed rules for the operation of the scheme devised for the imposition of maximum prices and forms the basis of a whole series of implementing decisions for different coalfields and even for individual undertakings within the same coalfield. For that reason it could not be contested by an association even if a federation existed which incorporated all the collieries of the Community.

The situation in this case is quite different. The rules in force are to be found in the Convention, as is the very principle of the task to be carried out. It is merely a question of applying those rules to a situation which is specific and clearly defined as regards both area and time. The decision which performs that function (I am using the singular intentionally, since I consider that there is in fact only one decision) is clearly individual in nature in relation to all the Belgian collieries considered together and on that ground it clearly concerns the Federation, which incorporates precisely the undertakings operating those collieries whose interests it must defend. I therefore suggest that the Court should regard the two decisions as “ndividual decisions concerning” the Federation Charbonnière de Belgique.

As regards the three applicant undertakings in Case 9/55, the situation is somewhat different, and here it is necessary to draw a distinction. I have no doubt that, with regard to the abolition or reduction of the rates of equalization applied to the undertakings referred to by name in the decision contained in the letter of 28 May 1955 and the table annexed thereto, the individual character of that decision cannot be contested. That is, moreover, accepted by the High Authority. It is no less certain that, as regards those undertakings, the same individual character cannot be regarded as attaching to the provisions concerning the threat to withdraw equalization. A subsequent decision implementing that threat with regard to one of the undertakings would alone be individual in character as regards that undertaking.

The position as regards the price fixing resulting from Decision No 22/55 may be more doubtful. I consider, however, that that decision, the purpose of which is to fix prices for each type and category which are applicable without distinction to all the Belgian collieries, cannot be individual in relation to a specific undertaking.

I now come to the third and final question of admissibility.

If the contested decisions are not to be regarded as being individual in character do they involve a “misuse of powers affecting” the applicants?

That is in fact a question which concerns the substance of the action but it relates in part to the question of admissibility, at least if one follows the view which I took in my opinion in Cases 3/54.and 4/54 and which I was happy to see the parties accept.

(i) General considerations

As regards the question what must be understood by “misuse of powers” within the meaning of Article 33 and by “misuse of powers affecting them” within the meaning of the second paragraph of that article, let me refer to my opinion in Cases 3/54 and 4/54 (ASSIDER and ISA, Rec. 1954-1955, Vol. I, pp. 149 et seq.). In fact, I admit quite frankly that despite the very serious thought which, not only in the course of this action, I have given to that question and despite the very interesting observations which I have read and heard in the present cases, the conclusions at which I arrived in giving my opinion in Cases 3/54 and 4/54 are in no way modified. I would merely note that, depending on the particular circumstances involved, the parties refer to one or other part of that opinion, which they obviously regard as favourable to the argument which they are putting forward, but so far as I am aware no one has ever criticized it systematically. As regards self-criticism, even of a serious nature, I have just said that it has produced no result!

I shall, therefore, merely make a few additional observations.

1.

First, I cannot leave unanswered the observations made by one of the eminent lawyers of the applicants concerning the passage in the statement of grounds for the Luxembourg Law of Ratification. It is quite true that, just like the other documents which it is usual to place under the heading of “preparatory work”, the statement of grounds for a law or, more correctly, for a draft law, are in no way bindings as regards the interpretation of the text of that law and, in particular, can never be relied on as against the text itself where it is clear and unambigious. It is, however, universally accepted that the courts may have recourse to that statement for the purposes of information and, where appropriate, may extract from it such elements as will elucidate the intention of the legislature. It is also true that in doing so the courts have complete discretion. Of course, in the case of a Treaty internal documents relating to the ratification procedure can only ever concern the intention or thought of one of the signatory governments. However, one must not assume that when it submits a Treaty to its parliament for ratification a government will allow itself to express an opinion which it knows is not shared by the governments of the other signatory States and which, at least in its opinion, would not reflect their common agreement. As regards the Treaty of 18 April 1951 the preparatory documents are practically non-existent-or are secret (which amounts to the same thing). For that reason the grounds stated by the individual States have greater importance, particularly as a certain attempt was made to co-ordinate such statements in order to avoid contradictions between them, which would have been highly embarrassing. Having made that point let me say that I referred to that argument solely in order to support an opinion which is essentially based on the text of Article 33, but the commentary in question so cleary reflects the firm intention of the authors of the Treaty that it seemed to me impossible not to recognize it as having a certain value.

2.

Contrary to the view put forward by the High Authority I consider that different interpretations cannot be put upon the words “misuse of powers” in the first and second paragraphs of Article 33. In the second paragraph there is simply an additional requirement: the misuse of powers alleged must have affected the applicant. The result of that view is undoubtedly a widening of the area of application of the second paragraph beyond the case of misuse of powers which consists in “camouflaging” an individual decision behind the external features of a general decision but, as I observed in my earlier opinion (Case 3/54 and 4/54, Rec, Vol. I, p. 172), although the camouflaged individual decision is to my mind the only plausible explanation, it cannot prevent the text from being applied as it stands since, in practical terms, a strict interpretation would deprive applications brought by associations against general decisions of their entire scope. It is true that if the Court were to follow my suggestions as to the nature of individual decisions concerning associations that difficulty would in practice diminish since the number of general decisions affecting associations would itself fall; nevertheless, the objection remains valid.

3.

The remaining observations which I would like to make concern the actual concept of misuse of powers contained in Article 33. (a) I noted with satisfaction that the parties were in agreement on the definition of misuse of powers as meaning the use of its powers by a public authority to an end other than that for which they were conferred. At most, counsel for the applicants tend to prefer the word “aim” or “objective” to the word “end”. How then is it possible to explain the total disagreement which reappears when it is a case of application and not simply of definition? How is it possible to explain that the applicants manage in each case to put forward a submission of misuse of powers at the same time as a submission of illegality? It is at this point that the theory of the socalled “objective misuse of powers”, as opposed to that which is said to be based solely on a criterion of intention, comes into play. I must confess that I find that theory mysterious and, despite great perseverance, fail to understand it. When I say that I do not understand the socalled “objective” theory that means that I do not understand how it can be based upon the classic definition to which I referred a few minutes ago. Let me refer to that definition again: an authority makes use of its power to an end (or if you prefer, for an aim or in the pursuit of an objective) other than that for which the power was conferred. That assumes, first of all, that the authority in question has a power and that it is discretionary, at least within certain limits. First, if it has no such power it cannot misuse it in relation to its lawful purpose, and, secondly, if its power is conferred under such conditions that it is legally bound to exercise it in one particular way and not in another, the question of misuse of powers cannot arise. The latter case represents what is known as “circumscribed power” (competence liée). As regards the criterion of intention, if that phrase shocks or dismays certain minds I will not cling to it. There is clearly no question of “searching the heart and soul” and discovering the secret thoughts or reservations which the author of the decision may have had when he adopted it. Such psychological research would be expecially ridiculous, since, as in this case, the decision may be adopted by a collegiate authority. It is necessary to discover what was the end (or the aim or the objective) actually pursued by the author of the decision when he adopted it, so that it may be compared with that which he should have pursued and, until evidence is brought to the contrary, that which he is said to have pursued. Such evidence is not constituted by the consequences of the decision, certainly not by its illegality and still less by showing that powers have been exceeded — or else words no longer have any meaning. How, then, is evidence to be brought of the end actually pursued? Such evidence may result from one or more material facts (such as correspondence, statements, etc.) which are consequently of a strictly objective nature, which demonstrate that the author of the measure did not have the lawful end (or aim or objective) in view but another which is unlawful. (b) I would like to make two further observations : (I) I quite accept (and I have never stated the contrary) that a misuse of powers may exist even where the end or aim to be pursued by the authority is defined by the law itself. Such a situation often occurs in the Treaty and it is precisely the case of Article 26 (2)(a) of the Convention which we are considering today. Of course nothing would be more arbitrary than to exclude misuse of powers on the sole ground that the end to be pursued is defined by a text. But it is only in so far as a power exists and is discretionary in character that it can be misused. If its limits are exceeded there is an abuse of power rather than a misuse (eccesso di potere, not sviamento di potere), which in the system established by the Treaty amounts either to lack of competence or infringement of the law (or both, since the rules governing competence are generally fixed by the law). (II) In support of an extension of the classic concept of misuse of powers for the application of Article 33 it has often been maintained that in practice that concept is never given positive application by reason of the nature and role of the authority required to take action to implement the Treaty. It is asked how the High Authority could conceivably lower itself to commit what is referred to as a “base” misuse of powers? To do so would reduce it to the level of a rustic mayor. In my opinion that objection is totally mistaken. First of all, to accept it is to forget that the great have sometimes great weaknesses… Above all, it is to forget two things: the first is that the classic concept of misuse of powers is in no way restricted to the “base” cases (in order to avoid that excessive word let us rather say the cases in which a particular or individual interest has taken the place of the general interest). In its traditional form misuse of powers is also to be found in cases in which the aim pursued is perfectly honest or even perfectly lawful but is not that which was intended. The classic example in this instance is that of the use of police powers to further a financial interest. There is also what is known as “misuse of procedure” which is the use of a more simple procedure in order to avoid having recourse to the more inconvenient formalities of the procedure actually applicable. The second observation is that if misuse of powers is considered from that point of view, one can see that the High Authority is particularly susceptible to it. For example, is it not in a position to use its powers (or to refuse to use them) to promote the general economic policy of a Member State while neglecting the interests for which it is responsible? Is that not precisely the allegation made against it in the present case and have we not seen an exactly similar criticism made of the High Authority in another case which also concerns coal? Reference has already been made to it before the Court so I feel free to mention it. To exercise its powers against the interests of coal producers in order to make concessions to the policy, thought to be perfectly honest and based on the purest considerations of general interest, of a dynamic Minister for Economic Affairs, whether Belgian or German, is that not, if I might be allowed to use such an expression, a misue of powers which is absolutely “made to measure” for the High Authority? Whether or not such a misuse of powers is established is another question. What I wish to show is that it is not correct to maintain that the classic concept of misuse of powers is almost inconceivable under the Treaty. I consider the contrary to be true.

(ii) Application in this instance.

I must now apply those principles to the present case, examining the real nature of each of the submissions put forward.

In order to do so I shall refer to the list of submissions as set out on p. 12 of the reply by the three Campine undertakings, since it is there that it is the most complete and the question is primarily of interest to those companies (even solely of interest to them, if the Court follows my suggestions with regard to the individual nature of the decisions concerning Fédéchar).

The first submission—“The High Authority has misused its powers, or acted outside the area of its competence and/or infringed the Treaty, by imposing a pricelist on its own authority”.

The discussion on this point only concerns the question whether or not the texts and, in particular, Article 26 of the Convention enable the High Authority to draw up a price list “on its own authority”, without the agreement of the producers. It is entirely a question of legality and has nothing to do with misuse of powers. Furthermore, it concerns Decision No 22/55 which, in my opinion, is not individual in nature as regards the three undertakings. The submission may not be pleaded as set out in Application No 9/55.

The second submission—“The High Authority has misused its powers, or acted outside the area of its competence and/or infringed the Treaty by imposing reduced prices”.

On that point the applicants, maintain, first, that a structual reform cannot be brought about by means of an artifical reduction in selling prices, since such a reduction must result from a lowering of cost prices through investment, rationalization and modernization of the machinery of production, which should leave the under takings free to profit from a favourable economic situation when one occurs — which was the case at that time.

It is therefore necessary to discover whether or not the High Authority is entitled to fix reduced prices without taking the economic situation into account. That is a question which is unconnected with the aim of the text, which is to bring prices into line. Since it is not contested that the High Authority did indeed have the alignment of prices in view this cannot constitute a misuse of powers.

In relation to that same submission, the applicants claim that the High Authority was wrong to equate prices in the common market with those in the Ruhr.

That is an allegation concerning a mistake of fact in the interpretation of the term “common market prices” within the meaning of Article 26 (2)(a) and not a misuse of powers.

Here again the submission may not be invoked in its entirety by the three applicant undertakings.

The third submission—“The High Authority has misused its powers, or acted outside the area of its competence and/or infringed the Treaty by imposing reduced prices which do not take account of estimated production costs at the end of the transitional period”.

I have already expressed my serious doubts concerning the admissibility in procedural terms of that submission which the three Campine undertakings formulated expressly only in their reply.

That submission must in any event receive the same reply as the two preceding ones. The failure to take account of the estimated production costs at the end of the transitional period is not a misuse of powers but rather an infringement of Article 26 (2)(a), which provides formally for the obligation to take them into account.

The fourth submission—“The High Authority has misused its powers by acting under pressure from the Belgian Government, or, at the least, in order to attain objectives which form part of the policy of the Belgian Government but are foreign to the Treaty”.

The nature of that submission is typical of a submission of misuse of powers. If the Court shares my view of the interpretation of the second paragraph of Article 33 it will naturally accept that, assuming it to be proved, the misuse of powers “affects” the three applicant companies, which are the real victims of the process of selection. I consider that to be true for the whole of both decisions since they are indivisible both in law and in fact; as a result, in addition to the submission of misuse of powers, the three companies may plead all the submissions concerning legality, at least if the Court inclines to the argument which I put forward in my opinion in Cases 3/54 and 4/54 (Rec. 1954-1955, Vol. I, p. 148) and which is accepted by the parties to the present actions. Let us note that that advantage need not be purely academic, at least as regards the consequences of the judgment if not as regards its operative part, which can only order annulment. However, let me remind the Court that that submission, which is clearly distinct from all the others, was not raised, even indirectly, in Application 9/55. It can therefore be considered only in relation to Application 8/55.

The fifth submission—“The High Authority has misused its powers, or acted outside the area of its competence and/or infringed the Treaty by threatening to withdraw equalization payments from undertakings which refused to undertake the investments considered necessary or to carry out the exchanges of deposits”.

I have already said that the letter of 28 May is not individual on that point as regards the three companies, as they themselves acknowledge. Furthermore, the essential question is whether or not the High Authority is empowered to adopt such a measure, not whether by so doing it pursued an aim other than the alignment of prices, which appears to be indisputable. It does not constitute a misuse of powers.

The sixth submission—“The High Authority misused its powers, or acted outside the area of its competence and/or infringed the Treaty by making the payment of equalization independent of the price list and by imposing a price list while refusing to pay equalization”.

I consider that that submission cannot be separated from the seventh and last, which is as follows:

The seventh submission—“The High Authority misused its powers, or acted outside the area of its competence and/or infringed the Treaty by refusing equalization or by granting reduced rates of equalization to the three applicants, while imposing on them the same price list for the same types of coal as on the other producers”.

That submission concerns a passage in the letter of 28 May which, by general agreement, is in the nature of an individual decision as regards the applicants. On that point there is no doubt as to the admissibility of the application and all the submissions referred to in Article 33 may be raised.

In conclusion, I consider that Application 9/55 is admissible only as regards the decision depriving the three applicant companies of equalization or granting them only reduced equalization while imposing a price list on them. Furthermore, they admit that it is that point which is of the greatest interest to them. As regards Application 8/55, I consider it to be admissible as regards all the points and submissions put forward on the basis of Article 33.

Before concluding my consideration of these questions of procedure, I should like to make a final observation.

My examination of the submissions raised in Application 9/55 shows strikingly that if too wide a concept of misuse of powers is accepted, it becomes in practice indentical with the submissions of infringement of the law or lack of competence, with the result that undertakings and their associations would acquire the same rights of recourse against general decisions as Member States and the Council, In my opinion a consequence so obviously and directly contrary to Article 33 is sufficient to condemn such a wide interpretation.

I consider, however, that in so far as the interpretation which I am suggesting to the Court derives from a view of the individual decision which is at once broad and yet based on relationships it does not conflict with Article 33 but remains within the spirit of that provision, since it refers to the essentially relative concept of legal interest which forms the basis of the application for annulment. I consider that the perfectly legitimate effort to open access to our Court to the largest number of those who are subject to its jurisdiction must be made in that direction rather than by what I am tempted to call the “disintegration” of a concept such as misuse of powers which is in itself difficult to apply and which, whatever its importance, has never played more than a somewhat marginal role in applications for annulment.

VI — Discussion of the substance

I come — finally — to a consideration of the substance of the case. I propose to consider, first, the submissions concerning the lawful nature of the decisions and then the submission of misuse of powers and to group the former in an order somewhat different from that in which they were put forward by the parties in their applications, their replies (to which I have just referred) or their pleadings. Moreover, it is better to call them “complaints” rather than submissions.

Here then is the new order:

1.	The unilateral imposition of prices. That is the first complaint in the replies and is essentially based upon infringement of Article 26 (2)(a) of the Convention;

2.	Fixing of reduced prices without taking the economic situation into account. That is the first part of the second complaint in the replies;

3.

Severing of the relationship between equalization payments and the price list. A price list cannot be imposed if, at the same time, equalization is refused, nor can the same price lists be imposed on certain undertakings for the same types of coal as on other undertakings if they are refused equalization or granted only reduced equalization. Those are the sixth and seventh complaints in the replies;

4.	The threat to withdraw equalization payments. That is the fifth complaint in the replies;

5.	Error of the High Authority in determining the ruling common market prices, which are not those of the Ruhr. That is the second part of the second complaint in the replies;

6.	Error in the determination of the estimated production costs at the end of the transitional period. That is the third complaint in the replies;

7.	The submission of misuse of powers. That is the fourth complaint in the replies.

The first complaint— The fixing of prices by the High Authority on its own authority.

It is maintained that neither Article 26 (2)(a) nor any other provision of the Treaty or of the Convention enables the High Authority to fix alone, on its own authority and without the agreement of the producers, the prices of Belgian coal for the purposes of equalization.

First of all, let me put forward a textual argument based on the wording of the last sentence of paragraph (2)(a): “The price list so fixed shall not be changed without the agreement of the High Authority”. That provision can make sense only if the price list is not drawn up by the High Authority. By whom then may it be drawn up? In the absence of any indication to the contrary, by the producer alone.

In fact — and here one embarks upon an interpretation of the Treaty — the latter established a market system and a market economy in which prices are, in principle, freely fixed by producers, the role of the public authority being limited to ensuring that competition within the market is normal and, in particular, that is is not subject to discrimination. The objectives assigned to the Community by the Treaty must be achieved naturally by means of such free competition and the powers of intervention must not be exercised except in cases of necessity and under procedural guarantees expressly provided for that purpose. As Article 26 provides for no exception to those principles, none can be put forward especially since Article 1 (5) of the Convention provides expressly that the provisions of the Treaty shall apply upon its entry into force “subject to the derogations allowed by this Convention and without prejudice to the supplementary provisions contained in this Convention”. The Convention is, therefore, particularly susceptible to a narrow interpretation and in so far as it does not expressly grant special powers to the High Authority that body possesses during the transitional period only those attributed to it by the Treaty. As regards prices, those powers are provided for by Article 61 and nowhere else. They involve the right to determine maximum or minimum prices, but not fixed prices, and only after certain formalities have been carried out.

Finally, according to the practice followed before international courts such as the Court at The Hague the principle of strict interpretation described above is that which must always prevail in the case of international treaties.

I shall not spend long on that last point. Of course, it could be objected that our Court is not an international court but the court of a Community created by six States on a model which is more closely related to a federal than to an international organization and that although the Treaty which the Court has the task of applying was concluded in the form of an international treaty and although it unquestionably is one, it is nevertheless, from a material point of view, the charter of the Community, since the rules of law which derive from it constitute the internal law of that Community. As regards the sources of that law, there is obviously nothing to prevent them being sought, where appropriate, in international law, but normally and in most cases they will be found rather in the internal law of the various Member States. Have the applicants themselves not followed that latter path in the present action with regard, for example, to the concept of misuse of powers, of which it has become apparent that the national laws constitute an infinitely richer source than the really rather summary theory of “abuse of power”?

I consider it unnecessary to begin an academic discussion on that point since, whether in relation to international treaties or to internal laws, there is a commonly accepted principle to which I have already referred, namely that it is necessary to interpret and seek the presumed intention of the authors of a text only when the latter is obscure or ambigious and that when the letter of the law is clear it must always prevail. Although I am in no way a specialist in international law — and it is therefore with modesty and caution that I venture into that area - I have the impression that there are not in fact two separate doctrines for the interpretation of internal texts and of international texts but that in practice international courts have a tendency to be more timid than national courts in departing from a literal interpretation, a fact which is easily explained. First, the common will (the common intention of the parties), which must form the basis for the interpretation of a contractual document, is in most cases difficult to establish with certainty in the case of documents such as international agreements, which are generally the result of compromises reached with more or less difficulty and in which the obscure or imprecise wording often only conceals fundamental disagreements. Secondly, the so-called general principles of law are necessarily much more vague when sought in a world-wide context than when appeal may be made to the traditions followed in a single country.

I am, therefore, in full agreement as to the method of interpretation.

The essential question is, however, whether the text is clear and requires no interpretation. In that respect, the very existence of the present action and the ramifications to which it has given rise are sufficient to show that it is not.

“The price list so fixed shall not be changed without the agreement of the High Authority”. The text lays down a procedural requirement as a precondition for any modification of the price list, but it fails to state by whom the price list shall be drawn up and the bases for it established. It is therefore necessary to interpret the text in order to fill that lacuna. Even though the Code Napoleon is not applicable here I cannot refrain from recalling Article 4, un der the terms of which “the judge who refused to judge on pretext of the silence, obscurity or insufficiency of the law, may be prosecuted as guilty of a denial of justice”. The Court is aware of the arguments in this case. I have recalled that put forward by the applicants. As regards the High Authority, it maintains that since it is responsible for the proper functioning of the equalization system, which is an authoritarian method of intervention imposed by the Convention to allow the Belgian coal market to be integrated into the common market by the end of the transitional period, it is alone qualified to fix prices to the extent necessary to achieve the end defined by the text. Such a measure can be adopted only by a public authority and it is impossible to leave responsibility for it to the initiative of producers.

In order for the picture to be complete I must also refer to a third argument. It derives from the statement of grounds for the Netherlands Law of Ratification which, in relation to Article 26, states that: “The equalization payments which Belgium is to receive from the equalization funds are to be used for three clearly defined purposes: the first relates to the aforementioned rationalization. It consists in allowing prices of Belgian coal to the consumer to be adjusted from the beginning of the transitional period to the level foreseeable at the end of that period. That level, which must necessarily be estimated, shall be fixed by the Belgian Government in the form of a price list which shall be valid for the whole of the transitional period unless the High Authority authorizes its modification999’.

I shall consider the substance of the argument of the High Authority in relation to the second complaint. For the moment, however, I am dealing with one problem alone: who has the power to fix the price list if there is no agreement between producers and the High Authority?

Let us note, first of all, that the parties agree in setting aside the application of Article 61. The High Authority acknowledges that it was wrong to refer to that provision in its first decision, No 24/53.

I share that point of view: the application of Article 26 (2)(a) concerns the establishment of fixed prices and not of maximum prices. That remains true whatever one's opinion as to the nature of the equalization system and the manner in which it must attain its objective, whether by the free play of economic forces or by supervisory action by the public authority.

Even if one accepts the first view, differences of opinion may exist as to the level at which selling prices must be fixed and it is impossible to imagine that those levels, which are necessarily related to the amount if not to the allocation of the equalization payments, should be freely fixed by the producers, while under Article 25 the High Authority is to determine the total amount of the levy to be actually charged ‘taking into account needs recognized by it’. Furthermore, the applicants do not hold that opinion. They claim (see the reply, p. 18) that ‘the fixing of a price must result from a joint consideration of the question, at the end of which the High Authority gives its agreement’.

However, the question immediately arises: what happens if there is no agreement? No reply was given to that question during the written procedure. However, one of the advisers of the Fédéchar gave us the reply during the hearings. He said that it is quite simple; if there is no agreement, no equalization payments are made, at least not to the undertaking which has refused its agreement. It follows that if all the undertakings refused their agreement there would be no equalization at all.

That result is sufficient to condemn the argument, since it cannot be accepted that the will of the producers alone may paralyse the operation of a system which was compulsorily established by the Treaty and is regarded by it as indispensable to the integration of the Belgian coal industry into the common market. As we have seen, the Convention provides expressly that the Belgian Government is alone empowered to oppose the operation of that system, which is quite understandable, since such an important decision may clearly be adopted only by the responsible political authorities of the country.

Thus, the power to take decisions can belong only to a public authority. Is that authority the High Authority or, following the argument which emerges from the statement of grounds for the Netherlands Law of Ratification, is it the Belgian Government? In the absence of any express provision conferring such a power upon it, I do not believe that it can be the Government. In my opinion it can only be the High Authority, since under Article 8 of the Treaty ‘it shall be the duty’ of that body ‘to ensure that the objectives set out in this Treaty are attained’ and under Article 84 the word ‘Treaty’ also covers the Convention on the Transitional Provisions. It is true, however, that Article 8 adds: ‘in accordance with the provisions thereof’, which refers to both procedural and material provisions. In this instance there are material provisions which define the aim of the equalization scheme but it clearly cannot be concluded from the fact that there are no specific procedural provisions that the decision-making power does not exist.

Then there remains the objection based on the wording of the last sentence of Article 26 (2) (a). If the price list “shall not be changed without the agreement of the High Authority” that implies that it is not established by that body or, at all events not by that objection is as follows: a distinction must be drawn between the price list and the bases on which it is fixed. The price list is the normal list which the undertakings are bound to make public in pursuance of Article 60. I shall not continue with a discussion of the concept of the price list, which the Court has had the opportunity to develop fully in another action. The very heading of Decision No 22/55 relates to “the establishment of price lists for the undertakings in the Belgian coal-fields”, which clearly refers to Article 60. In fact, there is only one price list for all the Belgian coal-mining undertakings, which is that established by the Comptoir Beige des Charbons (Belgian coal agency), a copy of which appears on the file. That fact clearly explains the use of the singular in Article 26 (2) (a), which states: “the price list so fixed…” As regards the bases on which that list is fixed, they are established by the High Authority on the basis of Article 8 of the Treaty for the reasons to which I have referred. It does so by drawing up a table of prices. The text therefore becomes clear: evidently, the undertakings' price list must set out all the prices which appear in the table drawn up by the High Authority but, as is shown by a comparison between the two documents, the undertakings' price list is much more detailed since, first, it determines the ‘conditions of sale’ which attach to the statement of prices and, secondly it fixes directly the prices of the types of coal which have been liberalized. Moreover, the copy produced states that expressly: ‘This price list (that is, the present price list) sets out the prices given in Journal Officiel No 12, which publishes Decision No 22/55 of the High Authority. Prices for the types not set out in that decision have been fixed by the producers concerned’. It is that price list established by the producers which cannot be changed without the agreement of the High Authority, at least (and this appears to go without saying) in so far as modification thereof affect the ‘bases’ which are fixed in the table of prices drawn up by the High Authority. In short, it constitutes an exception to the provisions of Article 60 which is intended to ensure that the undertakings' price list remains in accordance with the decisions of the High Authority.

The second complaint, which is in the nature of an alternative to the first: Even if it is accepted that the High Authority is empowered to fix prices of its own motion, it is not empowered to fix reduced prices without taking the economic situation into account.

It is on this point that the fundamental difference of opinion between the parties in terms of economics appears.

The applicants acknowledge that, like the other aids with which it is connected (loans under the Marshall plan, reduction of rates of interest, etc.), the equalization payments are intended to bring about indispensable structural reforms. They maintain, however, (reply, p. 21) that ‘structural reform is not brought about by an artifical reduction of selling prices but, by means of investment, rationalization and modernization of the machinery of production, by enabling cost prices to be reduced, which must under normal circumstances result in the reduction of selling prices, that is, in a strengthening of the competitive position’. They add that the High Authority acknowledges that at the time in question (that is, on 17 November 1955) Belgian coal could be marketed at the prices stated in the old list, or even at considerably higher prices. Furthermore, when the decision was adopted that coal was marketed in the common market at the prices fixed in the old list without the producers' having to apply for equalization under subparagraph (c) (which is reserved for exports). Where the economic situation is favourable, therefore, there is not reason to fix reduced prices; producers should be permitted to profit from such a situation, which will enable them to increase or at least to maintain their level of receipts and, consequently, to continue with their effort at modernization under the most favourable conditions. The desired reduction in cost prices will then come about by itself.

The defendant maintains, on the other hand, that purely short-term economic fluctuations must not be taken into account. It is the duty of the High Authority to act on its own authority to bring prices into line, so as to create gradually the proper conditions for the integration of the Belgian market in coal into the common market at the end of the transitional period. In doing so it cannot rely either on the goodwill of producers or on the unforeseeable circumstances of the economic situation.

I believe that the Court must choose between those two arguments.

The wording of Article 26 (2) (a) is entirely silent as regards the extent of the powers of the High Authority. It merely explains the purpose of what if refers to as ‘the equalization arrangements’, that is, in fact, the equalization payments. Thus the limit of the High Authority's powers are to be found solely in the requirements of the objective thus defined. The lawful nature of the decisions adopted is dependent upon those requirements, which means that in order to ensure the protection of the rights of those who are subject to its jurisdiction and who would otherwise be exposed to quite arbitrary treatment the Court must deal with the question — subject, of course, to the limitations set out in Article 33. As regards that point, I consider that the question so raised does not concern the ‘evaluation of the situation, resulting from economic facts or circumstances’ which formed the basis of the contested decisions: it is a question of principle and of legality.

My position is in accordance with that of the High Authority. I consider that the rules for the operation of the common market as defined in Articles 3 and 4 of the Treaty and in the light of which the provisions of the Treaty itself (such as Article 60) must be interpreted are no longer valid precisely when it is a question of bringing about the integration of an industry which is not in a state to meet competition on that common market. In such a case measures of State control — let us not retreat before that expression — become absolutely necessary. The aim of the Convention is to enable them to be adopted. Article 1 shows that clearly when it states that: ‘The purpose of this Convention … is to provide for the measures required in order to establish the common market and enable production to be progressively adapted to the new conditions, while helping to eliminate disequilibria arising out of the former conditions’. In short, the rules of a market economy are valid only in so far as the market exists. They are not sufficient to create it when it does not exist, or only at the risk of serious disturbances. In fact, the aim of the transitional provisions is precisely to avoid such disturbances by the adoption of appropriate protective measures, while enabling integration to be achieved within a certain period. It is quite clear that such a delicate operation can be undertaken only by a public authority. That emerges from the very wording of Article 26 (2) (a), which states that the equalization arrangements shall be designed, from the beginning of the transitional period, to bring the prices of Belgian coal more nearly into line with the ruling common market prices. Whether or not the prices have been fixed at a level below those of the common market (I shall consider that point shortly) is another question; but it is to my mind quite clear that the High Authority must attain the objective of bringing prices into line, without its having to take account of purely short-term fluctuations in the economic situation.

The third complaint — This is the question of the severing of the relationship between equalization payments and the price list and the problem of selectively.

The applicants maintain that there is a necessary connexion between the fixing of the prices and the amount of the equalization payments, whose aim is to maintain the undertakings' level of receipts so as to enable them to continue with their efforts to re-equip and modernize. The fixing of prices is justified only by the application of the equalization scheme. As is stated in the reply of the Fédéchar (at p. 35) ‘it is the right to equalization which is the decisive legal reason for the obligation on the undertakings not to modify their price list without the agreement of the High Authority’ and, clearly, that argument is even stronger if it is accepted that prices may be fixed by the High Authority without the agreement of the producers.

Furthermore, in the applicants' opinion it follows from the above that it is impossible to impose a price on an undertaking while at the same time refusing to pay equalization or to reduce or abolish equalization for one type of coal while maintaining a fixed price. The procedure known as ‘selectivity’ is thus said to be illegal.

That argument derives directly from the applicants' economic view of equalization which I have already analysed and which states that (see Fédéchar reply, at p. 37) ‘the aim of the equalization arrangements is therefore in principle to maintain the level of receipts of all the Belgian mines, despite the reductions in price which they are required to grant in the immediate future, and thus to ensure that those mines have available the financial means regarded as indispensable for the implementation of their programme of re-equipment, subject, of course, to the progressive reduction in equalization provided for by the Convention’. Thus, from the moment that the liberalization of prices is likely of itself to en sure the maintenance of the level of receipts, equalization may be abolished, and there is therefore no longer any legitimate reason for maintaining reduced prices artificially. The High Authority acknowledged that by liberalizing house coals at the same time as it abolished all equalization payments in their favour. How could it act differently in relation to the unclassified Category B high volatile bituminous coals extracted by the three applicant undertakings?

On all those grounds selectivity is said to be contrary to the provisions of Article 26 (2) (a), at least where it is not accompanied by a corresponding liberalization of prices. Furthermore, it infringes the fundamental rule against discrimination laid down in Article 4 of the Treaty.

It is also claimed that by its nature a system of equalization excludes any arbitrary or ‘selective’ power of distribution, as is the case as regards the national equalization schemes provided for by the Convention (Article 24 of the Convention). It is observed, finally, that the two other procedures for granting Belgian equalization, known as equalization under subparagraphs (b) and (c), apply generally which confirms the necessarily global character of that equalization, including that payable under paragraph (a).

I shall not spend time on those latter arguments, which have been convincingly refuted by the High Authority both in the written procedure and at the hearing. I shall merely observe that what is termed ‘equalization’ is never more than a financial arrangement, the basis of which is to be found in Article 53 of the Treaty.

That article in fact enables the High Authority either to ‘authorize the making, on conditions which it shall determine and under its supervision, of any financial arrangements common to several undertakings which it recognizes to be necessary for the performance of the tasks set out in Article 3’ or ‘itself [to] make any financial arrangements serving the same purposes’. In the first case it is required to consult the Consultative Committee and the Council; in the second case it must obtain the unanimous assent of the Council.

One must not be surprised at the fact that the Convention laid down no procedural requirements as regards the equalization arrangements introduced for the benefit of the Belgian and Italian collieries. Consultations or preliminary opinions were clearly superfluous since, in that specific case, the financial arrangements were made by the authors of the Convention themselves. The text in fact lays down the rules governing those arrangements, both as regards receipts (Article 25) and expenditure (Articles 26 and 27). However, the High Authority remains empowered to fix the conditions and review the wording of the arrangement; in other words, it is for the High Authority to fix the practical details for the application of rules thus laid down by the Convention in so far as is necessary to achieve the purpose defined by those rules.

Thus I return once more to the requirements of the objective to be pursued, which are regarded as a condition of the legality of the measures adopted.

As regards the principle of selectivity, I really have no doubts at all. Under Article 25, it is for the High Authority to determine periodically the amount of the equalization levy. It does so, according to the text, ‘taking into account needs recognized by it, in accordance with Articles 26 and 27’.

If one accepts what I have termed the ‘State control’ argument, it seems clear that the needs which must be taken into account by the High Authority are those involved in the modernization and re-equipment of undertakings which, by reason of their operating conditions, are not yet in a state to meet competition on the common market, although they may be so in the future. It is therefore quite proper for both those undertakings which do not or which no longer ‘need’ aid in order to make that effort and those which, on the other hand, have no chance of achieving integration, to be excluded from the equalization scheme. That is not discrimination but the application of distributive justice. I will even go so far as to say that if there is cause for surprise it is in the fact that the High Authority allowed a good part of the rather short transitional period to pass before taking that line of action.

But there then remains the question whether it is possible to deprive an undertaking of all equalization subsidies in respect of certain types of coal, while at the same time keeping it within the system of fixed prices for those same types. Is that not both a disregard of Article 26 (2)(a) which links the establishment of compulsory selling prices to the existence of equalization payments and an obvious contradiction, since to acknowledge that an undertaking no longer needs equalization is, it appears, to acknowledge thereby that it is in a state to meet competition in the common market, in other words that it has become competitive?

That is a difficult question and I confess that for a long time I hesitated over the solution to it. However, finally, I consider that the High Authority's argument is justified.

First — and this answers the first part of the argument — it must not be forgotten that Article 26 (2)(a) has a dual purpose: the first, which is the most important, concerns the fixing of prices which, from the beginning of the transitional period, must be brought into line with the ruling common market prices so that consumers of Belgian coal may immediately benefit from the prices on that market or from prices approaching them. In short, for Belgian and other consumers the problem is held to have been resolved. However, and this is the second purpose, that measure is accompanied by a safeguard clause in favour of producers to enable them not only to avoid bankruptcy but also to pursue their efforts at adjustment is such a way that, in conjunction with the effect of the other measures provided for, the Belgian market is integrated at the end of the transitional period when the aids cease.

The first and essential aim is not achieved if within the Belgian market all consumers cannot obtain for the same types of coal prices approximating to those ruling on the common market to which they are entitled. We are told, however — and this is the second part of the objection — that the common market price has been reached, since certain types of coal may be freely sold by certain undertakings without the aid of any equalization. At least, it has been reached as regards those types and in so far as they are produced by those undertakings. Why should the reasoning on that point be any different from the reasoning applied to house coals, the prices of which were entirely liberalized at the same time as they were deprived of all aid by way of equalization?

In reply one might say that it is impossible to allow a dual price to exist for the same types of coal within the Belgian market in which all sales are carried out by a single selling agency, which, as we have seen, publishes only one price list. That is the consequences of the uniformity of the Belgian coal market during the transitional period. However, I do not consider that reply to be conclusive.

In my opinion the correct reply and the one which has convinced me is that the types of coal for which fixed prices have been maintained, despite the fact that certain of the undertakings which produce them have been deprived of the equalization subsidies, are not yet competitive and that only the economic situation prevailing when the contested decision was adopted would have enabled them to be sold freely by those undertakings.

On the other hand, house coals may already be considered as integrated into the common market. Why? Because under normal conditions and apart from movements caused by the economic situation the Belgian producers of those have the largest exportable surplus of house coals available in the common market. For those types, therefore, the prices of Belgian house coal may in any event be considered as the market prices. There can therefore be no question of those prices being ‘brought into line’.

As regards industrial coals, on the other hand, it may be concluded from the same economic data that it is the Ruhr producers who, under normal circumstances, have the greatest exportable surplus available in the common market and who guide and determine the ‘market price’ for those types. The desire to make Belgian industrial coals structurally competitive (and not merely temporarily competitive as a result of the short-term economic situation) in relation to the ruling common market prices therefore requires their prices to be reduced to a level which enables them to withstand competition from the industrial coals of the Ruhr. Even if wages and social security charges are assumed to be equal, the differences in costs between those two categories shows the need to adopt measures which will bring Belgian industrial coals ‘into line’ since on this depends their final integration into the common market. It may therefore be said that Belgian house coals could legitimately be left off the price list, since their prices constitute the market price which is the ideal sought by Article 26 (2)(a), while the prices of Belgian industrial coals had properly to be kept on the list and reduced, without regard to the possible award of equalization to any given producer of those types, since the prices for those coals remain considerably higher than the market price, which is, in any event, represented by the price of industrial coals from the Ruhr.

To accept that the corollary of the abolition of equalization payments to the collieries of the Campine should have been to allow them to liberalize prices would be to fail to understand the exact nature of the aim of bringing ‘prices more nearly into line with the ruling common market prices’ which is a mandatory requirement of Article 26 (2)(a).

That is why I consider both the principle of selectivity and the maintenance of fixed prices for industrial coals to be justified, even as regards those undertakings which have been deprived of equalization as the result of the application of that principle. Of course, it is still necessary to discover whether harmonization of the prices has been correctly calculated: that is what I shall consider in my examination of the fifth and sixth complaints.

As regards the application of the principle of selectivity itself two questions arise:

1.

Are the acknowledged criteria correct? Let me remind the Court that, contrary to the proposals of the Joint Committee which were not followed on that point, the financial position of the undertakings was not considered. The criteria put forward were purely objective, namely, the concentration of mining operations on a single level and in a single pit. Perhaps other criteria could have been chosen in order to arrive at a greater degree of selectivity. The equalization payments could perhaps have been distributed between the undertakings according to criteria based on the urgency of their respective needs, rather than as before in proportion to the tonnages of each category and type of coal, with an exception in the case of only three undertakings. That would have been a logical application of the new system, based on selectivity. Those are, however, discretionary questions which in my opinion fall outside the power of review of the Court.

2.

In order for the system to remain lawful it is clearly necessary that the abolition of equalization payments or the reduction in the amount of those payments to certain undertakings, without any corresponding liberalization of prices, should not paralyse those undertakings' efforts to re-equip and modernize. If it did so, it would prove in effect that the decision adopted in their case was based upon an error of fact. However, no such error has been proved or, if the truth be told, formally alleged.

The fourth complaint— Threat to withdraw equalization payments.

I shall be brief in my consideration of this point.

If one accepts the legality of the principle of selectivity and the fact that equalization aid is paid on the basis of need — not the need of all the coalfields but that of each one individually in so far as that aid is intended to enable it to make the necessary efforts to re-equip and modernize — it is quite justifiable, in return, to provide for a power of review and for sanctions. Such sanctions are neither penal nor even administrative (the latter could not be introduced by a mere decision) but consist in depriving the undertaking which does not attain the objective for which that aid was granted of the benefits thereof. That is the normal rule as regards any machinery for the payment of subsidies.

I now come to the two final complaints concerning the legality of the decision. those based on the fact that the two lower limits fixed by Article 26 (2)(a) for the determination of prices — that is, the ruling common market prices and the estimated production costs at the end of the transitional period — were in fact exceeded.

The fifth complaint— Error committed by the High Authority in determining the ruling common market prices

A — The argument put forward by the applicants may be analysed as follows:

(a)

By equating prices in the Ruhr with those ruling within the common market, the latter being the final objective of the alignment of prices, the High Authority is committing an obvious error. The prices ruling in the Ruhr are only one of the prices at which industrial coals are sold on the market and furthermore it is not a price freely determined by the effect of supply and demand. Until 1 April 1956 a decision of the High Authority kept Ruhr prices at an artificially low level and even at a level below actual production costs. Although they have since been liberalized, action by the German Government has curbed their rise, limiting it to 2 German marks when it would normally have reached an average of 6 German marks if it had been able to react freely to pressure on a real competitive market. Prices for industrial coals extracted in the Nord, Pas-de-Calais and Aix-la-Chapelle coalfields are comparable to the Belgian prices and apply to the same volume of output. It is therefore difficult to see why Belgian prices should be the only ones to be brought into line with those of the Ruhr.

(b)

It is, in fact, the standstill level at which Belgian prices were fixed in 1953 which reflects both estimated production costs for Belgian coal at the end of the transitional period and the ruling common market prices at that time, since the natural consequence of the free play of competitive forces in the market and, in particular, of the pressure of wages in Germany, must be to bring prices in the Ruhr to that level and thereby to achieve the alignment which is the objective of Article 26 (2)(a): alignment need not take place only in one direction.

(c)

The applicants maintain that their argument is justified by the statistics for the trend in prices of industrial coals between 1952 and 1956 both in the Ruhr and in Belgium. The table showing the comparative evaluation of the prices of coking smalls in the Community since 1952, which they produced at the hearing (and which they are asking the Court to substitute for the table produced by the High Authority) clearly shows that the prices of cleaned smalls from the Ruhr have increased considerably since 1952 (565 francs in 1952, 627 francs in 1956, thus rising from 100 points on the index to 111 points) while prices for the same types of coal produced by the Belgian coalfiels dropped from 716 francs to 691 francs (and even to 671 francs for cleaned fat coal A) which reduced the index fixed at 100 points in 1952 to 96 and 94 respectively. If the sum of 2 German marks borne by the German Treasury by way of tax refund and transport costs (2 German marks per metric ton) is also added to the Ruhr prices it appears that once the industrial coals from the Ruhr have entered Belgium they are sold at a price which is very little different from the Belgian prices and that therefore the High Authority's misgivings are without foundation.

B — What is the High Authority's reply to that?

(a)

As regards the choice of the Ruhr, the High Authority maintains that it never purely and simply equated Ruhr prices with the ruling common market prices as is alleged and it observes that such an equation is not mentioned anywhere in the contested decisions. As regards industrial coals, however, it appears to be the Ruhr producers who determine the market price, since in a normal economic situation or during a recession it is they who have available the largest exportable surplus capable of competing with the output of foreign mines on their own markets and, in particular, on the Belgian market on which they are the single most dangerous competitor. In any economic situation the French market is traditionally a net importer (12 million metric tons per year). Its additional needs must be satisfied either by coal from the Ruhr or by Belgian coal. If, therefore, under normal conditions, Belgian coal is to be able to meet competition from the Ruhr on the French market, then the prices of that coal must clearly be brought into line with Ruhr prices. In fact (and the Belgian producers recognize this themselves) of all the producers in the common market it is the Ruhr producers who compete most strongly in the Belgian market and will continue to do so. The ruling Ruhr prices must therefore be used as a point of reference when bringing prices into line, especially as regards industrial coals with which they are major competitiors on both the Belgian market and the external markets, in particular in France.

(a)	As regards the second argument, the High Authority states that it does not share the applicants' optimism. If German prices were to rise, a rise in Belgian prices could not be ruled out, at least if the information given out by the press agencies is to be believed.

(b)

At all events, the High Authority considers that it cannot rely entirely on the rise in German wages to bring prices into line. It has been calculated that if in 1952 wages and social security charges in the Ruhr had been brought up to the Belgian level, the labour costs per metric ton produced in the Ruhr would have reached only 66 % of those costs in Belgium. The rise in German wages is therefore a factor of limited importance as regards the alignment of prices, and even absolute equality of wages and social security charges is not alone sufficient to achieve it. Furthermore, the High Authority knows from experience that although wages have risen in the Ruhr, social security charges do not remain stationary in Belgium. It refers, for example, to the repercussions to be expected from the introduction of the five-day week in the Belgian mines.

(c)

As regards the figures, the High Authority states that if the decision in question is considered from the point of view of the period at which it was adopted and reference is made to the table produced by the applicants themselves, it can be seen that in the Ruhr in 1955 the price of coking smalls was, in absolute terms, 605 francs and that in Belgium it was 691 francs for fat coal A and 671 francs for fat coal B. As the High Authority adds, those ‘figures make further comment superfluous’.

C — What view is one to take of this discussion?

First, on the question what is to be understood by the term ‘ruling common market prices’ I consider, as I have already said, that as regards a specific type of coal the criterion based on the ‘greatest exportable surplus’ is valid.

As regards the application of that criterion to determine the level of market prices for industrial coals, it clearly depends on an assessment of a situation which arises out of economic facts and circumstances. Thus the Court can review that assessment only in so far as it reveals either the existence of a misuse of powers (which we shall see shortly) or ‘a manifest failure to observe’ a rule of law.

As the Court stated in its judgment of 21 March 1955 in Case 6/54 (Government of the Netherlands v High Authority of the European Coal and Steel Community, Rec. 1954, Vol. I, p. 201 at p. 225), ‘the term “manifest” presupposes that a certain degree is reached in the failure to observe legal provisions so that the failure to observe the Treaty appears to derive from an obvious error in the evaluation, having regard to the provisions of the Treaty, of the situation in respect of which the decision was taken’.

That is certainly not the case in this instance.

First, the Belgian producers themselves acknowledge (see the statement quoted by the High Authority in its rejoinder at p. 65 which is not disputed) that under normal conditions the Ruhr is traditionally ‘the’ dangerous competitor, both on the Belgian market and on the export markets, since it ‘makes’ the price on those markets. The structural integration of Belgian coal into the common market thus requires the adoption of the measures necessary to render Belgian industrial coals able to compete with Ruhr coal.

Secondly, the figures put forward by the High Authority — which have not been contested by the applicants' advisers — for the respective labour costs, wages being equal, in the cost price of Ruhr coal and Belgian coal, clearly show that merely to equalize wages is not sufficent to bring about the ‘lasting’ alignment which is to enable Belgian coal to be integrated into the common market.

As regards the difference in price between Belgian smalls and Ruhr smalls in 1955 as it appears from the table provided by the applicants, it can be disregarded only if dangerous assumptions are made as to the possible influence in the context of an ideal competitive market of the free exercise of the law of supply and demand aided by the short-term economic situation on the price of coking smalls from the Ruhr, it being understood that those assumptions may be proved false at the least fluctuation in the economic situation.

In short, the complaint cannot be accepted either as regards the role assigned to the Ruhr as the basis for determining the ‘ruling market prices’ for industrial coals, or as regards the assessment made of the level of those prices.

The sixth complaint— Error committed by the High Authority in determining the estimated production costs at the end of the transitional period.

A — The applicants claim that by imposing a further reduction in the prices of Belgian coal by Decision No 22/55 the High Authority went beyond the limit of the estimated production costs at the end of the transitional period and thereby infringed the provisions of Article 26 (2)(a). That argument may be summarized as follows:

(a)

The assessments made in 1953 of the estimated costs of producing Belgian coal at the end of the transitional period showed a possible reduction of 29 francs per metric ton in relation to 1952. A reduction of the same amount was immediately made in the system linking the price of coal to the payment of equalization which was set up in 1953. The price lists were thus brought to a ‘standstill level’ which was to remain unchanged until the end of the transitional period since that one reduction has reached the permitted limit.

(b)

It is true that the applicants acknowledge that the real increase in output noted in 1952 and 1955 exceeded the initial estimates. Nevertheless, they maintain that the reduction in costs which should normally have resulted did not take place as a result of the rises in wages and the cost of materials which took place during the same period. In fact, the real cost in 1955 is higher than the original estimates and that fact is sufficient to prevent any fresh reduction in price and even to justify an increase in the prices fixed in 1953.

The applicants regard it as quite reasonable that when costs were estimated in 1953 wages and social security charges and the prices of products and materials used in the mines were assumed to remain constant for five years. They maintain, however, that it is inconceivable that when the estimated costs were revised in 1955, the rises in salaries and in the price of products and materials which had taken place in the intervening period were not taken into account, since they were no longer unforeseeable factors but rather concrete information which had to be taken into account in estimating cost prices.

B — What is the High Authority's reply to that?

(a)

As regards the first point, it maintains that the Belgian producers themselves anticipated in 1952 that the increase in output to be expected in 1956 as a result of the implementation of the programme of reequipment would make possible a saving of 90 francs per metric ton extracted. With the agreement of the Belgian Government the High Authority preferred to hold provisionally to a price reduction of only 29 francs although it reserved to itself the power to make further reductions later if the gradual implementation of the programme confirmed its inital estimates. The reduction ordered in 1953 cannot, therefore, be regarded as having reduced Belgian prices to an unalterable standstill level below which it was accepted that prices would not further be reduced.

(b)

As regards the second point, the High Authority does not deny that wages rose between 1953 and 1955. Furthermore, it took that fact into account when it authorized a general increase of 3 francs in the price of Belgian coal in 1955. However, such increase in wages and the cost of materials, which are by their nature unforeseeable, are not included in the calculation of the estimated costs required by Article 26 (2)(a). The estimated costs within the meaning of that provision can be calculated only on the basis of the improvements in output which may be anticipated during the transitional period, all other factors (basically wages, social security charges and the cost of raw materials used in mining) remaining equal. To wish to take account at the outset of possible modifications in labour costs as a result of possible wage rises would prevent the preparation of the economic forecast which must be made at the beginning of the transitional period. On that view, although the wage rises which took place between 1953 and 1955 could, where appropriate, have led the High Authority to order part of their effect to be devolved upon selling prices, they did not render it necessary to revise the estimates of production costs for 1958, which were based in 1953 on the progress to be expected, caeteris paribus, in the implementation of the re-equipment programme. On that basis, the figures put forward by the applicants in Column G of the table show that production costs, calculated on the assumption that wage levels would remain constant, fell between 1952 and the first quarter of 1955 from 452 to 409 francs per metric ton, which represents a real reduction of 43 francs. The cumulative effect of the reductions ordered in 1953 and 1955 (29 francs + 10 francs), that is, 39 francs, therefore remains within the limits of the cost reductions calculated at the date of the contested decisions. Fur thermore, the reduction in costs thus calculated on the basis of a constant level of wages takes account solely of the programme of re-equipment as implemented (which raised output from 753 kg. in 1952 to 826 kg in 1955) and disregards the expected beneficial results of the so-called ‘negative rationalization measures’ and the programme of modernization for the marginal mines. On the basis of the implementation of those measures and the fresh improvements in output which will take place between now and the end of the transitional period it may be maintained a fortiori that the reduction ordered in 1955 does not exceed the limit of estimated production costs at the end of that period.

C — Such are the two arguments put forward

There appear to me to be two questions involved in the complaint under consideration, one of which concerns the law and the other the facts.

(a)

The question of law concerns the meaning of the phrase ‘estimated production costs’ as used in Article 26 (2)(a) and, in particular, whether or not in determining those costs account must be taken of factors other than those which relate to output and are therefore likely to diminish as a direct consequence of the improvements in output brought about by the implementation of plans for re-equipment and modernization. On that question I share the view taken by the High Authority. The single concept ‘production costs’ clearly includes all the elements of the cost price, among them wages and social security charges, and the price of raw materials. On that point the applicants could have relied on the authority of the President of the High Authority who, during a statement recently made at Strasbourg to the Joint Assembly, referred to ‘the rise in the price of coal, rendered necessary by the increase in production costs and, in particular by wage increases…’. However, it is clear — and the parties agree in acknowledging this — that those factors can be included in the calculation of the production costs only as they exist at the moment when the calculation is made. As regards the estimate of the same costs in the future, no account can be taken of unpredictable factors or, at least, of their possible variations. Reductions in costs may be calculated only in so far as it is possible to draw up a plan based on concrete facts. Those factors whose variations are unpredictable will be taken into account only if all other factors remain equal. I regard that interpretation as the only one compatible with Article 26 (2)(a), for two reasons. The first is the use of the word ‘estimated’ in that article. An ‘estimate’ can be made only in relation to ‘predictable’ factors (economics is certainly not an exact science but it is nevertheless not an occult one). The second is that the aim of the equalization arrangements is to reduce cost prices to the extent that such reduction is made possible by an improvement in output: it is therefore the production costs, in so far as they are capable of reduction as a result of the predictable improvement in output, which must form the basis for the estimate. However,—and this appears to be in fact the only point on which the parties still disagree — what is to be done where one of the ‘unpredictable’ factors varies (for example, where there is a wage rise)? Must the estimate be remade, taking into account the modifications which have thereby taken place or, as the High Authority maintains, may those rises be compensated either by price increases or by the grant of subsidies, or by a combination of the two, but without affecting the estimates already prepared? In the light of my remarks concerning the concept of ‘estimated production costs’ within the meaning of Article 26, which, from the beginning of the transitional period, must serve as the basis for the preparation of an estimate based solely on the reductions in cost prices to be expected from an increase in output, I consider that a logical application of the system requires that the estimate should not be revised each time that circumstances bring about changes in factors which are not connected with the improvement in output, that is, in unpredictable factors. To do so would be to risk applying prices which not only depart from those ruling in the common market but also no longer bear any relation to those prices, since they are linked to events affecting Belgium (such as variations in wages), that would be directly contrary to Article 26 (2)(a) whose prime object is, as I have said, to enable consumers to benefit immediately from prices in line with the ruling common market prices. It is, of course, not unnatural for selling prices to be increased when a change occurs in the ‘unpredictable’ factors, but there must on no account be any change in the aim of bringing prices into line on the basis of an improvement in output in all the Belgian collieries. Only if errors are recognized in the assessment of predictable factors may they be corrected. That may, however, occur at any moment and quite independently of posssible changes in the unpredictable factors.

(b)

The question of fact concerns whether, in the light of the powers of the High Authority — the limits of which I have just attempted to trace — errors occurred in its assessment of the estimated production costs at the end of the transitional period. On that point the replies given by the parties to the questions raised by the Judge-Rapporteur show that if my interpretation is accepted, the prices fixed in May 1955 remain in any event higher than the estimated production costs for 1958. However, even if the applicants' method of preparing the estimate were followed in preference to my interpretation, I do not consider that they could be regarded as having produced proof that the limits were exceeded. In fact, the estimates provided by the applicants in the course of the proceedings have varied somewhat. Thus, for the first quarter of 1955 the real cost of fat and 3/4 fat coal is 669 francs, although the diagram produced in an annex to the application showed a figure of 699 francs for the same period, which represents a difference of 30 francs between the estimate and the real figure for a target period of less than one year! Can it be accepted that the sum of 10 francs at which, on the most favourable hypothesis, the applicants arrive when they compare actual prices with the estimated costs for 1958, that is, three years later, is not within the limits of the area of uncertainty inherent in such estimates? I do not think so. In short, I consider that the applicants have not shown that the limits fixed by Article 26 (2)(a) for the reduction in prices have been infringed. I therefore suggest that the Court should set the sixth complaint aside.

The seventh and final complaint — The submission of misuse of powers

The High Authority is alleged to have adopted the contested decisions ‘in order to advance the aims of the economic policy of the Belgian Government’.

What were the aims of the economic policy of the Belgian Government? To obtain, by means of a further adjustment of the equalization arrangements, a further reduction in the price of industrial coal. The adjustment of the equalization arrangements was thus only a pretext, and the real aim pursued consisted in fostering the economic policy of a Member State. In support of that point reference is made to a whole series of statements made in Parliament by the Belgian Minister for Economic Affairs, of which the Court is aware.

In order to set that ground of complaint aside one might be tempted merely to point to the fact that the final aim of the equalization scheme is the integration of the Belgian coal market into the common market within the shortest period and that the High Authority has never pursued any other aim. If it has erred, it is rather through excess of zeal than insufficiency of action. Far from being evidence of misuse of powers, the fact that the objectives of its action in that area largely coincided with those of the Belgian Government shows that it was directed towards the achievement of the lawful aim, since integration is the common objective of the High Authority and the Belgian Government and they share responsibility for it.

Such an answer would, however, be inadequate and in my opinion the question is more difficult.

In fact, if one accepts what I have called the‘classic’ concept of misuse of powers (on which the parties agree), but gives it its full meaning, misuse of powers must be assessed not only in relation to the final aim, (that is, in this instance, the integration of the Belgian coal market into the common market) but also on the basis of the objective of the equalization scheme itself as defined in Article 26 (2)(a), since equalization is only one of a series of means provided for by the Convention in order to achieve integration. That is precisely the argument put forward by the applicants. They allege that the High Authority used its powers under Article 26 (2)(a) to achieve ends other than those which it was required to achieve under the terms of that provision, that is, in order to favour a certain policy adopted by the Belgian Government. We are told that the Government sought to obtain from the High Authority, by means of equalization, the fixing of exaggeratedly and artificially low prices for Belgian coal, at least for industrial coal, in order to satisfy the demands of consumers while replying to criticisms from the countries which pay the equalization levy, and that the High Authority gave way that pressure, thereby losing sight of the true aims of the equalization arrangements.

As I have already said, misuse of powers may arise only in so far as an authority enjoys a discretionary power and within the limits in which it may be exercised.

I can therefore exclude from the discussion all the points on which I have accepted that the questions at issue were questions of law which had to be dealt with as such by the Court: there is no need for me to return to them.

Of all the points in dispute, in relation to which did the High Authority use its discretionary power?

(a)

First of all, I hesitate to include among those points the very principle of selectivity on which the contested decisions are based. In fact, I wonder whether the High Authority was not obliged to resort to it and whether the first arrangement (distribution effected exclusively in proportion to amounts extracted, without any consideration of ‘need’) was really lawful — in other words, whether the change of principle really resulted from the exercise of the discretionary power. I consider, however, that the question is of no great importance and that even if one replies to it in the affirmative the misuse of powers alleged is in no way established. In order to accept that, it is sufficient to note that the Joint Committee, which was charged with examining the problem as a whole and particularly the possibility of a fresh adjustment of the equalization system, was set up on 18 February 1954, while the elections for the Belgian Parliament took place only on 11 April 1954 and the new Government was constituted only the following May. Those dates appear to me to render any comment superfluous.

(b)

As regards the assessment of the estimated production costs at the end of the transitional period, we have seen that in essence the action concerns the interpretation of the concept of ‘estimated production costs’ within the meaning of Article 26 (2)(a) and, to a certain extent, the findings of fact which result therefrom. There is no room in this instance for any misuse of powers.

(c)	There remains the price-fixing itself, carried out in accordance with the aim laid down by the text of bringing Belgian prices into line with the ruling common market prices.

On that point the High Authority clearly enjoyed a fairly wide measure of discretionary power within the limits that I have attempted to trace. First, it was required to make an effort merely ‘to bring prices into line’. Secondly, it was in no way obliged to do so all at once at the beginning of the transitional period. In the light of the necessarily approximate nature of the assessment of the various factors to be taken into account it was perfectly entitled to act with prudence, particularly at the beginning. In preserving a certain safety margin so as to avoid as far as possible having to raise once again the prices which had previously been reduced or to change the price table too often, it appears to have acted wisely. Nevertheless, in doing so, did it seek to sacrifice the legitimate interests of producers to the policy of the Belgian Government? None of the ‘objective factors’ appearing in the file allow it to be stated — I was going to say that it had such an intention but I shall now say: that such was the aim actually pursued by the High Authority. In that respect, the fact that long discussions took place between the Belgian Government and the High Authority is clearly not proof, especially since, as is noted in the rejoinder (at p. 38), ‘it is… a matter of common knowledge that, far from accepting, purely and simply, the views of the Belgian Government, the High Authority accepted only a reorganization of the equalization scheme which involved a smaller reduction in price than that proposed by the Belgian Government’. That statement has not been disputed.

In short, I consider that no proof has been produced of the existence of the misuse of powers alleged.

In conclusion, I propose that the Court should dismiss the applications and that the applicants should bear their own costs.

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( 1 ) Translated from the French.