Court of Justice 21-03-1997 ECLI:EU:C:1997:185

Facts and legal background

The Council adopted the contested regulation on the basis of Article 109(1) of Council Decision 91/482/EEC of 25 July 1991 on the association of the overseas countries and territories with the European Economic Community (OJ 1991 L 263, p. 1), in conjunction with Article 1(7) of Annex IV thereto.

According to Article 109(1) of Decision 91/482, ‘if, as a result of the application of this Decision, serious disturbances occur in a sector of the economy of the Community or one or more of its Member States, or their external financial stability is jeopardized, or if difficulties arise which may result in a deterioration in a sector of the Community's activity or in a region of the Community, the Commission may, in accordance with the procedure specified in Annex IV, take, or authorize the Member State concerned to take, the necessary safeguard measures’.

Annex IV to Decision 91/482 provides, inter alia, that any Member State may refer the Commission's decision to the Council which, acting by a qualified majority, may adopt a different decision within 21 working days.

The reasons which led to the adoption of the contested regulation, and the procedure which led up to it, are summarized in the preamble to that regulation.

Article 1 of the contested regulation provides that imports into the Community of rice originating in the overseas countries and territories (OCT) benefiting from exemption from customs duties are to be restricted during the period from 1 January to 30 April 1997 to the quantities of husked rice equivalent of 8 000 tonnes for rice originating in Montserrat and in the Turks and Caicos Islands and 36 728 tonnes for rice originating in the other OCT.

The other provisions of the contested regulation determine procedure and the detailed rules for the application of that quota system.

Arguments of the parties

In support of its application for interim measures, the applicant sets out, first, its pleas of fact and law for establishing a prima fade case for the grant of the measures and, second, the circumstances establishing urgency.

For the purpose of establishing a prima facie case, the applicant puts forward five separate pleas.

The first plea alleges infringement of Article 109(1) of Decision 91/482. First of all, the Council errs in taking the view that that provision confers a power to introduce safeguard measures on grounds relating to quantities or price levels of products imported from the OCT. Secondly, it is manifestly erroneous to claim that imports of rice from the OCT are effected at such low prices and in such large quantities as to cause or threaten to cause a disturbance on the Community market in rice.

The second plea alleges infringement of Article 109(2) of Decision 91/482. First, the safeguard measure chiefly protects exports of rice from third countries to the Community. Secondly, both the Commission and the Council neglected to inquire into the consequences of that decision for the OCT and the industries most involved. Thirdly, neither the Commission nor the Council envisaged the possibility of deciding on less restrictive safeguard measures. Fourthly, Article 109(2) of Decision 91/482 was infringed owing to the fact that the person seeking an import licence must provide a security equivalent to the third-countries duty in force on the date of application.

The third plea alleges misuse of powers by the Council. By adopting the safeguard measures at issue, the Council sought to oppose the freedom to import rice from the OCT into the Community, thus avoiding an amendment of Decision 91/482 by a decision which would have required unanimity.

The fourth plea alleges breach of the rules of procedure laid down in Annex IV to Decision 91/482. First of all, the Council adopted its decision on the basis of the Commission's assertions, without itself ascertaining, as it ought to have done, whether the conditions for the application of Decision 91/482 were met. Finally, the retrospective nature of the contested regulation is contrary to Article 1(4) of Annex IV to Decision 91/482 which provides that the decision is to ‘apply with immediate effect’ and makes no mention of retrospective effect.

The fifth plea alleges infringement of Article 190 of the EC Treaty. The contested regulation contains no adequate statement of the reasons on which it is based.

The applicant also maintains that the contested regulation is causing serious and irreparable loss in the Netherlands Antilles and Aruba. The rice trade is totally paralysed and the undertakings concerned can no longer carry on business. In view of this situation it is to be feared that, failing the adoption of interim measures, it will not be possible for business to resume after 30 April 1997, since the undertakings will not have survived or will in the meantime have lost their qualified staff.

That would have serious economic effects on the regions in question. As far as the Netherlands Antilles are concerned, the contested regulation compromises the 1996-2000 structural adjustment plan which it adopted for the International Monetary Fund. The impact on the rice sector has a negative impact on the macroeconomic development of the Netherlands Antilles. Furthermore, the contested regulation has a negative impact on confidence in the trading system of the OCT and on the investment climate in that region. As regards Aruba, whose economy is strongly dependent on rice exports, the contested regulation also has a negative impact on the macroeconomic situation and public finances.

As to the balance of interests, the applicant maintains that it comes down in favour of suspension or modification of the contested regulation, which would not have an adverse effect on the Community market in rice.

Findings

Pursuant to Articles 185 and 186 of the Treaty, the Court may, if it considers that the circumstances so require, order that the contested act be suspended, or prescribe in cases before it any necessary interim measures.

The judge hearing an application for interim relief may order suspension of the operation of an act, or other interim measures, if it is established that such an order is justified, prima facie, in fact and in law and that it is urgent in so far as, in order to avoid serious and irreparable harm to the applicant's interests, it must be made and produce its effects before a decision is reached in the main action. Such an order must further be provisional, inasmuch as it must not prejudge the points of law or fact in issue or neutralize in advance the effects of the decision subsequently to be given in the main action (order of 19 July 1995 in Case C-l49/95 P(R) Commission v Atlantic Container Line and Others [1995] ECR 2165, paragraph 22).

In the context of that overall examination, the judge hearing the application enjoys a broad discretion and is free to determine, having regard to the specific circumstances of the case, the manner and order in which those various conditions are to be examined, there being no rule of Community law imposing a preestablished scheme of analysis within which the need to order interim measures must be assessed (orders in Commission v Atlantic Container Line and Others, cited above, paragraph 23, and of 12 July 1996 in Case C-180/96 R United Kingdom v Commission [1996] ECR I-3903, paragraph 45).

In the present case, it is apparent that the contested measure whose suspension or modification is sought will cease to be applicable on 1 May 1997. Any suspension or other interim measure which the judge hearing this application for interim relief may decide to grant therefore serves a purpose distinct from that of the main proceedings only if it is adopted very soon after the date on which the application was lodged.

In that connection, the applicant has, moreover, requested, pursuant to Article 84(2) of the Rules of Procedure, that its application be decided without waiting for the defendant to submit its observations.

However, it should be observed that, in the present case, a decision by the judge hearing the application, adopted in circumstances of urgency, to suspend or modify the contested regulation would in practice have more or less definitive effects, regard being had to the limited duration of that regulation.

In those circumstances, it is for the judge hearing the application to weigh the applicant's interest in the immediate adoption of an interim measure, on the one hand, and observance of the rights of defence of the other parties to the proceedings, on the other, having regard to what such an interim measure would actually involve.

In the present case it was considered appropriate to decide the application as quickly as possible in order to guarantee the right to effective judicial protection, but to do so after hearing the parties' oral submissions. In the context of such a procedure, it was for the applicant to put forward matters of a particularly serious nature in order to succeed in establishing a case for suspension or modification of the contested act.

In that context, it should be pointed out that, although the applicant's pleas do not appear to be entirely without foundation, they none the less raise particularly complex legal problems and economic questions which merit thorough examination after a hearing inter partes.

The contested regulation falls within a sector in which the Council appears to have a large margin of discretion in deciding whether the conditions justifying the adoption of a safeguard measure exist and most of the applicant's pleas specifically concern the manner in which the Council exercised the discretion which it appears to enjoy with respect to the need for such a measure and to the detailed rules for its application which it is to contain.

In such circumstances, given both the nature of the contested measures and the more or less definitive effects which his order may bring about, the judge hearing the application for interim relief may substitute his assessment for that of the Council only in exceptional circumstances.

In the present case it need only be stated that the urgency relied on by the applicant does not appear to be established to the requisite legal standard.

The applicant has been unable to provide evidence in support of its assertions concerning the serious and irreparable damage which would be caused by the maintenance in force until 30 April 1997 of the contested regulation.

As far as the damage suffered by the processing undertakings established in the Netherlands Antilles and Aruba are concerned, it may be regarded as proven, following the hearing, that they were able to continue exporting to the Community at least until the end of February 1997, and that they maintain a low level of business activity on their domestic market.

It cannot, admittedly, be ruled out that those undertakings are suffering financial losses of a certain order of magnitude. However, such losses could be made the subject of reparation.

On the other hand, it would not appear that the undertakings in question find themselves in a financial situation threatening their very existence. In particular, the assertions that it is to be feared in the current situation that they will be unable to resume business after 30 April 1997 are unsupported by any evidence.

As to the damage said to be caused by the contested regulation to the macroeconomic situation of the Netherlands Antilles and Aruba, that damage appears to be entirely uncertain and contingent. The arguments put forward by the applicant do not reveal that the maintenance in force until 30 April 1997 of the contested safeguard measure would have irreversible consequences for the overall economic situation of those territories in the medium term.

Finally, since the applicant has raised the possibility of renewal of the safeguard measure on expiry of the validity of the contested regulation, it should be added that the damage which might be sustained in that event cannot be taken into consideration in the context of these proceedings.

It follows from the foregoing that the application for interim relief must be dismissed.