61982J0317

1 . ECSC - PRODUCTION - QUOTA SYSTEM - ETABLISHMENT ON AN EQUITABLE BASIS - ADJUSTMENT OF REFERENCE PRODUCTION - CONDITIONS - RESTRICTION TO CATEGORIES SUBJECT TO A HIGH ABATEMENT RATE

( COMMISSION DECISION 1696/82 , ART . 14 )

2 . ECSC - PRODUCTION - QUOTA SYSTEM - ESTABLISHMENT ON AN EQUITABLE BASIS - ADJUSTMENT OF REFERENCE PRODUCTION - CONDITIONS - TAKING INTO ACCOUNT OF THE ABATEMENT RATE APPLICABLE TO EACH OF THE CATEGORIES OF PRODUCTS REFERRED TO

( COMMISSION DECISION 1696/82 , ART . 14 )

1 . ARTICLE 14 OF DECISION 1696/82/ECSC PROVIDES LIMITED SCOPE FOR ADJUSTING THE QUOTAS SOLELY WHEN AN UNDERTAKING EXPERIENCES ' ' EXCEPTIONAL DIFFICULTIES ' ' ' ' BY VIRTUE OF THE SCALE OF THE ABATEMENT RATES ' ' . IN THOSE CIRCUMSTANCES THE COMMISSION IS REQUIRED TO TAKE INTO CONSIDERATION THE SPECIAL SITUATION IN EACH CASE IN ORDER TO DETERMINE WHETHER THE UNDERTAKING IN QUESTION IS CONFRONTED WITH EXCEPTIONAL DIFFICULTIES RESULTING FROM THE REDUCTIONS IN PRODUCTION IMPOSED ON IT .

ACCORDINGLY ONLY DIFFICULTIES WHICH ARE THE DIRECT CONSEQUENCE OF THE ESTABLISHMENT AND APPLICATION OF THE QUOTA SYSTEM MAY BE CONSIDERED WHEN ARTICLE 14 IS APPLIED . IT FOLLOWS THAT IT IS ONLY FOR CATEGORIES THE SUBJECT OF A HIGH ABATEMENT RATE THAT AN ADJUSTMENT MAY IN EXCEPTIONAL CIRCUMSTANCES BECOME NECESSARY . ANY OTHER SOLUTION WOULD HAVE ARBITRARY RESULTS IN SO FAR AS IT WOULD ALLOW THE ADJUSTMENT OF REFERENCE PRODUCTION OF CATEGORIES LEAST AFFECTED BY THE SYSTEM OF RESTRICTION OF PRODUCTION SOLELY IN ORDER TO COUNTERACT THE DIFFICULTIES INVOLVED IN APPLYING HIGH ABATEMENT RATES TO OTHER CATEGORIES .

2.ARTICLE 14 OF DECISION 1696/82 DOES NOT EXPRESSLY IMPOSE AN OBLIGATION ON THE COMMISSION TO ADJUST REFERENCE PRODUCTIONS OF ALL CATEGORIES IA TO ID WHEN THE CONDITIONS IN THAT ARTICLE ARE SATISFIED . THAT IS TRUE EVEN THOUGH THE ARTICLE PROVIDES FOR ' ' SUITABLE ADJUSTMENTS TO ITS REFERENCE PRODUCTION . . . FOR THE CATEGORY IN QUESTION ' ' . THE EXPRESSION ' ' CATEGORY IN QUESTION ' ' USED IN THE AFORESAID ARTICLE 14 REFERS NOT TO ALL CATEGORIES IA TO ID BUT ONLY TO THOSE MENTIONED AT THE BEGINNING OF THE PROVISION , THE ABATEMENT RATES OF WHICH ARE OF A SCALE WHICH MAY CREATE EXCEPTIONAL DIFFICULTIES FOR THE UNDERTAKING .

IN CASE 317/82

USINES GUSTAVE BOEL , A BELGIAN LIMITED LIABILITY COMPANY HAVING ITS REGISTERED OFFICE IN BRUSSELS ,

FABRIQUE DE FER DE MAUBEUGE , A FRENCH LIMITED LIABILITY COMPANY HAVING ITS REGISTERED OFFICE IN LOUVROIL ( NORD ), FRANCE ,

BOTH REPRESENTED BY E . GUTT OF THE BRUSSELS BAR , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF J . LOESCH , 2 RUE GOETHE ,

APPLICANTS ,

V

COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY ITS PRINCIPAL LEGAL ADVISER , DONALD W . ALLEN , AND BY ITS LEGAL ADVISER , ETIENNE LASNET , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ORESTE MONTALTO , A MEMBER OF ITS LEGAL DEPARTMENT , JEAN MONNET BUILDING , KIRCHBERG ,

DEFENDANT ,

APPLICATION FOR A DECLARATION THAT THE COMMISSION DECISION OF 26 NOVEMBER 1982 , NOTIFIED BY TELEX MESSAGE OF THE SAME DAY AND CONFIRMED BY LETTER OF 3 DECEMBER 1982 , ON A PROCEDURE FOR THE APPLICATION OF ARTICLE 14 OF COMMISSION DECISION 1696/82/ECSC OF 30 JUNE 1982 ON THE EXTENSION OF THE SYSTEM OF MONITORING AND PRODUCTION QUOTAS FOR CERTAIN PRODUCTS OF UNDERTAKINGS IN THE STEEL INDUSTRY ( OFFICIAL JOURNAL L 191 , 1 . 7 . 1982 , P . 1 ), IS VOID ,

1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 13 DECEMBER 1982 THE LIMITED LIABILITY COMPANY USINES GUSTAVE BOEL , INCORPORATED UNDER BELGIAN LAW , AND THE LIMITED LIABILITY COMPANY FABRIQUE DE FER DE MEUBEUGE , INCORPORATED UNDER FRENCH LAW , BROUGHT AN ACTION UNDER THE SECOND PARAGRAPH OF ARTICLE 33 OF THE ECSC TREATY FOR A DECLARATION OF THE NULLITY OF THE INDIVIDUAL COMMISSION DECISION OF 26 NOVEMBER 1982 ON A PROCEDURE FOR THE APPLICATION OF ARTICLE 14 OF COMMISSION DECISION 1696/82/ECSC OF 30 JUNE 1982 ON THE EXTENSION OF THE SYSTEM OF MONITORING AND PRODUCTION QUOTAS FOR CERTAIN PRODUCTS OF UNDERTAKINGS IN THE STEEL INDUSTRY ( OFFICIAL JOURNAL L 191 , 1 . 7 . 1982 , P . 1 ).

2 ARTICLE 14 OF DECISION 1696/82/ECSC PROVIDES :

' ' IF , BY VIRTUE OF THE SCALE OF THE ABATEMENT RATES SET IN RESPECT OF A GIVEN QUARTER , THE QUOTA SYSTEM CREATES EXCEPTIONAL DIFFICULTIES FOR AN UNDERTAKING , THE COMMISSION SHALL MAKE SUITABLE ADJUSTMENTS TO ITS REFERENCE PRODUCTION AND/OR REFERENCE QUANTITIES FOR THE CATEGORY IN QUESTION , PROVIDED THAT THE UNDERTAKING MAKES AN APPLICATION TO THIS EFFECT DURING THE FIRST TWO MONTHS OF THE RELEVANT QUARTER IN THE FOLLOWING INSTANCES :

THE TOTAL REFERENCE PRODUCTION FOR CATEGORIES IA TO ID AMOUNTS TO LESS THAN 1 000 000 TONNES A YEAR AND AT LEAST 75% RELATES TO PRODUCTS WHERE THE ABATEMENT RATE FOR ONE OR MORE OF THESE CATEGORIES EXCEEDS 20% ; OR

THE TOTAL REFERENCE PRODUCTION FOR CATEGORIES IV , V AND VI AMOUNTS TO LESS THAN 100 000 TONNES AND THE ABATEMENT RATE FOR ONE OR MORE OF THESE CATEGORIES EXCEEDS 20% . ' '

3 BY LETTERS DATED 6 OCTOBER AND 2 NOVEMBER 1982 THE APPLICANTS ASKED THE COMMISSION TO APPLY THAT PROVISION TO THEM FOR THE FOURTH QUARTET OF 1982 IN RESPECT OF CATEGORIES IA , IB , IC AND ID . ACCORDING TO THE APPLICANTS THE TOTAL REFERENCE PRODUCTION OF CATEGORIES IA TO ID IN THEIR UNDERTAKINGS WAS LESS THAN 1 000 000 TONNES PER ANNUM AND AMOUNTED FOR THAT QUARTER TO MORE THAN 75% OF PRODUCTS THE ABATEMENT RATES FOR WHICH EXCEEDED 20% .

4 THE COMMISSION ACCEDED TO THE REQUEST IN RESPECT OF CATEGORIES IA AND IB THE ABATEMENT RATES OF WHICH WERE RESPECTIVELY 44% AND 42% BUT DID NOT ACCEDE TO THE APPLICANTS ' REQUEST IN RESPECT OF CATEGORY ID IN SO FAR AS THAT HAD A POSITIVE ABATEMENT RATE . ON THE OTHER HAND IT REJECTED THE APPLICATION IN RESPECT OF CATEGORY IC ' ' ON THE GROUND THAT PRODUCTS OF CATEGORY IC ARE NOT SUBJECT TO AN ABATEMENT RATE OF AT LEAST 20% FOR THE CURRENT QUARTER ' ' . THE ABATEMENT RATE FOR PRODUCTS OF CATEGORY IC IN THE FOURTH QUARTER OF 1982 HAD BEEN FIXED AT ONLY 16% BY COMMISSION DECISION 2585/82/ECSC OF 22 SEPTEMBER 1982 ( OFFICIAL JOURNAL L 275 , 25 . 9 . 1982 ).

5 THE ACTION BY THE APPLICANTS THEREFORE SEEKS TO HAVE THE COMMISSION DECISION DECLARED VOID SOLELY IN RESPECT OF THE REFUSAL TO ADJUST THE REFERENCE PRODUCTION IN RESPECT OF CATEGORY IC PRODUCTS .

6 THE APPLICANTS MAKE THE SINGLE SUBMISSION OF INFRINGEMENT OF ARTICLE 14 OF COMMISSION DECISION 1696/82/ECSC OF 30 JUNE 1982 AND ARTICLE 58 OF THE ECSC TREATY . IN THEIR VIEW BY REFUSING TO ADJUST THE REFERENCE PRODUCTION IN RESPECT OF CATEGORY IC PRODUCTS ON THE SOLE GROUND THAT CATEGORY IC PRODUCTS WERE NOT SUBJECT TO AN ABATEMENT RATE OF AT LEAST 20% FOR THE CURRENT QUARTER THE COMMISSION ADDED TO ARTICLE 14 A CONDITION WHICH IT DOES NOT CONTAIN . ACCORDING TO THAT ARTICLE IT SUFFICES FOR 75% OF THE TOTAL REFERENCE PRODUCTION OF CATEGORIES IA TO ID TO RELATE TO PRODUCTS THE ABATEMENT RATES OF WHICH EXCEED 20% AND IT IS NOT AT ALL NECESSARY FOR THE ABATEMENT RATES OF EACH OF THE CATEGORIES TO EXCEED THAT THRESHOLD . IN SUPPORT OF THAT SUBMISSION THE APPLICANTS CLAIM THAT ANY MEASURE APPLYING ARTICLE 58 OF THE ECSC TREATY MUST BE STRICTLY OBSERVED SINCE IT CONSTITUTES A DEROGATION FROM THE NORMAL WORKING OF THE MARKET .

7 THAT SUBMISSION CANNOT BE UPHELD . ARTICLE 14 OF DECISION 1696/82/ECSC , ACCORDING TO ITS WORDING , PROVIDES LIMITED SCOPE FOR ADJUSTING THE QUOTAS SOLELY WHEN AN UNDERTAKING EXPERIENCES ' ' EXCEPTIONAL DIFFICULTIES ' ' ' ' BY VIRTUE OF THE SCALE OF THE ABATEMENT RATES ' ' . IN THOSE CIRCUMSTANCES THE COMMISSION IS REQUIRED TO TAKE INTO CONSIDERATION THE SPECIAL SITUATION IN EACH CASE IN ORDER TE DETERMINE WHETHER THE UNDERTAKING IN QUESTION IS CONFRONTED WITH EXCEPTIONAL DIFFICULTIES RESULTING FROM THE REDUCTIONS IN PRODUCTION IMPOSED ON IT . ACCORDINGLY ONLY DIFFICULTIES WHICH ARE THE DIRECT CONSEQUENCE OF THE ESTABLISHMENT AND APPLICATION OF THE QUOTA SYSTEM MAY BE CONSIDERED WHEN ARTICLE 14 IS APPLIED . IT FOLLOWS THAT IT IS ONLY FOR CATEGORIES THE SUBJECT OF A HIGH ABATEMENT RATE THAT AN ADJUSTMENT MAY IN EXCEPTIONAL CIRCUMSTANCES BECOME NECESSARY . ANY OTHER SOLUTION WOULD HAVE ARBITRARY RESULTS IN SO FAR AS IT WOULD ALLOW THE ADJUSTMENT OF REFERENCE PRODUCTION OF CATEGORIES LEAST AFFECTED BY THE SYSTEM OF RESTRICTION OF PRODUCTION SOLELY IN ORDER TO COUNTERACT THE DIFFICULTIES INVOLVED IN APLYING HIGH ABATEMENT RATES TO OTHER CATEGORIES .

8 IN THIS CASE IT WAS POSSIBLE FOR ACCOUNT TO BE TAKEN OF THE DIFFICULTIES EXPERIENCED BY THE APPLICANTS AS A RESULT OF THE HIGH ABATEMENT RATES APPLIED TO CATEGORIES IA AND IB AND NOT OF ANY WHICH THEY MIGHT HAVE IN RESPECT OF THE RELATIVELY MODERATE ABATEMENT RATE APPLIED TO CATEGORY IC .

9 IT MUST FURTHER BE OBSERVED THAT ARTICLE 14 OF DECISION 1696/82/ECSC DOES NOT EXPRESSLY IMPOSE AN OBLIGATION ON THE COMMISSION TO ADJUST REFERENCE PRODUCTIONS OF ALL CATEGORIES IA TO ID WHEN THE CONDITIONS IN THAT ARTICLE ARE SATISFIED . THAT IS TRUE EVEN THOUGH THE ARTICLE PROVIDES FOR ' ' SUITABLE ADJUSTMENTS TO ITS REFERENCE PRODUCTION . . . FOR THE CATEGORY IN QUESTION ' ' . THE EXPRESSION ' ' CATEGORY IN QUESTION ' ' USED IN THE AFORESAID ARTICLE 14 REFERS NOT TO ALL CATEGORIES IA TO ID BUT ONLY TO THOSE MENTIONED AT THE BEGINNING OF THE PROVISION , THE ABATEMENT RATES OF WHICH ARE OF A SCALE WHICH MAY CREATE EXCEPTIONAL DIFFICULTIES FOR THE UNDERTAKING .

10 FINALLY IN REFERRING TO A PERCENTAGE OF 20% BOTH IN THE FIRST AND SECOND INDENTS , ARTICLE 14 OF DECISION 1696/82/ECSC MAKES IT POSSIBLE TO DETERMINE OBJECTIVELY THE THRESHOLD FROM WHICH THE QUOTA SYSTEM AND IN PARTICULAR THE FIXING OF ABATEMENT RATES MAY CAUSE FOR A CATEGORY OF PARTICULAR PRODUCTS DIFFICULTIES SUCH AS MAY BE TAKEN INTO ACCOUNT .

11 AS TO THE ARGUMENT TO THE EFFECT THAT ARTICLE 58 OF THE ECSC TREATY HAS BEEN INFRINGED , ALTHOUGH IT IS TRUE THAT ANY MEASURE APPLYING THE SYSTEM RESTRICTING PRODUCTION MUST BE INTERPRETED STRICTLY , IT MUST HOWEVER BE OBSERVED THAT THE INTERPRETATION SUGGESTED BY THE APPLICANTS WOULD RESULT IN UNREASONABLY ENLARGING THE SCOPE FOR ADJUSTING THE QUOTA SYSTEM AND THUS INDIRECTLY UNDERMINE THE SYSTEM FOR RESTRICTING PRODUCTION AS A WHOLE .

12 IT MUST THEREFORE BE DECLARED THAT THE COMMISSION HAS CORRECTLY APPLIED ARTICLE 14 OF DECISION 1696/82/ECSC AND ARTICLE 58 OF THE ECSC TREATY . THE APPLICATION MUST THEREFORE BE DISMISSED .

COSTS

13 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS . SINCE THE APPLICANTS HAVE FAILED IN THEIR SUBMISSION THEY MUST BE ORDERED TO PAY THE COSTS .

ON THOSE GROUNDS ,

THE COURT ( FIFTH CHAMBER )

HEREBY :

1 . DISMISSES THE APPLICATION ;

2 . ORDERS THE APPLICANTS TO PAY THE COSTS .