61960J0002

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1 . FUNDAMENTAL AND PERSISTENT DISTURBANCES - DIRECT RELATIONSHIP BETWEEN ARTICLE 37 AND THE SECOND PARAGRAPH OF ARTICLE 2 OF THE ECSC TREATY - SCOPE OF ARTICLE 37

( ECSC TREATY, SECOND PARAGRAPH OF ARTICLE 2 AND ARTICLE 37 )

2 . FUNDAMENTAL AND PERSISTENT DISTURBANCES - ESSENTIAL AIM OF ARTICLE 37 - NATURE OF THE MEASURES ADOPTED BY THE HIGH AUTHORITY - REVIEW BY THE COURT

( ECSC TREATY, SECOND PARAGRAPH OF ARTICLE 2 AND ARTICLE 37 )

3 . FUNDAMENTAL AND PERSISTENT DISTURBANCES - CAPACITY TO RAISE THE MATTER WITH THE HIGH AUTHORITY

( ECSC TREATY, ARTICLE 37 )

4 . FUNDAMENTAL AND PERSISTENT DISTURBANCES - DECISIONS OF THE HIGH AUTHORITY - PROCEEDINGS UNDER THE THIRD PARAGRAPH OF ARTICLE 37 OF THE ECSC TREATY - RECOGNITION OF THE RIGHT OF MEMBER STATES TO INSTITUTE PROCEEDINGS

( ECSC TREATY, ARTICLE 37 )

5 . FUNDAMENTAL AND PERSISTENT DISTURBANCES - DECISIONS OF THE HIGH AUTHORITY - PROCEEDINGS INSTITUTED BY UNDERTAKINGS AND ASSOCIATIONS OF UNDERTAKINGS - INADMISSIBILITY

( ECSC TREATY, ARTICLES 33 AND 37 )

1 . ARTICLE 37 OF THE ECSC TREATY, WHICH IS IN DIRECT RELATION TO THE SECOND PARAGRAPH OF ARTICLE 2, ASSIGNS TO THE HIGH AUTHORITY, SUBJECT TO REVIEW BY THE COURT, AN EXCEPTIONAL POWER ENABLING IT TO DEAL WITH THE CONSEQUENCES ARISING FROM THE APPLICATION OF CLAUSES OF THE TREATY WHICH DO NOT SPECIFICALLY REFER TO THE EXISTENCE OR THE THREAT OF FUNDAMENTAL AND PERSISTENT DISTURBANCES .

2 . THE ESSENTIAL AIM OF ARTICLE 37 IS TO ALLOW FOR THE RECONCILIATION OF THE INTERESTS OF A MEMBER STATE AFFECTED BY THE EXISTENCE OF FUNDAMENTAL AND PERSISTENT DISTURBANCES OR THE THREAT OF THIS ( IN APPLICATION OF THE BASIC PROVISION SET OUT IN THE SECOND PARAGRAPH OF ARTICLE 2 ) AND THE GENERAL INTERESTS OF THE COMMUNITY . THE MEASURES ADOPTED TO THIS END BY THE HIGH AUTHORITY MUST BE NECESSARY AND APPROPRIATE AND MUST THEREFORE CONSTITUTE A PROPER REMEDY TO THE DISTURBED SITUATION WHILST SAFEGUARDING THE ESSENTIAL INTERESTS OF THE COMMUNITY .

THE SATISFACTION OF THESE CONDITIONS IS SUBJECT TO REVIEW BY THE COURT WHICH HAS BEEN GIVEN EXTREMELY WIDE POWERS IN THIS RESPECT .

3 . IT IS EVIDENT FROM THE WORDING OF THE FIRST PARAGRAPH OF ARTICLE 37 THAT THE RIGHT TO RAISE THE MATTER WITH THE HIGH AUTHORITY IS HELD EXCLUSIVELY BY THE STATE IN WHICH THE DISTURBED SITUATION HAS APPEARED OR HAS THREATENED TO APPEAR .

4 . ONLY THE MEMBER STATE CONCERNED MAY INSTITUTE PROCEEDINGS AGAINST THE EXPRESS OR IMPLIED REFUSAL OF THE HIGH AUTHORITY TO ACCEDE TO ITS REQUEST OR AGAINST A DECISION ADOPTING MEASURES WHICH IT REGARDS AS BEING INSUFFICIENT .

THE OTHER MEMBER STATES ALSO HAVE THE CAPACITY TO INSTITUTE PROCEEDINGS UNDER THE THIRD PARAGRAPH OF ARTICLE 37 TO CONTEST THE EXISTENCE OF DISTURBANCES OR THE NECESSITY AND APPROPRIATENESS OF MEASURES ADOPTED BY THE HIGH AUTHORITY .

5 . ON THE OTHER HAND, UNDERTAKINGS DO NOT HAVE THE RIGHT TO RELY ON THE THIRD PARAGRAPH OF ARTICLE 37 SINCE PROCEEDINGS UNDER THIS PROVISION PUT IN QUESTION THE POLITICAL RESPONSIBILITY OF THE MEMBER STATES AND OF THE HIGH AUTHORITY, PARTICULARLY IN RESPECT OF RECONCILIATION OF THE GENERAL INTEREST OF A MEMBER STATE WITH THE GENERAL INTEREST OF THE COMMUNITY .

UNDERTAKINGS AND ASSOCIATIONS OF UNDERTAKINGS ALSO HAVE NO RIGHT, BY VIRTUE OF ARTICLE 33 ON ITS OWN OR IN CONJUNCTION WITH ARTICLE 37, TO CONTEST A DECISION TAKEN BY THE HIGH AUTHORITY UNDER THE SECOND PARAGRAPH OF ARTICLE 37 SINCE ANY JUDGMENT OF THE HIGH AUTHORITY'S USE OF THE SPECIAL POWER ASSIGNED TO IT BY ARTICLE 37 SHOULD IN ANY EVENT BE BASED NOT ON THE PROVISIONS OF ARTICLE 33 BUT ON THOSE OF ARTICLE 37 .

IN JOINED CASES

NIEDERRHEINISCHE BERGWERKS-AKTIENGESELLSCHAFT, 29 JAGERHOFSTRASSE, DUSSELDORF,

( CASE 2/60 ),

UNTERNEHMENSVERBAND DES AACHENER STEINKOHLENBERGBAUES, E . V ., 5, GOETHESTRASSE, AACHEN,

( CASE 3/60 ), APPLICANT,

REPRESENTED BY PROFESSOR KONRAD ZWEIGERT, 187 MITTELWEG, HAMBURG 13, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF PHILIPPE BENNECKE, 2 RUE DU FORT-ELISABETH,

V

HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, DEFENDANT,

REPRESENTED BY ITS LEGAL ADVISER, WALTER MUCH, ACTING AS AGENT, ASSISTED BY PROFESSOR ADOLF SCHULE, 17 BEI DER OCHSENWEIDE, TUBINGEN, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2 PLACE DE METZ,

APPLICATION FOR THE ANNULMENT OF ARTICLES 1, 3 AND 5 OF DECISION N . 46/59 OF THE HIGH AUTHORITY OF 23 DECEMBER 1959, AMENDED BY DECISION N . 1/60 OF 18 JANUARY 1960 .

P . 144

IN ORDER TO RESOLVE THE QUESTIONS OF ADMISSIBILITY RAISED IN THE PRESENT CASE IT IS FIRST NECESSARY TO DEFINE THE SCOPE OF ARTICLE 37 .

ARTICLE 37 IS IN DIRECT RELATION TO THE SECOND PARAGRAPH OF ARTICLE 2 .

THE LATTER PROVISION STIPULATES THAT THE ACTION OF THE COMMUNITY SHALL 'PROGRESSIVELY BRING ABOUT CONDITIONS WHICH WILL OF THEMSELVES ENSURE THE MOST RATIONAL DISTRIBUTION OF PRODUCTION AT THE HIGHEST POSSIBLE LEVEL OF PRODUCTIVITY WHILE...TAKING CARE NOT TO PROVOKE FUNDAMENTAL AND PERSISTENT DISTURBANCES IN THE ECONOMIES OF MEMBER STATES '.

NEVERTHELESS THE AUTHORS OF THE TREATY OBSERVED THAT IN CERTAIN CASES 'ACTION OR FAILURE TO ACT ON THE PART OF THE HIGH AUTHORITY' COULD BE 'OF SUCH A NATURE AS TO PROVOKE FUNDAMENTAL AND PERSISTENT DISTURBANCES IN' THE ECONOMY OF A MEMBER STATE ( FIRST PARAGRAPH OF ARTICLE 37 ).

THEY THEREFORE CONSIDERED IT NECESSARY TO ASSIGN TO THE HIGH AUTHORITY, SUBJECT TO REVIEW BY THE COURT, AN EXCEPTIONAL POWER ENABLING IT TO GUARD AGAINST THE CONSEQUENCES WHICH MIGHT RESULT FROM THE APPLICATION OF THE TREATY PROVISIONS WHICH DO NOT SPECIFICALLY REFER TO THE EXISTENCE OR THE THREAT OF FUNDAMENTAL AND PERSISTENT DISTURBANCES .

IT IS EVIDENT FROM THE WORDING OF THE FIRST PARAGRAPH OF ARTICLE 37 THAT THE RIGHT TO RAISE THE MATTER WITH THE HIGH AUTHORITY IS HELD EXCLUSIVELY BY THE STATE IN WHICH THE DISTURBED SITUATION HAS APPEARED OR HAS THREATENED TO APPEAR .

IN FACT ONLY THE MEMBER STATE CONCERNED IS CAPABLE OF APPRECIATING WHETHER THE ECONOMIC SITUATION REQUIRES APPLICATION OF ARTICLE 37 .

THE SECOND PARAGRAPH OF ARTICLE 37 GIVES THE HIGH AUTHORITY THE POWER TO RECOGNIZE THE EXISTENCE OF A DISTURBED SITUATION AND, IF THIS IS THE CASE, TO TAKE APPROPRIATE MEASURES .

THE THIRD PARAGRAPH OF ARTICLE 37 PROVIDES THAT BOTH THE DECISION TAKEN BY THE HIGH AUTHORITY UNDER THE SECOND PARAGRAPH AFTER THE MATTER HAS BEEN RAISED WITH IT BY THE MEMBER STATE CONCERNED AND THE EXPRESS OR IMPLIED DECISION REFUSING TO RECOGNIZE THE EXISTENCE OF A DISTURBED SITUATION MAY BE THE SUBJECT OF PROCEEDINGS IN THE COURT WHICH HAS EXTREMELY WIDE POWERS OF REVIEW .

THE THIRD PARAGRAPH OF ARTICLE 37 DOES NOT SPECIFY WHO MAY BRING THESE PROCEEDINGS .

P . 145

AS THE PROVISION IS SILENT IN THIS RESPECT, IT IS NECESSARY FOR ASSESSMENT OF THE ADMISSIBILITY OF THE PRESENT PROCEEDINGS TO EXAMINE WHETHER ANY LOGICAL ARGUMENTS REQUIRE THE RIGHT OF APPEAL TO THE COURT IN THIS RESPECT TO BE RESTRICTED .

IT IS CLEAR THAT ONLY THE MEMBER STATE CONCERNED MAY INSTITUTE PROCEEDINGS AGAINST AN EXPRESS OR IMPLIED DECISION REFUSING TO RECOGNIZE A DISTURBED SITUATION SINCE ONLY THE MEMBER STATE HAS THE RIGHT TO RAISE THE MATTER WITH THE HIGH AUTHORITY AND THEREFORE ONLY THE MEMBER STATE CAN SHOW AN INTEREST JUSTIFYING PROCEEDINGS .

FOR THE SAME REASONS THE RIGHT TO INSTITUTE PROCEEDINGS AGAINST A DECISION WHEREBY THE HIGH AUTHORITY HAS ADOPTED MEASURES WHICH THE MEMBER STATE CONCERNED REGARDS AS BEING INSUFFICIENT MAY ONLY BE OPEN TO THAT STATE .

NEVERTHELESS A DECISION TAKEN BY THE HIGH AUTHORITY UNDER THE SECOND PARAGRAPH OF ARTICLE 37 WHICH DOES NOT DETRIMENTALLY AFFECT THE MEMBER STATE CONCERNED MAY HARM THE INTERESTS OF OTHER MEMBER STATES OR OF UNDERTAKINGS WITHIN THE JURISDICTION OF THE COMMUNITY .

IN ORDER TO ASSESS WHETHER BY THEIR VERY NATURE PROCEEDINGS INSTITUTED UNDER THE THIRD PARAGRAPH OF ARTICLE 37 BY OTHER MEMBER STATES OR BY COMMUNITY UNDERTAKINGS MAY BE REGARDED AS ADMISSIBLE OR WHETHER THE RIGHT TO INSTITUTE SUCH PROCEEDINGS MUST BE RESERVED SOLELY TO OTHER MEMBER STATES, THE COURT MUST EXAMINE IN DETAIL THE POWERS ASSIGNED TO THE HIGH AUTHORITY BY THE SECOND PARAGRAPH OF ARTICLE 37, ON THE ONE HAND, AND THE POWERS RESERVED TO THE COURT BY THE THIRD AND FOURTH PARAGRAPHS OF THE SAME ARTICLE, ON THE OTHER .

THE ESSENTIAL AIM OF ARTICLE 37 IS TO ALLOW FOR THE RECONCILIATION OF THE INTERESTS OF A MEMBER STATE AFFECTED BY THE EXISTENCE OF FUNDAMENTAL AND PERSISTENT DISTURBANCES OR THE THREAT OF THIS ( IN APPLICATION OF THE BASIC PROVISION SET OUT IN THE SECOND PARAGRAPH OF ARTICLE 2 ) AND THE GENERAL INTERESTS OF THE COMMUNITY .

THE SECOND REQUIREMENT IS EMPHASIZED BY THE CLAUSE IN THE SECOND PARAGRAPH 'WHILE AT THE SAME TIME SAFEGUARDING THE ESSENTIAL INTERESTS OF THE COMMUNITY '.

THE EXCEPTIONAL POWER ASSIGNED TO THE HIGH AUTHORITY BY ARTICLE 37 IS NOT WITHOUT LIMITS .

THESE LIMITS MAY BE DEDUCED FROM THE EXCEPTIONAL NATURE OF THE POWERS ASSIGNED TO THE HIGH AUTHORITY AND ARE MOREOVER SPECIFIED IN THE CLAUSE 'WHILE AT THE SAME TIME SAFEGUARDING THE ESSENTIAL INTERESTS OF THE COMMUNITY '.

P . 146

THEREFORE THE MEASURES ADOPTED BY THE HIGH AUTHORITY MUST BE NECESSARY AND APPROPRIATE AND MUST THEREFORE, ON THE ONE HAND, CONSTITUTE A PROPER REMEDY TO THE DISTURBED SITUATION CAUSED BY ITS ACTION OR FAILURE TO ACT AND, ON THE OTHER HAND, SAFEGUARD THE ESSENTIAL INTERESTS OF THE COMMUNITY .

THE SATISFACTION OF THESE CONDITIONS IS SUBJECT TO REVIEW BY THE COURT WHICH HAS BEEN GIVEN EXTREMELY WIDE POWERS IN THIS RESPECT .

THESE FACTORS ARE SUFFICIENT TO DETERMINE THE ADMISSIBILITY OF THE ACTION ALTHOUGH IT IS NOT AT THIS STAGE POSSIBLE TO EXAMINE WHETHER OR NOT IN THE PRESENT CASE THE HIGH AUTHORITY EXCEEDED THE LIMITS IN QUESTION .

CONSEQUENTLY, WHERE A MEMBER STATE BELIEVES THAT IT IS FACED WITH FUNDAMENTAL AND PERSISTENT DISTURBANCES, THE POWER TO ARBITRATE BETWEEN THE PARTICULAR INTERESTS OF THAT STATE AND THE GENERAL INTERESTS OF THE COMMUNITY AND TO SEEK APPROPRIATE REMEDIES IS ENTRUSTED, SUBJECT TO THE REVIEW OF THE COURT, TO THE HIGH AUTHORITY WHICH NECESSARILY ENTAILS ASSIGNMENT OF EXCEPTIONAL POWERS .

PROCEEDINGS INSTITUTED AGAINST A DECISION TAKEN BY THE HIGH AUTHORITY UNDER ARTICLE 37 ACCEDING TO THE REQUEST OF A MEMBER STATE WHICH THOUGHT THAT ITS ECONOMY WAS AFFECTED BY FUNDAMENTAL AND PERSISTANT DISTURBANCES REQUIRE AN ASSESSMENT OF THE ECONOMIC POSITION OF THE MEMBER STATES AND IN ADDITION NECESSITATES EXAMINATION OF WHETHER, IN VIEW OF THIS SITUATION, THE MEASURES ADOPTED MIGHT BE CONSIDERED TO BE NECESSARY AND APPROPRIATE .

THESE PROCEEDINGS ALSO PUT IN QUESTION THE POLITICIAL RESPONSIBILITIES OF THE GOVERNMENTS OF THE MEMBER STATES AND OF THE HIGH AUTHORITY, PARTICULARLY IN RESPECT OF RECONCILIATION OF THE GENERAL INTEREST OF A MEMBER STATE WITH THE GENERAL INTEREST OF THE COMMUNITY .

IN THESE CIRCUMSTANCES UNDERTAKINGS OR ASSOCIATIONS OF UNDERTAKINGS CANNOT BE REGARDED AS HAVING THE RIGHT TO RELY ON THE THIRD PARAGRAPH OF ARTICLE 37 .

ON THE OTHER HAND, FOR THE REASONS SET OUT ABOVE THE ABILITY TO INSTITUTE THE PROCEEDINGS REFERRED TO IN THE THIRD PARAGRAPH OF ARTICLE 37 MUST BE GRANTED NOT ONLY TO THE MEMBER STATE WHICH RAISED THE MATTER WITH THE HIGH AUTHORITY BUT ALSO TO THE OTHER MEMBER STATES .

THIS INTERPRETATION IS CONFIRMED BY THE SECOND PARAGRAPH OF ARTICLE 37 WHICH OBLIGES THE HIGH AUTHORITY, BEFORE MAKING A DECISION ON THE REQUEST SUBMITTED BY THE MEMBER STATE CONCERNED, MERELY TO CONSULT THE COUNCIL WITHOUT BEING BOUND BY ITS OPINION .

P . 147

IN VIEW OF THE IMPORTANCE OF THE INTERESTS WHICH MAY BE CONCERNED, THIS SITUATION IS ONLY EXPLICABLE IF IT IS ACCEPTED THAT ANY MEMBER STATE WHICH DOES NOT AGREE WITH THE OPINION OF THE HIGH AUTHORITY HAS THE RIGHT TO BRING THE MATTER BEFORE THE COURT AND TO REQUEST IT TO DECIDE WHETHER THE MEASURES IN QUESTION ARE WELL FOUNDED AND APPROPRIATE .

THIS INTERPRETATION IS PERFECTLY COMPATIBLE WITH THE REFUSAL TO GRANT UNDERTAKINGS A RIGHT OF ACTION, IN VIEW OF THE FACT THAT MEMBER STATES WHICH ARE BY THEIR VERY NATURE IN A POSITION TO SUPPLY ALL THE NECESSARY INFORMATION FOR A DETAILED EXAMINATION BY THE COURT AND WHICH, AS THEY SIT ON THE COUNCIL, ARE EQUALLY RESPONSIBLE FOR THE SAFEGUARDING OF THE ESSENTIAL INTERESTS OF THE COMMUNITY, ARE ABLE TO INTERVENE IN ORDER TO PROTECT PUBLIC INTERESTS IN THE SAME WAY AS THOSE OF THE APPLICANT STATE .

THIS INTERPRETATION IS CONFIRMED BY THE DEBATES WHICH TOOK PLACE IN THE NETHERLANDS PARLIAMENT AT THE TIME OF THE RATIFICATION OF THE TREATY ( PARLIAMENTARY YEAR 1950/1951, N . 2228, P . 86 ).

SINCE, FOR THE REASONS SET OUT ABOVE, PROCEEDINGS BROUGHT BY UNDERTAKINGS OR ASSOCIATIONS OF UNDERTAKINGS UNDER ARTICLE 37 ARE NOT ADMISSIBLE, IT REMAINS TO EXAMINE WHETHER THE UNDERTAKINGS OR ASSOCIATIONS OF UNDERTAKINGS ARE ABLE, BY VIRTUE OF ARTICLE 33 ON ITS OWN OR IN CONJUNCTION WITH ARTICLE 37, TO CONTEST A DECISION TAKEN BY THE HIGH AUTHORITY UNDER THE SECOND PARAGRAPH OF ARTICLE 37 .

THE CONDITIONS FOR THE APPLICATION OF ARTICLE 37 ARE CLOSELY INTER-RELATED AND CANNOT THEREFORE BE EXAMINED SEPARATELY; THUS ANY JUDGMENT IS ONLY POSSIBLE IN EXERCISE OF THE SPECIAL POWERS CONFERRED ON THE COURT BY ARTICLE 37 .

CONSEQUENTLY, PROCEEDINGS INSTITUTED UNDER ARTICLE 37 IN CONJUNCTION WITH ARTICLE 37 ARE NOT POSSIBLE SINCE THEY NECESSARILY ENTAIL AN ASSESSMENT BOTH OF THE EXISTENCE OF THE DISTURBED SITUATION RECOGNIZED BY THE HIGH AUTHORITY AND THE NECESSITY AND APPROPRIATENESS OF THE DECISION ADOPTED BY THE HIGH AUTHORITY .

FURTHERMORE, PROCEEDINGS BROUGHT UNDER ARTICLE 33 IN ISOLATION ARE ALSO NOT POSSIBLE .

P . 148

SUCH PROCEEDINGS COULD NOT MERELY MAINTAIN THAT A DECISION ADOPTED BY THE HIGH AUTHORITY PURSUANT TO THE SECOND PARAGRAPH OF ARTICLE 37 IS NOT IN CONFORMITY WITH THE OTHER PROVISIONS OF THE TREATY SINCE IT WOULD ALSO REQUIRE THE COURT TO EXAMINE WHETHER THE DECISION IS NEVERTHELESS JUSTIFIED BY ARTICLE 37 .

IN THESE CIRCUMSTANCES IT MUST BE EXAMINED WHETHER THE MEASURES ADOPTED BY THE DECISION ARE IN FACT NECESSARY AND APPROPRIATE TO REMEDY A DISTURBED SITUATION AFFECTING THE ECONOMY OF ONE MEMBER STATE AND WHETHER IN ADDITION THEY SAFEGUARD THE ESSENTIAL INTERESTS OF THE COMMUNITY .

CONSEQUENTLY THE JUDGMENT COULD NO LONGER BE BASED ON THE PROVISIONS OF ARTICLE 33 BUT ON THOSE OF ARTICLE 37 .

IN OTHER WORDS PROCEEDINGS WHICH COULD ENTAIL A JUDGMENT OF ANNULMENT PURSUANT TO ARTICLE 33 CANNOT HAVE THIS EFFECT IF THE DECISION AT ISSUE IS TAKEN PURSUANT TO ARTICLE 37 SINCE THE SPECIAL POWER ASSIGNED TO THE HIGH AUTHORITY ENABLES IT TO ACT BEYOND THE NORMAL SCOPE OF ITS POWERS .

THEREFORE THE PROCEEDINGS INSTITUTED BY THE APPLICANTS MUST BE DECLARED TO BE INADMISSIBLE, EVEN IF THEY ARE REGARDED AS BEING BROUGHT UNDER ARTICLE 33 IN CONJUNCTION WITH ARTICLE 37 OR UNDER ARTICLE 33 ALONE .

IN VIEW OF THE COMPLEXITY OF THE QUESTIONS RAISED AND HAVING REGARD TO THE FIRST SUBPARAGRAPH OF ARTICLE 69 ( 3 ) OF THE RULES OF PROCEDURE THE COURT SEES FIT TO ORDER THE PARTIES TO BEAR THEIR OWN COSTS .

THE COURT

HEREBY :

1 . DECLARES APPLICATIONS 2/60 AND 3/60 FOR THE ANNULMENT OF ARTICLES 1, 3 AND 5 OF DECISION N . 46/59 OF THE HIGH AUTHORITY OF 23 JANUARY 1959, AS AMENDED BY DECISION N . 1/60 OF 18 JANUARY 1960, TO BE INADMISSIBLE .

2 . ORDERS THE PARTIES TO BEAR THEIR OWN COSTS .