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A - ADMISSIBILITY
THE APPLICANT IS OBJECTING TO THE INDIVIDUAL DECISION FOR PAYMENT TAKEN WITH REGARD TO IT BY THE HIGH AUTHORITY ON 12 DECEMBER 1956 UNDER THE EQUALIZATION SCHEME FOR IMPORTED FERROUS SCRAP ESTABLISHED BY DECISION NO 22/54 OF 26 MARCH 1954 AND BY DECISION NO 14/55 OF 26 MARCH 1955 . IN THE APPLICANT'S VIEW THOSE DECISIONS ARE VITIATED BY CERTAIN IRREGULARITIES AND THEIR RESULTANT ILLEGALITY NECESSARILY MEANS THAT THE IMPLEMENTING DECISION TAKEN CONCERNING THE APPLICANT, WHICH IT IS CONTESTING, IS ALSO ILLEGAL .
THE DEFENDANT CONTENDS THAT THE APPLICANT CANNOT IMPUGN THE LEGALITY OF THE BASIC DECISIONS, WHICH ARE GENERAL DECISIONS, IN ITS CAPACITY AS A PRIVATE UNDERTAKING, EXCEPT UNDER THE CONDITIONS AND WITHIN THE PERIODS PRESCRIBED IN ARTICLE 33 OF THE TREATY .
UNDER ARTICLE 33, PROCEEDINGS " SHALL BE INSTITUTED WITHIN ONE MONTH OF THE NOTIFICATION OR PUBLICATION, AS THE CASE MAY BE, OF THE DECISION OR RECOMMENDATION ". IF SUCH PROCEEDINGS ARE BROUGHT BY AN UNDERTAKING OR ASSOCIATION WITHIN THE MEANING OF ARTICLE 48 OF THE TREATY AND ARE CONCERNED WITH A GENERAL DECISION OR RECOMMENDATION, THEY ARE ADMISSIBLE ONLY IF THE APPLICANTS CONSIDER IT TO INVOLVE A MISUSE OF POWERS AFFECTING THEM .
THE APPLICATION WAS LODGED ON 6 MAY 1957 AND ALTHOUGH, ON ACCOUNT OF THIS, THE TIME-LIMIT LAID DOWN IN THE LAST PARAGRAPH OF ARTICLE 33 HAS BEEN OBSERVED IN RESPECT OF THE DECISION OF 12 DECEMBER 1956, WHICH WAS MADE ENFORCEABLE BY THE ORDER FOR ENFORCEMENT APPENDED THERETO BY THE COMPETENT AUTHORITY DATED 4 MARCH 1957, A CERTIFIED COPY OF WHICH WAS COMMUNICATED BY THE HIGH AUTHORITY BY LETTER OF 30 MARCH 1957, THE PERIOD HAD EXPIRED IN THE CASE OF DECISION NO 22/54 OF 26 MARCH 1954 AND DECISION NO 14/55 OF 26 MARCH 1955 .
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THESE LAST DECISIONS ARE NOT IMPUGNED DIRECLTY BUT BY WAY OF THE APPLICATION AGAINST THE ENFORCEABLE DECISION OF 12 DECEMBER 1956 . WHILE THE DECISION OF 12 DECEMBER 1956 IS AN INDIVIDUAL DECISION AFFECTING THE APPLICANT, DECISIONS NOS 22/54 AND 14/55 ARE GENERAL DECISIONS ON WHICH THE DECISION OF 12 DECEMBER 1956 IS BASED .
IN ORDER TO ESTABLISH WHETHER, IN SUPPORT OF ITS APPLICATION AGAINST THE INDIVIDUAL DECISION, THE APPLICANT IS ENTITLED TO PLEAD THE ILLEGALITY OF THE GENERAL DECISIONS ON WHICH IT IS BASED, CONSIDERATION MUST BE GIVEN TO THE QUESTION WHETHER IT CAN IMPUGN THE INDIVIDUAL DECISION AFTER EXPIRY OF THE PERIOD PRESCRIBED IN THE LAST PARAGRAPH OF ARTICLE 33 AND BY INVOKING AGAINST IT NOT ONLY A MISUSE OF POWERS AFFECTING THE APPLICANT BUT THE FOUR GROUNDS OF ANNULMENT REFERRED TO IN THE FIRST PARAGRAPH OF ARTICLE 33 .
THE COURT TAKES THE VIEW THAT AN UNLAWFUL GENERAL DECISION MUST NOT BE APPLIED TO AN UNDERTAKING AND THAT OBLIGATIONS ON THE PART OF SUCH AN UNDERTAKING CANNOT ARISE FROM A GENERAL DECISION OF THAT NATURE .
IN THE CASE OF AN APPEAL AGAINST A DECISION OF THE HIGH AUTHORITY IMPOSING PECUNIARY SANCTIONS OR PERIODIC PENALTY PAYMENTS, ARTICLE 36 OF THE TREATY PROVIDES AS FOLLOWS : " IN SUPPORT OF ITS APPEAL, A PARTY MAY, UNDER THE SAME CONDITIONS AS IN THE FIRST PARAGRAPH OF ARTICLE 33 OF THIS TREATY, CONTEST THE LEGALITY OF THE DECISION OR RECOMMENDATION WHICH THAT PARTY IS ALLEGED NOT TO HAVE OBSERVED ". THIS PROVISION OF ARTICLE 36 IS NOT TO BE TAKEN AS A SPECIAL RULE TO BE APPLIED ONLY IN THE CASE OF PECUNIARY SANCTIONS OR PERIODIC PENALTY PAYMENTS BUT AS THE APPLICATION OF A GENERAL PRINCIPLE ON WHICH EMPHASIS IS PLACED IN ARTICLE 36 ONLY BECAUSE IT APPLIED TO THE SPECIAL CASE OF AN APPEAL IN WHICH THE COURT HAS UNLIMITED JURISDICTION . NOTHING IN THE EXPRESS REFERENCE MADE IN ARTICLE 36 CAN BE USED AS AN ARGUMENT IN RESERVE SO AS TO JUSTIFY EXCLUDING THE APPLICATION OF THE SAME RIGHT IN A CASE IN WHICH IT IS NOT EXPRESSLY MENTIONED, SINCE THE COURT HAS PREVIOUSLY RULED THAT AN ARGUMENT A CONTRARIO IS TO BE PERMITTED ONLY IF NO OTHER INTERPRETATION PROVES TO BE APPROPRIATE AND COMPATIBLE WITH THE WORDING AND CONTEXT AND THEIR UNDERLYING AIM .
ANY OTHER DECISION WOULD MAKE IT DIFFICULT TO EXERCISE THE RIGHTS OF APPEAL GRANTED TO THE UNDERTAKINGS AND ASSOCIATIONS REFERRED TO IN ARTICLE 48 OF THE TREATY, SINCE IT WOULD COMPEL THEM TO STUDY EVERY GENERAL DECISION WHEN PUBLISHED IN ORDER TO ASCERTAIN WHETHER IT IS NOT CAPABLE OF OPERATING TO THEIR DISADVANTAGE AT A LATER DATE AND WHETHER IT CANNOT BE CONSIDERED TO BE VITIATED BY MISUSE OF POWERS AFFECTING THEM; UNDERTAKINGS WOULD BE ENCOURAGED TO ALLOW THE PECUNIARY SANCTIONS OR PERIODIC PENALTY PAYMENTS PROVIDED FOR UNDER THE TREATY TO BE IMPOSED UPON THEM IN ORDER TO BE ABLE, BY VIRTUE OF ARTICLE 36, TO CONTEST THE LEGALITY OF THE GENERAL DECISIONS OR RECOMMENDATIONS WHICH THEY WERE ALLEGED NOT TO HAVE OBSERVED .
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AFTER THE EXPIRY OF THE PERIOD PRESCRIBED IN THE LAST PARAGRAPH OF ARTICLE 33, THE RIGHT OF AN UNDERTAKING, IN SUPPORT OF AN APPEAL AGAINST AN INDIVIDUAL DECISION, TO CONTEST THE LEGALITY OF A GENERAL DECISION OR RECOMMENDATION ON WHICH THE INDIVIDUAL DECISION IS BASED CANNOT RESULT IN THE ANNULMENT OF THE GENERAL DECISION BUT ONLY OF THE INDIVIDUAL DECISION TO WHICH IT HAS GIVEN RISE .
THE SAME PRINCIPLE IS EXPRESSLY EMBODIED IN THE TREATIES ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY AND THE EUROPEAN ATOMIC ENERGY COMMUNITY WHERE, IN ARTICLES 184 AND 156 THEREOF RESPECTIVELY, IT IS PROVIDED AS FOLLOWS : " NOTWITHSTANDING THE EXPIRY OF THE PERIOD LAID DOWN IN THE THIRD PARAGRAPH OF ARTICLE 173 ( OR IN THE CASE OF THE EAEC TREATY, OF ARTICLE 146 ) ANY PARTY MAY, IN PROCEEDINGS IN WHICH A REGULATION OF THE COUNCIL OR OF THE COMMISSION IS IN ISSUE, PLEAD THE GROUNDS SPECIFIED IN THE FIRST PARAGRAPH OF ARTICLE 173 ( OR IN THE CASE OF THE EAEC TREATY, OF ARTICLE 146 ), IN ORDER TO INVOKE BEFORE THE COURT OF JUSTICE THE INAPPLICABILITY OF THAT REGULATION ". WHILE THIS CIRCUMSTANCE DOES NOT CONSTITUTE A CONCLUSIVE ARGUMENT, IT CONFIRMS THE FOREGOING CONCLUSION BY SHOWING THAT IT ALSO COMMENDED ITSELF TO THE AUTHORS OF THE NEW TREATIES .
THE ANNULMENT OF AN INDIVIDUAL DECISION BASED ON THE IRREGULARITY OF THE GENERAL DECISIONS WHICH GAVE RISE TO IT APPLIES TO THE EFFECT OF GENERAL DECISIONS ONLY IN SO FAR AS THE LATTER ARE EMBODIED IN THE INDIVIDUAL DECISION WHICH IS ANNULLED . ANY UNDERTAKING IS ENTITLED TO INVOKE THE FOUR GROUNDS OF ANNULMENT REFERRED TO IN THE FIRST PARAGRAPH OF ARTICLE 33 AGAINST AN INDIVIDUAL DECISION CONCERNING IT . IN THESE CIRCUMSTANCES, WHEN PROCEEDINGS ARE BROUGHT AGAINST AN INDIVIDUAL DECISION, THERE IS NOTHING TO PREVENT AN UNDERTAKING FROM BEING ENTITLED TO INVOKE THE FOUR GROUNDS OF ANNULMENT LISTED IN THE FIRST PARAGRAPH OF ARTICLE 33 IN ORDER TO CONTEST THE LEGALITY OF THE GENERAL DECISIONS OR RECOMMENDATIONS ON WHICH THE INDIVIDUAL DECISION IS BASED .
FOR THE FOREGOING REASONS, THE APPLICATION IS ADMISSIBLE .
B - SUBSTANCE
1 . INFRINGEMENT OF THE TREATY
( A ) INFRINGEMENT OF ARTICLE 29 OF THE CONVENTION
THE APPLICANT'S CONTENTION IS THAT THE PURPOSE OF ARTICLE 29 IS CONCERN TO AVOID ANY SHIFTS IN PRODUCTION LEVELS; THE HIGH AUTHORITY IS, ACCORDINGLY, BOUND TO ADOPT SPECIAL SAFEGUARDS NOT ONLY WHEN DIFFICULTIES ARISE DURING THE ESTABLISHMENT OF THE COMMON MARKET BUT ALSO WHEN AN UNDERTAKING IS AFFECTED BY THE MEASURES WHICH THE HIGH AUTHORITY DECIDES TO ADOPT IN IMPLEMENTATION OF THE PROVISIONS OF THE TREATY - IN THE PRESENT CASE ARTICLE 53 .
NOWHERE IN ARTICLE 29 IS THERE ANY REFERENCE TO SUCH AN OBLIGATION; IT DOES NO MORE THAN RECOGNIZE THAT SAFEGUARDS MAY BE NECESSARY TO ENSURE THAT THE ESTABLISHMENT OF THE COMMON MARKET DOES NOT SUDDENLY CAUSE SHIFTS IN PRODUCTION LEVELS WHICH UNDERTAKINGS WOULD BE IN A POSITION TO OVERCOME FOLLOWING SOME ADAPTATION . THE APPLICANT HAS NOT, IN THIS CASE, ESTABLISHED THAT THE DIFFICULTIES OF WHICH IT COMPLAINS AND THAT THE SHIFTS IN PRODUCTION LEVELS WHICH IT APPREHENDS ARE ATTRIBUTABLE TO THE ESTABLISHMENT OF THE COMMON MARKET . THE FACT THAT THOSE DIFFICULTIES MAY ARISE AS A RESULT OF A MEASURE ( THE INTRODUCTION OF AN EQUALIZATION SCHEME ), WHICH THE HIGH AUTHORITY HAS ADOPTED IN EXERCISE OF THE POWERS CONFERRED UPON IT BY THE TREATY, WHEREAS THE EXERCISE OF THOSE POWERS IS NOT DIRECTLY CONNECTED WITH THE ESTABLISHMENT OF THE COMMON MARKET, CANNOT JUSTIFY THE ADOPTION OF SAFEGUARDS WITHIN THE MEANING OF ARTICLE 29 OF THE CONVENTION .
AS ARTICLE 29 OF THE CONVENTION IS NOT APPLICABLE, THIS COMPLAINT MUST BE DISMISSED . ( B ) DISTORTION OF THE NORMAL CONDITIONS OF COMPETITION
ACCORDING TO THE APPLICANT THE NORMAL COURSE OF COMPETITION HAS BEEN DISTORTED BY EQUALIZATION BECAUSE THE EFFECT OF THE LATTER WAS TO ENCOURAGE THE CONSUMPTION OF FERROUS SCRAP AT THE EXPENSE OF THAT OF PIG-IRON . THE DEFENDANT DOES NOT DISPUTE THAT THE REDUCTION IN THE PRICE OF IMPORTED SCRAP AS A RESULT OF EQUALIZATION MAY ENCOURAGE UNDERTAKINGS TO INCREASE THEIR CONSUMPTION OF SCRAP; INDEED, THE DEFENDANT ACCEPTS THAT THERE HAS BEEN SOME WORSENING OF THE APPLICANT'S POSITION AS A PRODUCER EXCLUSIVELY OF HAEMATITE PIG-IRON . NEVERTHELESS IT CORRECTED THE SITUATION BY THE ALLOCATION TO UNDERTAKINGS CONSUMING SCRAP OF A BONUS FOR FERROUS SCRAP ECONOMIES EFFECTED THROUGH INCREASED USE OF PIG-IRON ( DECISIONS NOS 26/55 AND 3/56 ).
THE QUESTION WHICH IS TO BE ANSWERED IS THEREFORE WHETHER THE HIGH AUTHORITY, CONVINCED AS IT WAS OF THE CAPITAL IMPORTANCE OF PREVENTING THE PRICE OF DOMESTIC SCRAP FROM RISING TO THE PRICE LEVEL OF IMPORTED SCRAP AND DETERMINED FOR THIS REASON TO INTRODUCE EQUALIZATION, WAS UNDER A DUTY IN LAW TO PREVENT THE SCHEME FROM HAVING ANY REPERCUSSIONS WHICH MIGHT HARM THE INTERESTS OF PRODUCERS OF PIG-IRON OR OF SOME OF THEIR NUMBER .
IN VIEW OF THE FACT THAT, WHEN INTRODUCING EQUALIZATION, THE HIGH AUTHORITY ADOPTED INDIRECT MEASURES ( THE BONUS FOR ECONOMIES IN FERROUS SCRAP THROUGH INCREASED USE OF PIG-IRON ) DESIGNED TO IMPROVE TO SOME EXTENT THE POSITION OF PIG-IRON PRODUCERS, THE QUESTION ARISES WHETHER THIS PRECAUTION WAS SUFFICIENT OR WHETHER MORE COMPREHENSIVE STEPS SHOULD HAVE BEEN TAKEN TO MAINTAIN IN ITS ENTIRETY THE COMPETITIVE POSITION OF PRODUCERS OF PIG-IRON, FOR EXAMPLE, BY A DIRECT MEASURE EXEMPTING FERROUS SCRAP USED IN PIG-IRON PRODUCTION FROM THE EQUALIZATION CONTRIBUTION .
ON THIS POINT, THE COURT CONSIDERS THAT THE APPLICANT'S CONTENTION THAT, IN ADOPTING ITS MEASURES, THE HIGH AUTHORITY OUGHT TO HAVE ENSURED THAT THERE WAS NO CHANGE IN THE COMPETITIVE POSITION OF PRODUCERS OF PIG-IRON AS COMPARED WITH OTHER SCRAP CONSUMERS IS AN UNREASONABLE DEMAND . IF IT WERE ACCEPTED THAT SUCH A STRICT OBLIGATION EXISTED IT WOULD BE NECESSARY TO APPLY IT NOT ONLY TO THE CASE OF PIG-IRON PRODUCERS BUT ALSO TO ALL CASES IN WHICH THE COMPETITIVE POSITION OF A PRODUCER COMING WITHIN THE JURISDICTION OF THE COMMUNITY WAS AFFECTED, EVEN INDIRECTLY .
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ANY SET OF ECONOMIC RULES NECESSARILY HAS CONSEQUENTIAL EFFECTS, EVEN ON THE INTERESTS OF THOSE WITHIN THE JURISDICTION TO WHOM THOSE MEASURES ARE NOT DIRECTLY ADDRESSED . THE APPLICATION OF THE PRINCIPLE ADVOCATED BY THE APPLICANT WOULD RENDER UNLAWFUL ANY ACTION IN THE ECONOMIC FIELD WHICH THE STATE CONSIDERED NECESSARY TO SAFEGUARD MAJOR INTERESTS IF IT HAD NOT PROVIDED FOR THE WHOLE RANGE OF INTERESTS INVOLVED HOWEVER REMOTE THEY MIGHT BE FROM THOSE WHICH THAT ACTION WAS PRIMARILY DESIGNED TO FURTHER . A PUBLIC AUTHORITY HAS A DUTY TO ACT WITH CIRCUMSPECTION AND TO INTERVENE ONLY AFTER CAREFULLY BALANCING THE VARIOUS INTERESTS CONCERNED WHILE SO FAR AS POSSIBLE RESTRICTING THE FORESEEABLE DAMAGE TO THIRD PARTIES . IT IS ACCORDINGLY NECESSARY TO ESTABLISH IN THIS CASE WHETHER THE HIGH AUTHORITY TOOK THE INTERESTS OF PIG-IRON PRODUCERS SUFFICIENTLY INTO ACCOUNT . IN THIS CONNEXION THE COURT ASKED THE PARTIES, DURING THE PREPARATORY INQUIRY, TO SUPPLY SPECIFIC INFORMATION ON THE RESULTS OF THE MEASURES ADOPTED BY THE HIGH AUTHORITY IN ORDER TO ENCOURAGE PURCHASERS OF FERROUS SCRAP TO INCREASE THEIR CONSUMPTION OF PIG-IRON . IN ITS REPLY THE HIGH AUTHORITY SUPPLIED INFORMATION FOR THE PERIOD 1 APRIL 1955 TO 31 JULY 1957 FROM WHICH IT APPEARS THAT ECONOMIES IN FERROUS SCRAP FOR WHICH A BONUS WAS PAID AMOUNTED TO 1 643 101 METRIC TONS OR 21 PER CENT OF IMPORTED SCRAP . THIS INFORMATION SHOWS THAT A CONSIDERABLE QUANTITY OF SCRAP WAS SAVED AND REPLACED BY PIG-IRON . THE PERIOD IN QUESTION INCLUDED SIX MONTHS UNDER THE NEW SYSTEM SET UP BY DECISION NO 2/57 BUT THIS IS OF NO SIGNIFICANCE SINCE, UNDER THE NEW RULES, THE BONUS PREVIOUSLY GRANTED FOR REPLACING SCRAP BY PIG-IRON WAS MAINTAINED FOR THOSE SIX MONTHS .
THE APPLICANT WENT ONLY SO FAR AS TO STATE THAT THERE HAD BEEN SOME REDUCTION IN THE PRODUCTION OF OPEN HEARTH STEEL COMPARED WITH THAT OF ELECTRIC STEEL BUT IT DID NOT GIVE AN ADEQUATE ANSWER TO THE QUESTION ASKED, NOR DID IT DISPUTE THE FIGURES SUPPLIED BY THE HIGH AUTHORITY . IN ITS FINAL WRITTEN CONCLUSIONS AND ITS ORAL SUBMISSIONS THE APPLICANT STATED THAT THE HIGH AUTHORITY'S DATA PROVED NOTHING SINCE IT HAD NOT INDICATED TO WHAT EXTENT UNDERTAKINGS ( AND ESPECIALLY THE APPLICANT'S UNDERTAKING ) PRODUCING HAEMATITE PIG-IRON HAD BENEFITED FROM THE ECONOMIES THUS ACHIEVED . HOWEVER, AGAINST THE CONCLUSIONS WHICH CAN, AS A WHOLE, BE DRAWN FROM THE FACTS REFERRED TO BY THE HIGH AUTHORITY, THE APPLICANT HAS NOT ADDUCED ANY INFORMATION TO SHOW THAT THE BONUS DID NOT IN FACT HAVE THE EFFECT OF MAKING GOOD THE DISADVANTAGES WHICH THE INTRODUCTION OF EQUALIZATION ENTAILED FOR PRODUCERS OF PIG-IRON .
NOR IS IT OPEN TO THE APPLICANT TO SUPPORT HIS CONTENTION BY REFERRING TO THE FACT THAT, IN THE RECITALS IN THE PREAMBLE TO DECISION NO 2/57, THE HIGH AUTHORITY ACKNOWLEDGED THAT DECISION NO 26/55 ON THE DETAILED RULES FOR IMPLEMENTATION OF THE FINANCIAL ARRANGEMENT HAD NOT BEEN ENTIRELY SUCCESSFUL IN ACHIEVING ECONOMIES IN SCRAP BY INCREASED USE OF PIG-IRON . EVEN IF THE BONUS SYSTEM DID NOT PROVIDE A COMPLETE SAFEGUARD FOR PRODUCERS OF PIG-IRON IT MUST NOT BE CONCLUDED FROM THIS THAT THAT SYSTEM GROSSLY AND ARBITRARILY NEGLECTED THE INTEREST OF PRODUCERS OF PIG-IRON . FINALLY, THE FACT BROUGHT OUT BY THE APPLICANT IN REPLY TO QUESTIONS PUT DURING THE PREPARATORY INQUIRY, THAT THE PRODUCTION OF OPEN HEARTH STEEL DID NOT FOLLOW THE SAME COURSE AS THAT OF ELECTRIC STEEL DOES NOT EXCLUDE THE POSSIBILITY THAT, AS THE HIGH AUTHORITY DEMONSTRATED, FERROUS SCRAP WAS TO AN APPRECIABLE EXTENT REPLACED BY PIG-IRON . THE APPLICANT'S CONTENTION HAS NO FOUNDATION IN FACT .
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IN ADOPTING SPECIAL MEASURES IN ORDER TO RESTRICT THE CONSUMPTION OF SCRAP BY INCREASED USE OF PIG-IRON, THE HIGH AUTHORITY DEMONSTRATED THAT IT HAD GIVEN FAIR AND CAREFUL CONSIDERATION TO THE INTERESTS OF PRODUCERS OF PIG-IRON . THE PREPARATORY INQUIRY REVEALED THAT THOSE MEASURES WERE NOT WITHOUT APPRECIABLE EFFECT . THE LEGALITY OF THE HIGH AUTHORITY'S MEASURES WAS NOT CONDITIONAL ON THEIR BEING FULLY EFFECTIVE IN MAINTAINING THE PREVIOUS SCRAP/PIG-IRON RATIO; THE EQUALIZATION SYSTEM DOES NOT, CONSEQUENTLY, INFRINGE THE RULES OF THE TREATY ON THE MAINTENANCE OF NORMAL CONDITIONS OF COMPETITION .
THE CONTENTION THAT THE EQUALIZATION SCHEME IS UNLAWFUL BECAUSE IT UNDERMINES THE APPLICANT'S COMPETITIVE POSITION IS WITHOUT FOUNDATION .
( C ) DISREGARD OF THE GENERAL OBJECTIVES OF THE TREATY
ACCORDING TO THE APPLICANT, THE INSTITUTIONS OF THE COMMUNITY ARE, UNDER ARTICLE 3 OF THE TREATY, REQUIRED TO ACT " IN THE COMMON INTEREST ", AN EXPRESSION MEANING THAT THE INSTITUTIONS MUST ACT IN THE INTERESTS OF ALL CONCERNED WITHOUT EXCEPTION; THE HIGH AUTHORITY IS, ACCORDINGLY, NOT EMPOWERED TO ADOPT MEASURES " IN THE GENERAL INTEREST ", THAT IS TO SAY, MEASURES WHICH ARE IN THE INTEREST OF THE GENERALITY OF THOSE CONCERNED, IF THOSE MEASURES ARE CAPABLE OF HARMING THE INTERESTS OF CERTAIN OF THEM, SUCH AS THOSE OF THE APPLICANT IN THE PRESENT CASE . IN ANY CASE, ARTICLE 59 ( 4 ) VESTS THE HIGH AUTHORITY WITH EXCEPTIONAL POWERS FOR CASES EXPRESSLY PROVIDED FOR . EVEN IN THOSE CASES, THE INTERESTS OF THOSE CONCERNED ARE THE SUBJECT OF CERTAIN SAFEGUARDS SPECIFIED BOTH IN ARTICLE 59 AND IN ANNEX II TO THE TREATY; IT FOLLOWS THAT THE HIGH AUTHORITY IS ALSO BOUND TO OBSERVE THESE SAFEGUARDS WHEN IT ACTS UNDER ARTICLE 53 .
THE COURT REJECTS THE INTERPRETATION PLACED BY THE APPLICANT ON THE EXPRESSION " COMMON INTEREST "; AS WAS STATED IN SECTION ( B ) ABOVE, THE HIGH AUTHORITY'S ROLE AS A PUBLIC AUTHORITY DOES NOT INVOLVE AN OBLIGATION TO USE ITS POWER TO MAKE REGULATIONS ONLY ON CONDITION THAT NO INTEREST IS ADVERSELY AFFECTED . THIS DOES NOT MEAN THAT THE HIGH AUTHORITY MAY IGNORE THE SPECIAL INTERESTS OF THOSE CONCERNED AND ACT SO HARSHLY THAT THOSE INTERESTS ARE COMPROMISED VERY MUCH MORE THAN CAN REASONABLY BE EXPECTED . ON THE CONTRARY THE HIGH AUTHORITY IS BOUND TO ACT WITH ALL THE CIRCUMSPECTION AND CARE REQUIRED TO BALANCE AND ASSESS THE VARIOUS, OFTEN CONFLICTING, INTERESTS INVOLVED AND TO AVOID HARMFUL CONSEQUENCES IN SO FAR AS, WITHIN REASON, THE NATURE OF THE DECISION TO BE TAKEN PERMITS . WHERE THE HIGH AUTHORITY IS EMPOWERED TO PROMULGATE MEASURES " IN THE COMMON INTEREST ", IT CAN USE ITS POWER TO MAKE REGULATIONS AS THE CIRCUMSTANCES REQUIRE, EVEN AT THE EXPENSE OF CERTAIN INDIVIDUAL INTERESTS .
NOR IS THERE ANY JUSTIFICATION FOR THE REFERENCE TO ARTICLE 59 . THE PRECAUTIONARY MEASURES PRESCRIBED IN THAT ARTICLE AND ALSO IN ANNEX II TO THE TREATY ARE BOUND UP WITH THE EXERCISE OF THE EXCEPTIONAL POWERS LAID DOWN FOR THE SITUATION REFERRED TO THEREIN . SUCH A SITUATION DID NOT EXIST AT THE TIME WHEN THE DECISIONS WERE TAKEN . THE FACT THAT THE HIGH AUTHORITY CANNOT MAKE A FAIR ALLOCATION OF THE RESOURCES WITHOUT HAVING TO CONSULT THE UNDERTAKINGS CONCERNED IS EXPLAINED BY THE SERIOUSNESS OF THE SITUATION WHICH SUCH AN ALLOCATION HAS TO DEAL WITH BUT THIS IS NO JUSTIFICATION FOR TURNING THAT SPECIAL PROVISION INTO ONE OF GENERAL APPLICATION APART FROM THE CASE REFERRED TO IN ARTICLE 59 .
( D ) PROHIBITED DISCRIMINATION GIVING RISE TO AN INDIRECT SUBSIDY
( I ) THE FIRST COMPLAINT MADE BY THE APPLICANT UNDER THIS HEADING IS BASED ON THE FACT THAT ITS SITUATION CANNOT BE COMPARED WITH THAT OF OTHER SCRAP CONSUMERS; IT USES ONLY SCRAP FROM LYON DISTRICT FOR WHICH THERE WAS NO NEED WHATEVER FOR EQUALIZATION . IT DENIES THAT THE PRICE OF LYON SCRAP WOULD FALL INTO LINE WITH THAT OF IMPORTED SCRAP IF EQUALIZATION HAD NOT BEEN INTRODUCED; THE APPLICANT DESCRIBES THE CLAIM TO THE CONTRARY AS A HYPOTHETICAL ONE WHICH IS INCAPABLE OF BEING CHECKED . THE COURT REJECTS THIS COMPLAINT SINCE THERE CAN BE NO DOUBT THAT, SO LONG AS THE SUPPLY OF DOMESTIC SCRAP IS INSUFFICIENT TO MEET THE NEEDS OF THE COMMON MARKET, THE PRICES OF DOMESTIC SCRAP WILL TEND TO FALL INTO LINE WITH THE HIGHER PRICES OF IMPORTED SCRAP . THERE IS NO REASON WHY THE PRICE OF SCRAP IN THE LYON DISTRICT SHOULD NOT FOLLOW THIS GENERAL TENDENCY AND THE APPLICANT HAS FAILED TO MENTION ANY SPECIAL CIRCUMSTANCES WHICH WOULD ESTABLISH THAT THE LYON DISTRICT IS NOT AFFECTED BY THE GENERAL TREND OF PRICES . MOREOVER, IT FOLLOWS FROM THE FIGURES PRODUCED DURING THE PREPARATORY INQUIRY THAT THE PRICES FOR SCRAP IN THE LYON DISTRICT WENT UP IN PARALLEL WITH THE PRICE OF SCRAP IN OTHER DISTRICTS AND THE PRICE OF IMPORTED SCRAP . FURTHERMORE THE APPLICANT ITSELF STATED THAT THE PRICE OF SCRAP WHICH IT BOUGHT SHOWED SOME INCREASE ON ACCOUNT OF PURCHASES BY COMPETING UNDERTAKINGS, ESPECIALLY FOUNDRIES USING HOT-BLAST CUPOLAS WHICH AT LEAST IN PART, ARE NOT SUBJECT TO THE EQUALIZATION SCHEME .
NOR IS THERE ANY SUBSTANCE IN THE APPLICANT'S CONTENTION THAT THERE IS NO POSSIBILITY OF THE COMPETING UNDERTAKINGS OBTAINING SUPPLIS ON THE LYON MARKET IN LIGHT SCRAP . IN THE LYON DISTRICT THE APPLICANT IS NOT THE ONLY SCRAP PURCHASER AND THERE IS NO REASON FOR BELIEVING THAT OTHER PURCHASERS WOULD NOT ENTER THIS MARKET IF THE DIFFERENCE IN PRICES WERE APPRECIABLY GREATER THAN THE DIFFERENCE ATTRIBUTABLE TO ADDITIONAL TRANSPORT COSTS .
( II ) SECONDLY, THE APPLICANT CLAIMS THAT THE APPLICATION OF A UNIFORM EQUALIZATION RATE TO ALL CATEGORIES OF SCRAP CONSTITUTES A DISCRIMINATORY MEASURE PROHIBITED UNDER THE PROVISIONS OF ARTICLE 4 ( B ) OF THE TREATY . THE APPLICANT CLAIMS TO USE ONLY LIGHT SCRAP, WHICH IT OBTAINS CHEAPLY AND ON WHICH THE UNIFORM EQUALIZATION RATE FALLS RELATIVELY MORE HEAVILY THAN IN THE CASE OF THE HEAVY SCRAP USED BY THE STEEL MILLS . THE COMPAGNIE DE CHASSE IS ACCORDINGLY NOT IN A SITUATION WHICH COMPARES WITH THAT OF THE STEEL MILLS AND IN THOSE CIRCUMSTANCES THE APPLICATION IN THIS CASE OF UNIFORM RULES IS ALLEGED TO CONSTITUTE UNLAWFUL DISCRIMINATION .
ON THE OTHER HAND THE DEFENDANT STATES THAT THERE IS MUCH IN COMMON BETWEEN THE VARIOUS CATEGORIES OF FERROUS SCRAP AS A RESULT OF THE FACT THAT THEY ARE INTERCHANGEABLE AND THAT THEY ARE USED JOINTLY BY THE VARIOUS CONSUMERS . ACCORDINGLY, THE DIFFERENT EFFECTS OF THE EQUALIZATION RATE ON THE VARIOUS CATEGORIES OF SCRAP PUT THE APPLICANT IN A POSITION COMPARABLE TO THAT OF OTHER CONSUMERS SO THAT THERE CAN BE NO QUESTION OF THE SCHEME'S BEING DISCRIMINATORY .
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IT IS CLEAR FROM THE DOCUMENTS PUT IN BY THE PARTIES DURING THE PREPARATORY INQUIRY THAT NEITHER THE APPLICANT NOR ANY OTHER SCRAP CONSUMER EXCLUSIVELY USES ONE CATEGORY OF SCRAP . FOR EXAMPLE, IN ITS CONSUMPTION OF SCRAP, THE APPLICANT USES, ACCORDING TO THE NOMENCLATURE ESTABLISHED BY THE HIGH AUTHORITY ( DECISION NO 28/53, JO NO 5 OF 15.3.1953, PP . 98 AND 99 ), APPROXIMATELY 80 PER CENT OF " TURNINGS " AND 20 PER CENT OF BALES COMING UNDER THE CATEGORY OF " LIGHT SCRAP " , WHEREAS THE STEEL MILLS IN THE SAME REGION USE BETWEEN 10 PER CENT AND 25 PER CENT " TURNINGS " AND, IN ADDITION, " HEAVY " AND " LIGHT " SCRAP IN VARIOUS PROPORTIONS .
THERE ARE, THEREFORE, TWO GROUPS OF PURCHASERS USING TO SOME EXTENT THE SAME CATEGORIES OF SCRAP . HOWEVER, INASMUCH AS THE STEEL MILLS HAVE, AS FAR AS 75 PER CENT OF THEIR PURCHASES ARE CONCERNED, BOUGHT CERTAIN CATEGORIES WHICH THE APPLICANT DOES NOT USE, IT IS CONCEIVABLE THAT A UNIFORM RATE MAY HAVE DIFFERENT EFFECTS . BUT THE PREPARATORY INQUIRY DID NOT REVEAL ANY SPECIFIC EVIDENCE THAT SUCH A DIFFERENCE EXISTS . CONSIDERING THAT ANY DIFFERENCE COULD ONLY MAKE ITSELF FELT IN THE CASE OF A PROPORTION OF THE PURCHASES AND BEARING IN MIND THE GENERAL TENDENCY TOWARDS THE ALIGNMENT OF PRICES APPLICABLE TO THE CATEGORIES OF SCRAP OF FOREIGN AND DOMESTIC ORIGIN THE APPLICANT HAS NOT ADVANCED SUFFICIENT LEGAL PROOF THAT THE APPLICATION OF A UNIFORM RATE CONSTITUTED DISCRIMINATION TO ITS DETRIMENT .
IN THESE CIRCUMSTANCES, THIS COMPLAINT CANNOT BE ACCEPTED AS WELL FOUNDED .
( III ) THE THIRD POINT RAISED BY THE APPLICANT CONCERNS THE INFRINGEMENT OF ARTICLE 4 ( C ) OF THE TREATY AS A RESULT OF THE DISCRIMINATORY EFFECT, AMOUNTING TO AN INDIRECT SUBSIDY, CREATED BY THE EQUALIZATION SCHEME IN FAVOUR OF THE STEEL MILLS AND AT THE EXPENSE OF PRODUCERS OF PIG-IRON . THE DEFENDANT ADMITS THAT EQUALIZATION TENDED TO ENCOURAGE THE CONSUMPTION OF SCRAP, AND THAT IS WHY IT WISHED TO COUNTERACT THIS EFFECT BY INTRODUCING A BONUS FOR ANY INCREASE IN THE CONSUMPTION OF PIG-IRON . THIS ISSUE HAS ALREADY BEEN CONSIDERED ABOVE UNDER HEADING ( B ) FOR THE PURPOSE OF DETERMINING WHETHER THERE WAS ANY GROUND FOR BELIEVING THAT THERE HAS BEEN INTERFERENCE WITH THE NORMAL CONDITIONS OF COMPETITION, A QUESTION WHICH WAS ANSWERED IN THE NEGATIVE . FOR THE SAME REASONS, THE CHANGES WHICH OCCURRED IN THE RESPECTIVE POSITIONS OF PRODUCERS OF PIG-IRON AND THE STEEL MILLS AS A RESULT OF THE DECISIONS CANNOT BE DESCRIBED AS EITHER DISCRIMINATION OR AS INDIRECT SUBSIDIES SINCE THE PROHIBITION OF THE LATTER IN ARTICLE 4 ( C ) OF THE TREATY REFERS ONLY TO SUBSIDIES GRANTED BY THE STATES . THIS COMPLAINT IS THEREFORE WITHOUT FOUNDATION .
2 . MISUSE OF POWERS
THE TWO PARTIES AGREE THAT, IN ORDER TO PROVE A MISUSE OF POWERS, IT MUST FIRST OF ALL BE ESTABLISHED THAT POWERS EXIST AND THEN THAT THEY HAVE BEEN USED FOR A PURPOSE OTHER THAN THAT FOR WHICH THEY WERE CONFERRED .
THE PARTIES ARE AGREED THAT UNDER ARTICLE 53 ( B ) OF THE TREATY THERE IS A POWER TO SET UP A FINANCIAL ARRANGEMENT, THAT IS TO SAY AN EQUALIZATION SCHEME; THE COURT ALSO CONSIDERS THAT THIS POINT HAS BEEN ESTABLISHED .
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THE ONLY QUESTION, THEREFORE, IS WHETHER THE USE TO WHICH THE HIGH AUTHORITY PUT THIS POWER CAN BE DESCRIBED AS A MISUSE OF POWERS . THE MAJORITY OF THE APPLICANT'S ARGUMENTS HAVE ALREADY BEEN CONSIDERED ABOVE FROM THE STANDPOINT OF INFRINGEMENT OF THE TREATY; IN THE CIRCUMSTANCES OF THIS CASE THERE IS NO NEED TO CONSIDER THEM AFRESH FROM THE STANDPOINT OF A MISUSE OF POWERS, SINCE THE APPLICANT FAILED TO SPECIFY WHAT THIS ILLEGALITY CONSISTS IN . ON THE OTHER HAND THE COMPLAINTS WHICH THE APPLICANT HAS ADDED TO THOSE WHICH HAVE ALREADY BEEN CONSIDERED MUST BE LOOKED INTO MORE PARTICULARLY FROM THE STANDPOINT OF MISUSE OF POWERS .
IN THE FIRST PLACE THE APPLICANT IS OF THE OPINION THAT, BY INTRODUCING EQUALIZATION UNDER ARTICLE 53 ( B ) OF THE TREATY, THE HIGH AUTHORITY EVIDENCED ITS INTENTION OF EVADING THE SAFEGUARDS PROVIDED FOR IN THE PROVISIONS OF THE TREATY COVERING EXCEPTIONAL SITUATIONS, SUCH AS THE SAFEGUARDS IN ARTICLE 59 OF THE TREATY .
IN THIS CONNEXION IT MUST BE RECOGNIZED THAT THERE MIGHT HAVE BEEN A MISUSE OF POWERS IF THE HIGH AUTHORITY HAD BEEN FACED WITH A SITUATION COVERED BY THE PROCEDURE IN ARTICLE 59 AND, IN ORDER TO EVADE THE SAFEGUARDS PROVIDED FOR IN ARTICLE 59, HAD NEVERTHELESS DELIBERATELY DECIDED TO MAKE USE OF ARTICLE 53 ( B ) AND OF THE FINANCIAL ARRANGEMENTS PROVIDED FOR THEREIN, BUT IT HAS NOT BEEN ESTABLISHED THAT, WHEN THE BASIC DECISIONS WERE TAKEN, THE HIGH AUTHORITY WAS FACED WITH SUCH A SITUATION . IN THE CIRCUMSTANCES, THERE IS NO EVIDENCE THAT THE INTRODUCTION OF THE EQUALIZATION SYSTEM BY WAY OF A FINANCIAL ARRANGEMENT ESTABLISHED PURSUANT TO ARTICLE 53 ( B ) WAS VITIATED BY MISUSE OF POWERS . THE COMPLAINT IS WITHOUT FOUNDATION . SECONDLY, THE APPLICANT HAS CLAIMED THAT, ACCORDING TO THE WORDING OF THE DECISIONS INTRODUCING EQUALIZATION, THEIR OBJECT WAS THE REGULAR SUPPLY OF SCRAP TO THE COMMON MARKET BUT THAT THIS AIM HAD BEEN SUBSTITUTED FOR THE OBJECTIVE SET OUT IN THE MEMORANDUM OF THE HIGH AUTHORITY DEFINING THE GENERAL OBJECTIVE, PUBLISHED IN THE JOURNAL OFFICIEL OF 6 JULY 1955, NAMELY, AN ATTEMPT TO BALANCE THE PIG-IRON/STEEL MARKET . THE APPLICANT IS OF THE OPINION THAT THIS SUBSTITUTION IS EVIDENCE OF MISUSE OF POWERS . THE DEFENDANT HAS REPLIED THAT NEITHER THE MEMORANDUM NOR THE BASIC DECISIONS WERE CONCERNED WITH TRYING TO STRIKE A BALANCE BETWEEN THE CONFLICTING INTERESTS OF PIG-IRON PRODUCERS AND STEEL PRODUCERS BUT WITH PUTTING INTO EFFECT A SERIES OF MEASURES WHICH, IN THE HIGH AUTHORITY'S VIEW, WERE REQUIRED BY THE ECONOMIC EXPANSION WHICH WAS TO BE FORESEEN . IN THIS CONTEXT, THE DECISIONS OF THE HIGH AUTHORITY HAD AS THEIR OBJECT THE ESTABLISHMENT OF REASONABLE PRICES FOR FERROUS SCRAP WITH A VIEW TO ENSURING A REGULAR SUPPLY OF THIS MATERIAL TOGETHER WITH AN INCREASE IN OUTPUT CAPACITY FOR PIG-IRON .
THIS GROUND OF COMPLAINT MUST BE REJECTED BECAUSE THE LEGALITY OF THE BASIC DECISIONS CANNOT DEPEND ON THEIR CONFORMITY OR OTHERWISE WITH THE MEMORANDUM PUBLISHED BY THE HIGH AUTHORITY BUT ONLY ON THEIR CONFORMITY OR OTHERWISE WITH THE TREATY . IN NO SENSE DOES THE MEMORANDUM CONTAIN THE ONLY POSSIBLE DEFINITION OF THE LEGAL OBJECTIVE WHICH THE HIGH AUTHORITY IS ENTITLED TO PURSUE . TO PROVE A MISUSE OF POWERS THE APPLICANT WOULD HAVE HAD TO DEMONSTRATE THAT THE DECISIONS THEMSELVES WERE IN FACT PURSUING AN OBJECTIVE OTHER THAN THAT FOR THE PURPOSES OF WHICH THE HIGH AUTHORITY WAS ENTITLED TO ACT; THE VARIATION WHICH THE APPLICANT HAS POINTED OUT BETWEEN THE WORDING OF THE MEMORANDUM AND THAT OF THE BASIC DECISIONS DOES NOT SUFFICE TO CONSTITUTE SUCH EVIDENCE .
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THIRDLY THE APPLICANT CLAIMS THAT AN EXAMPLE OF MISUSE OF POWERS ARISES FROM THE APPLICATION OF A UNIFORM EQUALIZATION RATE NOT BECAUSE SUCH UNIFORMITY WAS NECESSARY TO ATTAIN THE OBJECTIVE PURSUED BUT IN ORDER TO AVOID THE ADMINISTRATIVE COMPLICATIONS WHICH WOULD HAVE BEEN CREATED BY THE APPLICATION OF A GRADED RATE, WHICH WOULD HAVE HAD A BALANCED EFFECT ON THE PRICE OF THE VARIOUS QUALITIES OF SCRAP, PARTICULARLY THOSE USED EXCLUSIVELY BY INDEPENDENT PIG-IRON PRODUCERS .
IT IS TRUE THAT, IN ITS WRITTEN OBSERVATIONS AND DURING THE PREPARATORY INQUIRY, THE DEFENDANT POINTED OUT THE DIFFICULTIES AND ADMINISTRATIVE COMPLICATIONS WHICH WOULD HAVE ENSUED IF A SYSTEM OF GRADUATED RATES HAD BEEN APPLIED . THERE IS NOTHING HOWEVER TO JUSTIFY THE STATEMENT THAT THE MAIN REASON WHICH LED THE HIGH AUTHORITY TO INTRODUCE A UNIFORM RATE WAS THE DESIRE TO AVOID COMPLICATIONS OF THAT NATURE; SINCE THIS RATE WAS CONSISTENT WITH THE PROVISIONS OF THE TREATY, THE CONTESTED DECISIONS WOULD STILL BE IN ORDER EVEN IF IT WERE PROVED THAT A UNIFORM RATE WAS ALSO SELECTED OUT OF CONCERN TO AVOID ADMINISTRATIVE COMPLICATIONS .
THIS COMPLAINT IS THEREFORE WITHOUT FOUNDATION .
UNDER ARTICLE 60 OF THE RULES OF PROCEDURE OF THE COURT OF JUSTICE, THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS BUT WHERE PARTIES SUCCEED ON SOME AND FAIL ON OTHER HEADS, THE COURT MAY ORDER THEM TO BEAR THEIR OWN COSTS IN WHOLE OR IN PART .
AS THE DEFENDANT HAS FAILED IN ITS SUBMISSION CONCERNING THE ADMISSIBILITY OF THE APPLICATION, IT MUST BEAR A QUARTER OF THE TOTAL OF THE COSTS, THE REMAINING THREE-QUARTERS BEING PAID BY THE APPLICANT .
THE COURT
HEREBY :
1 . DISMISSES THE APPLICATION FOR ANNULMENT OF THE DECISION OF THE HIGH AUTHORITY OF 12 DECEMBER 1956 DECLARING THAT THE COMPAGNIE DES HAUTS FOURNEAUX DE CHASSE, CHASSE-SUR-RHONE, ISERE, SHALL PAY TO THE CAISSE DE PEREQUATION DES FERRAILLES IMPORTEES THE SUM DUE ON 31 AUGUST 1956 IN IMPLEMENTATION OF THE PROVISIONS RELATING TO THE EQUALIZATION OF IMPORTED FERROUS SCRAP;
2 . ORDERS THE DEFENDANT TO PAY A QUARTER OF THE COSTS OF THE ACTION AND THE APPLICANT TO PAY THREE-QUARTERS THEREOF .
