Avis juridique important

Judgment of the Court (Sixth Chamber) of 2 May 1996. - Barbara Hopkins and others v National Power plc and Powergen plc. - Reference for a preliminary ruling: High Court of Justice, Queen's Bench Division - United Kingdom. - ECSC Treaty - Discrimination between producers - Application of Articles 4 and 63 of the Treaty - Direct effect - EC Treaty - Abuse of dominant position - Article 86 of the Treaty - Compensation for damage resulting from infringement of those provisions - Powers of the Commission and of the national court. - Case C-18/94. European Court reports 1996 Page I-02281

Summary Parties Grounds Decision on costs Operative part

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1. ECSC ° Scope of the Treaty ° Discrimination practised by purchasers against coal producers ° Included ° Provisions of the EC Treaty not applicable

(ECSC Treaty, Arts 4, 33, 35, 63(1), 80, 81 and 88; EC Treaty, Art. 232)

2. ECSC ° Provisions relating to discrimination as regards price and other conditions of purchase ° Articles 4(b) and 63(1) ° Direct effect ° None ° Recommendations based on Article 63(1) ° Direct effect ° Conditions

3. ECSC ° Provisions relating to cartels and abuses of dominant positions ° Binding force of individual decisions adopted by the Commission ° Obligations of national courts ° Power of review of the Community court

(ECSC Treaty, Arts 14, 41, 65 and 66(7))

1. The provisions of the ECSC Treaty, and in particular Articles 4(b) and 63(1) thereof, and not those of the EC Treaty, constitute the legal framework for dealing with discrimination practised by purchasers against producers as regards price, volume and other terms and conditions for the purchase of coal.

First, it is clear from those two provisions, taken together, that they are aimed at discrimination systematically practised by purchasers irrespective of their status of undertaking within the meaning of Article 80 of the ECSC Treaty, to the detriment of coal producers which are undertakings within the meaning of Article 80. Secondly, in the ECSC Treaty the Commission has appropriate means of action and the producer undertakings have effective judicial protection against such discrimination, without any need to resort to the instruments and procedures established by the EC Treaty.

2. Since Article 4(b) of the ECSC Treaty does not apply by itself, it cannot have direct effect. Similarly, having regard to the power of the Commission, laid down in Article 63(1) of that Treaty, to make appropriate recommendations to the Governments concerned where it finds that discrimination is being systematically practised by purchasers, individuals cannot contend before the national courts that such discrimination is incompatible with Article 63(1) as long as the alleged discrimination has not been the subject of a recommendation addressed to the Governments concerned.

However, whenever the provisions of a recommendation based on Article 63(1) appear, as regards their subject-matter, to be unconditional and sufficiently precise, those provisions may be relied upon directly by individuals before the national court on the same conditions as directives under the EC Treaty. The same rules apply to ECSC recommendations and directives, which are measures of the same kind.

3. Since the Commission has sole jurisdiction, subject to review by the Community court, to adopt decisions on the basis of Articles 65 and 66(7) of the ECSC Treaty in the matter of cartels and abuses of dominant positions, such decisions, which are binding in their entirety pursuant to Article 14 of the ECSC Treaty, are binding on the national courts which may, however, still ask the Court of Justice to rule on the validity or interpretation of those provisions.

In Case C-18/94,

REFERENCE to the Court by the High Court of Justice of England and Wales, Queen' s Bench Division, for a preliminary ruling under Article 177 of the EC Treaty and Article 41 of the ECSC Treaty in the proceedings pending before that court between

Barbara Hopkins and Others

and

National Power plc,

PowerGen plc,

Third party: British Coal Corporation

on the interpretation of Articles 4 and 63 of the ECSC Treaty and Article 86 of the EC Treaty,

THE COURT (Sixth Chamber),

composed of: C.N. Kakouris, President of the Chamber, G. Hirsch, G.F. Mancini, (Rapporteur), F.A. Schockweiler and P.J.G. Kapteyn, Judges,

Advocate General: N. Fennelly,

Registrar: L. Hewlett, Administrator,

after considering the written observations submitted on behalf of:

° Barbara Hopkins and Others, by T. Sharpe QC, and M. Brealey, Barrister, instructed by S. Llewellyn Jones and T. Llewellyn Jones, Solicitors,

° National Power plc, by N. Forwood QC, and D. Anderson, Barrister, instructed by S. Barrett-Williams and G. Chapman, Solicitors,

° PowerGen plc, by P. Scott QC, and K.P.E. Lasok QC, instructed by L.G.D. Marr and N.P. Lomas, Solicitors,

° British Coal Corporation, by D. Vaughan QC, and D. Lloyd Jones, Barrister, instructed by Nabarro Nathanson, Solicitors,

° the United Kingdom, by J.E. Collins, Assistant Treasury Solicitor, acting as Agent, and by R. Plender QC,

° the Commission of the European Communities, by J. Currall, of its Legal Service, acting as Agent, assisted by R. Caudwell, a national official seconded to its Legal Service,

having regard to the Report for the Hearing,

after hearing the oral observations of Barbara Hopkins and Others, represented by T. Sharpe QC, and M. Brealey, Barrister, instructed by S. Llewellyn Jones and T. Llewellyn Jones, Solicitors; of National Power plc, represented by N. Forwood QC, and D. Anderson, Barrister, instructed by S. Barrett-Williams and G. Chapman, Solicitors; of PowerGen plc, represented by P. Scott QC, and K.P.E. Lasok QC, instructed by L.G.D. Marr and N.P. Lomas, Solicitors; of British Coal Corporation, represented by D. Vaughan QC, and D. Lloyd Jones, Barrister, instructed by Nabarro Nathanson, Solicitors; of the United Kingdom, represented by J.E. Collins, R. Plender QC, and D. Pannick QC; and of the Commission, represented by J. Currall, assisted by R. Caudwell, at the hearing on 12 October 1995,

after hearing the Opinion of the Advocate General at the sitting on 7 December 1995,

gives the following

Judgment

1 By orders of 13 January 1994 and 12 May 1994, received at the Court on 17 January and 16 May 1994 respectively, the High Court of Justice of England and Wales, Queen' s Bench Division, referred to the Court for a preliminary ruling under Article 41 of the ECSC Treaty and Article 177 of the EC Treaty a number of questions on the interpretation of Articles 4 and 63 of the ECSC Treaty and Article 86 of the EEC Treaty, which has now become the EC Treaty.

2 Those questions have been raised in proceedings between Barbara Hopkins and Others (hereinafter "Hopkins and the other plaintiffs"), all established in the United Kingdom, and National Power plc (hereinafter "National Power") and PowerGen plc (hereinafter "PowerGen") concerning a claim for damages made by Hopkins and the other plaintiffs.

3 Hopkins and the other plaintiffs produce coal from deep mines under licences granted by British Coal Corporation (hereinafter "British Coal"), a public undertaking created by the 1946 Coal Industry Nationalization Act and proprietor of nearly all of the United Kingdom' s coal reserves.

4 Before 1 April 1990, the Central Electricity Generating Board (hereinafter "the CEGB"), a State body, was responsible for producing most of the electricity in England and Wales. Since that date, the business of the CEGB has been taken over by, inter alios, National Power and PowerGen.

5 From 1979 to 31 March 1990, the CEGB, and from 1 April 1990 National Power and PowerGen, have concluded with British Coal contracts for the supply of coal determining terms as to price, volume and other terms for the purchase of coal. The CEGB obtained from British Coal most of the coal supplies which it needed for its own use but also purchased, on different terms, imported coal and coal from deep mines run by, in particular, Hopkins and the other plaintiffs. The CEGB purchased this coal either directly from Hopkins and the other plaintiffs or from certain approved intermediaries which blended coal from various sources, including coal produced by Hopkins and the other plaintiffs.

6 In March 1990, the National Association of Licensed Open Cast Operators and the Federation of Small Mines of Great Britain lodged with the Commission of the European Communities a complaint based on Articles 85 and 86 of the EC Treaty and Articles 4, 60, 63, 65 and 66(7) of the ECSC Treaty concerning, in particular, the contracts mentioned above.

7 On 5 June 1990 the South Wales Small Mines Association also lodged a complaint with the Commission pursuant to Article 3 of Regulation No 17 of the Council of 6 February 1962, First Regulation implementing Articles 85 and 86 of the Treaty (OJ, English Special Edition 1959-1962, p. 87). The thrust of that complaint was that, in purchasing coal on different terms as to price, volume and delivery times from British Coal, on the one hand, and from Hopkins and the other plaintiffs or blenders, on the other, the CEGB, and subsequently National Power and PowerGen, had abused their dominant position.

8 By decision of 23 May 1991, the Commission dismissed those complaints in relation to the period subsequent to 1 April 1990 without taking any decision in relation to the previous period.

9 On 1 June 1991, Hopkins and the other plaintiffs brought an action for damages in the High Court of Justice against National Power and PowerGen in relation to the period going from 1985 to 31 March 1990. In that action, they allege, in particular, breach of Articles 4 and 63 of the ECSC Treaty and breach of Article 86 of the EC Treaty. They claim that National Power and PowerGen, the successors to the CEGB, have discriminated against them in relation to British Coal by purchasing coal from them on terms as to price and volume less favourable than those offered to British Coal.

10 The High Court of Justice has suspended proceedings and referred the following questions to the Court for a preliminary ruling:

"1. Where a purchaser of coal for its own use, not being an undertaking within the meaning of Article 80 of the ECSC Treaty, is alleged to have discriminated as to price, volume and other terms and conditions of purchase in respect of coal produced by two or more undertakings within the meaning of Article 80 of the ECSC Treaty, is such an allegation to be considered under the ECSC Treaty, the EC Treaty or both?

2. If and to the extent that such an allegation is to be considered under the ECSC Treaty:

(a) do Articles 4 and/or 63(1) of the ECSC Treaty impose any duty upon such a purchaser?

(b) if so, is such a duty enforceable in the national court?

(c) is any such enforceable duty owed to a producer of coal and, if so, in what circumstances? In particular, is any such duty owed to a producer which sells its coal to an independent blender for mixing with coal from other sources to produce a blend which the blender then sells to the purchaser?

(d) does Community law require a remedy in damages for breach of any such duty to be available to any person to whom such a duty is owed and, if so, on what conditions?

3. If and to the extent that such an allegation is to be considered under the EC Treaty:

(a) does the purchaser owe a duty under Article 86 of the EC Treaty enforceable in the national courts to a producer of coal and, if so, in what circumstances? In particular, is such a duty owed to a producer which sells its coal to an independent blender for mixing with coal from other sources to produce a blend which the blender then sells to the purchaser?

(b) does Community law require a remedy in damages for breach of any such duty to be available to any person to whom such a duty is owed and, if so, on what conditions?

(c) in determining whether an alleged abuse has the requisite effect on trade between Member States, is the relevant effect to be judged solely by reference to the potential markets for the coal produced by the parties alleging infringement of Article 86 and sold by them to blenders or to the purchaser for its own use, or by reference to other matters and, if so, which?

4. To what extent, if at all, do the answers to Questions 2 and/or 3 above depend upon:

(a) a prior determination by the Commission, the making of a recommendation addressed to a Member State and/or the subsequent breach of the national implementing measures; and/or

(b) the completion of any other steps or procedures and, if so, which?

5. To what extent, if any, is the decision of the Commission contained in its letter dated 23 May 1991, in so far as that decision concerned the supply of coal to the electricity generators, determinative of issues of fact or law raised in the present proceedings before the national court, having regard to the particular circumstances in which that decision was made?

6. Where a producer of coal, being an undertaking within the meaning of Article 80 of the ECSC Treaty, is alleged to have induced or participated in the alleged discrimination described in Question 1 to the prejudice of other coal-producing undertakings by reason of the prices and conditions under which the first undertaking sold its coal to the purchaser referred to in Question 1, is such an allegation to be considered under the ECSC Treaty, the EC Treaty, or both?"

The first, third and sixth questions

11 By its first, third and sixth questions, the High Court asks, in essence, which provisions of the ECSC Treaty or the EC Treaty are relevant to the case before it.

12 In paragraph 9 of its judgment in Case C-128/92 Banks [1994] ECR I-1209 the Court has already held that the extraction of unworked coal falls within the scope of the ECSC Treaty. Annex I to the ECSC Treaty, to which Article 81 of the Treaty refers for the definition of the term "coal", expressly refers to hard coal, the type of coal concerned in the main proceedings.

13 Hopkins and the other plaintiffs and British Coal, the latter being more particularly concerned by the sixth question, are covered by Article 80 of the ECSC Treaty in any event. Since their coal extraction activity is the first stage in the processing cycle of a more highly-worked product, they are engaged in production in the coal industry within the territory of a Member State, within the meaning of that provision. That is not the case with National Power and PowerGen, which are "purchasers" within the meaning of Article 63(1), being consumers of coal but without being undertakings under Article 80 of the ECSC Treaty.

15 As it is, it must be concluded that discrimination such as that alleged in the main proceedings is caught by Articles 4 and 63 of the ECSC Treaty applied together.

17 Article 63(1) gives effect to Article 4(b) by empowering the Commission, when it "finds that discrimination is being systematically practised by purchasers", to make appropriate recommendations to the governments concerned. In order for those provisions to be applied, it is necessary, in particular, for the discrimination to be attributable to purchasers.

18 It is clear from those two provisions, taken together, that they are aimed at discrimination systematically practised by purchasers, irrespective of their status of undertaking within the meaning of Article 80 of the ECSC Treaty, to the detriment of coal producers which are undertakings within the meaning of Article 80.

19 In order to ensure the effectiveness of the prohibition laid down in Article 4(b), the powers conferred by Article 63(1) on the Commission must be such as to enable it, not only to oblige the authorities of the Member States to bring to an end for the future any systematic discrimination which the Commission has found to exist, but also, on the basis of that finding, to draw all the consequences as regards the effects which such discrimination may have had in relationships between purchasers and producers within the meaning of Article 4(b) even before the Commission took action. That same finding may be relied on by the persons concerned before the national courts.

20 Further, the undertakings referred to by Article 80 of the ECSC Treaty which suffer such discrimination may apply to the Commission under that Treaty in order for the Commission to make recommendations to the Member State concerned pursuant to Article 63(1) and, if there is any unlawful refusal, express or implied, on the Commission' s part, they can bring an action against that decision before the Community court pursuant to the second paragraph of Article 33 or the third paragraph of Article 35 of the ECSC Treaty.

21 If the Commission should adopt a recommendation under Article 63(1) of the Treaty, it is for the Member State to which it is made to comply with it. If the Member State fails to do so, Article 88 of the Treaty empowers the Commission to record this failure in a reasoned decision. Furthermore, the Court has held that if the Commission, with which a matter has been raised pursuant to the first paragraph of Article 35 of the ECSC Treaty, expressly or impliedly refuses to exercise that power, the undertakings referred to in Article 80 of the Treaty which are directly concerned may bring proceedings before the Community court pursuant to the second paragraph of Article 33 or the third paragraph of Article 35 of the Treaty (see, to this effect, the judgment in Case 30/59 De Gezamenlijke Steenkolenmijnen in Limburg v High Authority [1961] ECR 1).

22 It follows from the foregoing that the ECSC Treaty deals exhaustively with discrimination practised by purchasers and that it provides victims of such discrimination with effective judicial protection. Consequently, there is no place for application of the provisions of the EC Treaty.

23 This is all the more so where, as in the situation referred to in the sixth question, the discrimination in question is practised by a coal producer which is an undertaking within the meaning of Article 80 of the ECSC Treaty.

24 In view of those considerations, the reply to the first, third and sixth questions must be that the provisions of the ECSC Treaty, and in particular Articles 4(b) and 63(1) thereof, constitute the legal framework for dealing with discrimination practised by purchasers against producers as regards price, volume and other terms and conditions for the purchase of coal.

The second and fourth questions

25 By its second and fourth questions the national court asks in substance whether Articles 4(b) and 63(1) of the ECSC Treaty or a recommendation adopted by the Commission pursuant to the latter provision create rights which individuals may rely on directly before national courts.

26 Since Article 4(b) does not apply by itself, as was reiterated in paragraph 16 of this judgment, it cannot have direct effect.

27 Article 63(1) empowers the Commission to make appropriate recommendations to the Governments concerned where it finds that discrimination is being systematically practised by purchasers. It follows that individuals cannot contend before the national courts that such discrimination is incompatible with Article 63(1) as long as the alleged discrimination has not been the subject of a recommendation addressed to the Governments concerned.

28 It is settled case-law that the rules evolved by the Court to determine the effects of a directive which has not been transposed into national law apply equally to recommendations adopted under the ECSC Treaty, which are measures of the same kind, binding upon those to whom they are addressed as to the result to be achieved but leaving to them the choice of form and methods to achieve that result (see the judgment in Case C-221/88 Busseni [1990] ECR I-495, paragraph 21). Whenever the provisions of a recommendation based on Article 63(1) appear, as regards their subject-matter, to be unconditional and sufficiently precise, those provisions may therefore be relied upon directly by individuals before the national court on the same conditions as directives.

The fifth question

30 In view of the replies given to the other questions, the issue raised by this question is in substance whether the national court is bound as a matter of law or fact by the decision adopted on 23 May 1991 by the Commission following the submission of a complaint based on Articles 65 and 66(7) of the ECSC Treaty.

31 As the Court held in Banks, since the Commission has sole jurisdiction, subject to review by the Court of Justice and the Court of First Instance, to adopt decisions on the basis of Articles 65 and 66(7) of the ECSC Treaty, such decisions, which are binding in their entirety pursuant to Article 14 of the ECSC Treaty, are binding on the national courts. However, the national courts may still ask the Court of Justice to rule on the validity or interpretation of those provisions.

Costs

32 The costs incurred by the United Kingdom and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT (Sixth Chamber),

in answer to the questions referred to it by the High Court of Justice of England and Wales (Queen' s Bench Division), by orders of 13 January 1994 and 12 May 1994, hereby rules:

1. The provisions of the ECSC Treaty, and in particular Articles 4(b) and 63(1) thereof, constitute the legal framework for dealing with discrimination practised by purchasers against producers as regards price, volume and other terms and conditions for the purchase of coal.

2. Articles 4(b) and 63(1) of the ECSC Treaty do not create rights which individuals may rely on directly before national courts. However, wherever the provisions of a recommendation based on Article 63(1) appear, as regards their subject-matter, to be unconditional and sufficiently precise, those provisions may be relied upon directly by individuals before the national court.

3. Commission decisions based on Articles 65 and 66(7) of the ECSC Treaty, which are binding in their entirety pursuant to Article 14 of the ECSC Treaty, are binding on the national courts. However, the national courts may still ask the Court of Justice to rule on their validity or interpretation.