Court of Justice 29-03-1979 ECLI:EU:C:1979:93

Application

According to the applicants, there should be no dispute about their capacity to make this application.

The applicants draw attention to the fact that Article 10 (2) and (6) (a) of Regulation No 459/68 refers to ‘interested parties’, and Article 10 (6) (b) refers to ‘parties directly concerned’, and that this is also true of Article 15.

The Commission confined its on-the-spot investigations to the applicants and to the other three groups of undertakings mentioned in Article 3 of the contested regulation.

Furthermore, Article 20 of the basic regulation, Regulation No 459/68, requires that the description of the product covered by the measure shall include the name of the supplier or suppliers unless it is ‘impracticable’ to name all such suppliers.

In particular, Article 3 of the contested regulation constitutes a decision adopted in relation to the applicants.

According to the applicants, Regulation No 1778/77 is the sanction used to enforce compliance by the applicants with the undertaking given by NSK Japan and referred to in Article 2 of the Regulation [see paragraph 76 of the application].

The objection of inadmissibility entered by the Council

The Council emphasizes that the adoption of anti-dumping measures is at the entire discretion of both the Council and the Commission. Regulation No 459/68 is based on the principle according to which the imposition of duties must not constitute per se an obligation even if dumping and injury have been ascertained. This shows, because of its very objective, the intrinsically legislative character of Regulation No 1778/77.

Moreover, Regulation No 459/68 provides expressly that anti-dumping duties must be imposed by regulation.

Because those duties are an instrument of commercial policy, the Council considers that a regulation has to apply to all actual or potential importers whether or not they are known or identifiable when the measures are adopted.

Regulation No 1778/77 is a genuine generally applicable measure of a legislative nature. Article 1 of that regulation provides for the application of a definitive anti-dumping duty on certain generally defined products originating in Japan. The fact that products are identified cannot prevent the regulation from having a general normative character (judgment of 5 May 1977Koninklijke Scholten Honig v Council and Commission, Case 101/76 [1977] ECR 808). Paragraph (2) of Article 1 suspends the duty quite generally.

Article 2 expresses the duties of the Commission. By directing the Commission to perform certain functions and giving it appropriate power and authority to exercise them the true nature of that article is legislative.

Article 3 is a general provision imposing anti-dumping duty and applies generally to products manufactured and exponed by four named manufacturers. The manufacturers are named because Article 8 (b) of the General Agreement on Tariffs and Trade Anti-dumping Code requires the parties to the Code to ensure that the authorities should name the suppliers of the product concerned. The duty is payable quite generally by all importers of such products and the fact that the importers may be potentially identifiable would not affect the generality of the regulation in question.

According to the Council, the Japanese exporters are neither directly nor individually concerned by the contested regulation. The regulation imposes a suspended anti-dumping duty and provides for the definitive collection of provisional duty paid by the importers on the products concerned. Since that duty is payable only by the importers, any effect that Regulation No 1778/77 may have on the exporters is indirect.

Nor is there anything in Regulation No 1778/77 which individually concerns the exporters. As mentioned earlier, the fact that the exporters are named in Article 3 merely serves to comply with the provisions of the General Agreement on Tariffs and Trade Anti-dumping Code and to identify the products which accounted for all but an insignificant proportion of imports into the Community.

As regards the importers among the applicants, the Council considers that they are not directly concerned by Articles 1 and 2 of Regulation No 1778/77. First, they cannot be directly affected by a duty which is imposed and then suspended by the same regulation. Secondly, to the extent to which Article 2 may involve the re-imposition of the duty, the importers are not directly concerned because the Commission's power is interposed between the suspension and the reimposition of the duty.

The applicant importers are not individually concerned by Article 3 of Regulation No 1778/77, because it applies generally to importers of the relevant products. The general character of that article is not affected by the fact that the importers can be identified. The importers who are applicants in this case are not the only importers who were required to pay the definitive duty. There are at least 260 such importers in the Community.

The terms appearing in Article 10 (6) of Regulation No 459/68 relied on by the applicants cannot affect the character of the regulation which results from the investigation.

Moreover, Regulation No 1778/77 is not an individual sanction.

The Council considers that the claim for damages is inadmissible (pp. 25 to 34 of the defence). It emerges from the case-law of the Court that an action for damages cannot be used as an alternative to, or in aid of, an application for annulment.

Moreover, where the claim is for restitution of sums paid to national authorities, available national remedies must be resorted to.

According to the Council, the Court has no jurisdiction to order the Council or the Commission to instruct the relevant competent authorities in the Member States to repay the duties together with interest. Accordingly, this claim by the applicants is inadmissible.

Supporting the submissions of the Council, the intervener submits observations to the same effect. On the claim for damages, it adds that this claim is inadmissible because, if a distinction is drawn between the four applicants, it relates to losses suffered by the three importers as a result of a voluntary undertaking given by the exporter.

The objection of inadmissibility entered by the Commission

The Commission submits that all the provisions of Regulation No 1778/77 are of a legislative nature. Articles 1 and 2 of the Regulation are neither of direct nor of individual concern to the applicants. Article 3 is not of direct concern to the Japanese producers. The importers are directly concerned, as a necessary consequence of the Commission's having legislative competence in these matters. However, Article 3 is not of individual concern either to the producers or to the importers (pp. 2 to 10 of the defence).

The claim for damages is inadmissible, because the duties are collected by the national authorities (p. 11 of the defence). The Commission considers that the claim for damages in respect of alleged loss of profits is also inadmissible. This follows from the case-law of the Court (Case 96/71, Haegeman v Commission [1972] ECR 1005, at p. 1015). Moreover, the alleged losses are due to undertakings given by the applicants.

Answer of the applicants to the objections of inadmissibility

The applicants draw attention first of all to the consequences in terms of legal protection which would follow from a ruling that their application was inadmissible (pp. 1 to 14 of their document).

In the applicants' submission, whether or not the measure also has legislative aspects, it can be attacked by natural or legal persons if it has the aspects of a decision which is of direct and individual concern to them.

This character as a decision has to be determined by reference to the function and object of the measure attacked. In the present case the definitive duty is a sanction which, by Articles 1 (2) and 2 of Regulation No 1778/77, is directed in a special way at the applicants and the three other major Japanese producers who gave undertakings (pp. 15 to 20 of the applicants' document). The contested regulation is of direct concern to the applicants, because Article 2 thereof does not confer a mere power on the Commission. On the contrary, these provisions oblige the Commission to terminate forthwith the suspension of the application of the duty imposed by Article 1.

The applicants argue that the identity of the person who actually pays the duty is not determinative of the identity of the persons who are directly affected by it. The applicants maintain that, by reason of the particular facts and matters set out in the application and in the document in answer to the objections of inadmissibility, all the applicants are directly and individually concerned by the contested regulation (pp. 23 to 32 of the document in answer to the objections of inadmissibility).

As regards the claim for damages by European subsidiaries of NSK seeking compensation for the loss which they suffered as a result of their obligation to pay the provisional duty, the applicants state that the basis of this claim is not merely the invalidity of Regulation No 1778/77 but also the wrongful acts of the defendants [paragraph 90 of the document in answer to the objections of inadmissibility].

The applicants have not claimed repayment, but are claiming damages. Such a claim cannot be brought before the national courts (pp. 44 to 56 of the document in answer to the objections of inadmissibility).

The objection that the loss is due to an allegedly voluntary undertaking goes not to the admissibility but to the substance of the case.

Rejoinders

The Council does not accept that one and the same provision may both have a legislative character and nevertheless be regarded as a decision for the purpose of Article 173. The applicants did not consider the decisions of the Court which establish that a measure does not lose its character as a regulation simply because it may be possible to ascertain with a greater or lesser degree of accuracy the number of the persons to whom it applies [pp. 16 to 30 of the rejoinder].

According to the Council, the provisions of Article 2 of the contested regulation do not require any automatic action by the Commission. The applicants have no legal interest in complaining about the conferment of a power which has not been exercised.

The claim for damages is directed in essence at annulment, and the applicants relied upon the same wrongful acts, both in support of their claim for annulment and in support of their claim for damages.

According to the Council, the applicants do not seriously contest that there are remedies available to them under national law, although they raise doubts as to their effectiveness or scope (pp. 30 to 42 of the rejoinder).

The Commission points out that the essential characteristic of the contested regulation, as for any anti-dumping regulation, is that it imposes a measure of general application, applicable to all imports by all importers of the specified products, in response to a specific situation. The regulation itself cannot be challenged merely on the ground that the Commission's findings concern the applicants (pp. 3 to 17).

The Commission maintains that the claim for damages is inadmissible. As regards the alleged loss of profit, the Commission submits that the act causing such loss must be an act of the Community, otherwise a condition of the admissibility of the applications is not fulfilled (pp. 29 to 36).

A — Failure to observe procedural requirements

In the course of the Commission's investigation which led to Regulation No 1778/77, the Commission failed to observe the obligation imposed by Article 10 (4) of Regulation No 459/68 by refusing to inform the applicants of certain matters relevant to the defence of their interests.

The Commission did not inform the applicants of factors on which the Commission based its calculations of the margin of dumping (domestic prices in Japan, export prices, methodology used in the construction of export prices).

The Commission also wrongfully applied the provisions concerning the confidential information supplied by the Committee which lodged the complaint.

B — Inadequate and defective reasoning

Since the Commission's investigation and the conclusions thereof were carried out and drawn up in secret, the Council's decision which is based on the Commission's report should, in the applicants' submission, disclose the matters which provided a basis for a finding that there was dumping and injury.

From this point of view, there are important omissions in the reasoning of Regulation No 1778/77 (paragraphs 88 and 89 of the application).

C — Fundamental errors of fact

The Commission made certain fundamental errors of fact, and this affects the validity of the contested regulation.

In paragraphs 92 to 96 of the application, it is submitted that the Commission's findings of dumping are not supportable.

Moreover, the reasons on which the contested regulation was based did not state facts capable of showing that the alleged dumping was the principal cause of the injury suffered by the Community industry. There were other factors which probably caused the recession in the Community industry (paragraphs 97 to 100 of the application).

D — Other infringements of the provisions of Regulation No 459/68

There is no power under the basic regulation, Regulation No 459/68, for the Council to impose a definitive duty the operation of which is suspended as regards the products of businesses which have given undertakings within the meaning of Article 14 of the said regulation. Either the Council can impose a duty or the Commission can accept undertakings: there is nothing in Regulation No 459/68 which permits the Council to follow a third and different course of imposing a duty and then suspending its operation.

If undertakings are acceptable to the Commission, it should terminate the proceeding or propose its termination (paragraph 104 of the application).

E — Discrimination between the exporters referred to in Article 3 of the contested regulation

After providing in Article 1 of Regulation No 1778/77 for an equal rate of anti-dumping duty for all the Japanese undertakings concerned, the authors of the regulation discriminated by providing in Article 3 of the regulation for different percentages for the collection of the provisional duty (paragraphs 105 and 106 of the application).

F — Misuse of powers

By requiring that the undertaking given by NSK should be extended to NSK UK's production in Great Britain, the Commission exceeded its powers under Regulation No 459/68; the Council was guilty of a misuse of powers in using the imposition of an anti-dumping duty to sanction this excess of powers (paragraphs 107 to 115 of the application).

Furthermore, the Council was guilty of misuse of powers in using its power to impose a definitive anti-dumping duty as a sanction to compel compliance with the undertakings given by the Japanese producers.

G — Compensation for damage

In paragraphs 119 to 126 of the application, the applicants claim that they have suffered damage as a result of the action of the Council and the Commission, and claim compensation therefor in accordance with the provisions of Articles 178 and 215 of the Treaty.

B — Reasoning

The Council and the intervener submit that in stating the reasons on which a measure is based, the Council must have regard to the circumstances in which that measure was adopted. In this case regard must be had to (a) the extensive investigations conducted by the Commission and (b) the limitations imposed on the Commission by the applicants and all other Japanese exporters and by the EEC industry in relation to confidentiality of information.

In paragraphs 42 to 45 of its defence, the Council makes observations on the alleged omissions in the statement of reasons for Regulation No 1778/77.

C — Fundamental errors of fact (paragraphs 46 to 50)

According to the Council and the intervener, the Commission was entitled to take the view that the actual export prices were unreliable because of ‘association’ (Article 3 (3) of Regulation No 459/68). Having found that the principal cause of injury was the dumping, the Commission was under no obligation further to assess the causative effects of other factors.

D — Other infringements of the provisions of Regulation No 459/68

The Council considers that the solution of a suspended definitive duty has the merit of not rendering nugatory the extensive investigations already carried out, should a breach of the undertaking given be committed later.

If no regulation imposing a definitive duty had been passed, the only course open to the Commission in the case of any failure to comply with the undertaking would have been a complete recommencement of examination of the facts pursuant to Article 14 (2) (d) of Regulation No 459/68 (added by Council Regulation No 2011/73). According to the Council and the intervener, Article 14 (2) (d) deals only with a situation in which an undertaking was given and accepted during examination of the matter and in which proceedings were terminated.

In the present case, however, none of the conditions was fulfilled under which the proceedings had to stand terminated or under which the Commission was bound to submit a proposal to terminate the proceedings.

In the Council's submission, first, the undertaking offered at the end of the examination of the matter did not eliminate the margin of dumping for the period prior to July 1977 and only went some way to eliminating the margin for the period following.

Secondly, the Commission did not accept the undertaking unreservedly. The undertakings were accepted only in the context of the adoption of Council Regulation No 1778/77 and after examination of the matter had been completed.

E — Discrimination

According to the Council and the intervener, the laying down of duties having a different rate did not constitute discrimination. Any allegation involving in effect an attack on the validity of Regulation No 261/77 is misconceived.

F — Misuse of powers

The Council points out that the undertaking was freely offered and accepted. No undertaking without Article 5 would have been accepted, because it was. necessary to minimize the risk of evasion of the undertaking through disguised dumping or through imports from other parts of the world.

G — Compensation for damage

By the very formulation of their claim, the applicants in effect admit that such a claim can be made only to the national authorities.

A — Failure to observe procedural requirements

The Commission fully complied with the requirements of Article 10 (4) of Regulation No 459/68.

The ‘essential facts’ which the Commission is alleged to have refused to ‘disclose’ were for the most part matters which the applicants already knew and on which they themselves provided information to the Commission, or matters which were set out in the legislation which the applicants knew the Commission to be applying (paragraphs 99 and 100).

The Commission did not rely upon the information supplied by the complainants. It conducted an independent inquiry, and its information was not relevant to the defence of the applicants' interests. Thus the Commission could not infringe the provisions concerning .. confidential treatment of certain information (Article 11 of Regulation No 459/68)

A — Failure to observe procedural requirements

During the inquiry, the Commission refused to disclose essential facts. The applicants did not know whether the Commission was basing its calculations on the prices of all or only some, and if so which, of the 54 types taken into account. The applicants also did not know that the export prices were considered unreliable merely because of the association between importers and exporters. The Commission did not (save in the preamble to Regulation No 261/77) give the applicants any explanation for treating the export prices as unreliable.

At a meeting of the anti-dumping Committee of the General Agreement on Tariffs and Trade, a representative of the Commission told a representative of the Japanese Government that the Commission could not give the applicant the calculations until the final decision, thereby implying that it could and would do so afterwards. Again, at the meeting on 1 April 1977 (see paragraph 58 of the application), the excuse of the Commission's representative for not giving the Japanese producers details of the basis of the dumping margin calculations was that such details could not be disclosed during the period in which provisional duty was being levied.

The Commission cannot justify its refusal to disclose material information in this way.

The statement in the defences that the applicants could infer the case against them from the questions asked them in the course of the investigation, does not fulfill the requirement in Article 10 (4) of the basic regulation that opportunities should be provided for those concerned ‘to see all information that is relevant to the defence of their interests’.

B — Reasoning

The Council cannot rely on the alleged nature of the contested measure as a regulation to evade its obligation to give an adequate statement of reasons for the measures adopted in this case. Since the basic regulation requires a finding both of dumping and of injury, the Council cannot confine itself to ..vague and general ‘evaluations’ but must state the facts and calculations on which it based itself.

When the Council contends that the reasons given are sufficient so that the ‘reasoning which has led’ to the measure being made ‘may be understood’, it should be answered that the reasons must justify that reasoning.

Moreover, the reasons did not justify the fact that in its investigation the Commission based itself, with regard to export prices, on the sales to the first independent buyer. No reasons were given for the fact that, owing to this method of calculation, the domestic prices in the first half of 1976 were in fact compared with the (constructed) export prices in the second half of 1975, a fact capable of falsifying the whole comparison.

Finally, it is unclear how the figure of 15 % for the alleged margin of dumping was arrived at, or why this percentage corresponds to the injury allegedly suffered by the Community industry.

The recitals in the preamble to Regulation No 1778/77 do not provide any relevant reason justifying the adoption of Article 2 of that regulation, as the reasoning is essentially restricted to the use of the words ‘in the circumstances’.

C — Errors of fact

The applicants dispute the Council's contention that the Court should not examine the detailed investigations carried out by the Commission but should restrict itself to examining whether the evaluation made by the Commission contains a patent error or constitutes a misuse of powers.

However, in applying the basic regulation, the Commission must make a finding both of dumping and of injury, and these findings must be able to be challenged and completely examined by the Court.

The contested regulation did not provide any element of justification in particular as regards the question whether the injury caused by the Japanese imports is due to dumping and the question whether the anti-dumping duty imposed exceeds the extent of the injury.

D — Other infringements of the provisions of Regulation No 459/68

The applicants submit that the Council does not dispute that Regulation No 459/68 provided no legal basis for the imposition of suspended definitive duties. All the Council contends is that such a solution has ‘merits’.

However, the Council is not entitled to avoid the provisions of Article 14 (2) of the basic regulation. The adoption of Articles 1 and 2 of the contested regulation could deprive the applicants of the benefit of the protection of the said article.

Nor can Article 2 of Regulation No 1778/77 be regarded as a ‘general dispensation’ under Article 19 (4) of the basic regulation.

Article 113 of the EEC Treaty cannot be relied upon to extend the Council's powers beyond those provided for in the basic regulation. At most, that article could justify an amendment of the basic regulation.

According to Article 14 (2), an undertaking which the Commission considers acceptable should lead to-termination of the proceeding. The acceptance of undertakings of this kind is incompatible with the imposition of definitive duties.

The applicants formally deny the Council's contention that NSK's undertaking did not eliminate the margin of dumping, and submit that that contention is not supported by any facts or relevant considerations.

In paragraphs 136 and 137 the applicants deny the contention that the Commission did not accept the undertaking unreservedly but accepted it only after examination of the matter had been completed.

E — Discrimination

The applicants maintain that Article 3 of the contested regulation involves unlawful discrimination contrary to the principles of the law and in particular the principle of equality of treatment (paragraphs 138 to 142).

F — Misuse of powers

The applicants state that the undertakings given by the producers were not ‘freely’ offered, but were accepted on the insistence of the Commission. They maintain in particular that the inclusion of NSK UK in the undertaking constituted a misuse of powers.

Finally, the applicants briefly state that they persist in their claim for compensation for the damage which they claim to have suffered, in particular with regard to NSK UK.

B — Reasoning

The Council maintains that a regulation may be generally reasoned even where it is specific in nature. However, Regulation No 1778/77 is quite general. There was no obligation on the Council to produce in the reasoning of that regulation all the ‘evidence’ on which the Commission acted.

According to the Council, the correct comparison is between the price of goods on the domestic market and the price at which the same goods arc being sold by the associated company taken at the same time.

As regards the figure of 15 % for the margin of dumping, the finding in the ninth recital in the preamble to Council Regulation No 1778/77 is clear. The Commission having found that there was dumping and injury, the only obligation on the Council is to state the finding of the Commission.

According to the Council, the 18th recital in the preamble to Regulation No 1778/77 clearly was part of the reasoning for the imposing of a suspended duty.

C — Fundamental errors of fact

According to the Council, a dumping investigation in the course of which judgment and discretion clearly have to be exercised (see, for example, Article 4 (2) and (3) of Regulation No 459/68) falls precisely within that category of cases in which the Court has said that it will not substitute its own evaluation and will restrict itself to examining whether there is any patent error or a misuse of powers.

As to whether the injury caused by Japanese imports is due to dumping, the Council once again emphasizes that it is not incumbent on it to produce to the Court, merely because a regulation is challenged, the totality of the evidence collected during a dumping investigation. It is in any event absurd to suggest that the mere fact that material was not annexed to the case-files demonstrates that there was no evidence.

In the Council's view, the question is whether the duty should be less than the margin of dumping found. The answer is in the affirmative only if such lesser duty would be adequate to remove the injury of which the dumping was the principal cause, but the answer is in the negative if a lesser margin would not be adequate to remove the injury (not part of the injury) of which the dumping was the principal cause.

D — Other infringements of the provisions of Regulation No 459/68

The Council accepts that there are no express words in Regulation No 459/68 providing for the power to suspend a definitive duty. However, the Council considers that the fact that there are no express words to this effect should not preclude the Court from accepting that there was such power. If there is a power to impose and make effective a definitive duty, there is no necessity for there to be express words providing a general dispensation, which would be an obvious method of giving effect to the provisions and intent of Article 19 (4) of Regulation No 459/68.

As to the interpretation of Article 14 (1) and (2) of Regulation No 459/68, the Council persists in the point of view which it defended in its defence. It adds that the date when the examination ended was immediately prior to the Commission's proposal going to the Council on 4 July 1977.

The 17th recital in the preamble to the contested regulation states that ‘the four major Japanese producers have given undertakings to the Commission to revise their future prices’.

The Council maintains that in fact the undertakings were accepted only in the context of the adoption of Regulation No 1778/77.

E — Discrimination

The Council maintains that by virtue of Article 19 (3) of Regulation No 459/68, the collection of the provisional duty could not exceed 10 % as regards Nachi and Koyo. The Council emphasizes that the applicants did not proceed under Article 19 (4) of Regulation No 459/68.

F — Misuse of powers

The applicants were not forced to offer any undertaking and were well aware of what they were offering. The inclusion of NSK UK in the undertaking was necessary in order to prevent an exporter to the Community from dumping goods through its ‘limbs’.

G — As regards the claim for compensation for damage, the Council refers to its defence.

In its observations, the intervener adds to its earlier obervations concerning the Japanese and European bearings markets, in order adequately to define the context of the dispute.

A — Failure to observe procedural requirements

A distinction must be drawn between information supplied to the Commission and the use made of such information by the Commission. If the applicants' contentions were correct, they could be satisfied only if in every case everything in the Commission's files were shown to all concerned. Since in the present case alone there are hundreds of importers and many thousands of documents, it is apparent that the consequences of the applicants' interpretation are unreasonable.

Contrary to their assertions, the applicants did know the factors taken into consideration by the Commission (paragraph 192).

The whole of this part of the applicants' case is based on the mistaken contention that the applicants were entitled to see all the findings and calculations of the Commission.

The Commission maintains that the applicants' claim for damages in respect of loss of profits is plainly unfounded.