In Case 25/62
PLAUMANN & Co., Hamburg, represented by Harald Ditges, advocate of the Cologne Bar, with an address for service in Luxembourg at the offices of Mr Audry, Fédération des Commerçants, 8 Avenue de l'Arsenal,
applicant,
v
COMMISSION OF THE EUROPEAN ECONOMIC COMMUNITY, represented by Hubert Ehring, Legal Adviser to the European Executives, acting as Agent, assisted by Ernst Steindorff, Professor of Law at the University of Tübingen, with an address for service in Luxembourg at the offices of Henri Manzanarès, Secretary of the Legal Service of the European Executives, 2 Place de Metz,
defendant,
Application for:
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annulment of the Decision No SIII 03079 of the Commission of 22 May 1962, refusing to authorize the Federal Republic of Germany to suspend in part customs duties applicable to ‘mandarins and Clementines, fresh’ imported from third countries; |
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payment of 39414,01 DM compensation; |
THE COURT
composed of: A. M. Donner, President, L. Delvaux and R. Lecourt (Presidents of Chambers), Ch. L. Hammes, R. Rossi (Rapporteur), A. Trabucchi and W. Strauß, Judges,
Advocate-General: K. Roemer
Registrar: A. Van Houtte
gives the following
JUDGMENT
Issues of fact and of law
I — Facts
The facts may be summarized as follows:
On 16 June 1961 the Federal Republic of Germany requested the Commission to authorize it to suspend the collection of the customs duty of 13 %, set out in the Common Customs Tariff, for fresh Clementines imported from third countries (tariff heading ex 08.02 of the Common Customs Tariff) and to apply the 10 % duty set out in the German customs tariff. This request was amended orally in Brussels so as to seek the creation of ‘an ex-tariff heading for Clementines’ with a 10 % duty applicable.
In its Decision No SIII 03079 of 22 May 1962 addressed to the Government of the Federal Republic of Germany, the Commission refused the authorization asked for. Against this Decision refusing the request, the applicant, a limited partnership, brought the present action on 30 July 1962.
II — Conclusions of the parties
The applicant claims that the Court should:
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Annul the Decision No SIII 03079 of the defendant of 22 May 1962 and
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declare that the defendant is obliged to compensate the applicant for future damage arising from the refusal to authorize partial suspension of the customs duty: |
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order the defendant to pay the costs; |
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accept German as the language of the case; |
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order the appearance of the Federal Republic of Germany.’ |
In its reply it claims that the Court should:
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annul the contested Decision; |
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order the defendant to pay compensation amounting to 43265,30 DM; |
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order the defendant to pay the costs; |
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accept German as the language of the case.’ |
The defendant contends that the Court should:
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dismiss the action as inadmissible and, alternatively, as unfounded; |
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order the applicant to pay the costs.’ |
III — Submissions and arguments of the parties
The submissions and arguments of the parties in the written procedure may be summarized as follows:
Before argument on admissibility and the substance of the claim the defendant protests against the complaints made by the applicant which in the defendant's view amount to an unfounded accusation that the Commission in making its decision was inspired by political motives and which could prejudice the Court against the defendant.
On Admissibility
The defendant disputes the admissibility of the application and contends as follows:
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On the request for annulment
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On the claim for compensation
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The applicant, after indicating its interest in a quick decision by the Court on the matter before it, advances the following arguments against the defendant :
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On the request for annulment
This loss is at the same time individual because:
The application further refers to the reasoning developed in Case 27/62. |
2. |
The claim for compensation On this claim, which is based on the second paragraph of Article 215 of the Treaty, it should be noted, on the one hand, that the conclusions in the application for a declaration that the Commission is obliged to make good future damage can no longer be maintained since the year 1962 is now past, and, on the other hand, that the damage in question now arises from the fact that no repayment of the increased customs duties has been granted to the applicant. The damage amounts to some 43265,30 DM from 1 August to 31 December 1962. A more accurate assessment has not in fact yet been possible. |
On the Substance
A — Request for annulment
The applicant puts forward three submissions: infringement of an essential procedural requirement, infringement of the Treaty and misuse of powers.
1. Infringement of an essential procedural requirement
The applicant observes on this matter that the Commission has partly limited itself to reproducing the conditions required by the Treaty without examining either the legal points or the facts mentioned by the Federal Republic of Germany. Moreover, the Decision in question makes no mention of any economic considerations and gives the impression that the Commission considers that it can rule on this issue as it thinks fit and by virtue of an absolute discretion.
The defendant on the other hand argues that the statement of reasons for a decision need neither refute nor examine critically other possible interpretations and that the Commission has mentioned in its Decision the decisive considerations and clearly indicated the factors on which it relied.
2. Infringement of the Treaty
Apart from the arguments mentioned above and in part those which it invokes concerning misuse of powers the applicant stresses more especially, as regards the submission of infringement of the Treaty, the following points:
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The conditions required by Article 25(3) of the Treaty for granting the authorizations therein provided are much less stringent than those required by paragraphs (1) and (2) of the same Article. |
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In the contested Decision, the commission has failed to deal with the fundamental question of disturbance of the market. In any event the statement therein that the other Member States are not in a position to meet the Federal Republic's quantitative requirements for clementines, is already enough to justify the measures asked for by the German Government. |
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Mandarins cannot take the place of clementines. |
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The increase in the duty applicable would not involve improved competitive capacity of Community undertakings. |
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The contested Decision refers to Regulation No 23 of the Council but this Regulation entered into force as from 30 July 1962 for the ‘extra’ commercial category. This reference does not appear relevant in the present case as regards imports of clementines in 1962. |
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In the contested Decision, the Commission has remained silent on Article 29(a) of the Treaty for the very good reason that if it had taken account of the aim set out in this provision it would have had difficulty in justifying its refusal to give the authorization. |
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The Decision of the commission is limited to a verbatim reproduction of Article 29(b) of the Treaty without a factual appraisal of the case in point. |
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The authorization asked for would not have adversely affected the aims set out in Article 29(d). |
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The contested Decision also infringes Article 39 (1)(d) of the Treaty since the increase in the duty raises the cost of supplying clementines and only up to 10 % of the supply can come from the Community Market. |
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The contested Decision moreover infringes Article 39(1)(e) of the Treaty because calculations made by the associations concerned show that the retail price will increase by 10 DM per 100 kg. |
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The commission's argument that a partial suspension of customs duties would have harmful psychological effects on the opening up of new plantations is unfounded. |
The applicant ends by referring in addition to the arguments put forward by the applicants in Cases 24/62 and 27/62.
The defendant raises doubts whether it is possible to invoke such a ground for complaint in cases where, as here, the administrative authority is not obliged to exercise a defined power but enjoys a discretionary power. In such cases the only conceivable ground of complaint against an administrative act is, in the defendant's view, that of misuse of powers. Nevertheless the defendant analyses this ground of complaint in case the Court should feel bound to accept the opposite view. It argues as follows:
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The applicant s argument that, as the production of clementines in the Common Market is insufficient, it is impossible to improve the competitive capacity of this market for the products in question appears to be directed against the exercise of the Commission's technical discretionary power in this matter. Moreover the applicant overlooks the fact that the attainment of the objective pursued by the Commission, that is to say, the setting up of new Clementine plantations and the improvement of the cultivation of mandarins is ensured by prohibiting any exceptions to the Common Customs Tariff applicable to these products. |
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The assertion by the applicant that mandarins cannot take the place of clementines is contradicted not only by the available statistics but also by the particulars supplied by the Federal Republic itself. |
3. Misuse of powers
The applicant adduces several arguments on this issue which have already been put forward or touched on in relation to the submission of infringement of the Treaty. In particular, it argues as follows:
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On the question whether in the present case the Commission enjoys a discretionary power, reference need only be made to the arguments put forward on this subject by the applicant in Case 34/62. |
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What the Commission wanted to achieve by the contested Decision was to substitute mandarins for clementines for consumption within the Community, and it is a matter for consideration whether the Commission can impose a fixed choice on the consumer. |
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By the term products concerned Article 25(3) clearly shows that any decision must take account of the market for the product for which a suspension of customs duties is requested and not of the entire market for all the products listed in Annex II. |
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The inadequacy of the statement of reasons on which the refusal is based creates the impression that the authorization in question was refused for political not economic reasons. The procedure followed by the Commission in consulting the Member States about the Federal government's request is contrary to Article 25(3) of the Treaty. |
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Agricultural policy as described by the defendant and as it appears from Regulation No 135 of the Commission seems to lean towards economic selfsufficiency. |
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The argument or the commission that the Common Customs Tariff forms a single unit to which no exceptions may be made save for a compelling reason has no force in relation to Article 25(3) of the Treaty. |
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From an examination or otner decisions taken within the framework of Article 25(3) of the Treaty it may be deduced that the requests made under this provision are often made the subject of ‘compensatory transactions’. |
The defendant on the other hand argues as follows:
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The condition set out in Article 25(3) of the Treaty for the authorization of a suspension of customs duties, that is to say, no ‘serious disturbance of the market of the products concerned’ should result from such a measure, is not the only condition to be taken into acount in applying that Article. The grant of a discretionary power to the Commission flows on the one hand from the very words of Article 25(3) of the Treaty, compared with the first subparagraph of each of paragraphs (1) and (2), in which the word ‘may’ does not appear, and on the other hand from the fact that paragraph (3) refers to agricultural products and thus touches on the agricultural policy of the Community for which the Treaty has laid down only certain objectives as binding, reserving the elaboration of the necessary measures for later negotiations and decisions. |
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In the exercise of this discretionary power the Commission, far from acting capriciously, has held to the principles which Articles 29 and 39 of the Treaty require it to observe. |
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As regards more especially the objective set out in Article 29(a) of the Treaty, it is to be noted that, since the Community must be considered as a single entity, the Commission had to take into account the trade of all Member States of the Community with third countries. |
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The defendant was also guided by the objective set out in Article 29(b) of the Treaty because this is an objective which appears too in the second paragraph of Article 110 of the Treaty in relation to the common commercial policy. |
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The ever increasing turnover in clementines has not so far been influenced to any appreciable extent by the increase in customs duties. |
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Equally the commission nas respected the objectives contained in Article 29(d) of the Treaty. |
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The arguments invoked on tne subject of Article 29(b) of the Treaty may also be invoked in respect of Article 39(1)(a). |
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As regards Article 39(1)(b), it is to be noted that the fair standard of living for the agricultural community must come first and foremost from a rationalization of production. |
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The objectives set out in Article 39(1)(c) and (d) have not been of vital importance in the present case. |
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The increase in prices brought about by the application of the customs tariff is such that supplies to consumers will still be available at reasonable prices. |
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No provision in Articles 25, 29 or 39 of the Treaty prohibits the Commission from taking account of the repercussions of decisions taken under Article 25(3) upon the market in products competing with those for which a suspension of customs duties is requested. |
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Lastly, the applicant has adduced no facts to substantiate the allegation of arbitrary and discriminatory treatment. |
B — The claim for compensation
The applicant contends that the damage suffered, amounting to some 43265.30 DM, has been assessed approximately because it has not in fact been possible to do all the calculations for the year 1962.
Moreover it has not been possible to pass on the increased customs charge.
Further, the question whether such a charge can be passed on to other persons or not has already been examined in the requests for an interim order for the suspension of the contested Decision.
The defendant on the contrary puts forward the following arguments:
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The request for compensation, made under the second paragraph of Article 215 of the Treaty, is based on a decision of the Commission which is not unlawful. |
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German, Belgian and Italian domestic law as well as the decisions of the Court require that an action for compensation be considered as well founded only if the administrative authority has infringed a rule of law operating for the protection of the applicant. Moreover, in the present case, the applicant has not indicated which such rule it claims has been infringed and it would be wrong to assume that Article 25(3) of the Treaty was intended to protect importers. |
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The claim is for compensation by way of repayment of amounts paid as customs duties, but the claim for compensation provided for by the second paragraph of Article 215 of the Treaty cannot have this form of restitution in view, since this is the logical consequence of the annulment of the contested Decision should the action be deemed admissible and well founded. |
IV — Procedure
By application of 16 August 1962, the applicant requested suspension of the contested Decision. A second application to the same effect was lodged on 6 December 1962. These two applications for an interim order were dismissed by order of the President on 31 August and 21 December 1962 respectively.
By application lodged on 28 August 1962 under Article 91 of the Rules of Procedure, the defendant raised a preliminary objection of the inadmissibility of the present action. By order of the Court of 24 October 1962 this objection was reserved for consideration in the final judgment.
By order of 6 December 1962 the Court decided to hear the parties orally on the admissibility of the conclusions in the application for an order for the appearance of the Federal Republic of Germany. In its written observations lodged on 21 December 1962, the applicant withdrew these conclusions. By order of 24 January 1963 the Court decided that it was no longer necessary to rule on the said conclusions.
In the course of the oral procedure the applicant assessed the damage alleged at 39414,01 DM.
Grounds of judgment
I — On the application for annulment
Admissibility
Under the second paragraph of Article 173 of the EEC Treaty ‘any natural or legal person may … institute proceedings against a decision … which, although in the form of … a decision addressed to another person, is of direct and individual concern to the former’. The defendant contends that the words ‘other person’ in this paragraph do not refer to Member States in their capacity as sovereign authorities and that individuals may not therefore bring an action for annulment against the decisions of the Commission or of the Council addressed to Member States.
However the second paragraph of Article 173 does allow an individual to bring an action against decisions addressed to ‘another person’ which are of direct and individual concern to the former, but this Article neither defines nor limits the scope of these words. The words and the natural meaning of this provision justify the broadest interpretation. Moreover provisions of the Treaty regarding the right of interested parties to bring an action must not be interpreted restrictively. Therefore, the Treaty being silent on the point, a limitation in this respect may not be presumed.
It follows that the defendant's argument cannot be regarded as well founded.
The defendant further contends that the contested decision is by its very nature a regulation in the form of an individual decision and therefore action against it is no more available to individuals than in the case of legislative measures of general application.
It follows however from Articles 189 and 191 of the EEC Treaty that decisions are characterized by the limited number of persons to whom they are addressed. In order to determine whether or not a measure constitutes a decision one must enquire whether that measure concerns specific persons. The contested Decision was addressed to the government of the Federal Republic of Germany and refuses to grant it authorization for the partial suspension of customs duties on certain products imported from third countries. Therefore the contested measure must be regarded as a decision referring to a particular person and binding that person alone.
Under the second paragraph of Article 173 of the Treaty private individuals may institute proceedings for annulment against decisions which, although addressed to another person, are of direct and individual concern to them, but in the present case the defendant denies that the contested decision is of direct and individual concern to the applicant.
It is appropriate in the first place to examine whether the second requirement of admissibility is fulfilled because, if the applicant is not individually concerned by the decision, it becomes unnecessary to enquire whether he is directly concerned.
Persons other than those to whom a decision is addressed may only claim to be individually concerned if that decision affects them by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and by virtue of these factors distinguishes them individually just as in the case of the person addressed. In the present case the applicant is affected by the disputed Decision as an importer of clementines, that is to say, by reason of a commercial activity which may at any time be practised by any person and is not therefore such as to distinguish the applicant in relation to the contested Decision as in the case of the addressee.
For these reasons the present action for annulment must be declared inadmissible.
II — On the action for compensation
Admissibility
The defendant maintains that the conclusions in the present action, having been formulated for the first time in the reply, were submitted out of time and are not therefore admissible under Article 38(1)(d) of the Rules of Procedure.
The applicant has however included in the application a request for a declaration with regard to the damage which may result from the contested Decision. In the course of the written and oral procedures, the applicant specified the subject matter of this request and set a value on the amount of the damage. Therefore the conclusions of the action for compensation may be considered as a permissible amplification of those contained in the application. They are therefore admissible under the above-mentioned Article 38(1)(d).
Substance
The conclusions of the applicant ask for payment of compensation equivalent to the customs duties and turnover tax which the applicant had to pay in consequence of the Decision against which it has at the same time instituted proceedings for annulment. In these circumstances it must be declared that the damage allegedly suffered by the applicant issues from this Decision and that the action for compensation in fact seeks to set aside the legal effects on the applicant of the contested Decision.
In the present case the contested Decision has not been annulled. An administrative measure which has not been annulled cannot of itself constitute a wrongful act on the part of the administration inflicting damage upon those whom it affects. The latter cannot therefore claim damages by reason of that measure. The Court cannot by way of an action for compensation take steps which would nullify the legal effects of a decision which, as stated, has not been annulled.
The action brought by the applicant must therefore be dismissed as unfounded.
III — Costs
Under the terms of Article 69(2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs.
The applicant having failed in its action must be ordered to bear the costs.
On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to the second paragraph of Article 173, Articles 176, 189, 191 and the second paragraph of Article 215 of the Treaty establishing the European Economic Community; Having regard to the Protocol on the Statute of the Court of Justice annexed to the Treaty establishing the European Economic Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, especially Article 69(2); THE COURT hereby: |
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DONNER DELVAUX LECOURT HAMMES ROSSI TRABUCCHI STRAUSS Delivered in open court in Luxembourg on 15 July 1963. A. VAN HOUTTE Registrar A. M. DONNER President |