Empresa Nacional de Urânio SA v Commission of the European Communities (C-107/91)

Contents

Judgment of the Court16 February 1993^noteIn Case C-107/91,Empresa Nacional de Urânio SA (ENU), a company incorporated under Portuguese law, having its registered office in Urgeiriça, commune of Nelas, represented by José Mota Coimbra de Matos, of the Lisbon Bar, with an address for service in Luxembourg at the Chambers of Joaquín Calvo Basarán, 34 Boulevard Ernest Feltgen,vCommission of the European Communities, represented by Herculano Lima, Legal Adviser, and Jürgen Grunwald, of its Legal Service, acting as Agents, with an address for service in Luxembourg at the office of Roberto Hayder, also of its Legal Service, Wagner Centre, Kirchberg,THE COURT,composed of: G. C. Rodríguez Iglesias, President of the First and Fifth Chambers, acting for the President, M. Zuleeg and J. L. Murray (Presidents of Chambers), G. F. Mancini, R. Joliét, F. A. Schockweiler, J. C. Moitinho de Almeida, F. Grévisse and D. A. O. Edward, Judges,Advocate General: C. Gulmann,Registrar: D. Louterman-Hubeau, Principal Administrator,having regard to the Report for the Hearing,after hearing oral argument from the parties at the hearing on 3 June 1992, at which ENU was represented by José Mota Coimbra de Matos and João Mota de Campos, Professor,after hearing the Opinion of the Advocate General at the sitting on 15 September 1992,gives the following

Judgment

1By application lodged at the Registry of the Court of Justice on 3 April 1991, the Empresa Nacional de Urànio SA (‘ENU’) brought an action under Article 148 of the EAEC Treaty seeking a declaration that the Commission had failed to adopt and address to the applicant the decision which the latter had requested it to adopt pursuant to Article 53 of the EAEC Treaty.

2ENU is a company which produces uranium concentrates (U₃ O₈) in Portugal. Since there are no industrial nuclear reactors in Portugal, ENU is obliged to export its entire production. To that end, it had concluded a long-term contract with Electricité de France (‘EDF’) accounting for approximately 73% of its production. The remainder was sold on the spot market. A combination of very low spot prices — which did not even cover production costs and precluded practically any transaction — and EDF's decision not to conclude any further long-term contracts resulted in the accumulation of uranium stocks and severe financial difficulties for ENU.

3Pursuant to Chapter VI of the EAEC Treaty, ENU requested the Euratom Supply Agency (‘the Agency’), by letters of 8 October 1987 and 10 October 1988, to exercise the right of option under Article 57 of the EAEC Treaty in respect of 350 tonnes of uranium concentrate. ENU also drew its situation to the attention of the Commission's Directorate-General for Energy. By letter of 8 November 1988, the Agency replied that the problem raised by ENU was serious and that it would receive all due attention. For its part, the Commission, by letter of 14 November 1988, promised to examine the problem with a view to seeking a satisfactory solution.

4In the absence of any reply to those two letters, ENU, on 25 October 1989, once again asked the Agency to take action pursuant to Chapter VI of the EAEC Treaty and sent a copy of the letter to the Commission in which it pointed out that it could survive only if it was able to sell its stock. By letter of 8 December 1989, the Commission informed ENU that it agreed that the Agency's supply policy should include a ‘special course of action’ enabling cases such as that of ENU to be resolved and that it was asking the Agency to move on to take concrete steps to implement the proposals for action which it had submitted to this effect. Pursuant to that request, the Agency drew up ‘outline practical solutions for the “Portuguese uranium” aspect of supply policy’. The Agency then held discussions with Community users in order to persuade them to accept a plan for the disposal of Portuguese uranium. The Agency's requests elicited no response.

5ENU thereupon referred the matter to the Commission by formally requesting it, by letter of 21 December 1990,‘in accordance with the second paragraph of Article 53 and Article 148 of the EAEC Treaty:(a) to order the Agency, pursuant to Article 53 of the Treaty ... to restore the proper functioning of the machinery established by the Treaty under Chapter VI, requiring compliance with the provisions concerning the common supply policy ...(b) to carry out an immediate inquiry — and thereafter take action accordingly — to determine how it was possible that, without any checks by the Commission under Article 66 of the Treaty, Community users freely obtain supplies of uranium on foreign markets, despite the availability of all ENU's production at a reasonable price ... and to warn the offending undertakings, either directly or through the Agency, that it will take action against them if they effect further imports whilst ENU production remains on sale ...(c) ... to discuss ... with ENU the amount of the fair compensation which must be paid to ENU for the damage caused to it by the Commission's unlawful failure and the Supply Agency's to exercise their Community powers;(d) require compliance with its decision — which the Supply Agency did not comply with — to direct the Agency to take “a special course of action” affording an immediate solution to the problem of the disposal of uranium by ENU and to assist it in its implementation ...;(e) ... therfore ... to order the Agency to implement the decision addressed to it by implementing a satisfactoiy solution to the problem affecting ENU — without prejudice to the application of the Treaty provisions in such a way as to palliate future difficulties’.

6By letter of 17 January 1991, the Commission acknowledged receipt of the letter of 21 December 1990 and indicated that it was receiving the necessary attention. Since three months went by without any reply from the Commission, ENU brought the present action.

7Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the course of the procedure and the pleas in law and arguments of the parties, which are discussed hereinafter only in so far as is necessary for the reasoning of the Court.

The subject-matter of the application

8Article 53 of the EAEC Treaty provides as follows:‘The Agency shall be under the supervision of the Commission, which shall issue directives to it, possess a right of veto over its decisions and appoint its Director-General and Deputy Director-General.Any act, whether implied or expressed, performed by the Agency in the exercise of its right of option or of its exclusive right to conclude supply contracts, may be referred by the parties concerned to the Commission, which shall give a decision thereon within one month’.

9Article 148 of the EAEC Treaty is worded as follows:‘Should the Council or the Commission, in infringement of this Treaty, fail to act, the Member States and the other institutions of the Community may bring an action before the Court of Justice to have the infringement established.The action shall be admissible only if the institution concerned has first been called upon to act. If, within two months of being so called upon, the institution concerned has not defined its position, the action may be brought within a further period of two months.Any natural or legal person may, under the conditions laid down in the preceding paragraphs, complain to the Court of Justice that an institution of the Community has failed to address to that person any act other than a recommendation or an opinion.’

10As the Court has held with regard to Article 175 of the EEC Treaty, the wording of which is identical to that of Article 148 of the EAEC Treaty, the remedy for a failure to act is founded on the premiss that the unlawful inaction on the part of the Council or the Commission enables the other institutions and the Member States and, in certain circumstances, private persons to bring the matter before the Court in order to obtain a declaration that the failure to act is contrary to the Treaty, in so far as it has not been repaired by the institution concerned (judgments in Case 377/87 Parliament v Council [1988] ECR 4017, paragraph 9, and in Case 383/87 Commission v Council [1988] ECR 4051, paragraph 9). A reply given by the institutions to a request to act need not necessarily correspond with the action sought by the applicants in order to put an end to the failure. A failure to act, for the purposes of Article 175, means a failure to take a decision or to take a position, and not the adoption of a measure different from that south or considered necessary by the persons concerned (judgment in Case 8/71 Deutscher Komponistenverband v Commission [1971] ECR 705).

11The special feature of the second paragraph of Article 53 of the EAEC Treaty is to give interested parties seeking to contest an Agency decision the possibility of bringing the matter before the Commission and obliging that institution to take a decision within a one-month period.

12ENU contends that, by its letter of 21 December 1990, it referred to the Commission an Agency act, in accordance with the second paragraph of Article 53 of the EAEC Treaty. By failing to take a decision, contrary to that provision, the Commission, it is claimed, acted in breach of the Treaty.

13The object of the application by ENU is to obtain a declaration of this breach of the Treaty on the basis of Article 148.

Admissibility

14The Commission relies on three grounds in contesting the admissibility of the application.

15First, it submits that ENU lacks locus standi under Article 148 of the Treaty in so far as the act requested, had it been adopted, would, in accordance with the second paragraph of Article 53 of the Treaty, have had to be addressed to the Supply Agency and not to ENU.

16It must be pointed out that the decision requested by ENU was meant to provide a solution for the specific problem which it had submitted to the Agency and the Commission. That decision ought to have been taken, according to the applicant, under the second paragraph of Article 53 of the Treaty, which entitles the parties concerned to refer to the Commission an act performed by the Agency and to obtain a decision from the Commission.

17Accordingly, such a decision, even if it had been addressed to the Agency, would have been of direct and individual concern to the applicant, which could therefore have contested it before the Court pursuant to the second paragraph of Article 146 of the Treaty.

18It follows that the applicant must be able to bring an action before the Court under the third paragraph of Article 148 in order to challenge the failure to take the decision requested. If there were no such possibility, the right provided for in the second paragraph of Article 53 would be bereft of judicial protection.

19The first ground of inadmissibility relied on by the Commission must therefore be rejected.

20Second, the Commission submits that the condition for the admissibility of an action for failure to act, laid down in the second paragraph of Article 148, has not been complied with in this case, because the letter of 21 December 1991 cannot be treated as being both a reference to the Commission within the meaning of the second paragraph of Article 53 and a call to act under the second paragraph of Article 148 of the Treaty. The Commission takes the view that it is only on the expiry of the one-month period specified in the second paragraph of Article 53 that it could have been in a position of failing to act and that the call to act could therefore have been addressed to it.

21That interpretation, which would require two calls to act, is not correct. Article 53 of the Treaty does not rule out that, when the parties concerned refer to the Commission an act performed by the Agency, they may also call, at that stage, for the Commission to act within the meaning of Article 148. If the parties concerned have proceeded in this way, it would be excessively formalistic to require them to renew their call to act if the Commission has not taken a decision within the month following the referral to it.

22The second ground of inadmissibility relied on by the Commission must therefore also be rejected.

23Third, the Commission argues that the application is out of time on the ground that it was brought after a reasonable period of time, which, according to the Court's case-law, individuals must respect before challenging a failure by the Commission to act, had passed. The Commission points out in that regard that, in the reply which it sent to the applicant in December 1989, it fully approved the Agency's position and that, notwithstanding this, it was not until sixteen months later that the application was brought.

24Those arguments cannot be accepted. In the first place, the letter of 8 December 1989, in which the Commission stated that it shared the view that the Agency's supply policy should include a ‘special course of action’ in order to resolve ENU's problem, could not be interpreted by the applicant as a mere approval of the Agency's position. Second, as the applicant correctly points out, during the entire period in question there were frequent contacts between the Commission, the Agency and ENU, with the result that ENU had grounds for believing that the problem which it had referred to them was going to receive a favourable solution.

25It follows that the third ground of inadmissibility must also be rejected.

Substance

26The actual wording of the second paragraph of Article 53 of the EAEC Treaty provides that the Commission is required to give a decision if an act, whether implied or expressed, performed by the Agency in the exercise of its right of option or of its exclusive right to conclude supply contracts, is referred to it by a concerned party.

27In this connection, Article VIII(3) of the Statutes of the Euratom Supply Agency, adopted by the Council pursuant to the second paragraph of Article 54 of the EAEC Treaty (OJ, English Special Edition 1952-1958, p. 78), provides as follows:‘Any act of the Agency referred to in the second paragraph of Article 53 of the Treaty may be referred to the Commission by the party concerned within fifteen days of notification being received, or, failing such notification, within fifteen days following publication. Failing both notification and publication, the period shall run from the day on which the party concerned learns of the act.’

28During the fifteen days prior to dispatch of the letter of 21 December 1990, no express act was addressed by the Agency to the applicant.

29It is therefore necessary to determine whether, as the applicant claims, it referred to the Commission by that letter an implied act of the Agency.

30The Court finds, first, that the applicant requested the Agency to exercise its right of option on the applicant's uranium production, pursuant to Article 57 of the Treaty and that, although the Agency had announced its intention to seek a favourable solution to the applicant's problem, the Agency's attitude over several years amounted to an implied rejection of that request.

31Second, it must be held that it was in reply to that same request, which was also addressed to the Commission, that the latter informed the applicant, by letter of 8 December 1989, that it shared the view that the Agency's supply policy should include ‘special action’ enabling cases such as that of ENU to be resolved and that it requested the Agency to move on to take concrete steps to implement the proposals for action which the Agency had submitted to that effect.

32It is against that background that the letter sent by the applicant to the Commission on 21 December 1990 must be treated, having regard to the second paragraph of Article 53 of the Treaty.

33The various requests regarding the policy which the Agency ought to be pursuing and the request relating to the discussion of the amount of damages to be paid to the applicant do not come within the scope of the second paragraph of Article 53 of the Treaty.

34On the other hand, in so far as the Commission is formally requested, ‘in accordance with the second paragraph of Article 53 ... of the EAEC Treaty’, in particular to order the Agency to take ‘special action’ enabling an immediate solution to be found for the problem encountered by ENU in disposing of its uranium, the letter at issue must be understood as referring to the Commission the implied act of the Agency refusing to exercise its right of option in respect of the applicant's uranium production.

35It should be added that, in view of the fact that neither the Agency nor the Commission have ever expressed a position at variance with the applicant's request but, on the contrary, led it to understand that its request would be the subject of an examination likely to result in a favourable solution, no precise date, from which the period laid down in Article VIII(3) of the Statutes of the Agency would begin, can be placed on the implied act of refusal.

36It follows that the conditions laid down in the second paragraph of Article 53 of the EAEC Treaty were satisfied in this case and that the Commission was therefore under an obligation to take a decision under that provision on the applicant's request within one month. Since the reply in the letter of 17 January was no more than an interim reply, it must be held that this obligation was not complied with.

37Finally, the Commission submits that, even if the Agency's refusal to purchase the uranium in question were to be regarded as a ‘permanent act’ which could be referred to it at any time, the same should apply with regard to the decision contained in its letter of 8 December 1989 and that, in those circumstances, it could not be required to take a fresh decision which would have been merely repetitive.

38In order to dispel that argument, it need only be pointed out that, in the letter in question, the Commission did not take a definitive position on the applicant's request.

39In those circumstances, it must be held that, contrary to the second paragraph of Article 53 of the Treaty, the Commission failed to take a decision on the request submitted to it by the applicant pursuant to that provision.

Costs

40Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the Commission has been unsuccessful, it must be ordered to pay the costs.

Operative part

On those grounds,THE COURThereby:

1.Declares that, contrary to the second paragraph of Article 53 of the EAEC Treaty, the Commission failed to take a decision on the request submitted to it by the applicant pursuant to that provision;

2.Orders the Commission to pay the costs.

Delivered in open court in Luxembourg on 16 February 1993.