Judgment of the Court (Sixth Chamber) of 6 July 1988. - Dillinger Hüttenwerke AG v Commission of the European Communities. - Action for a declaration of nullity under Article 33 of the ECSC Treaty - Steel - Allocation of additional references to a competitor. - Case 236/86.
European Court reports 1988 Page 03761
1 . Action for a declaration of nullity - Action brought by an undertaking against an individual ECSC decision of which it is not the addressee - Decision conferring benefits on competitors
( ECSC Treaty, Art . 33 ( 2 ) )
2 . Action for a delaration of nullity - Limitation periods - Starting point - Decision neither published nor notified to the applicant - Precise knowledge of the content and reasons - Duty to request the whole text of the decision within a reasonable time once its existence is known
( ECSC Treaty, Art . 33 ( 3 ) )
3 . ECSC - Production - System of quotas for the production and delivery of steel - Determination of reference production and reference quantities in the event of merger - Adjustments - Allocation of additional references in order to give incentive to plant closure - No legal basis in general Decision No 3485/85
( general Decision No 3485/85, Art . 13 )
1 . An undertaking is concerned, within the meaning of Article 33 ( 2 ) of the ECSC Treaty , by an individual decision of the Commission enabling benefits to be conferred on one or several other undertaking which are in competition with it .
In the context of the system of quotas for the production and delivery of steel, an undertaking producing only one category of products is concerned by a decision of the Commission granting, in that same category, additional reference production and reference quantities to a competitor undertaking .
2 . In the absence of publication or notification, it is for a party that has knowledge of a decision concerning it to request the whole text thereof within a reasonable period . Subject to that proviso, the period for bringing an action begins to run only from the moment when the third party concerned has precise knowledge of the content of the decision in question and of the reasons on which it is based in such a way as to enable it to exercise its right of action .
3 . Article 13 ( 4 ) of general Decision No 3485/85 confers on the Commission, in cases of concentration of undertakings, separation of merged undertakings and the formation of independent undertakings, the power to carry out the adjustments needed to reference production and reference quantities, that is to modify the results of the calculations made in accordance with the basic rules laid down in paragraphs ( 1 ), ( 2 ) and ( 3 ) of that article, for the purpose of allocating new references in such cases .
However, neither the wording of that provision nor the reasons on which the general decision are based provide any criteria enabling the conditions to be determined in which such adjustments are to be deemed "needed", so that reference must be made to the purpose of the quota system, which is to spread in the most equitable manner possible amongst all undertakings the limitations on production required by the steel crisis . It follows that the adjustments which the Commission may carry out in accordance with Article 13 ( 4 ) can only be deemed to be needed if the application of the basic rules were to bring about inequitable results . Therefore, the allocation of additional references as a means of encouraging the closure of plant has no legal basis in Article 13 ( 4 ).
However, although it is permissible for the Commission, in exercising its responsibilities in the management of the crisis in the steel manufacturing sector, to pursue a policy of incentives to restructuring, where appropriate by allocating additional references as compensation for plant closures entailing reductions in capacity, it may not do so by means of individual decisions which have no legal basis in the applicable general decision .
In Case 236/86
Dillinger Huettenwerke AG, a company incorporated under German law having its registered office in Dillingen-Saar ( Germany ), represented by Messrs Arved Deringer, Claus Tessin, Hans-Juergen Herrmann and Jochim Sedemund, Rechtsanwaelte, Cologne, with an address for service in Luxembourg at the office of Mr Jacques Loesch, 8 rue Zithe,
Commission of the European Communities, represented by its Legal Adviser, Mr Rolf Waegenbaur, acting as Agent, with an address for service in Luxembourg at the office of Mr G . Kremlis, a member of its Legal Department, Jean Monnet Building, Kirchberg,
APPLICATION for a declaration that individual decision No SG ( 86 ) D/3794 of the Commission of 26 March 1986, addressed to the British Steel Corporation pursuant to Article 13 ( 1 ) and ( 4 ) of Commission Decision No 3485/85/ECSC of 27 November 1985 on the extension of the system of monitoring and production quotas for certain products of undertakings in the steel industry ( Official Journal L 340, p . 5 ), is void,
THE COURT ( Sixth Chamber )
composed of : O . Due, President of Chamber, G . C . Rodríguez Iglesias, T . Koopmans, K . Bahlmann and C . Kakouris, Judges,
Advocate General : M . Darmon
Registrar : H . A . Ruehl, Principal Administrator
having regard to the Report for the Hearing and further to the hearing on 19 January 1988,
after hearing the Opinion of the Advocate General delivered at the sitting on 19 April 1988,
gives the following
1 By an application lodged at the Court Registry on 5 September 1986, Dillinger Huettenwerke AG brought an action under the second paragraph of Article 33 of the ECSC Treaty for a declaration that the Commission' s individual Decision No SG ( 86 ) D/3794 of 26 March 1986, addressed to the British Steel Corporation ( hereinafter referred to as "BSC "), was void .
2 BSC is a manufacturer of a vast range of steel products, in particular various flat products in categories Ia, Ib, Ic and II of the Community steel-producing regime . In 1985, following an agreement between BSC and Alpha Steel Ltd, which specialized in its Newport factory ( Wales ) in the manufacture of hot-rolled wide strip coming within category Ia, a new company was formed under the name of Newport Plant Co . Ltd which took over the Newport plant . The entirety of the share capital in that company was acquired by BSC . This concentration within the meaning of Article 66 of the ECSC Treaty was authorized by the Commission . The Newport plant was subsequently closed down .
3 The date of closure was disputed between the parties . Having regard to the evidence supplied by the Commission at the Court' s request and in the absence of evidence to the contrary from the applicant, the plant should be deemed to have been shut down definitively on 20 December 1985 .
4 In the contested decision, which was based on Commission Decision No 3485/85/ECSC of 27 November 1985 on the extension of the system of monitoring and production quotas for certain products of undertakings in the steel industry ( Official Journal L 340, p . 5 ), the Commission communicated to BSC its new references with effect from the first quarter of 1986, allocating to it, in addition to the original references held by Alpha Steel Ltd in respect of its production at the Newport factory, supplementary references of 345 108 tonnes for production and 228 892 tonnes for delivery, and it distributed them over the whole of the flat products manufactured by BSC in proportion to the references held by BSC in the various categories .
5 The applicant company, which produces exclusively flat products coming within category II, challenges the validity of the increases in references allocated to BSC on the ground that such increases, on the one hand, exceed the sum of the references held by BSC and those held by Alpha Steel in respect of its Newport plant before the acquisition of Newport by BSC and, on the other hand, were allocated by the Commission to BSC in categories in which Newport held no references before the acquisition .
6 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the legal context and the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court .
7 The Commission does not dispute that, whilst the contested decision was not addressed to the applicant company, it did concern that company within the meaning of the second paragraph of Article 33 of the ECSC Treaty .
8 In fact, it should be recalled that, as the Court has already held ( in particular in its judgments of 15 July 1960 in Joined Cases 24 and 34/58 Chambre syndicale de la sidérurgie de l' Est de la France (( 1960 )) ECR 573 ) and of 19 September 1985 in Joined Cases 172 and 226/83 Hoogovens Groep (( 1985 )) ECR 2831 ), an undertaking is concerned within the meaning of that provision by a decision of the Commission enabling benefits to be conferred on one or more other competitor undertakings .
9 The applicant and BSC are indeed steel-producing companies which are in competition with each other as producers of steel coming within category II of the Community steel-producing regime . Consequently, the contested decision does concern the applicant inasmuch as it allocates to BSC additional references in respect of products coming within that category .
10 On the other hand, the Court is constrained to hold, of its own motion, that, to the extent that the contested decision allocates to BSC additional references in respect of products other than those of category II, the applicant is not concerned by that decision as it is a single-product company .
11 Moreover, the Commission argues that the action should be dismissed as inadmissible as it was brought after the expiry of the one-month period laid down in the third paragraph of Article 33 of the ECSC Treaty . In the absence of publication or notification of the contested decision, that period must begin to run - as provided for in the third paragraph of Article 173 of the EEC Treaty - on the day on which it came to the applicant' s knowledge . In the present case, the applicant obtained knowledge of the essential content of the contested decision in particular by a letter from the European Association of Steel-Producers ( Eurofer ), dated 14 May 1986 .
12 The applicant points out, on the one hand, that it only acquired full knowledge of the precise wording of and reasons for the decision by way of the Commission' s defence lodged in these proceedings . In its view, in the absence of publication or notification, the period of limitation can begin to run only from the moment when the person concerned obtains precise knowledge of the act in question .
13 In this respect, it should first be stated that, although it subsequently appeared that the letter from Eurofer of 14 May 1986 gave an accurate indication of the essential content of the contested decision, the applicant was not in a position to know that that was the case and in particular could not be sure of the reasons on which the decision was based . Moreover, as the applicant has asserted, without being contradicted by the Commission, the latter, in reply to a request for further information concerning the contested decision which had been addressed to it by Eurofer by a letter of 9 June 1986, declined to communicate the decision in question, but merely confirmed and referred to its legal basis .
14 It is clear from the Court' s case-law relating to the third paragraph of Article 173 of the EEC Treaty ( judgments of 5 March 1980 in Case 76/79 Koenecke (( 1980 )) ECR 665, and of 5 March 1986 in Case 59/84 Tezi Textiel (( 1986 )) ECR 887 ) that, failing publication or notification, it is for a party who has knowledge of a decision concerning it to request the whole text thereof within a reasonable period but, subject thereto, the period for bringing an action can begin to run only from the moment when the third party concerned acquires precise knowlege of the content of the decision in question and of the reasons on which it is based in such a way as to enable it to exercise its right of action .
15 In the present case Eurofer, an association of which the applicant is a member, diligently requested additional information about the contested decision and the Commission refused to give it, so that the applicant was constrained to challenge that decision without being able to be sure of knowing all its relevant details .
16 In those circumstances, the Commission' s argument cannot be upheld .
17 It follows from the foregoing that the action must be declared admissible in so far as it seeks a declaration that the decision addressed to BSC is void, inasmuch as it grants to BSC additional production and delivery references for products coming within category II .
18 The first submission put forward by the applicant in support of its action is based on the absence of a legal foundation for the contested decision . It considers that Article 13 of the aforementioned general Decision No 3485/85/ECSC did not confer on the Commission the power to grant BSC the additional references at issue .
19 Article 13 lays down the general rules for determining reference production and reference quantities for steel producing undertakings in the event of concentration ( paragraph 1 ), in the event of separation ( paragraph 2 ) or the formation of new independent undertakings which assign to them plant which was previously part of their own production facilities ( paragraph 3 ). Paragraph 4 of Article 13 adds that :
"The Commission shall carry out any adjustments needed, on the basis, where appropriate, of the opinion of a panel of experts ."
20 The Commission relied on that last-mentioned provision in order to allocate to BSC the disputed additional references . It considers that Article 13 ( 4 ) aforesaid conferred on it the power to recompense, by means of the allocation of additional references, undertakings carrying out a concentration in connection with the closure of plant, thus enabling it to pursue a policy of incentives for the shedding of production capacity with a view to restructuring the steel manufacturing sector .
21 In order to determine whether this interpretation, which is challenged by the applicant, is correct, paragraph 4 of Article 13 must be brought into relation with the three preceding paragraphs of that article and regard must be had to the history of that provision in the general decisions for previous years relating to the system of monitoring and production quotas for certain products of undertakings in the steel industry .
22 The Commission' s power to carry out the "adjustments needed" was conferred solely for cases of separation and formation of independent undertakings by Article 13 ( 2 ) and ( 3 ) of the general decisions in respect of 1982, 1983 and 1984 ( No 1696/82/ECSC of 30 June 1982, Official Journal L 191, p . 1; No 2177/83/ECSC of 28 July 1983, Official Journal L 208, p . 1; No 234/84/ECSC of 31 January 1984, Official Journal L 29, p . 1 ).
23 According to the eighth recital of the aforementioned general Decision No 3485/85/ECSC, the Commission considered it appropriate that
"this option should also be extended to mergers, and in particular to mergers resulting in closures of hot-rolling mills which account for an exceptionally large share of the capacity shedding without receiving any compensation in the form of capacity increases or constituting a counterpart for State aid ."
24 It is clear from the wording and the structure of Article 13 of this general decision and of the eighth recital, cited above, that the new paragraph 4 of that article relates to the cases of concentration, separation and formation of undertakings mentioned in paragraphs 1, 2 and 3 respectively of the same articles . The Commission' s power to carry out the adjustments needed in the event of concentration is therefore the same as the power which is conferred on it in the case of separation or formation of independent undertakings .
25 In these three cases referred to Article 13, paragraphs 1, 2 and 3 lay down specific rules for the allocation of new references . The scheme of the article is such that the "adjustments" mentioned in paragrpah 4 constitute modifications in relation to the result of the calculations provided for in the preceding paragraphs, which lay down the basic rules .
26 Neither the wording of the provision nor the reasons on which the general decision are based provide any criteria enabling the conditions to be determined in which such adjustments are to be deemed to be "needed ". Consequently, reference must be made to the purpose of the quota system which is, as is clear from Article 58 ( 2 ) of the ECSC Treaty, to spread in the most equitable manner possible amongst all undertakings the limitations on production required by the steel crisis .
27 It follows that the adjustments which the Commission may carry out in accordance with Article 13 ( 4 ) can be deemed to be needed only if the application of the basic rules were to bring about inequitable results .
28 In order to determine whether that is the case, the Commission, which may obtain, where appropriate, the opinion of a panel of experts, enjoys a wide discretion in assessing the particular circumstances of each concentration, separation or formation of independent undertakings . In particular, it may have regard to the fact that a concentration entails, as in the present case, the closure of plant . The abovementioned eighth recital of Decision No 3485/85/ECSC rightly makes reference to that factor .
29 It is clear from the documents before the Court that, in the present case, the Commission allocated the disputed additional references to BSC in order to recompense it for the restructuring efforts reflected in the closure of the Newport plant, which entailed a major reduction in capacity and, according to the Commission, would not have been brought about without such an incentive . It follows from the foregoing that such an incentive goes beyond the "adjustments needed" referred to in Article 13 ( 4 ).
30 This conclusion is corroborated by a comparison between the structure of general Decision No 3485/85/ECSC and that of the corresponding general decisions in respect of previous years . The general decisions in respect of 1983 and 1984 ( mentioned above ) included an Article 14b or 14B, which conferred on the Commission the power to allocate additional quotas to an undertaking within the context of a restructuring programme approved by the Commission, subject to the observance of certain conditions laid down in that article . It is apparent from the documents before the Court that the Commission had initially contemplated strengthening this means of encouraging the restructuring of undertakings in the general decision extending the system for 1985, but that it abandoned that idea following the opposition which it encountered on this point within the Council .
31 It follows that Article 13 ( 4 ) of this latter decision cannot be interpreted as conferring on the Commission, solely in the event of a concentration, the power to allocate additional references in order to encourage plant closures entailing a reduction in capacities, where it itself has abstained from providing itself with a specific legal basis giving it this power generally .
32 However, although it is permissible for the Commission, in exercising its responsibilities in the management of the crisis in the steel manufacturing sector, to pursue a policy of incentives to restructuring, where appropriate by allocating additional references as compensation for plant closures entailing reductions in capacity, it may not do so by means of individual decisions which have no legal basis in the applicable general decision .
33 It follows from the foregoing, without its being necessary to examine the other submissions put forward by the applicant, that the contested decision must be declared void but, regard being had to the partial inadmissibility of the action, only in so far as it allocates to BSC additional references in respect of category II products .
34 Under Articles 69 ( 2 ) of the Rules of Procedure the unsuccessful party is to be ordered to pay the costs . Since the Commission has essentially failed in its submissions, it must be ordered to pay the costs .
On those grounds,
THE COURT ( Sixth Chamber )
( 1 ) Declares void Commission Decision No SG ( 86 ) D/3794 of 26 March 1986, addressed to the British Steel Corporation, in so far as it allocates, in category II, additional references for production ( 161 500 tonnes ) and for delivery ( 128 100 tonnes );
( 2 ) For the rest, dismisses the application as inadmissible;
( 3 ) Orders the Commission to pay the costs .