Lemmerz-Werke GmbH and others v High Authority of the European Coal and Steel Community (C-53/63, C-54/63)

Contents

In Joined Cases(1) 53/63LEMMERZ-WERKE GMBH, Königswinter (Rheinland), represented by its manager Paul Lemmerz,(2) 54/63a) GUßSTAHLWERK CARL BÖNNHOFF Kommanditgesellschaft, Wetter (Ruhr), represented by its partners, Hermann Carl Bönnhoff, Horst Pegan and Waldemar Bönnhoff,b) Edelstahlwerke Ed. Dörrenberg Sohne Kommanditgesellschaft, Ründeroth (Rheinland), represented by its partner Oskar Dörrenberg,c) Stahlwerk Mannheim-AG Mannheim-Rheinau, represented by its directors, Werner Esser and Ludwig Schreiner,assisted by Dr H. Wirtz, Mr Hengeler, Dr Kurth and Dr B. Wirtz, advocates of the Düsseldorf Bar, and in the oral proceedings by A. Heusch, advocate of the Düsseldorf Bar, with an address for service in Luxembourg at the chambers of Mr Jehle, 2 rue du Fort-Élisabeth,vHIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, represented by its Legal Adviser Dr Heinrich Matthies, acting as Agent, with an address for service in Luxembourg at its offices at 3 Place de Metz,THE COURTcomposed of: A. M. Donner, President, Ch. L. Hammes and A. Trabucchi (Presidents of Chambers), L. Delvaux, R. Rossi, R. Lecourt and W. Strauß (Judge-Rapporteur), Judges,Advocate-General: K. RoemerRegistrar: A. Van Houttegives the following

Judgment

Issues of fact and of law

I —Facts

The facts may be summarized as follows:

A —Case 53/63

1.The applicant manufactures bicycle wheels and rims. To provide for its requirements, it constructed a steel works and rolling mill and during the summer of 1956 commenced production (at first by way of experiment).

2.The question arose as to the date from which it should pay levies to the Imported Ferrous-Scrap Equalization Scheme (set up by the High Authority in 1954 on the basis of Article 53 of the Treaty establishing the ECSC) for the scrap purchased by it. By a unanimous resolution of 8 May 1957, the Board of the Imported Ferrous Scrap Equalization Fund, (hereinafter referred to by the initial letters of its French tide, namely ‘CPFI’) exempted certain firms from any retroactive levy for the period prior to 1 February 1957. The applicant claims the benefit of this Decision; the High Authority opposes this claim.

3.On 3 April 1963 by Decision No 7/63 (Official Journal of the European Communities, pp 1091/63 et seq.) the High Authority altered the basis for calculation of the equalization levy. Article 6 of the Decision provides that ‘a complete statement of account will be sent to each undertaking subject to the equalization scheme …; if the balance of the account is to the credit of the equalization scheme, payment of the amount due is to be made by the undertaking to the account of the High Authority at one of the banks mentioned below … by 31 May 1963’. The statement of reasons for the Decision declares, inter alia, that ‘the revision of resolutions’ made by the CPFI ‘before Decision No 13/58…’ as well as other amendments ‘now make it both possible and necessary to draw up fresh statements of account’.

4.On 8 April 1963 the Directorate-General for Steel, Marketing Division, of the High Authority sent to the applicant a registered letter (with form of acknowledgment of receipt) signed by the Director-General, Rollman, and another Director, Peco, which stated:‘Decision No 7/63 of the High Authority published in the Official Journal of the European Communities of 6 April 1963 fixes the revised contribution rates for the equalization scheme for imported ferrous scrap and scrap treated as such on the basis of Decisions Nos 22/54, 14/55, 26/55, 3/56, 2/57 and 16/58 for the period April 1954 to March 1959 inclusive.In accordance with this Decision and subject to the reservations set out therein, a complete statement of account taking into consideration all the debits and credits, inclusive of principal and interest, of your undertaking, has been compiled and is enclosed herewith. The statement is in two parts. The first complies with Decisions Nos 22/54, 14/55, 26/55, 3/56 and-2/57 (administration of the Imported Ferrous Scrap Equalization Fund, Brussels) while the second is based on Decision No 16/58 (administration of the Luxembourg fund). An explanatory note is attached.The purpose of the statement is to adjust the state of your account as closely as possible to the final position. Subsequent amendments may nevertheless be made once certain outstanding difficulties have been setded.On the basis of this statement drawn up as at 31 May 1963, the account for your undertaking is made up as follows … In accordance with the terms of Article 6 of Decision No 7/63, you are requested to pay the sum of … to the account of the High Authority at one of the banks listed in the above Article bv 31 May 1963 at the latest.’The sum determined in this way does not take into account the exemption claimed by the applicant (see paragraph 2 above)The explanatory note referred to in the letter states, inter alia:‘Undertakings should, therefore, after examining their statements of account, send to the Regional Office of their country, to the CPFI, Brussels, … or to the High Authority, their observations on any questions arising, and upon which the High Authority has not already given an opinion.’

5.By a letter of 6 May 1936, the High Authority through one of its members, Mr Hellwig, informed Wirtschafts-vereinigung Eisen und Stahl,‘that the demand for payment sent by the High Authority on 8 April 1963 does not constitute a formal decision within the meaning of Article 15 of the Treaty.In cases where undertakings do not agree with the balance shown on the statement of account before 31 May 1963, the High Authority will take individual reasoned and enforceable decisions, based on Article 92 of the Treaty.A right to institute proceedings against these individual decisions will be available if necessary.The period of time mentioned in Article 33 runs from the date of the present Decision’.Representatives of the High Authority had already adopted the same point of view on 3 May 1963 in a conversation with the representatives of the applicant.

6.On 15 May 1963, the applicant instituted the present proceedings.

B —Case 54/63

1.The applicants are small and medium-sized undertakings. Only a relatively small proportion of their production (ingot castings) comes within the jurisdiction of the ECSC. For this reason the defendant was originally of the opinion that the applicants would not have to contribute to the equalization scheme even for the quantities of bought scrap used for the ingot castings.

2.On 26 January 1957, the High Authority, by its General Decision No 2/57, (Official Journal of the European Communities, pp 61/57 et seq) required of the applicants equalization contributions for the proportion of bought scrap used for the production of ingot castings.

3.On 8 May 1957, the Board or the CPFI unanimously decided to grant the applicants and a certain number of other named undertakings in a similar position exemption from all contributions for the period prior to 1 February 1957 (the date upon which Decision No 2/57 entered into force). The representative of the High Authority raised no objection.

4.During the summer and autumn or 1961, the High Authority requested the applicants to make a declaration, supported by documentary evidence, of their purchases of scrap for the period from 1 April 1954 to 31 January 1957. The applicants complied with this request, subject to the reservation that they did not admit any obligation to contribute for the period prior to 1 February 1957.

5.See A 3 above.

6.See A 4 above (the letters arc identical in all respects save for the respective totals of contributions).

7.See A 5 above.

8.See A 6 above.

II —Conclusions of the parties

1.The applicant in Case 53/63 claims that the Court should:(1) Annul Decision No 7/63 of the High Authority of 3 April 1963, published in the Official Journal of the European Communities, pp 1093/63 et seq., in so far as it fails to take into account the resolution of the Council of the CPFI of 8 May 1957 exempting the applicant from contributions to the Equalization Fund for the period from 1 April 1954 to 31 January 1957;(2) Annul the order tor payment contained in letter No 1/0620/262 from the High Authority to the applicant dated 8 April 1963, in so far as the order fails to take into account the resolution of 8 May 1957 referred to at (1) above;(3) Order the defendant to pay the costs of the action.’

2.The conclusions of the applicants in Case 54/63 are identical.

3.The defendant contends in both cases that the Court should:‘rule on the preliminary objection, in accordance with Article 91 (1) of the Rules of Procedure, that the applications are inadmissible.’

III —Submissions and arguments of the parties

The submissions and arguments of the parties may be summarized as follows:

1. On Admissibility

The applicants themselves are of the opinion that Decision No 7/63 does not concern them individually and that the orders for payment of 8 April 1963 do not constitute decisions. However, as a special precaution, they feel themselves obliged to make an application for annulment.(a) As regards Decision No 7/63 the defendant's Legal Adviser, Mr van der Esch, explained to representatives of the applicants during a conversation on 3 May 1963 that the Decision contained a revocation of the CPFI resolutions of 8 May 1957. The defendant apparently bases its orders for payment on the same view, since it expressly refers to the said resolution. It is true that the applicants are unable to draw such an inference from the Decision, but are obliged by the clearly contrary view held by the defendant to apply for an annulment.If the Decision does constitute such a revocation, then it is individual in character. The applicants rely on the case-law of the Court, according to which even a disguised specific decision is not as such divested of its legal character. They maintain further that if there is a revocation it refers only to a small number of undertakings known to the defendant by name, and is restricted to exemptions granted only to specific individual firms.During the oral proceedings the applicants stated in answer to a question that they challenged Decision No 7/63 ‘only in so far as it is an individual Decision’, and independently of the conclusions directed against the orders for payment.(b) as far as the orders for payment of 8 April 1963 are concerned, it is true that the defendant's Decision No 22/60 of 7 September 1960 on the implementing of Article 15 of the ECSC Treaty (Official Journal of the European Communities, p. 1248/60 et seq.) and the ‘Communication of the High Authority on the form of decisions and recommendations within the meaning of Article 14 of the Treaty’ (Official Journal of the European Communities 1960, p. 1250/60) are evidence against regarding these orders as decisions. However the application is necessary since neither the above-mentioned Decision nor the parties' view of the law is binding on the Court.The defendant replies:

A —On the first head of the conclusions

The claim is inadmissible. Decision No 7/63 is a general decision and does not contain a revocation of any previous resolutions in favour of the applicants.Mr van der Esch merely referred to Decision No 13/58 (Official Journal of the European Communities, p. 269/58) which authorizes the High Authority to revoke resolutions of the CPFI and the Joint Bureau of Ferrous Scrap Consumers. This right of revocation means that the defendant is not bound in making its orders for payment to take account of such previous resolutions of those bodies as it considers unjustified. Moreover anything said during the conversation in question is not relevant, since the defendant cannot be bound by statements of this kind (cf. also at 2, below, where the defendant's observations are recorded).

B —On the second head of the conclusions

This head of the conclusions is also inadmissible; the contested letters are not ‘decisions’ within the meaning of Article 14 of the ECSC Treaty.(a) The letters contain no more than ‘a new statement of account’ which was made necessary chiefly by the adjustments made by Decision No 7/63 to the contribution rates. The explanatory note (cf. 1 A 4 above) which is an ‘integral part’ of the orders for payment makes it clear that the latter do not constitute the final word of the defendant, but give undertakings the opportunity to examine the statements of account and if necessary to submit objections to the High Authority — perhaps successfully.(b) The statements of account do not satisfy the requirements for decisions of the High Authority laid down by Decision No 22/60. Admittedly the Court has not previously been given the opportunity of determining the scope of this Decision. But the great majority of undertakings which received orders for payment, interpreting the legal situation correctly, acted ‘as the High Authority had expected’, that is to say that they either paid or raised objections, which are at present being dealt with in administrative proceedings.(c) The statements of account cannot of themselves be made the subject of enforcement proceedings. That being so, it is inconceivable that they should nevertheless have the character of decisions, since the only possible content of such a ‘decision’ would be an obligation to pay — which is always enforceable under the first paragraph of Article 92 of the ECSC Treaty.(d) For the rest, the defendant refers to the letter from Mr Hellwig of 6 May 1963 (cf. 1 A 5 above).(e) If the defendant had issued a formal decision immediately in each case, it would be setting in motion unnecessarily a cumbersome procedure contrary to the principles of good administration.(f) The fact that the orders for payment are based on Decision No 7/63 means nothing. For general decisions to be implemented, it is not necessary to issue individual decisions automatically; rather these are only made ‘when no agreement appears possible between the administration and the party concerned’.(g) Nor is the fact that the contested letters give a time-limit for payment of any significance. It can be explained by reference to the rules laid down in Decision No 7/61 (Official Journal of the European Communities, p. 653/61), according to which interest is not charged on arrears, but the amount due increases automatically according to the length of time which elapses before payment is made. That is why the amounts due cannot be fixed absolutely, but only by reference to a given date.(h) Were the orders for payment to be regarded as decisions, the consequences would be prejudicial to all the parties concerned. Since the demands naturally do not contain a statement of reasons, they would have to be declared invalid without further examination of the merits on the ground that they infringed an essential procedural requirement, with the result that the defendant would thenceforth be obliged to issue a properly-reasoned decision. ‘The High Authority would thus be compelled to do precisely what, in accordance with its view that the order for payment does not amount to a decision, it would do anyway’, the only difference being that in such an event unnecessary delay would be caused. On the other hand, the view advanced by the defendant makes it possible to ‘conclude the administrative procedure without a decision and without initiating new proceedings’. This would not entail any disadvantage to the undertakings, since they could not in any case be compelled to make payment until the adoption by the defendant of an enforceable decision which could lawfully be contested in an application to the Court.The view of the law refuted by the High Authority would also frustrate the purpose of Decision No 22/60, which is to establish legal certainty for all parties concerned.The applicants reply in their written submissions lodged in accordance with Article 91 (2) of the Rules of Procedure that even a judgment dismissing the applications on the ground of inadmissibility would be ‘of great value’ to them, since thereby it would be established that the contested letter has no binding force whatsoever and that Decision No 7/63 contains no revocation of the relevant resolutions of the CPFI.

2. Costs

The applicants consider that even if the application were to be dismissed as inadmissible, the High Authority ought to bear the costs of the proceedings, since it caused them to be instituted.(a) Article 6 of Decision No 7/63, taken in conjunction with the contested letters of 8 April 1963 which quote that Decision, creates the impression that an individual decision is concerned. This Article states that ‘a complete statement of account shall be sent to every undertaking liable to contribute’. Subsequently the applicants received other statements of account which failed to take into consideration the previous exemptions. It is therefore understandable that the applicants should conclude that Decision No 7/63 might contain a revocation of these exemptions.(b) As for the actual letters, both their content and the surrounding circumstances created the impression that a decision was concerned:— they were sent by registered post with form of acknowledgment of receipt;— they contained not merely a statement of account, but a demand for payment accompanied by a time-limit therefor;— the ‘explanatory note’ precludes any objections relating to questions ‘upon which the High Authority has already given an opinion’; during the conversation between the representatives of the applicants and those of the High Authority (Mr Hellwig, Member of the High Authority; Mr Rollman, Director General; and Legal Advisers of the High Authority) the latter indicated that objections could only be made if they were purely on questions of calculation, and not on exemptions applicable at the time;— the Court has not yet had occasion to consider Decision No 22/60; consequently the applicants had no means of knowing whether the Court would uphold its earlier statement that there is always a decision if the notification in question constitutes — as in this instance — in practice, ‘the final word of the administration’ (Rec. 1958-59);— the applicants could not be sure whether or not the Court would take into account the letter from Mr Hellwig in interpreting the contested letters.The defendant denies having caused the application to be made and refers in particular to Decision No 22/60 and to the communication subsequently issued. The applicants ought to have deduced from these statements that the contested letters would not be regarded by the defendant as a decision.As to the statements which occurred during the conversation between the parties' representatives, the assertions made by the applicants are not adequately substantiated. Moreover, such statements could not bind the High Authority. The meaning of statements made during such discussions could only reasonably be interpreted to the effect that the High Authority ‘in all probability’ would refuse to accept the objections in question.

IV —Procedure

The procedure followed the normal course. By Order of the President of the Court of 5 July 1963 Mr Advocate-General Roemer was appointed to take the place of Mr Advocate-General Lagrange and by Order of the Court of 25 September 1963 the present cases were joined for the purposes of the oral procedure and for a decision on the preliminary objections.The oral procedure relating to the preliminary objections took place on 9 October 1963 and on 16 October 1963 the Advocate-General presented his opinion.

Grounds of Judgment

It is established that on 8 April 1963 the relevant departments of the High Authority sent to the applicant undertakings registered letters with forms of acknowledgement of receipt. The letters stated that the said undertakings were requested to make, by 31 May 1963 at the latest, payments by way of contribution to the imported ferrous scrap equalization scheme.These letters relied upon Decision No 7/63 of the High Authority of 3 April 1963 and the sums therein indicated did not take into consideration the exemptions, which, according to the applicants, had previously been granted to them by the CPFI. In view of this, the applicants considered that Decision No 7/63 amounted to a withdrawal of these exemptions, and requested in the first head of their applications that the Decision should to this extent be annulled.In addition, fearing that the content of these letters would be regarded as a decision within the meaning of the ECSC Treaty, the applicants, in the second head of their respective applications, requested the annulment of this alleged decision.The High Authority disputes the admissibility of these applications.

Admissibility of the application

The first head of the applications

The objection of inadmissibility is well-founded.In fact the conclusions put forward by the applicants are devoid both of purpose and of legal interest, as Decision No 7/63 did not withdraw any exemptions which had previously been granted to certain undertakings.It follows both from the headings of sections II and III of its statement of reasons, and from the wording of the operative part, that the Decision refers only to the revision of equalization prices and of contribution rates and not to resolutions taken having regard to tie particular position of individual undertakings or groups of undertakings.These findings would remain unaltered even supposing that an official of the High Authority had made the statements attributed to him by the applicants.In fact, any statements originating from officials of the High Authority cannot have any influence on the interpretation of decisions taken by it, at least when that interpretation, leaving aside the statements made, leads to an unequivocal conclusion.It follows from these considerations that Decision No 7/63 is not of individual concern to the applicants.Therefore, the conclusions put forward under the first head of the application are inadmissible.

The second head of the applications

In support of its objection on the ground of inadmissibility the High Authority points out that the letter of 8 April 1963 does not constitute a decision and cannot therefore be made the subject of an application. The applicant undertakings have left this matter to the discretion of the Court. It is appropriate to inquire whether the letter constitutes a decision within the meaning of Article 14 of the Treaty. According to the provisions of this Article, the High Authority ‘shall … take’ decisions which ‘shall be binding in their entirety’.The High Authority in its Decision No 22/60 has considered it necessary to establish ‘as a matter of obligation’ the form of these decisions and has laid down the conditions with which it undertakes to make such measures comply.In a subsequent ‘communication’, (Official Journal of the European Communities, p. 1250/60, the High Authority has prescribed that if these formalities are not carried out, then the parties concerned may ‘infer that the measures in question do not entail any legal obligations’.Although it is desirable to ensure observance of the requirements prescribed in the appropriate manner by the High Authority, which enable governments, institutions and undertakings to identify decisions from their actual form, it does not follow that a measure should not be considered a decision, merely because it fails to comply with some inessential requirement of form if the fundamental conditions underlying the concept of a decision within the meaning of the Treaty are otherwise satisfied.According to Article 14, decisions shall be taken by the High Authority, that is to say by its members sitting as a body. As such decisions are ‘binding in their entirety’ however, they must show that they are intended to have legal effects upon those to whom they are addressed.It follows from the natural meaning of the word that a decision marks the culmination of procedure within the High Authority, and is thus the definitive expression of its intentions.Finally, it is necessary for the legal protection of all those affected that they should be able to identify by its very form a decision which involves such serious legal consequences, in particular a compulsory time-limit for exercising the right of instituting proceedings against it. In particular, for a measure to amount to a decision, those to whom it is addressed must be enabled clearly to recognize that they are dealing with such a measure.It follows therefore from all these considerations that a decision must appear as a measure taken by the High Authority, acting as a body, intended to produce legal effects and constituting the culmination of procedure within the High Authority, whereby the High Authority gives its final ruling in a form from which its nature can be identified.Any measure, therefore, which in particular, does not appear to have been debated and adopted by the High Authority and authenticated by the signature of one of its members, cannot be regarded as a decision.In the present case, in spite of the apparently peremptory nature of the letters in dispute, they cannot be considered as decisions within the meaning of the Treaty. In fact, there is nothing to indicate that the High Authority, sitting as a body, discussed and resolved upon them. The applicants were merely ‘requested’ to make payment, and, according to the ‘explanatory note’ enclosed with the contested letters, to submit any observations they might have.Consequently the conclusions put forward under the second head of the applications are also inadmissible.

Costs

Under Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs if they have been asked for in the conclusions of the successful party. Since the defendant has not made any formal submissions on this matter, the applicants cannot be ordered to pay the costs incurred by the defendant notwithstanding that they have failed in their applications. The defendant must therefore bear its own costs.Under Article 69 (3) of the Rules of Procedure moreover, it is open to the Court to order even a successful party to pay in whole or in part the costs incurred by the opposite party. The peremptory tone of the letters involved in the present proceedings, accentuated by the mode of despatch, and the setting of a time-limit for payment, were capable in themselves of creating uncertainty in the applicants' minds about the nature of the said letters.The High Authority, having by its own conduct induced the applicants to institute proceedings in order to safeguard their rights, must bear the greater part of the costs. It is appropriate that the High Authority should bear three-quarters of the applicants' costs.

Operative part

On those grounds,Upon reading the pleadings;Upon hearing the report of the Judge-Rapporteur;upon hearing the parties;Upon hearing the opinion of the Advocate-General;Having regard to the Treaty establishing the European Coal and Steel Community, especially Articles 14, 15 and 33;Having regard to the Protocol on the Statute of the Court of Justice of the European Coal and Steel Communitv;Having regard to the Rules of Procedure of the Court of Justice of the European Communities, especially Articles 69 and 91;THE COURThereby:

1.Dismisses the applications as being inadmissible;

2.Orders the High Authority of the European Coal and Steel Community to bear its own costs and three-quarters of the costs of the applicants and orders the applicants to bear one-quarter of their own costs.

Delivered in open court in Luxembourg on 5 December 1963.