Court of Justice 16-06-1966 ECLI:EU:C:1966:33

1. The application for annulment

2. The claim for damages

Should the Court uphold the contested decision, the applicant considers that the fact that the CPFI granted it an illegal authorization constitutes a wrongful act or omission on the part of the High Authority. Had it not been for this wrongful act or omission, the applicant would have been aware that the products in question could not be deducted from the basic rate of assessment for contribution and would have sold them at higher prices. The applicant is attempting to demonstrate by means of a detailed calculation that, for the total tonnage delivered, the difference between these prices and those actually charged amounts to 465 635.04 francs. This sum represents the total equalization contributions payable for a similar quantity of assessable scrap and constitutes the loss suffered by the applicant.

The applicant's belief that its purchasers would have accepted the price in question results from the fact that, as it shows by means of calculations, this price “did not mean any additional sacrifice, since the difference between the consumer price of the two categories of scrap remains constant, that is, the saving of the refining costs”.

In answer to the argument that it would have been unable to impose on its clients any price other than that fixed in its price lists, the applicant maintains that it is not obliged to submit a price list concerning arisings of ferrous scrap and that those which were submitted could be withdrawn or amended at any time.

“Should the Court require further explanation, the applicant offers to produce evidence of any additional factor which the Court might consider necessary to complete its inquiry into the present application.”

The defendantreplies that there can be no question of a wrongful act or omission in view of the fact that the applicant itself sold the material in question as semi-finished products.

As regards the loss and the relationship of cause and effect, the defendant maintains, first, that if it were to be found that a wrongful act or omission had occurred (quod non), the only period which could be taken into consideration is that between 12 August 1958 when the letter was sent and 30 November 1958 when the equalization scheme came to an end. Even that is excluded in the light of the general warning given by Decision No 13/58.

Secondly, the applicant would never have been able to make its purchasers bear the equalization levy. In fact:

• it was bound by the price lists properly submitted;

• one may accept the applicant 's argument that, in the large iron and steel undertakings, the sales departments responsible for fixing selling prices were for a long time unaware of the possible consequences of their actions on questions of equalization; in this case, however, the applicant's sales department ‘was unable to take into account and did not take into account the equalization factor… The prices in question … were determined solely on the basis of supply and demand. It is, moreover, impossible to reconcile the idea of a price list which remains more or less constant over a period of months, if not years, with the existence of the considerable monthly fluctuations of the equalization contribution at that period’;

• finally, the purchasers of the material in question believed that they too were not liable to pay the equalization contribution.

First submission: Infringement of Article 53 (b) of the ECSC Treaty and of the general decisions of the High Authority governing the equalization scheme for imported ferrous scrap

The contested decision regarded the material in question not as ferrous scrap within the meaning of the basic decisions which successively governed the equalization scheme for imported ferrous scrap (hereinafter referred to as ‘the basic decisions’), but as a semi-finished product.

This decision thus denied the applicant the right to deduct tonnages of this material sold to its customers from its basis of assessment to the equalization contribution.

In this submission the applicant contends that this claim is unfounded.

First, the basic decisions do not define the ‘ferrous scrap’ to which they refer, except for ‘scrap from alloy steels’ which is of no relevance in this case.

Secondly, Decision No 28/53, which fixes maximum prices for ferrous scrap, enumerates twenty-five different categories of ‘ferrous scrap’ and defines them precisely.

It is not disputed that the material in question does not fall within any of these categories.

Furthermore, the purpose of the basic decisions is the same as that of Decision No 28/53, in that they seek to avoid the danger of a substantial increase in the price of ferrous scrap within the Common Market.

The relationship between all these decisions is shown in particular by Decision No 21/54, which rescinds Decision No 28/53 with effect from 1 April 1954.

In fact, it was on this date that Decision No 22/54, which was the first of the basic decisions, came into force.

Moreover, Decisions Nos 21/54 and 22/54 were both adopted at the same meeting of the High Authority and published in the same edition of the Official Journal of the ECSC.

It must therefore be admitted that the concepts of ‘ferrous scrap’, employed by Decision No 28/53 and by the basic decisions which have replaced it, are the same, with the result that the material in question is not covered by the basic decisions.

The applicant further maintains that this material must constitute ferrous scrap, from the very fact that it is intended for recasting.

However, no provision of the Treaty or of the basic decisions gives rise to such an interpretation of the concept of ‘ferrous scrap’.

On the contrary, the list appearing in Annex I to the ECSC Treaty refers, under heading 4300 which does not include ferrous scrap, to ‘Crude and semi-finished products of iron, ordinary steel or special steel, including products for re-use and re-rolling’, which shows that in the minds of the authors of the Treaty material used for re-casting may constitute a semi-finished product.

Furthermore, until 8 November 1957 the applicant itself sold the materials in question on the basis of price lists notified to the High Authority which described them as ‘semi-finished products in Armco pure iron for recasting’.

It is true that the applicant now claims this description to be incorrect. However, as it is the corollary of the relatively high price of the material in question and as it was accepted by the applicant's customers, it appears to have been in accordance with commercial usage.

Certain customers of the applicant or of its sister company, which sells similar products, objected to their respective suppliers subsequently describing this material as ‘arisings from billets’, when according to the customers it was simply ‘billets’ and therefore a true semi-finished product within the meaning of heading 4 300 of Annex I to the Treaty.

It must finally be noted that until 8 November 1957 the applicant published and sent to the High Authority price lists for the material in question, according to the provisions of the Treaty relating to semi-finished products.

The applicant further alleges that the difference between the respective prices of the material in question and of ordinary ferrous scrap remained more or less constant during the equalization period, with the result that it is reasonable to accept that the first price was dependent upon the second; and that it would therefore be fair to include the material in question in the equalization scheme, as its purchasers benefited from the regulating effect of the basic decisions.

The graph which the applicant placed on the file cannot show the parallel alleged, since it indicates several perceptible divergences in the evolution of the two prices in question.

Moreover, the applicant has not disputed that, after the equalization scheme came to an end, the price of the material in question increased considerably whilst that of ordinary ferrous scrap remained relatively stable.

The applicant's allegations show a definite parallel between the prices which it had fixed in its price lists, first, for this material and, secondly, for the ‘semi-finished products in Armco pure iron for re-rolling’, that is, for the genuine billets which, it admits, do not constitute ferrous scrap.

In fact, according to the reply, the difference between the prices was maintained at a constant 5 % or, in absolute figures, at a maximum of 2 000 or a minimum of 1950 French francs.

Thus, to follow the applicant's argument concerning the alleged parallel between the price of the material in question and that of ordinary ferrous scrap, it is necessary to accept that the price of billets intended for re-rolling and, therefore, for purposes for which ordinary ferrous scrap is not used was dependent upon the price of ferrous scrap.

Faced with such an unlikely argument it is necessary to accept the more convincing explanation furnished by the defendant, to the effect that the price of the products in question ‘was determined by the price of ordinary billets, but remained at a slightly lower figure since less care was required in the rolling process as they were intended for re-casting’.

Finally the price of this material was always perceptibly higher than the price of ordinary imported ferrous scrap. If this fact is not itself sufficient to exclude the material in dispute from the application of these decisions, it is nevertheless evidence in favour of the argument put forward by the defendant.

In fact, it did not meet the purpose of the equalization scheme for the contribution in question to be imposed upon the purchasers of a product which was appreciably more expensive than that whose price was to be reduced by the equalization scheme.

It follows from all these considerations that this submission is unfounded.

Second submission: Infringement of Article 15 of the ECSC Treaty

The applicant maintains that, as the grounds for the contested decision are incorrect for the reasons set out in connexion with the preceding submission, the decision is vitiated by the infringement of an essential procedural requirement.

It follows from the above considerations regarding the first submission that these grounds have not been proved to be incorrect.

This submission must therefore be rejected.

Third submission: Infringement of Article 4 (b) of the ECSC Treaty

The applicant maintains that the contested decision discriminated in favour of purchasers of the material in question to the detriment of purchasers of ordinary ferrous scrap, who were obliged to contribute to the equalization scheme.

It follows from the preceding considerations concerning the first submission that such fundamental differences exist between these two categories of products that the different treatment accorded them by the defendant cannot amount to discrimination.

In particular, since, as has just been shown, the material in question does not constitute ferrous scrap within the meaning of the basic decisions, the defendant was not empowered to subject it to the payment of the equalization levy on the basis thereof.

Thus, in reality, the applicant's complaint refers to the basic decisions themselves.

On this point, it meets the objections set out in relation to the preceding considerations.

This submission must therefore be rejected.

Fourth submission: Infringement of the general principles of law applying to the revocation of administrative measures

The applicant complains that the contested decision revoked ex tunc the ‘CPFI agreements’ dated 12 June and 12 August 1958 by which the description of ‘ferrous scrap’ was accepted for the material in question.

Alternatively, it maintains that even if these ‘agreements’ are assumed to be illegal, they could not validly be rescinded.

First, the applicant had every reason to have confidence in the stability of the position created by these ‘agreements’; secondly, their rescission was not effected within a reasonable period of time.

It follows from the preceding considerations concerning the first submission that the declarations of the CPFI led to an incorrect application of the basic decisions and thus cannot be considered valid and in no way constitute genuine ‘decisions’.

A decision must in fact appear as a measure emanating from the competent authority, intended to produce legal effects and constituting the culmination of procedure within that authority, whereby the latter gives its final ruling in a form from which its nature can be identified.

In this instance, certain of these conditions are absent.

First, it has in fact neither been established nor even alleged that the statements in question result from a formal discussion on the part of the CPFI.

Moreover, as regards in particular the letter of 12 June 1958 headed ‘Investigation by the SA Fiduciaire Suisse into your tonnages subject to contribution’, one reads:

‘We refer to the report drawn up by the SA Fiduciaire Suisse concerning the investigation into your tonnages subject to contribution. In this respect, may we make the following observations:

1. …

2. Part of your Armco arisings sold to third parties was deducted and part was not deducted from the tonnages subject to the levy … The ferrous scrap resulting from the Armco products is to be treated in the statements as ordinary ferrous scrap. Consequently, the 257 metric tons are still deductible …

3. …’

This letter appears to be merely a communication inviting the applicant to rectify its statements in connexion with the equalization scheme.

Moreover as regards the letter of 12 August, it was drafted and notified after the entry into force of Decision No 13/58, in accordance with which the High Authority, considering, inter alia, that ‘it is necessary for the powers delegated to the Equalization Fund … to be resumed by the High Authority’, provided that ‘the right which [the basic decisions] conferred on the Equalization Fund … shall fall to the High Authority, which may entrust the administrative work to the Equalization Fund or any other appropriate body’.

Consequently, at the date in question, the CPFI no longer had the power to take decisions which could be regarded as decisions of the High Authority.

The High Authority has the power to revoke decisions and may even do so retroactively, subject in exceptional cases to considerations of legal certainty.

This power is even greater when the ‘revocation’ concerns not a formal decision, but a simple statement.

In this instance, the applicant was only able to rely for a relatively short period on the maintenance of the position adopted by the CPFI.

Under the terms of Article 1 (b) of the abovementioned Decision No 13/58, which came into force after the first and before the second of the letters in question, the defendant reserved the right to ‘rescind as far as is necessary any resolutions’ of the agencies in Brussels and ‘to take any measures entailed in rescinding them’.

The effect of this provision was to make all the measures adopted by these bodies appear rather precarious.

Secondly, bearing in mind the magnitude of the task of reconsidering all these measures, the beneficiaries of any favourable statements could not expect a final decision on these statements to be taken in a short time.

On 25 November 1959, a letter addressed by the Market Division of the High Authority to the applicant's sister company, which had the same general manager, referred to a ‘disagreement between you and your purchasers’ about the description of material similar to the material in question.

By letter of 17 August 1961, the High Authority's Market Directorate informed the applicant that the problem in question was ‘at present under further consideration’ and that the competent departments of the High Authority ‘provisionally accept the method of declaration adopted by your undertaking’.

By letter of 8 October 1962 the Market Directorate informed the applicant of its final decision, which is identical with that maintained by the defendant in the present case.

Finally, it must be borne in mind that, by continuing an advantage illegally granted to an undertaking within the framework of the equalization scheme, the defendant would not only be increasing the burdens borne by the other undertakings, of which at least some are competitors of the recipient undertaking, but above all put the latter in a privileged position.

It follows from the above considerations that this complaint must be rejected.

As none of the submissions put forward by the applicant has been found to be justified, the application for annulment must be dismissed.