100/86 · GlobalLawDB

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Judgment of the Court(Third Chamber)9 July 1987^noteIn Case 100/86Jacques Cauët and Bertrand Joliot, avocats, Avesnes-sur-Helpe, France, in their capacity as liquidators of Cockerill-DRC SA, Hautmont, France, represented by Michel Waelbroeck and Alexandre Vandencasteele, of the Brussels Bar, with an address for service at the Chambers of Ernest Arendt, of the Luxembourg Bar, 34b rue Philippe-II,vCommission of the European Communities, represented by its Legal Adviser Michel van Ackere, with an address for service at the office of G. Kremlis, a member of its Legal Department, Jean Monnet Building, Kirchberg, Luxembourg,THE COURT (Third Chamber),composed of: Y. Galmot, President of Chamber, U. Everling and J. C. Moitinho de Almeida, Judges,Advocate General: J. MischoRegistrar: B. Pastor, Administratorhaving regard to the Report for the Hearing and further to the hearing on 13 May 1987,after hearing the Opinion of the Advocate General delivered at the sitting on 14 May 1987,gives the following

Judgment

1By an application lodged at the Court Registry on 21 April 1986 Jacques Cauët and Bertrand Joliot, in their capacity as liquidators of Cockerill-DRC SA, brought an action under the second paragraph of Article 33 of the ECSC Treaty for a declaration that the individual decision of the Commission of 10 March 1986 is void in so far as it allocated Cockerill's reference production to Sacilor, under Article 9 (4) of Commission Decision No 234/84/ECSC of 31 January 1984 on the extension of the system of monitoring and production quotas for certain products of undertakings in the steel industry (Official Journal 1984, L 29, p. 1), and for equitable redress for the harm resulting from the contested decision.

2The present application is a continuation of Case 48/86 which was withdrawn by the applicants and removed from the Court Register by order of 18 June 1986. That order reserved the costs of interim application 48/86 R until judgment in the present case in so far as Case 48/86 R related to the suspension of the operation of the decision of 10 March 1986.

3The background to the application is that in early 1985 Cockerill-DRC, in Hautmont, France, a subsidiary of the Belgian concern Cockerill-Sambre, closed its production plant. On 22 October 1985 the rolling mill was sold, with judicial authorization, to the German company Dorninger, which immediately resold it to Sacilor. By the contested decision of 10 March 1986, adopted pursuant to Article 9 (4) of Decision No 234/84, the Commission refused to authorize the transfer of the reference production and quantities to Cockerill-Sambre and allocated them to Sacilor, the present owner of the plant.

4Reference is made to the Report for the Hearing for a fuller account of the facts of the case 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.

The application for the annulment of the contested decision

5The applicant argues first of all that the Commission was manifestly mistaken as to the identity of the new owner of the plant. The rolling mill was in fact consigned not to Sacilor but to Dillinger Hüttenwerke, in the Saarland. Since Dillinger Hüttenwerke and not Sacilor has control over the use of the rolling mill Article 9 (4) of Decision No 234/84 is not applicable.

6The Commission takes the view that the present ownership of the rolling mill is irrelevant. The only consequence of a further transfer of ownership would be that the new purchaser could apply to have the references in question allocated to it. The applicant has no legitimate interest which it can set up against the existence of possible final consignees of the mill since it no longer has the possibility of negotiating the transfer of the reference production.

7It must first be recalled that Article 9 (4) of the abovementioned Decision No 234/84, on which the contested decision is based, provides that when a plant — a works or an undertaking — undergoes a change of ownership the new owner receives the plant's reference production and quantities and the relevant quotas. It is forbidden to circumvent such a transfer of references by selling, exchanging or transferring them. Furthermore, under the second subparagraph of Article 9 (3) of that decision, in the case of permanent cessation of activity or bankruptcy the reference production and quantities lapse after 12 months.

8It is apparent from these provisions that when a plant undergoes a change of ownership the new owner automatically acquires the reference production and quantities, provided that the transfer has taken place within 12 months after the permanent cessation of activity by the former owner. The implicit consequence of these provisions is that in such a case the former owner loses its reference production and quantities.

9In the present case, on 22 October 1985 Mr Cauët, the liquidator of Cockerill-DRC, sold the rolling mill with judicial authorization to the German company Dorninger, which resold it to Sacilor on 4 November 1985. It must therefore be held that Cockerill-DRC relinquished the ownership of the rolling mill, and indeed that is not disputed by the applicant. Consequently Cockerill-DRC automatically lost the reference production and quantities pursuant to Article 9 (4) of Decision No 234/84.

10When Sacilor submitted the contract of sale the Commission was entitled to conclude that Sacilor had become the owner of the plant concerned. That conclusion was later confirmed by the declaration of the chairman of Sacilor on 30 April 1986 that that company was the owner of the rolling mill.

11In these circumstances the Commission was bound under the terms of Article 9 (4) of Decision No 234/84 to declare that the reference production and quantities had been transferred to Sacilor, and it did so by the contested decision of 10 March 1986. Since Cockerill-DRC relinquished the ownership of the rolling mill and therefore lost the reference production and quantities, any questions concerning the present ownership of the rolling mill, including the question whether the plant has in the meantime been sold to Dillinger Hüttenwerke, do not concern the applicant for the purposes of the second paragraph of Article 33 of the ECSC Treaty.

12The first submission must therefore be rejected.

13Secondly, the applicant argues that Article 9 (4) of Decision No 234/84 is applicable only when the purchaser is a steel undertaking which uses the plant for steel production. Since Dorninger is not a steel undertaking within the meaning of the ECSC Treaty the Commission is exceeding its powers under the ECSC Treaty by applying Article 9 (4) to that undertaking.

14The Commission considers that any purchaser of a rolling mill becomes a steel undertaking as soon as the plant is put into service even if the company has not previously been engaged in any steelmaking activities. Under Article 9 (4) of Decision No 234/84 Dorninger thus acquired a right to use the reference productions upon the plant being put into service.

15In this respect it must be held that there is nothing in the text of Article 9 (4) of Decision No 234/84 to support the conclusion that the reference production and quantities are transferred along with the plant only when the plant is sold to another steel undertaking. Nor does the ECSC Treaty impose a restriction of this kind when a steelmaking plant is purchased by a new owner. It therefore follows that the second submission must also be rejected.

16Thirdly, the applicant argues that the Commission was wrong to apply Article 9 (4) instead of Article 15 (1) of Decision No 234/84. The purpose of Article 9 (4) of the decision is to allow a purchaser of plant to keep the plant in service by continuing to use it for the production of products subject to quotas. That was not the case in regard to Dorninger or Sacilor or even Dillinger Hüttenwerke. By permanently closing its plant and ceasing all activity at the beginning of 1985 and by selling the plant to a company which was not engaged in steelmaking the applicant fulfilled the conditions of Article 15 (1) of the decision.

17The Commission considers that under Article 9 (4) it is irrelevant whether or not the purchaser of reference production quantities uses them for the purposes of production subject to quotas. Conversely, the application of Article 15 (1) presupposes that an undertaking has permanently closed a plant, sold or transferred it to a third country or implemented a restructuring plan which has been approved by the Commission. None of these hypotheses is applicable in this case.

18It must be observed that the first subparagraph of Article 15 (1) covers two distinct situations: on the one hand the permanent closure of a plant, and on the other hand the sale and transfer of a plant to a nonmember country. In both cases, where the undertakings concerned so request in advance, the Commission may authorize exchanges, sales or transfers of all or part of the reference production or quantities. The sale and transfer of a plant within the Community does not fall within Article 15 (1) of Decision No 234/84.

19This latter situation is, on the other hand, covered by Article 9 (4) of that decision. According to the fifth recital in the preamble to Commission Decision No 2177/83/ECSC of 25 July 1983 (Official Journal 1983, L 208, p. 1), which introduced the second subparagraph of Article 9 (3) and Article 9 (4) into the quota system, the purpose of these provisions is to avoid any increase of references, in the interest of the market. The attainment of that goal is not jeopardized if the purchaser of plant makes no use of it or immediately dismantles it but uses the reference production and quantities attached thereto to increase its total production on other plant which belongs to it.

20The fact that neither Dorninger or even Sacilor has ever used the plant in question for production therefore has no bearing on the applicability of Article 9 (4) in this case. Consequently the third submission must also be rejected.

21For these reasons the first head of claim must be dismissed.

The claim for equitable redress for the harm suffered

22The claim for equitable redress for the harm resulting from the contested decision is based on the argument that the Commission caused the applicant harm by preventing it from realizing a part of its assets.

23Since examination of the contested decision has not revealed any illegality this head of claim must also be dismissed.

Costs

24Under Article 69 (2) of the Rules of Procedure the unsuccessful party is to be ordered to pay the costs. Since the applicants have failed in their submissions they must be ordered jointly and severally to pay the costs, including the costs of application for interim measures 48/86 R in so far as that application related to the suspension of the operation of the decision of 10 March 1986.

Operative part

On those grounds,THE COURT (Third Chamber)hereby:

(1).Dismisses the application;

(2).Orders the applicants jointly and severally to pay the costs, including the costs of application for interim measures 48/86 R in so far as that application related to the suspension of the operation of the decision of 10 March 1986.

Delivered in open court in Luxembourg on 9 July 1987.