61982J0188

1 . COMMUNITY LAW - INFRINGEMENT BY PRIVATE PERSONS - JUSTIFYING GROUNDS - WRONGFUL ACT BY THE COMMISSION - NO EFFECT

2 . COMMUNITY LAW - GENERAL PRINCIPLES - PROTECTION OF LEGITIMATE EXPECTATIONS - CONDITIONS - UNDERTAKING BY COMMISSION OFFICIALS NOT TO APPLY COMMUNITY LAW - SITUATION NOT GIVING RISE TO A LEGITIMATE EXPECTATION

3 . ECSC - PRODUCTION - SYSTEM OF PRODUCTION QUOTAS - PRODUCTION IN EXCESS OF QUOTAS - JUSTIFYING GROUNDS - STATE OF NECESSITY OF A THIRD PARTY - NO EFFECT

( ECSC TREATY , ART . 58 )

4 . ECSC - PRODUCTION - SYSTEM OF STEEL PRODUCTION QUOTAS - PRODUCTION IN EXCESS OF QUOTAS - FIXING OF A FINE - POWERS OF THE COMMISSION - SCOPE

( ECSC TREATY , ART . 58 ( 4 ); COMMISSION DECISION NO 2794/80/ECSC , ART . 9 )

1 . A WRONGFUL ACT ON THE PART OF A COMMUNITY INSTITUTION CANNOT JUSTIFY AN INFRINGEMENT OF COMMUNITY LAW BY AN UNDERTAKING , REGARDLESS OF THE ECONOMIC JUSTIFICATION RELIED UPON BY THE LATTER .

2 . NO OFFICIAL OF A COMMUNITY INSTITUTION CAN GIVE A VALID UNDERTAKING NOT TO APPLY COMMUNITY LAW AND NO LEGITIMATE EXPECTATION CAN BE AROUSED BY SUCH AN UNDERTAKING .

3 . AN UNDERTAKING CANNOT RELY ON THE ALLEGED NECESSITY OF A THIRD PARTY IN ORDER TO JUSTIFY ITS FAILURE TO COMPLY WITH THE OBLIGATIONS INCUMBENT UPON IT UNDER A SYSTEM OF PRODUCTION QUOTAS .

4 . ARTICLE 9 OF DECISION NO 2974/80 , AS INTERPRETED IN THE LIGHT OF ARTICLE 58 ( 4 ) OF THE ECSC TREATY , WHICH MERELY REFERS TO FINES ' ' NOT EXCEEDING THE VALUE ' ' OF THE EXCESS PRODUCTION , AND IN THE LIGHT OF THE TERM ' ' GENERALLY ' ' CONTAINED IN ARTICLE 9 ITSELF , IN NO WAY PRECLUDES THE COMMISSION FROM MODIFYING THE AMOUNT OF THE FINES , HAVING REGARD TO THE CIRCUMSTANCES OF THE INFRINGEMENT .

IN CASE 188/82

THYSSEN AG , HAVING ITS REGISTERED OFFICE IN DUISBURG ( FEDERAL REPUBLIC OF GERMANY ), REPRESENTED BY JOCHIM SEDEMUND , RECHTSANWALT , COLOGNE , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF JACQUES LOESCH , 2 RUE GOETHE ,

APPLICANT ,

V

COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY MR GOTZ ZUR HAUSEN , A MEMBER OF THE COMMISSION ' S LEGAL DEPARTMENT , ACTING AS AGENT , ASSISTED BY PROFESSOR EBERHARD GRABITZ , OF THE FREE UNIVERSITY OF BERLIN , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ORESTE MONTALTO , A MEMBER OF THE COMMISSION ' S LEGAL DEPARTMENT , JEAN MONNET BUILDING , KIRCHBERG ,

DEFENDANT ,

APPLICATION FOR A DECLARATION THAT THE COMMISSION ' S DECISION OF 11 JUNE 1982 IMPOSING A FINE ON THE APPLICANT IS VOID ,

1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 24 JULY 1982 , THYSSEN AG , OF DUISBURG , INSTITUTED PROCEEDINGS UNDER THE SECOND PARAGRAPH OF ARTICLE 36 OF THE ECSC TREATY FOR A DECLARATION THAT THE COMMISSION ' S DECISION IMPOSING ON IT A FINE OF 288 825 ECU , OR DM 691 802 , IS VOID .

2 THE CONTESTED DECISION IS BASED ON THE FACT THAT IN THE FIRST QUARTER OF 1981 THYSSEN EXCEEDED BY 3 851 TONNES THE PRODUCTION QUOTA ALLOCATED TO IT FOR THE PRODUCTS IN GROUP I UNDER THE SYSTEM OF STEEL PRODUCTION QUOTAS ESTABLISHED BY COMMISSION DECISION NO 2794/80/ECSC OF 31 OCTOBER 1980 ( OFFICIAL JOURNAL 1980 , L 291 , P . 1 ).

3 THE QUANTITY PRODUCED IN EXCESS OF THE QUOTA WAS SUPPLIED BY THE APPLICANT , IN FULFILMENT OF AN ORDER RECEIVED IN 1980 , TO STAHLWERKE BOCHUM ( HEREIN AFTER REFERRED TO AS ' ' SWB ' ' ), A MANUFACTURER OF ELECTRICAL SHEET WHICH REQUIRED THE SUPPLIES IN QUESTION IN ORDER TO ENSURE CONTINUITY OF PRODUCTION .

4 THYSSEN CLAIMED THAT THE FOLLOWING FACTORS RELATING TO THE FOURTH QUARTER OF 1980 SHOULD BE TAKEN INTO ACCOUNT IN CONNECTION WITH THE INFRINGEMENT OF THE QUOTA .

( A ) THE QUOTA OF 1 159 701 TONNES NOTIFIED TO THYSSEN BY THE COMMISSION ON 3 NOVEMBER 1980 WAS INCORRECT .

( B)THE CORRECT QUOTA OF 1 227 736 TONNES WAS NOTIFIED TO THE APPLICANT ON 17 DECEMBER 1980 .

( C)THE 3% TOLERANCE MARGIN PROVIDED FOR BY ARTICLE 8 ( 1 ) OF DECISION NO 2794/80 AMOUNTED TO 36 832 TONNES , ON THE BASIS OF THE ADJUSTED QUOTA .

( D)THYSSEN WAS THEREFORE LEGALLY ENTITLED TO PRODUCE 1 264 568 TONNES IN THE FINAL QUARTER OF 1980 .

( E)THYSSEN ' S ACTUAL PRODUCTION DURING THE PERIOD IN QUESTION AMOUNTED TO 1 251 895 TONNES AND PART OF THE TOLERANCE MARGIN , NAMELY 12 673 TONNES , WAS THEREFORE LEFT UNUSED .

5 ALTHOUGH IT DOES NOT DENY EXCEEDING THE QUOTA IN THE FIRST QUARTER OF 1981 , THYSSEN CONTENDS THAT :

( A ) DECISION NO 2794/80 IS UNLAWFUL INASMUCH AS IT WRONGLY INCLUDED WITHIN THE SYSTEM OF PRODUCTION QUOTAS ELECTRICAL SHEET AND RAW MATERIALS INTENDED FOR THE MANUFACTURE THEREOF ;

( B)ARTICLE 8 ( 2 ) OF THAT GENERAL DECISION CONFERS , SUBJECT TO CERTAIN LIMITATIONS , THE RIGHT TO CARRY OVER TO THE NEXT QUARTER THE UNUSED PORTION OF A QUOTA AND THE APPLICANT WAS ALSO ENTITLED TO EXERCISE THAT RIGHT IN RESPECT OF THE QUANTITY NOT PRODUCED IN THE FOURTH QUARTER OF 1980 ;

( C)HAVING DEVELOPED AN ADMINISTRATIVE PRACTICE OF AUTHORIZING UNDERTAKINGS IN THE APPLICANT ' S POSITION TO CARRY OVER THE UNUSED PORTION OF A QUOTA , THE COMMISSION COULD NOT PENALIZE THE APPLICANT FOR EXCEEDING ITS QUOTA , WITHOUT CONTRAVENING THE PRINCIPLE THAT THE ADMINISTRATION IS BOUND BY ITS OWN ACTS ;

( D)SINCE , OWING TO A WRONGFUL DELAY IN NOTIFYING THE QUOTA , THE COMMISSION PREVENTED THE APPLICANT FROM PRODUCING IN 1980 THE QUANTITY OF STEEL INTENDED FOR SWB , IT CANNOT , WITHOUT CONTRAVENING THE PRINCIPLE OF GOOD FAITH , CRITICIZE THE APPLICANT FOR HAVING PRODUCED THAT QUANTITY IN THE FIRST QUARTER OF 1981 ;

( E)CERTAIN SENIOR OFFICIALS OF THE COMMISSION PROMISED THE APPLICANT THAT A FINE WOULD NOT BE IMPOSED IF IT EXCEEDED ITS QUOTA SOLELY WITH A VIEW TO SUPPLYING SWB WITH THE QUANTITY OF RAW MATERIALS WHICH IT NEEDED IN ORDER TO CONTINUE PRODUCTION ;

( F)THE RECORDING MADE BY THE COMMISSION WITHOUT THE APPLICANT ' S KNOWLEDGE AT A HEARING WHICH TOOK PLACE ON 15 JANUARY 1982 MUST BE REGARDED AS A BREACH OF ESSENTIAL PROCEDURAL REQUIREMENTS ;

( G)THE FINE WAS IMPOSED IN THE ABSENCE OF ANY EVIDENCE OF FAULT ON THE PART OF THE APPLICANT ; AND

( H)THE COMMISSION CONTRAVENED THE PRINCIPLE OF PROPORTIONALITY , INASMUCH AS IT IMPOSED A FINE EXCLUSIVELY ON THE BASIS OF AN ARITHMETICAL CALCULATION OF THE QUANTITY PRODUCED IN EXCESS OF THE QUOTA WITHOUT TAKING INTO ACCOUNT THE SPECIFIC CIRCUMSTANCES OF THE CASE .

6 THE ARGUMENT THAT THE COMMISSION WAS WRONG TO INCLUDE WITHIN THE QUOTA SYSTEM ELECTRICAL SHEET AND RAW MATERIALS INTENDED FOR THE MANUFACTURE THEREOF , ON THE GROUND THAT THE MARKET IN ELECTRICAL SHEET DID NOT CONTRACT SHARPLY BETWEEN 1974 AND 1980 , WAS CHALLENGED BY THE COMMISSION , WHICH EMPHASIZED THAT THE GENERAL CRISIS IN THE STEEL INDUSTRY HAD IN RECENT YEARS ALSO EXTENDED TO THE ELECTRICAL SHEET SECTOR . IN THAT REGARD , THE COMMISSION FURNISHED STATISTICS IN ITS REPLY TO THE QUESTIONS PUT TO IT BY THE COURT , SHOWING THAT THE AVERAGE MONTHLY PRODUCTION OF ELECTRICAL SHEET IN THE COMMUNITY HAD FALLEN FROM 88 920 TONNES IN 1978 TO 85 250 TONNES IN 1979 AND TO 75 580 TONNES IN 1980 . AT THE HEARING THE COMMISSION ALSO POINTED OUT THAT IN 1980 THE PRODUCTION OF ELECTRICAL SHEET AMOUNTED TO APPROXIMATELY 900 000 TONNES , REPRESENTING A DROP OF 400 000 TONNES OR 29% SINCE 1974 , THE LAST YEAR IN WHICH THE STATE OF THE STEEL INDUSTRY WAS SATISFACTORY .

7 IN THE LIGHT OF THOSE CIRCUMSTANCES , IT CANNOT BE DENIED THAT THE COMMISSION WAS ENTITLED , WITHOUT INFRINGING ARTICLE 58 OR PRACTISING DISCRIMINATION , TO CONSIDER THAT THERE WAS NO REASON TO EXCLUDE ELECTRICAL SHEET FROM THE SYSTEM OF PRODUCTION QUOTAS .

8 AS REGARDS THE SUBMISSION BASED ON ARTICLE 8 ( 2 ) OF DECISION NO 2794/80 , IT MUST BE NOTED THAT THAT PROVISION REFERS EXCLUSIVELY TO THE POSSIBILITY OF CARRYING OVER TO THE FOLLOWING QUARTER THE UNUSED PORTION OF THE PRODUCTION QUOTA , WHEREAS THE APPLICANT HAD IN FACT USED UP THE WHOLE OF ITS QUOTA . ITS ARGUMENT TO THE EFFECT THAT IN THE NOTIFICATION OF 17 DECEMBER 1980 THE COMMISSION FIXED AN ADDITIONAL QUOTA WHICH THE APPLICANT WAS UNABLE TO USE UP ENTIRELY , AFTER EXHAUSTING THE INITIAL QUOTA AND THE TOLERANCE MARGIN RELATING THERETO , MUST BE REJECTED . IN FACT , THE APPLICANT WAS ALLOCATED A SINGLE QUOTA : NAMELY , THE ONE NOTIFIED TO IT ON 17 DECEMBER 1980 IN PLACE OF THE INCORRECT QUOTA NOTIFIED ON 3 NOVEMBER 1980 .

9 AS REGARDS THE REFERENCE TO THE PRINCIPLE THAT THE ADMINISTRATION IS BOUND BY ITS OWN ACTS , THE COMMISSION HAS DEMONSTRATED THAT THE UNDERTAKINGS WHICH WERE ALLOWED TO CARRY OVER THE UNUSED PORTION OF THEIR QUOTA HAD NOT YET , UNLIKE THYSSEN , EXHAUSTED THEIR QUOTA AND THEREFORE FULFILLED THE CONDITIONS LAID DOWN BY ARTICLE 8 ( 2 ) OF DECISION NO 2794/80 FOR EXERCISING THAT RIGHT . SINCE THE TWO SITUATIONS ARE NOT COMPARABLE , NO PRINCIPLE OF COMMUNITY LAW CAN BE RELIED UPON TO SUPPORT THE CLAIM THAT THEY SHOULD BE ACCORDED IDENTICAL TREATMENT .

10 AS REGARDS THE SUBMISSION BASED ON THE DELAY WHICH OCCURRED IN THE NOTIFICATION OF THE DEFINITIVE QUOTA , IT MUST BE EMPHASIZED THAT A WRONGFUL ACT ON THE PART OF THE COMMISSION CANNOT JUSTIFY A BREACH OF COMMUNITY LAW BY AN UNDERTAKING , REGARDLESS OF THE ECONOMIC JUSTIFICATION RELIED UPON BY THE LATTER .

11 THE ARGUMENT CONCERNING THE PROMISE ALLEGEDLY MADE BY CERTAIN COMMISSION OFFICIALS MUST ALSO BE REJECTED , SINCE NO OFFICIAL CAN GIVE A VALID UNDERTAKING NOT TO APPLY COMMUNITY LAW . NO LEGITIMATE EXPECTATION CAN THEREFORE HAVE BEEN AROUSED BY SUCH A PROMISE , EVEN IF ONE WAS MADE .

12 THE SUBMISSION TO THE EFFECT THAT ESSENTIAL PROCEDURAL REQUIREMENTS WERE INFRINGED AS A RESULT OF THE RECORDING MADE AT THE HEARING WHICH TOOK PLACE ON 15 JANUARY 1982 CANNOT BE ACCEPTED EITHER . WHILST IT IS DESIRABLE THAT THE COMMISSION SHOULD WARN IN ADVANCE THE REPRESENTATIVES OF UNDERTAKINGS WHO APPEAR AT A HEARING THAT IT NORMALLY RECORDS EVERY STATEMENT MADE , FOR THE PURPOSE OF DRAWING UP THE MINUTES OF THE PROCEEDINGS , THYSSEN HAS NOT DENIED IN THE PRESENT CASE THAT THE MINUTES OF THE HEARING WERE FORWARDED TO IT IN THEIR ENTIRETY FOR ITS APPROVAL AND THAT ACCORDINGLY NO INFORMATION WAS INCLUDED IN THE FILE WITHOUT THYSSEN ' S KNOWLEDGE .

13 IN SUPPORT OF THE SUBMISSION CONCERNING THE ABSENCE OF ANY FAULT ON ITS PART , THYSSEN MAINTAINS THAT , IN THE LIGHT OF ALL THE RELEVANT FACTORS , IN PARTICULAR THE STATE OF NECESSITY IN WHICH SWB FOUND ITSELF , THE PROMISES MADE BY CERTAIN COMMISSION OFFICIALS , THE QUESTIONABLE LEGALITY OF THE INCLUSION WITHIN THE QUOTA SYSTEM OF RAW MATERIALS INTENDED FOR THE MANUFACTURE OF ELECTRICAL SHEET , THE BELATED NOTIFICATION OF THE QUOTA FOR THE FOURTH QUARTER OF 1980 AND THE SMALL QUANTITY PRODUCED IN EXCESS OF THE QUOTA ALLOCATED TO THE APPLICANT FOR THE FIRST QUARTER OF 1981 , IT IS CLEAR THAT THE APPLICANT WAS NOT GUILTY OF ANY FAULT WHICH MIGHT JUSTIFY THE IMPOSITION OF A FINE .

14 THE ARGUMENTS WHICH THE COURT HAS ALREADY HELD TO BE UNFOUNDED WHEN CONSIDERING THE APPLICANT ' S OTHER SUBMISSION MAY BE DISREGARDED FORTHWITH . THUS THE SOLE FACTORS WHICH REMAIN TO BE CONSIDERED ARE SWB ' S STATE OF NECESSITY AND THE NEGLIGIBLE QUANTITY PRODUCED IN EXCESS OF THE QUOTA .

15 THE ARGUMENT BASED ON NECESSITY MUST BE REJECTED . WHATEVER ROLE THAT ARGUMENT MAY PLAY IN COMMUNITY LAW IN GENERAL , AN UNDERTAKING CANNOT IN ANY EVENT RELY ON THE ALLEGED NECESSITY OF A THIRD PARTY IN ORDER TO JUSTIFY ITS FAILURE TO COMPLY WITH THE OBLIGATIONS INCUMBENT UPON IT UNDER THE SYSTEM OF PRODUCTION QUOTAS .

16 AS REGARDS THE CONTENTION THAT THE QUANTITY PRODUCED IN EXCESS OF THE QUOTA WAS NEGLIGIBLE , IT MUST BE REMEMBERED THAT SUCH PRODUCTION WAS PENALIZED BECAUSE IT EXCEEDED THE 3% TOLERANCE MARGIN FIXED BY ARTICLE 8 ( 1 ) OF DECISION NO 2794/80 ; HENCE THE EXCESS PRODUCTION CANNOT BE REGARDED AS NEGLIGIBLE .

17 THE COMMISSION WAS THEREFORE RIGHT , EVEN IN THIS CASE , TO ABIDE BY THE PRINCIPLES GOVERNING THE INFRINGEMENT OF ARTICLE 58 OF THE ECSC TREATY AND THE RESULTING IMPOSITION OF A FINE .

18 HOWEVER , THE COURT MUST CONSIDER WHETHER THE CIRCUMSTANCES OF THE CASE JUSTIFY THE AMOUNT OF THE FINE IMPOSED BY THE COMMISSION . IN THAT RESPECT , IT MUST BE REMEMBERED THAT THE APPLICANT PLEADS A BREACH OF THE PRINCIPLE OF PROPORTIONALITY , ON THE GROUND THAT THE COMMISSION IMPOSED A FINE EXCLUSIVELY ON THE BASIS OF AN ARITHMETICAL CALCULATION OF THE QUANTITY PRODUCED IN EXCESS OF THE QUOTA WITHOUT TAKING INTO ACCOUNT THE SPECIFIC CIRCUMSTANCES OF THE CASE .

19 THE COMMISSION ARGUES THAT IT IS BOUND BY ARTICLE 9 OF DECISION NO 2794/80 , WHICH PROVIDES THAT THE AMOUNT OF THE FINE SHALL ' ' GENERALLY ' ' BE 75 ECU PER TONNE OF EXCESS PRODUCTION . IT STATES THAT ITS ADMINISTRATIVE PRACTICE IN APPLYING THAT PROVISION HAS INVARIABLY BEEN TO IMPOSE A FINE OF 75 ECU PER TONNE OF EXCESS PRODUCTION . IT NEVERTHELESS ACKNOWLEDGES THAT THE IMPOSITION OF A FINE AT A LOWER RATE IS POSSIBLE IN CERTAIN EXCEPTIONAL CASES .

20 THAT REASONING IS HOWEVER BASED ON A MISCONCEPTION OF THE COMMISSION ' S POWERS . ARTICLE 9 OF DECISION NO 2794/80 , INTERPRETED IN THE LIGHT OF ARTICLE 58 ( 4 ) OF THE ECSC TREATY , WHICH MERELY REFERS TO FINES ' ' NOT EXCEEDING THE VALUE ' ' OF THE EXCESS PRODUCTION , AND IN THE LIGHT OF THE TERM ' ' GENERALLY ' ' CONTAINED IN ARTICLE 9 ITSELF , IN NO WAY PRECLUDES THE COMMISSION FROM MODIFYING THE AMOUNT OF THE FINES , HAVING REGARD TO THE CIRCUMSTANCES OF THE INFRINGEMENT , AS THE COMMISSION ITSELF RECOGNIZES IN REGARD TO EXCEPTIONAL CASES .

21 IT IS CLEAR FROM THE EVIDENCE BEFORE THE COURT THAT THE COMMISSION ' S DELAY IN NOTIFYING THE DEFINITIVE QUOTA TO THYSSEN PREVENTED IT FROM PRODUCING IN THE FINAL QUARTER OF 1980 THE QUANTITY WHICH IT WAS ENTITLED TO PRODUCE . AS THE APPLICANT HAS DEMONSTRATED BY MEANS OF A VERY DETAILED ACCOUNT OF THE TECHNICAL REQUIREMENTS OF PRODUCTION AND OF LABOUR LEGISLATION IN THE FEDERAL REPUBLIC OF GERMANY , THE PERIOD BETWEEN 17 DECEMBER 1980 AND THE EXPIRY OF THE FOURTH QUARTER OF 1980 WAS NO LONGER SUFFICIENT FOR IT TO USE UP THE TOLERANCE MARGIN .

22 THUS IT CANNOT BE DENIED THAT THE APPLICANT FOUND ITSELF IN AN EXCEPTIONAL SITUATION JUSTIFYING A DIFFERENT ASSESSMENT FROM THAT MADE BY THE COMMISSION AS REGARDS THE GRAVITY OF THE INFRINGEMENT AND THE FIXING OF THE AMOUNT OF THE FINE .

23 IN THAT REGARD , IT MUST BE REMEMBERED THAT , UNDER THE SECOND PARAGRAPH OF ARTICLE 36 OF THE ECSC TREATY , THE COURT HAS UNLIMITED JURISDICTION IN APPEALS AGAINST PECUNIARY SANCTIONS AND PERIODIC PENALTY PAYMENTS IMPOSED UNDER THE TREATY .

24 IN VIEW OF THE EXCEPTIONAL CIRCUMSTANCES IN WHICH THE INFRINGEMENT WAS COMMITTED IN THE PRESENT CASE , IT IS APPROPRIATE TO IMPOSE A TOKEN FINE OF 5 ECU , CORRESPONDING TO DM 12 .

25 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE , THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS . HOWEVER , UNDER ARTICLE 69 ( 3 ) WHERE EACH PARTY SUCCEEDS ON SOME AND FAILS ON OTHER HEADS , OR WHERE THE CIRCUMSTANCES ARE EXCEPTIONAL , THE COURT MAY ORDER THAT THE PARTIES BEAR THEIR OWN COSTS IN WHOLE OR IN PART . SINCE BOTH THE APPLICANT AND THE COMMISSION HAVE FAILED IN SOME OF THEIR SUBMISSIONS , IT IS APPROPRIATE TO MAKE SUCH AN ORDER .

ON THOSE GROUNDS ,

THE COURT ( FOURTH CHAMBER )

HEREBY :

1 . REDUCES THE FINE IMPOSED ON THYSSEN AKTIENGESELLSCHAFT BY THE COMMISSION TO 5 ECU , CORRESPONDING TO DM 12 ; AND

2.ORDERS THE PARTIES TO BEAR THEIR OWN COSTS .