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Judgment of the Court of 13 July 1965. - Lemmerz-Werke GmbH v High Authority of the ECSC. - Case 111-63. European Court reports French edition Page 00835 Dutch edition Page 00936 German edition Page 00894 Italian edition Page 00972 English special edition Page 00677 Danish special edition Page 00111 Greek special edition Page 00153 Portuguese special edition Page 00189

Summary Parties Subject of the case Grounds Decision on costs Operative part

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1 . PROCEDURE - APPLICATIONS - FORMAL REQUIREMENTS - SUBMISSIONS PUT FORWARD - BRIEF STATEMENT OF GROUNDS OF APPLICATION - CONCEPT

( PROTOCOL ON THE STATUTE OF THE COURT OF JUSTICE OF THE ECSC, ARTICLE 22, RULES OF PROCEDURE OF THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES, ARTICLE 38 )

( ECSC TREATY, ARTICLE 80 )

3 . MEASURES ADOPTED BY COMMUNITY INSTITUTIONS - HIGH AUTHORITY - RETROACTIVE REVOCATION - CONDITIONS - REVIEW BY THE COURT

4 . MEASURES ADOPTED BY COMMUNITY INSTITUTIONS - DECISION OF THE HIGH AUTHORITY TAKEN WITH THE UNANIMOUS ASSENT OF THE COUNCIL - AMENDMENT - POWERS OF THE HIGH AUTHORITY

5 . MEASURES ADOPTED BY COMMUNITY INSTITUTIONS - VALIDITY - CONDITIONS OF ESSENTIAL PROCEDURAL REQUIREMENTS - PROVISIONS RELATING THERETO - PROHIBITION ON THE EXTENSION OF THEIR APPLICATION

6 . COMMON FINANCIAL ARRANGEMENTS - EQUALIZATION OF FERROUS SCRAP - CONTRIBUTIONS - LIMITATION PERIOD - TIME RUNNING FROM DATE OF CLOSURE OF FINAL ACCOUNTS

( ECSC TREATY, ARTICLE 53 )

( ECSC TREATY, ARTICLE 53 )

( ECSC TREATY, ARTICLE 53 )

1 . THE EXPRESSION ' EXPOSES SOMMAIRES DES MOYENS ' (' A BRIEF STATEMENT OF THE GROUNDS UPON WHICH THE APPLICATION IS BASED ') MEANS THAT THE APPLICATION MUST MAKE IT POSSIBLE TO IDENTIFY THE COMPLAINTS WHICH THE APPLICANT INTENDS TO RAISE AND THE ESSENCE OF THE ARGUMENTS INVOKED IN SUPPORT OF THEM .

CF . PARAGRAPH 3, SUMMARY IN JOINED CASES 19/60, 21/60, 2/61 AND 3/61, ( 1961 ) ECR 563 .

2 . THE SYSTEMATIC BUYING OF RAW MATERIALS MARKS THE COMMENCEMENT OF PRODUCTION WITHIN THE MEANING OF ARTICLE 80 OF THE TREATY IF IT ENABLED THE BUYER TO START ACTUAL PRODUCTION, EVEN IF SUCH PRODUCTION WAS ON A TRIAL BASIS .

3 . THE HIGH AUTHORITY CAN REVOKE ILLEGAL DECISIONS, EVEN RETROACTIVELY, PROVIDED THAT IN CERTAIN EXCEPTIONAL CASES PROPER CONSIDERATION IS GIVEN TO THE PRINCIPLE OF LEGAL CERTAINTY . SUCH CONSIDERATION IS IN THE FIRST INSTANCE A MATTER FOR THE HIGH AUTHORITY; IT IS, HOWEVER, SUBJECT TO REVIEW BY THE COURT . THE REVOCATION IS INADMISSIBLE IF THE HIGH AUTHORITY MAKES A SUBSTANTIAL ERROR OF JUDGMENT IN CONSIDERING ANY POSITION ACQUIRED BY THE UNDERTAKING CONCERNED FOR WHICH IT COULD CLAIM PROTECTION, OR IF IT FAILS TO SHOW CARE AND ACCURACY IN ITS DEALINGS WITH THE UNDERTAKING .

CF . PARAGRAPH 10, SUMMARY, IN JOINED CASES 42 AND 49/59, ( 1961 ) ECR 107 .

4 . THERE IS NO JUSTIFICATION FOR THE CONCLUSION THAT THE DECISIONS OF THE HIGH AUTHORITY TAKEN WITH THE UNANIMOUS ASSENT OF THE COUNCIL COULD ONLY BE AMENDED, EVEN IN THE CASE OF AMENDMENTS NOT AFFECTING THE BASIS OF SUCH DECISIONS, BY A NEW DECISION ALSO TAKEN WITH THE UNANIMOUS ASSENT OF THE COUNCIL .

5 . A PROVISION WHICH LAYS DOWN THE ESSENTIAL PROCEDURAL REQUIREMENTS FOR THE VALIDITY OF CERTAIN DECISIONS MUST BE STRICTLY CONSTRUED .

6 . IT IS OF THE NATURE OF THE EQUALIZATION SCHEME THAT THE LIMITATION PERIOD CAN ONLY RUN FROM THE DATE WHEN THE ACCOUNTS ARE FINALLY CLOSED .

CF . PARAGRAPH 4, SUMMARY, CASE 108/63, ( 1963 ) ECR 2-3 .

7 . IN THE FERROUS SCRAP EQUALIZATION SCHEME THE UNIT OF ACCOUNT IS NOT A CURRENCY DIFFERENT FROM NATIONAL CURRENCIES BUT IS MERELY AN ACCOUNTING DEVICE INTENDED TO FACILITATE THE FIXING OF A GENERAL EQUALIZATION PRICE AND THE UNIFORM AND EXPEDITIOUS CALCULATION OF EQUALIZATION PAYMENTS AND CONTRIBUTIONS .

8 . IT IS NECESSARY TO FIX THE CONTRIBUTIONS TO BE PAID BY THE UNDERTAKINGS TO THE FERROUS SCRAP EQUALIZATION SCHEME ON THE BASIS OF THE PARITY OF THE UNIT OF ACCOUNT IN FORCE DURING THE VARIOUS ACCOUNTING PERIODS .

9 . IN THE EQUALIZATION SCHEME, WHICH IS BASED ON A CLOSE INTERDEPENDENCE BETWEEN THE CONTRIBUTIONS OF EACH PARTICIPANT, IT IS PERMISSIBLE TO ALTER SITUATIONS CREATED BY RULES WHICH, IF THEY ARE ALLOWED TO CONTINUE IN FORCE, WOULD CONFER UNJUSTIFIED BENEFIT ON CERTAIN UNDERTAKINGS COMPARED WITH OTHERS AND WOULD THEREFORE JEOPARDIZE THE OBJECTIVES OF THE SCHEME .

IN CASE 111/63

LEMMERZ-WERKE GMBH OF KOENIGSWINTER ( RHINELAND ), REPRESENTED BY ITS MANAGING DIRECTOR, PAUL LEMMERZ, AND H . WIRTZ, HENGELER, KURTH, B . WIRTZ AND A . HEUSCH, ADVOCATES AT DUESSELDORF AUTHORIZED TO ACT IN THESE PROCEEDINGS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICES OF JUERGEN NAUMANN, 2 RUE DU FORT-ELISABETH,

APPLICANT,

V

HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, HEINRICH MATTHIES, ACTING AS AGENT, ASSISTED BY HANS-PETER IPSEN, PROFESSOR AT THE UNIVERSITY OF HAMBURG, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICES OF THE HIGH AUTHORITY, 2 PLACE DE METZ,

DEFENDANT,

APPLICATION FOR THE ANNULMENT OF THE DECISION OF THE HIGH AUTHORITY OF 6 NOVEMBER 1963 RELATING TO THE FINANCIAL OBLIGATIONS OF THE APPLICANT UNDER THE EQUALIZATION SCHEME FOR IMPORTED FERROUS SCRAP,

P.688

THE CONTESTED DECISION CALLS UPON THE APPLICANT TO PAY BY WAY OF CONTRIBUTIONS UNDER THE IMPORTED FERROUS SCRAP EQUALIZATION SCHEME THE SUM OF DM 432 043.25, OF WHICH DM 374 844.79 RELATE TO THE PERIOD PRIOR TO 1 FEBRUARY 1957 AND THE BALANCE TO THE PERIOD THEREAFTER .

I - THE SUBMISSIONS RELATING TO THE PERIOD PRIOR TO 1 FEBRUARY 1957

1 . MISTAKE RELATING TO THE PRINCIPLE OF LIABILITY TO CONTRIBUTE TO THE EQUALIZATION SCHEME

P.689

THE APPLICANT SUBMITS THAT, INDEPENDENTLY OF ANY QUESTION OF EXEMPTION, THE FERROUS SCRAP WHICH IT BOUGHT PRIOR TO 1 FEBRUARY 1957 WAS NOT SUBJECT TO THE EQUALIZATION LEVY, AS THE OPERATIONS CARRIED OUT AT ITS STEEL WORKS AT THAT TIME WERE LIMITED TO PREPARATORY WORK AND TRIALS .

ACCORDING TO THE WORDING OF THE BASIC DECISIONS RELATING TO THE FINANCIAL SCHEME IN QUESTION ' THE UNDERTAKINGS REFERRED TO IN ARTICLE 80 OF THE TREATY WHICH CONSUME FERROUS SCRAP ' ARE LIABLE TO PAY THE CONTRIBUTIONS PRESCRIBED BY THE SAID DECISIONS . UNDER THE SAID ARTICLE OF THE ECSC TREATY ' FOR THE PURPOSES OF THIS TREATY " UNDERTAKING " MEANS ANY UNDERTAKING ENGAGED IN PRODUCTION IN THE COAL OR THE STEEL INDUSTRY '. THE SYSTEMATIC BUYING OF RAW MATERIALS MARKS THE COMMENCEMENT OF SUCH PRODUCTION IF IT ENABLED THE BUYER TO START ACTUAL PRODUCTION EVEN IF SUCH PRODUCTION WAS ON A TRIAL BASIS .

UNDER ARTICLE 53 OF THE TREATY THE HIGH AUTHORITY MAY MAKE ANY FINANCIAL ARRANGEMENTS ' WHICH IT RECOGNIZES TO BE NECESSARY FOR THE PERFORMANCE OF THE TASKS SET OUT IN ARTICLE 3 ' INCLUDING THAT OF ' ENSURING AN ORDERLY SUPPLY TO THE COMMON MARKET ' LAID DOWN IN SUBPARAGRAPH ( A ) OF THE SAID ARTICLE 31 . THE TREATY DOES NOT THEREFORE ONLY LOOK ON ' UNDERTAKINGS ' FROM THE POINT OF VIEW OF PRODUCTION BUT ALSO FROM THAT OF THE PROCUREMENT OF MATERIALS WHICH OF NECESSITY PRECEDE PRODUCTION, AT ANY RATE IN THE CASE OF THE PROCUREMENT OF MATERIALS SUCH AS FERROUS SCRAP WHICH FALL WITHIN THE JURISDICTION OF THE HIGH AUTHORITY .

IT IS NOT DISPUTED THAT THE APPLICANT BOUGHT FERROUS SCRAP FROM APRIL 1956 AND THAT IT COMMENCED ACTUAL PRODUCTION OF STEEL ON 1 FEBRUARY 1957 AT THE LATEST . IT IS THEREFORE LIABLE TO PAY CONTRIBUTIONS FROM APRIL 1956 . FINALLY THE APPLICANT IS WRONG TO QUOTE ARTICLE 6 OF DECISION NO 2/57, PUBLISHED IN THE OFFICIAL JOURNAL OF 28 JANUARY 1957, TO PROVE THAT THE PERIOD PRIOR TO 1 FEBRUARY 1957 WAS NOT A ' PERIOD OF NORMAL OPERATION '. THIS PROVISION IN FACT ONLY REFERS TO THE ' SUPPLEMENTARY RATES ' TO BE CHARGED ON ' THE EXCESS CONSUMPTION ' OF FERROUS SCRAP, A QUESTION WHICH DOES NOT ARISE IN THE PRESENT CASE .

THIS SUBMISSION MUST THEREFORE BE REJECTED WITHOUT THERE BEING ANY NEED TO ASCERTAIN WHETHER AND TO WHAT EXTENT THE OPERATIONS CARRIED OUT BY THE APPLICANT DURING THE PERIOD IN QUESTION WENT BEYOND THE PREPARATORY STAGE .

2 . THE EXEMPTION OF THE APPLICANT FOR THE PERIOD PRIOR TO 1 FEBRUARY 1957 AND ITS EVENTUAL WITHDRAWAL

P.690

THE CONTESTED DECISION, AFTER STATING IN ITS PREAMBLE THAT THE DECISION OF THE BOARD OF THE CPFI OF 8 MAY 1957 DID NOT EXEMPT THE APPLICANT AND THAT, EVEN IF THE FACT THAT THIS DECISION WAS INADVERTENTLY SENT TO THE APPLICANT IS TREATED AS AN EXEMPTION, IT SHOULD IN FACT BE REGARDED AS ILLEGAL, REVOKES, SO FAR AS NECESSARY, ANY EXEMPTION WHICH IT MAY HAVE GRANTED .

THE APPLICANT CONTESTS THE SAID DECISION WITH A NUMBER OF COMPLAINTS, BASED ON THE ONE HAND ON THE ACTUAL EXISTENCE OF A DECISION GRANTING IT AN EXEMPTION AND ON THE OTHER HAND ON THE ILLEGALITY OF ANY REVOCATION OF THE LATTER DECISION .

IT IS DESIRABLE TO EXAMINE FIRST THE SUBMISSIONS WHICH SEEK TO SHOW THAT SUCH A REVOCATION IS ILLEGAL, BECAUSE IT WOULD BE UNNECESSARY TO CONSIDER THE QUESTION WHETHER THERE WAS ANY EXEMPTION OR NOT, ONCE IT WAS SHOWN THAT THE DEFENDANT WAS ENTITLED TO REVOKE IT .

( A ) THE LEGALITY OF THE RETROACTIVE REVOCATION OF A DECISION GRANTING A BENEFIT TO THE PERSON TO WHOM IT IS ADDRESSED DEPENDS, IN THE FIRST INSTANCE, ON THE QUESTION WHETHER THE REVOKED DECISION WAS ILLEGAL . THIS IS THE POSITION IN THE PRESENT CASE . IN FACT NO LEGAL PROVISION CONFERRED UPON THE BODIES RESPONSIBLE FOR THE MANAGEMENT OF THE FINANCIAL MACHINERY OF THE EQUALIZATION SCHEME THE AUTHORITY TO GRANT EXEMPTIONS .

THE HIGH AUTHORITY CAN REVOKE ILLEGAL DECISIONS, EVEN RETROACTIVELY, PROVIDED THAT IN CERTAIN EXCEPTIONAL CASES PROPER CONSIDERATION IS GIVEN TO THE PRINCIPLE OF LEGAL CERTAINTY . ALTHOUGH SUCH CONSIDERATION IS IN THE FIRST INSTANCE A MATTER FOR THE HIGH AUTHORITY, IT IS, HOWEVER, SUBJECT TO REVIEW BY THE COURT .

( B ) IN THE OPINION OF THE APPLICANT THE CONTESTED DECISION IS INCORRECT WHEN IT STATES, ' THAT ... LEMMERZ-WERKE COULD NOT ASSUME THAT ( THE DECISION OF THE BOARD OF THE CPFI ) ALSO APPLIED TO IT, BUT, ON THE CONTRARY, HAD TO ACKNOWLEDGE THAT THE DECISION HAD BEEN SENT TO IT IN ERROR OR THAT IT HAD OBTAINED THE BENEFIT OF IT BY MISTAKE, WITHOUT THE SPECIFIC FACTS OF ITS CASE HAVING BEEN EXAMINED AT ALL BY THE BOARD . ' FURTHER THE APPLICANT SUBMITS THAT THE DISPUTED REVOCATION TOOK PLACE AFTER THE REASONABLE PERIOD OF TIME FOR SUCH REVOCATION HAD ALREADY ELAPSED .

BOTH THESE COMPLAINTS MUST BE EXAMINED TOGETHER, BECAUSE THEY BOTH RAISE THE SAME GENERAL QUESTION WHETHER THE DEFENDANT PAID SUFFICIENT REGARD TO THE EXTENT TO WHICH THE APPLICANT WAS ABLE TO RELY ON THE LEGALITY AND THE CONTINUANCE OF THE EXEMPTION IN QUESTION .

P.691

( 1 ) EVEN IF THE REASON QUOTED ABOVE WAS FACTUALLY INCORRECT, IT WOULD ONLY BRING ABOUT THE ANNULMENT OF THE CONTESTED DECISION IF IT DISCLOSED A SUBSTANTIAL ERROR OF JUDGMENT IN CONSIDERING ANY POSITION ACQUIRED BY THE APPLICANT FOR WHICH IT COULD CLAIM PROTECTION ( VERTRAUENSSCHUTZ ).

FOR THIS PURPOSE IT IS NECESSARY TO CONSIDER THE FACT THAT THE APPLICANT COULD NOT AT ANY TIME BE CERTAIN OF THE LEGALITY OF THE DISPUTED EXEMPTION, FOR IT COULD NOT HAVE ESCAPED THE APPLICANT'S NOTICE THAT THE BASIC DECISIONS WHICH SET UP THE EQUALIZATION SCHEME DID NOT PROVIDE FOR EXEMPTIONS AND THAT IN THE MATTER OF PUBLIC CONTRIBUTIONS EXEMPTIONS CANNOT BE PRESUMED .

MOREOVER IT IS CLEAR THAT THE APPLICANT COULD ONLY RELY ON THE CONTINUANCE OF THE SAID EXEMPTION FOR A SHORT PERIOD BECAUSE :

- FROM JUNE 1958 THE SOCIETE FIDUCIAIRE SUISSE CARRIED OUT CHECKS AT THE APPLICANT'S OFFICES; IT IS APPARENT FROM THE REPORT WHICH IT SENT TO THE DEFENDANT THAT ON THE ONE HAND IT HAD DIRECTED THE DEFENDANT'S ATTENTION TO THE FERROUS SCRAP IN DISPUTE, AND ON THE OTHER HAND THAT WHEN QUESTIONED ABOUT THE SCRAP THE APPLICANT HAD PRODUCED THE CIRCULAR OF 20 MAY 1957; THEREFORE, FROM THAT TIME, THE APPLICANT HAD TO CONSIDER THE POSSIBILITY THAT THE DECISION OF THE CPFI WOULD BE REVIEWED BY THE DEFENDANT;

- THE DEFENDANT PUBLISHED IN THE OFFICIAL JOURNAL OF 30 JULY 1958 ARTICLE 1(B ) OF DECISION NO 13/58 UNDER WHICH IT RESERVED THE RIGHT TO ' REVOKE IF NECESSARY ANY DECISION ' OF THE ORGANS IN BRUSSELS AND TO ' TAKE SUCH MEASURES AS ARE ENTAILED BY THE REVOCATION '; THIS PROVISION WAS LIKELY TO CALL IN QUESTION ALL THE MEASURES ADOPTED BY THE SAID ORGANS; ON THE OTHER HAND, HAVING REGARD TO THE AMOUNT OF WORK INVOLVED IN REVIEWING ALL THESE MEASURES, THE PERSONS WHO MIGHT BENEFIT FROM EXEMPTIONS COULD NOT EXPECT A DEFINITE DECISION ON THEIR REVOCATION TO BE MADE WITHIN A SHORT TIME;

- IN THE OFFICIAL JOURNAL OF 19 DECEMBER 1959 THE COURT PUBLISHED THE SUBMISSIONS IN AN APPLICATION BROUGHT BY SNUPAT FOR THE ANNULMENT OF THE REFUSAL TO REVOKE RETROACTIVELY CERTAIN EXEMPTIONS; ALTHOUGH THE SUBJECT MATTER OF THIS APPLICATION WAS ONLY ' GROUP SCRAP ' , IT WAS NEVERTHELESS THE FIRST TIME IN THE HISTORY OF THE EQUALIZATION SCHEME THAT THE COURT AND THE HIGH AUTHORITY WERE FACED WITH THE GENERAL QUESTION OF THE LEGALITY OF THE RETROACTIVE REVOCATION OF AN EXEMPTION;

- IN ITS JUDGMENT IN THIS CASE OF 22 MARCH 1961 THE COURT CONFIRMED THAT THE HIGH AUTHORITY HAD AN INHERENT RIGHT TO REVOKE DECISIONS AND ALSO CONFIRMED THE IMPORTANCE IN THIS CONNEXION OF THE INTERDEPENDENCE OF THE EQUALIZATION CHARGES;

P.692

- ACCORDING TO THE WORDING OF A LETTER OF 2 JUNE 1961, THE REGIONAL OFFICE IN GERMANY, HAVING BEEN INVITED BY THE DEFENDANT AND THE CPFI IN APRIL AND MAY 1959 TO RECTIFY THE POSITION WITH REGARD TO THE UNDERTAKINGS IN THE SAME SITUATION AS THE APPLICANT, REFUSED TO DO SO, ' IN PARTICULAR BECAUSE THE UNDERTAKINGS CONCERNED HAVE ALREADY THREATENED TO TAKE PROCEEDINGS IF WE ALTER OUR ARRANGEMENTS '; IT MUST BE INFERRED FROM THIS THAT THE SAID OFFICE HAD AT LEAST INFORMED THE UNDERTAKINGS ORALLY OF THE ATTITUDE OF THE ADMINISTRATION;

- BY LETTER OF 19 JULY 1961 THE DEFENDANT NOTIFIED THE APPLICANT THAT IT CONSIDERED THAT IT WAS LIABLE TO PAY THE DISPUTED CONTRIBUTIONS, A VIEW WHICH IT DID NOT CHANGE UNTIL THE ADOPTION OF THE CONTESTED DECISION .

THE DEFENDANT DID NOT DISREGARD TO ANY SUBSTANTIAL DEGREE THE SAID CLAIM BY THE APPLICANT FOR THE PROTECTION OF ITS LEGAL RIGHTS, IF ANY .

( 2 ) THE CONDUCT OF THE DEFENDANT IN THE SITUATION DESCRIBED ABOVE MUST HOWEVER BE EXAMINED BECAUSE THE FACT THAT THE APPLICANT COULD NOT COUNT ON THE CONTINUANCE OF THE EXEMPTION DOES NOT OF ITSELF EXCLUDE THE POSSIBILITY THAT THE DEFENDANT OR ITS REPRESENTATIVES COMMITTED A BREACH OF THEIR DUTY TO ACT WITH CARE AND ACCURACY WHICH WOULD PRECLUDE THE DEFENDANT FROM REVOKING THE EXEMPTION IN DISPUTE . THE EXAMINATION OF THIS QUESTION IS CONNECTED WITH THE SUBMISSION THAT THE RIGHT TO REVOKE THE EXEMPTION HAD BEEN FORFEITED .

IT WAS NOT UNTIL JULY 1961, MORE THAN FIVE YEARS AFTER THE NOTIFICATION OF THE EXEMPTION IN QUESTION TO THE APPLICANT, THAT THE DEFENDANT INFORMED THE LATTER DIRECTLY THAT IT DID NOT INTEND TO ALLOW IT THE BENEFIT OF THE SAID EXEMPTION .

BETWEEN NOVEMBER 1958 AND MAY 1959 THE DEFENDANT THROUGH THE CPFI INVITED THE REGIONAL OFFICE IN GERMANY TO RECTIFY THE SITUATION OF UNDERTAKINGS IN THE SAME POSITION AS THE APPLICANT .

HOWEVER, BY A LETTER OF 2 JUNE 1961 SENT TO THE CPFI, THE SAID OFFICE REFUSED TO COMPLY WITH THIS INVITATION, BUT INTIMATED, AS HAS BEEN STATED ABOVE, THAT IT HAD INFORMED THE PARTIES CONCERNED UNOFFICIALLY OF THE DEFENDANT'S ATTITUDE .

IT IS CLEARLY AS A RESULT OF THIS REFUSAL THAT THE DEFENDANT WROTE DIRECTLY TO THE APPLICANT ON 19 JULY 1961 .

ALTHOUGH THE ATTITUDE OF THE REGIONAL OFFICE IN GERMANY IS NOT ENTIRELY BLAMELESS, IT IS UNDERSTANDABLE THAT THE DEFENDANT MIGHT HAVE BELIEVED THAT ITS INSTRUCTIONS HAD BEEN COMMUNICATED CORRECTLY AND WITHOUT DELAY . THEREFORE IT CANNOT BE ACCEPTED THAT, HAVING REGARD TO THE CONDUCT OF THE DEFENDANT, ITS RIGHT TO DEMAND PAYMENT OF THE DISPUTED AMOUNT WAS FORFEITED .

P.693

MOREOVER IT MUST BE BORNE IN MIND THAT BY CONTINUING TO EXEMPT ONE UNDERTAKING THE DEFENDANT WOULD NOT ONLY HAVE TO INCREASE THE CHARGES ON THE OTHER UNDERTAKINGS, SOME OF WHICH AT LEAST ARE NORMALLY IN COMPETITION WITH THE EXEMPTED UNDERTAKING, BUT WOULD IN PARTICULAR BE PLACING THE LATTER IN A PRIVILEGED POSITION .

FINALLY THE DEFENDANT STATED THAT IT WAS WILLING TO TAKE INTO ACCOUNT POSSIBLE DIFFICULTIES IN MAKING ARRANGEMENTS FOR PAYMENT .

THIS SUBMISSION MUST THEREFORE BE REJECTED .

THEREFORE IT IS UNNECESSARY TO EXAMINE THE ALLEGATION THAT A DECISION TO GRANT AN EXEMPTION HAD IN FACT BEEN TAKEN .

( C ) THE APPLICANT COMPLAINS OF DISCRIMINATION IN THAT THE DEFENDANT DID NOT REVOKE THE EXEMPTION GRANTED TO OTHER UNDERTAKINGS BY THE SAME DECISION OF THE CPFI .

THIS COMPLAINT CANNOT BE UPHELD . IN FACT, SO FAR AS THE INDEPENDENT FOUNDRIES ARE CONCERNED, THEIR LEGAL POSITION UNDER DECISION NO 2/57 CANNOT BE COMPARED WITH THAT OF THE APPLICANT, AS THE DECISION MENTIONED ABOVE WAS NOT BASED ON A MISTAKE AFFECTING THE SAID FOUNDRIES .

SO FAR AS THE UNDERTAKINGS WHICH HAVE BENEFITED FROM THE SAME MISTAKE ARE CONCERNED, THE APPLICANT HAS NOT PROVED THE INCORRECTNESS OF THE DEFENDANT'S ALLEGATION THAT IN THEIR CASES REVOCATION WAS UNNECESSARY HAVING REGARD TO THE FACTS .

3 . LIMITATION OF ACTIONS

THE APPLICANT SUBMITS THAT THE RIGHT TO DEMAND PAYMENT OF THE AMOUNTS IN QUESTION WAS TIME-BARRED BEFORE THE ADOPTION OF THE CONTESTED DECISION .

IN ANY EVENT IT IS OF THE NATURE OF THE EQUALIZATION SCHEMES THAT THE LIMITATION PERIOD CAN ONLY RUN FROM THE DATE WHEN THE ACCOUNTS ARE FINALLY CLOSED .

THIS SUBMISSION MUST THEREFORE BE REJECTED .

4 . MISUSE OF POWERS

BY THIS SUBMISSION THE APPLICANT COMPLAINS THAT THE DEFENDANT, IN USING ITS DISCRETIONARY POWER TO REVOKE OR NOT TO REVOKE THE DISPUTED EXEMPTION, PROCEEDED ON THE BASIS OF AN INACCURATE OR INCOMPLETE VERSION OF THE FACTS .

P.694

IT RELIES IN ADDITION ON THE TIME TAKEN BY THE DEFENDANT TO MAKE THE REVOCATION WHICH IT CONSIDERS WAS EXCESSIVE .

THIS SUBMISSION IS SIMILAR TO THOSE WHICH HAVE JUST BEEN EXAMINED AND MUST THEREFORE BE REJECTED FOR THE SAME REASONS .

5 . INADEQUATE STATEMENT OF THE REASONS UPON WHICH THE DECISION WAS BASED

( A ) THE APPLICANT SUBMITS THAT, ALTHOUGH THE CONTESTED DECISION STATES THAT THE NOTIFICATION OF THE APPLICANT OF THE CIRCULAR OF 20 MAY 1957 WAS BASED ON A MISTAKE, IT DOES NOT STATE THE NATURE OF THE MISTAKE . THE STATEMENT OF THE REASONS UPON WHICH THIS DECISION IS BASED SHOWS THAT, IN THE OPINION OF THE DEFENDAT, THE DECISION WHICH WAS THE SUBJECT OF THE SAID CIRCULAR ONLY REFERRED TO INDEPENDENT STEEL FOUNDRIES, PRODUCING STEEL INGOTS AS WELL AS CASTINGS, WHEREAS THE APPLICANT NEVER MANUFACTURED CASTINGS . AS THIS STATEMENT OF REASONS REPRODUCES THE MAIN CONSIDERATIONS TAKEN INTO ACCOUNT BY THE DEFENDANT, THIS COMPLAINT IS UNFOUNDED .

( B ) THE APPLICANT COMPLAINS THAT THE CONTESTED DECISION IS IRRELEVANT, AS A MISTAKE ON THE PART OF THE PERSON MAKING A DECLARATION DOES NOT NORMALLY AFFECT THE VALIDITY OF HIS DECLARATION .

THIS COMPLAINT REFERS TO THE MAIN ARGUMENT PUT FORWARD IN THE SAID DECISION, THAT IS TO SAY, THAT THERE WAS NO EXEMPTION . SINCE THE EXAMINATION OF THIS ARGUMENT IS UNNECESSARY, AS HAS ALREADY BEEN STATED, THIS COMPLAINT HAS BECOME PURPOSELESS .

( C ) THE APPLICANT COMPLAINS THAT THE ONLY REASON PUT FORWARD BY THE DEFENDANT IN JUSTIFICATION OF THE CONTESTED REVOCATION WAS THAT THE APPLICANT SHOULD HAVE RECOGNIZED THAT IN FACT THE REVOCATION DID NOT APPLY TO IT . THE DEFENDANT SHOULD THEREFORE HAVE INDICATED THE REASONS WHY THE REVOCATION WAS JUSTIFIED EVEN IF THE APPLICANT HAD BECOME ENTITLED TO REGARD ITS LEGAL POSITION AS SECURELY ESTALISHED .

SINCE THE DEFENDANT WAS OF THE OPINION THAT THE APPLICANT MUST HAVE KNOWN FROM THE VERY BEGINNING THAT A MISTAKE HAD BEEN MADE, IT WAS ABLE LOGICALLY TO EXCLUDE STRAIGHT AWAY ANY ARGUMENTS RELATING TO THE CONFIDENCE WHICH THE APPLICANT COULD HAVE HAD IN THE CONTINUANCE OF THE EXEMPTION . MOREOVER THE STATEMENT OF REASONS REFERS ALSO TO CERTAIN EVENTS OCCURRING AFTER THE CIRCULAR MENTIONED ABOVE BY STATING THAT THEY MUST HAVE CONVINCED THE APPLICANT THAT A DEFINITIVE DECISION HAD NOT YET BEEN TAKEN . THIS COMPLAINT IS THEREFORE UNFOUNDED .

P.695

( D ) THE APPLICANT ARGUES THAT A CONTRADICTION EXISTED BETWEEN THE OPERATIVE PART OF THE DECISION DEMANDING PAYMENT WITHIN THIRTY DAYS AND THE STATEMENT OF REASONS, ACCORDING TO WHICH ' ADEQUATE ACCOUNT COULD BE TAKEN OF ANY JUSTIFIABLE REASONS WHEN THE METHOD OF PAYMENT IS FIXED '.

THE PASSAGE QUOTED ABOVE MUST BE INTERPRETED TO MEAN THAT THE APPLICANT HAD TO PAY THE ENTIRE SUM WHICH IS DISPUTED WITHIN THE PRESCRIBED TIME, UNLESS THE DEFENDANT FOR VALID REASONS GRANTED IT LESS ONEROUS CONDITIONS OF PAYMENT . AS THE ALLEGED CONTRADICTION THEREFORE DOES NOT EXIST, THIS SUBMISSION MUST BE REJECTED .

( E ) THE APPLICANT COMPLAINS THAT THE DEFENDANT DECIDED, WITHOUT HAVING OBTAINED ANY INFORMATION ON THE MATTER, THAT THE AMOUNT TO BE PAID BY THE APPLICANT WAS NOT LIKELY TO PREJUDICE ITS ECONOMIC SITUATION . AS THE APPLICANT HAS NOT SUBSTANTIATED THAT IT WAS FACED WITH SUCH DIFFICULTIES, THIS COMPLAINT IS UNFOUNDED .

( F ) THE APPLICANT CLAIMS THAT THE STATEMENT OF REASONS DISTORTS THE FACTS BY REFERRING TO OBJECTIONS WHICH THE APPLICANT RAISED, ' BY WAY OF PROCEEDINGS ', AGAINST THE DEFENDANT'S LETTER OF 19 JULY 1961 .

IT IS TRUE THAT THE SAID EXPRESSION DOES NOT CORRESPOND TO THE FACTS, BECAUSE THE APPLICANT DID NOT COMMENCE PROCEEDINGS AFTER RECEIVING THE SAID LETTER . HOWEVER, IT IS DIFFICULT TO UNDERSTAND HOW SUCH A TRIVIAL MISTAKE IN DRAFTING COULD HAVE THE SLIGHTEST EFFECT ON THE OPERATIVE PART OF AND THE PRINCIPAL REASONS FOR THE CONTESTED DECISION . AS THIS COMPLAINT IS IRRELEVANT IT CANNOT BE UPHELD .

( G ) THE APPLICANT COMPLAINS THAT THE DEFENDANT DID NOT CONSIDER WHETHER THE APPLICANT WAS LIABLE UNDER THE EQUALIZATION SCHEME FOR THE PERIOD PRIOR TO 1 FEBRUARY 1957 .

THIS COMPLAINT IS NOT FACTUALLY ACCURATE, AS THE STATEMENT OF THE REASONS FOR THE CONTESTED DECISION STATES THAT THE APPLICANT QUALIFIED AS AN UNDERTAKING WITHIN THE MEANING OF THE TREATY FROM APRIL 1956, ' THE DATE WHEN IT BEGAN TO PURCHASE FERROUS SCRAP FOR THE PRODUCTION OF STEEL WHICH IT INTENDED TO UNDERTAKE '.

THE RESULT OF ALL THE FOREGOING CONSIDERATIONS IS THAT THIS APPLICATION IS NOT WELL-FOUNDED TO THE EXTENT TO WHICH IT REFERS TO THE CONTRIBUTIONS CHARGED TO THE APPLICANT FOR THE PERIOD PRIOR TO 1 FEBRUARY 1957 .

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II - THE SUBMISSIONS RELATING TO THE PERIOD AFTER 1 FEBRUARY 1957

A - ADMISSIBILITY OF THESE SUBMISSIONS

( A ) THE DEFENDANT RAISES AN OBJECTION OF INADMISSIBILITY BASED ON THE FACT THAT THE APPLICANT, IN ITS ORIGINATING APPLICATION IN CASE 53/63, ACKNOWLEDGED THE CORRECTNESS OF THE CALCULATION OF THE DISPUTED AMOUNT, TO THE EXTENT TO WHICH IT REFERS TO THE PERIOD AFTER 1 FEBRUARY 1957 .

IN THE SAID APPLICATION THE APPLICANT STATED THAT IT DOUBTED ITSELF WHETHER ITS ACTION IN CASE 53/63 WAS ADMISSIBLE AND THAT IT HAD ONLY INSTITUTED IT AS A PRECAUTIONARY MEASURE . IN THESE CIRCUMSTANCES IT IS NECESSARY TO PROCEED ON THE BASIS THAT THE APPLICANT, FAR FROM ACKNOWLEDGING ONCE AND FOR ALL THAT THE CALCULATION OF THE DISPUTED AMOUNT COMPLIED WITH THE TREATY AND WITH THE RULES OF LAW RELATING TO ITS APPLICATION, SIMPLY INTENDED TO LIMIT THE SUBJECT-MATTER OF THE SAID APPLICATION TO THE PERIOD PRIOR TO 1 FEBRUARY 1957 IN ORDER TO MINIMIZE THE RISK ON THE QUESTION OF COSTS . THE OBJECTION MUST THEREFORE BE DISMISSED .

( B ) THE DEFENDANT RAISES ANOTHER OBJECTION OF INADMISSIBILITY ON THE GROUND THAT THE APPLICANT'S SUBMISSIONS ARE NOT SUFFICIENTLY DETAILED .

UNDER ARTICLE 22 OF THE PROTOCOL ON THE STATUTE OF THE COURT OF JUSTICE OF THE ECSC AND ARTICLE 38(1)(C ) OF THE RULES OF PROCEDURE THE APPLICANT ONLY HAS TO GIVE A BRIEF STATEMENT OF THE GROUNDS ON WHICH THE APPLICATION IS BASED . IN THIS CASE THE APPLICANT HAS COMPLIED WITH THIS CONDITION, AS ITS APPLICATION MAKES IT POSSIBLE TO IDENTIFY THE COMPLAINTS WHICH IT INTENDS TO RAISE AND THE ESSENCE OF THE ARGUMENTS INVOKED IN SUPPORT OF THEM . THEREFORE THIS OBJECTION MUST BE DISMISSED .

( C ) THE APPLICANT HAS PRODUCED AN OPINION OF A UNIVERSITY PROFESSOR ANNEXED TO ITS REPLY BUT HAS STATED THAT THIS OPINION ' DOES NOT REPRESENT IN EVERY RESPECT THE VIEW OF THE APPLICANT '.

IN VIEW OF THIS STATEMENT THE COURT CANNOT REGARD THIS OPINION AS FORMING PART OF THE SUBMISSIONS AND ARGUMENTS PUT FORWARD BY THE APPLICANT .

B - THE SUBSTANCE OF THE SUBMISSIONS

1 . THE RATE OF EXCHANGE TO BE APPLIED TO THE CALCULATION OF THE DEBTS OF UNDERTAKINGS

P.697

THE APPLICANT COMPLAINS THAT THE DEFENDANT DID NOT TAKE PROPER ACCOUNT, WHEN IT CALCULATED THE AMOUNTS CHARGED TO UNDERTAKINGS, EITHER OF THE DOUBLE DEVALUATION OF THE FRENCH FRANC OR THE REVALUATION OF THE GERMAN MARK . IN ITS OPINION THE UNIT OF ACCOUNT IN FACT DETERMINED FINALLY THE AMOUNT AND EXTENT OF THE CREDITS AND DEBITS OF FERROUS SCRAP CONSUMERS, WHEREAS NATIONAL CURRENCIES WERE ONLY THE MEDIUM FOR PAYMENT AND THEIR REVALUATION OR DEVALUATION COULD NOT HAVE ANY EFFECT ON THE AMOUNT OF THE DEBTOR'S OBLIGATION . IT SUBMITS ALSO THAT IF, ON THE OTHER HAND, SUCH AN EFFECT HAD EXISTED THE DEFENDANT SHOULD ALSO HAVE TAKEN INTO ACCOUNT ANY CHANGE IN CURRENCY PARITIES AFTER THE EQUALIZATION PERIOD, IN THIS CASE THE REVALUATION OF THE GERMAN MARK . THEREFORE BY ONLY TAKING INTO ACCOUNT THE DEVALUATION OF THE FRENCH FRANC IT DISCRIMINATED AGAINST GERMAN UNDERTAKINGS .

WITHIN THE FRAMEWORK OF THE EQUALIZATION SCHEME THE UNIT OF ACCOUNT IS NOT A CURRENCY DIFFERENT FROM NATIONAL CURRENCIES BUT IS ONLY AN ACCOUNTING DEVICE INTENDED TO FACILITATE THE FIXING OF A GENERAL EQUALIZATION PRICE AND THE UNIFORM AND EXPEDITIOUS CALCULATION OF EQUALIZATION PAYMENTS AND CONTRIBUTIONS . WITH REGARD TO THE VARIOUS UNDERTAKINGS THE USE OF THE UNIT OF ACCOUNT MERELY INDICATES THE METHOD OF CALCULATING IN THEIR NATIONAL CURRENCIES THE AMOUNTS WHICH THEY OWE OR ARE OWED . THESE AMOUNTS, CALCULATED IN UNITS OF ACCOUNT, ARE IMMEDIATELY CONVERTED INTO NATIONAL CURRENCIES . THUS THE UNDERTAKINGS' CONTRIBUTIONS, EVEN IF THEY WERE CALCULATED IN UNITS OF ACCOUNT, ARE IN FACT ONLY DETERMINED IN NATIONAL CURRENCIES .

THE QUESTION THEN ARISES AT WHAT TIME THE CALCULATION OF BOTH THE AMOUNTS OF THE EQUALIZATION CONTRIBUTIONS AND PAYMENTS AND THE RESULTING CONVERSION INTO NATIONAL CURRENCIES OF THE AMOUNTS IN UNITS OF ACCOUNTS MUST BE EFFECTED .

IN ORDER TO ACHIEVE AN EQUAL DISTRIBUTION OF THE CHARGES ARISING OUT OF THE IMPORTATION OF FERROUS SCRAP FROM THIRD COUNTRIES THE EQUALIZATION SCHEME OPERATED ON THE BASIS OF ACCOUNTING PERIODS, USUALLY OF ONE MONTH, SO THAT ONE EQUALIZATION PRICE WAS ADOPTED FOR EACH PERIOD, AND THE EQUALIZATION PAYMENTS MADE DURING THIS PERIOD WERE CALCULATED ON THE BASIS OF THIS EQUALIZATION PRICE . WHEN THIS HAD BEEN DONE THE CHARGE RESULTING FROM THE SAID PAYMENTS, WHICH VARIED CONSIDERABLY FROM ONE ACCOUNTING PERIOD TO ANOTHER, WAS LEVIED ON ALL UNDERTAKINGS SUBJECT TO THE LEVY IN PROPORTION TO THE VOLUME OF THEIR PURCHASES OF FERROUS SCRAP WHETHER IMPORTED FROM OUTSIDE OR ORIGINATING WITHIN THE COMMON MARKET . IN THIS WAY IN EACH ACCOUNTING PERIOD IT WAS ARRANGED THAT THE COST PRICE OF IMPORTED FERROUS SCRAP FOR ALL UNDERTAKINGS WAS THE SAME AS THE AVERAGE PURCHASE PRICE OF FERROUS SCRAP BOUGHT ON THE INTERNAL MARKET . AS THE CONTRIBUTION PER METRIC TON OF FERROUS SCRAP VARIES FROM ONE ACCOUNTING PERIOD TO ANOTHER IT IS NECESSARY TO FIX THE CONTRIBUTIONS TO BE PAID ON THE BASIS OF THE PARITY OF THE UNITY OF ACCOUNT IN FORCE DURING THE SAID PERIODS .

P.698

AS THE EQUALIZATION SCHEME CONSISTS BASICALLY ON THE ONE HAND OF A CHARGE ON THE DIFFERENCE BETWEEN THE PRICE OF IMPORTED FERROUS SCRAP AND THE PRICE INSIDE THE COMMON MARKET AND ON THE OTHER HAND OF THE EQUAL DISTRIBUTION OF THIS CHARGE AMONG UNDERTAKINGS CONSUMING SCRAP IN PROPORTION TO THEIR CONSUMPTION IT WOULD BE WRONG TO ADOPT A RATE OF EXCHANGE FOR THE CALCULATIONS NECESSARY FOR THE FIRST STAGE OF THE OPERATION DIFFERENT FROM THE ONE ADOPTED FOR THE CALCULATIONS REQUIRED FOR THE SECOND STAGE .

THE METHOD ADOPTED DOES NOT INFRINGE THE PROHIBITION ON DISCRIMINATION . AN EQUAL APPORTIONMENT OF CHARGES PRESUPPOSES THE AVOIDANCE OF VARIATIONS IN CURRENCY PARITIES BY THE ADOPTION FOR ALL UNDERTAKINGS OF THE SAME PERIOD OF REFERENCE DURING WHICH THEIR DEBITS AND CREDITS CALCULATED IN UNITS OF ACCOUNT ARE CONVERTED AT THE SAME TIME INTO NATIONAL CURRENCIES . THE ADOPTION OF A SYSTEM BASED ON THE DATE OF PAYMENT OR ON THE DATE ON WHICH THE ENFORCEABLE NATURE OF THE CLAIM WAS ESTABLISHED WOULD LEAD TO THE DANGER THAT THE PARITY APPLICABLE COULD VARY ACCORDING TO THE CONDUCT OF THE UNDERTAKINGS CONCERNED OR OF THE HIGH AUTHORITY AND THAT THERE WOULD BE DISCRIMINATION AGAINST UNDERTAKINGS OF THE SAME COUNTRY WHICH HAD PAID THEIR CONTRIBUTION EITHER EARLIER OR LATER .

IT FOLLOWS FROM THIS IN PARTICULAR THAT ONLY THOSE CHANGES IN PARITIES WHICH OCCURRED BEFORE THE END OF THE EQUALIZATION SCHEME CAN BE TAKEN INTO CONSIDERATION WHEN CONVERTING INTO NATIONAL CURRENCIES THE AMOUNTS CALCULATED IN UNITS OF ACCOUNT . THEREFORE THE METHOD ADOPTED BY THE DEFENDANT APPEARS TO BE NOT ONLY OBJECTIVE BUT TO CONFORM TO THE EQUALIZATION SCHEME AND THE FACT THAT IT DID NOT TAKE INTO ACCOUNT THE REVALUATION OF THE MARK DOES NOT AMOUNT TO DISCRIMINATION AGAINST GERMAN UNDERTAKINGS .

IN VIEW OF THE FOREGOING THIS SUBMISSION MUST BE REJECTED AS UNFOUNDED .

2 . THE SYSTEM RELATING TO INTEREST

( A ) THE APPLICANT STATES THAT THE GENERAL DECISIONS CONTESTED IN THIS APPLICATION ARE ILLEGAL, BECAUSE THEY INTRODUCED A SYSTEM WITH REGARD TO INTEREST WHICH IS NOT COVERED BY THE DECISIONS MADE EARLIER WITH THE ASSENT OF THE COUNCIL, IN ACCORDANCE WITH ARTICLE 53(B ) OF THE TREATY .

THE FIRST QUESTION TO BE ANSWERED IS WHETHER THE OBLIGATION TO OBTAIN THE ASSENT OF THE COUNCIL IN THIS CASE ARISES UNDER THE TREATY .

P.699

UNDER ARTICLE 53(B ) OF THE TREATY THE HIGH AUTHORITY MAY ' WITH THE UNANIMOUS ASSENT OF THE COUNCIL, ITSELF MAKE ANY FINANCIAL ARRANGEMENTS SERVING THE SAME PURPOSES '. AS THIS IS A PROVISION WHICH LAYS DOWN THE ESSENTIAL PROCEDURAL REQUIREMENTS FOR THE VALIDITY OF CERTAIN DECISIONS IT MUST BE STRICTLY CONSTRUED . THE EFFECT OF ARTICLE 53(B ) OF THE TREATY IS THAT THE UNANIMOUS ASSENT OF THE COUNCIL WAS ONLY NECESSARY IF THE INTRODUCTION OF A SYSTEM OF CREDITING INTEREST AFFECTED OR MODIFIED THE VERY BASIS OF THE IMPORTED FERROUS SCRAP EQUALIZATION SCHEME .

A SYSTEM FOR CREDITING INTEREST, ESTABLISHED IN ORDER TO COMPENSATE UNDERTAKINGS SUBJECT TO THE SCHEME FOR THE PERIODS DURING WHICH THEY HAD TO LOCK UP CAPITAL REQUIRED TO MEET THEIR OBLIGATIONS, APPEARS TO BE NECESSARY IN ORDER TO ENSURE THAT THESE UNDERTAKINGS ARE NOT UNJUSTIFIABLY PREJUDICED BY DELAYS IN PAYMENTS MADE BY OTHER UNDERTAKINGS . THIS SYSTEM, WHICH DOES NOT MODIFY THE ESSENTIAL STRUCTURE OF THE FINANCIAL ARRANGEMENTS FOR EQUALIZATION, WAS ADOPTED TO ENABLE IT TO FUNCTION PROPERLY AND TO ATTAIN THE OBJECTIVES APPROVED BY THE COUNCIL .

THE SECOND QUESTION TO BE ANSWERED IS WHETHER THE FACT THAT ARTICLE 13 OF DECISION 16/58, ADOPTED WITH THE UNANIMOUS ASSENT OF THE COUNCIL, PROVIDED FOR THE APPLICATION OF A SYSTEM FOR THE PAYMENT OF INTEREST FOR DELAY MEANT THAT THE HIGH AUTHORITY HAD TO OBTAIN ONCE MORE THE UNANIMOUS ASSENT OF THE COUNCIL TO ANY AMENDING DECISION .

THERE IS NO JUSTIFICATION FOR THE CONCLUSION THAT THE DECISIONS OF THE HIGH AUTHORITY TAKEN WITH THE UNANIMOUS ASSENT OF THE COUNCIL COULD ONLY BE AMENDED, EVEN IN THE CASE OF AMENDMENTS NOT AFFECTING THE BASIS OF SUCH DECISIONS, BY A NEW DECISION ALSO TAKEN WITH THE UNANIMOUS ASSENT OF THE COUNCIL .

THEREFORE THE COMPLAINT BASED ON THE ABSENCE OF THE UNANIMOUS ASSENT OF THE COUNCIL IS UNFOUNDED .

( B ) THE APPLICANT STATES THAT THE STATEMENT OF THE REASONS UPON WHICH DECISION NO 7/61 IS BASED IS INCONCLUSIVE, ON THE GROUND THAT IT DOES NOT GIVE THE REASONS WHY IT WOULD HAVE BEEN IMPOSSIBLE FOR THE HIGH AUTHORITY TO REMOVE THE DISADVANTAGES OF THE FORMER SYSTEM FOR CHARGING INTEREST FOR DELAY IN PAYMENT AND TO ADOPT A SYSTEM OTHER THAN THE ONE WHICH IS CONTESTED .

RECITALS 5 TO 8 OF THIS DECISION UNDERLINE CLEARLY THE DISADVANTAGES CAUSED BY CHARGING INTEREST FOR DELAY IN PAYMENT ON PROVISIONAL CONTRIBUTIONS, AND THAT IT IS NECESSARY TO CALCULATE THE AMOUNT OF THE CONTRIBUTIONS OF ALL THE UNDERTAKINGS LIABLE TO PAY THEM BY REFERENCE TO THE SAME DATE, AS THESE CONTRIBUTIONS ARE OFTEN SPREAD OVER VARYING PERIODS FOR DIFFERENT UNDERTAKINGS, WHICH ARE THEREBY EITHER BENEFITED OR PREJUDICED . RECITAL 8 DESCRIBES THE SITUATION WHICH IN THE OPINION OF THE HIGH AUTHORITY RESULTS FROM THE APPLICATION OF THE CONTESTED SYSTEM AND WHICH IS THE REASON WHY IT ADOPTED THIS SYSTEM .

P.700

THIS STATEMENT OF REASONS THUS DISCLOSES THE CONSIDERATIONS WHICH LED THE HIGH AUTHORITY TO ADOPT THE DISPUTED DECISION NO 7/61 AND THE REASONS UPON WHICH THAT DECISION IS BASED . SINCE THE STATEMENT OF THE REASONS UPON WHICH THE SAID DECISION IS BASED IS ADEQUATE IN LAW THIS SUBMISSION MUST BE REJECTED AS UNFOUNDED .

( C ) THE APPLICANT MAINTAINS THAT THE NEW SYSTEM FOR CHARGING INTEREST ADOPTED BY DECISION NO 7/61 DISCRIMINATES AGAINST UNDERTAKINGS WHICH ARE NOT RESPONSIBLE FOR THE DELAY IN THEIR PAYMENTS .

IN FACT THE SYSTEM INTRODUCED BY DECISION NO 7/61 DISPENSED WITH THE IMPOSITION OF PECUNIARY SANCTIONS IN THE FORM OF INTEREST PAYABLE FOR DELAYED PAYMENT . HOWEVER, EXPERIENCE SHOWED THAT FOR VARIOUS REASONS, FOR WHICH THE UNDERTAKINGS COULD NOT OFTEN NOT BE MADE RESPONSIBLE, THE EXACT AMOUNTS OF THE CONTRIBUTIONS COULD ONLY BE DETERMINED AFTER DELAYS WHICH ARE AT TIMES CONSIDERABLE .

THERE WAS THEREFORE THE DANGER THAT THE FORMER SYSTEM MIGHT LEAD TO BOTH AN INTRICATE AND COMPLICATED INVESTIGATION INTO ALL THE CIRCUMSTANCES RELATING TO RESPONSIBILITY FOR DELAY AND TO THE UNSATISFACTORY SITUATION THAT THE CHARGE UNDER THE EQUALIZATION SCHEME WAS IN FACT IMPOSED UNEQUALLY ON THE VARIOUS UNDERTAKINGS . THUS THE UNDERTAKINGS, WHOSE EXACT CONTRIBUTIONS COULD ONLY BE DETERMINED AFTER SOME DELAY, RETAINED THE USE FOR A CERTAIN TIME OF SUMS WHICH SHOULD HAVE BEEN AVAILABLE TO THE FUND . THE RESULT WAS THAT THE OTHER UNDERTAKINGS HAD TO BEAR ADDITIONAL CHARGES WITHOUT ANY SET-OFF . THESE UNDERTAKINGS WERE THEREFORE IN A DOUBLY UNFAVOURABLE POSITION COMPARED WITH THE UNDERTAKINGS WHOSE PAYMENTS WERE DELAYED . THESE DISPARITIES WHICH AROSE OUT OF THE FORMER SYSTEM WERE OF A KIND LIKELY TO HAVE DIRECT EFFECTS IN THE FIELD OF COMPETITION .

SUCH A RESULT WOULD CLEARLY BE CONTRARY TO THE REQUIREMENTS AND OBJECTIVES OF THE EQUALIZATION SCHEME, IN PARTICULAR TO THE PRINCIPLE THAT THE CONTRIBUTIONS TO BE PAID BY THE CHARGEABLE UNDERTAKINGS SHOULD BE APPORTIONED AS EQUALLY AS POSSIBLE . FOR THIS REASON THE HIGH AUTHORITY COULD NOT CONTINUE THE FORMER SYSTEM BUT HAD TO REPLACE IT WITH ANOTHER WHICH DID NOT HAVE THE DISADVANTAGES MENTIONED ABOVE . WHILST IT IS TRUE THAT FOR THIS PURPOSE IT TREATED ON A FOOTING OF EQUALITY ALL UNDERTAKINGS WHICH WERE FOR ANY REASON IN ARREAR WITH THEIR PAYMENTS, WITHOUT CONSIDERING THE QUESTION OF BLAME OR LIABILITY, THIS IS EXPLAINED BY THE INJUSTICES AND UNCERTAINTIES WHICH A MORE CONVENTIONAL SYSTEM WOULD HAVE INTRODUCED INTO THE WORKING OF THE EQUALIZATION SCHEME .

P.701

IT IS MOREOVER CLEAR THAT THE SYSTEM ADOPTED BY DECISION NO 7/61 ELIMINATES AS FAR AS POSSIBLE THE OBJECTIVE INEQUALITIES CAUSED BY THE DELAY IN THE LIQUIDATION OF THE EQUALIZATION SCHEME .

THEREFORE THIS COMPLAINT IS UNFOUNDED .

( D ) FINALLY, THE APPLICANT SUBMITS THAT DECISION NO 7/61 IS DEFECTIVE BECAUSE IT HAS RETROACTIVE EFFECT AND THEREFORE INFRINGES LEGAL PRINCIPLE .

IN SUCH A FINANCIAL SCHEME AS THE ONE IN QUESTION, BASED ON A CLOSE INTERDEPENDENCE BETWEEN THE CONTRIBUTIONS OF EACH OF THE PARTICIPANTS, IT IS ABOVE ALL NECESSARY TO ENSURE EQUALITY OF TREATMENT BETWEEN THOSE SUBJECT THERETO, BY ELIMINATING ALL POSSIBILITY OF DISCRIMINATING BETWEEN THEM . IN THESE CIRCUMSTANCES THE CONTINUANCE OF RULES WHICH WOULD HAVE THE EFFECT OF CONFERRING UNJUSTIFIED BENEFITS ON CERTAIN UNDERTAKINGS COMPARED WITH OTHERS, ON THE PRETEXT THAT THEY ESTABLISHED LEGAL SITUATIONS OR VESTED RIGHTS, WOULD JEOPARDIZE THE OBJECTIVES OF THE SAID SCHEME .

IT IS THEREFORE NECESSARY WITHIN THE FRAMEWORK OF SUCH A SCHEME TO ACKNOWLEDGE THAT THE RESPONSIBLE BODIES HAVE THE POWER TO MAKE THE NECESSARY AMENDMENTS TO SUCH RULES IN ORDER TO ELIMINATE ANY POSSIBLE DISCRIMINATION .

FURTHER, AS THIS FINANCIAL SCHEME IS BEING LIQUIDATED AND THE CONTRIBUTIONS OF EACH PARTICIPANT ARE THEREFORE BEING DEALT WITH ON A PROVISIONAL BASIS, IT IS IMPOSSIBLE TO ELIMINATE ANY SUCH DISCRIMINATION WITHOUT ALTERING SITUATIONS CREATED BY THE PREVIOUS RULES, WHICH HAD TO BE AMENDED . IT IS THEREFORE NECESSARY TO CONCLUDE THAT THIS SUBMISSION IS UNFOUNDED AND MUST BE REJECTED .

THE RESULT OF ALL THESE CONSIDERATIONS IS THAT THIS APPLICATION IS UNFOUNDED .

THE APPLICANT HAS FAILED IN ALL ITS CLAIMS . HOWEVER, THE CONDUCT OF THE BODIES RESPONSIBLE FOR THE ADMINISTRATION OF THE FINANCIAL SCHEME COULD BE SAID TO HAVE ENCOURAGED IT TO CONTEST JUSTIFICATION FOR THE CHARGE RELATING TO THE PERIOD PRIOR TO 1 FEBRUARY 1957 WHICH COVERED THE LARGEST PART OF THE DISPUTED SUM . IN THESE CIRCUMSTANCES IT IS APPROPRIATE TO APPLY ARTICLE 69(3 ) OF THE RULES OF PROCEDURE AND TO ORDER THAT THE COSTS BE BORNE AS SET OUT IN THE OPERATIVE PART OF THE JUDGMENT;

THE COURT

HEREBY :

1 . DISMISSES THE APPLICATION AS UNFOUNDED;

2 . ORDERS THE APPLICANT TO PAY ITS OWN COSTS AND ONE-HALF OF THE DEFENDANT'S COSTS, THE OTHER HALF OF THE DEFENDANT'S COSTS TO BE BORNE BY THE DEFENDANT .