Court of Justice of the European Communities (including Court of First Instance Decisions)

ECSC - PRODUCTION - SYSTEM OF STEEL PRODUCTION AND DELIVERY QUOTAS - EXCEEDING THE DELIVERY QUOTA IN A PARTICULAR QUARTER - REDUCTION OF DELIVERIES IN A SUBSEQUENT QUARTER IN ORDER TO COMPENSATE FOR THE EXCESS - NOT PERMISSIBLE - EXCEPTIONAL DIFFICULTIES OF THE UNDERTAKING IN OBSERVING THE QUOTA - BELATED REACTION BY THE COMMISSION - REDUCTION IN FINE
( ECSC TREATY , ART . 58 ; GENERAL DECISION NO 1831/81 , ART . 8 , AS AMENDED BY DECISION NO 2804/81 , AND ART . 12 )

IN CASE 2/83
SPA ALFER , PISOGNE ( BRESCIA , ITALY ), REPRESENTED BY ITS MANAGING DIRECTOR , ANTONIO GIORDANI , ASSISTED BY CESARE CASTELLI OF THE BRESCIA BAR , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF GUY THOMAS , 11A BOULEVARD JOSEPH-II ,
APPLICANT ,
V
COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY SERGIO FABRO , A MEMBER OF ITS LEGAL DEPARTMENT , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ORESTE MONTALTO , ALSO A MEMBER OF ITS LEGAL DEPARTMENT ,
DEFENDANT ,

APPLICATION FOR DECISION NO 24/XI/82 - C(82 ) 1631/4 DEF . OF THE COMMISSION OF THE EUROPEAN COMMUNITIES , NOTIFIED TO THE APPLICANT ON 7 DECEMBER 1982 AND IMPOSING ON IT A FINE FOR AN ALLEGED INFRINGEMENT OF CERTAIN COMMUNITY RULES , TO BE DECLARED VOID OR AT LEAST VARIED ,

1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 6 JANUARY 1983 , SPA ALFER ( HEREINAFTER REFERRED TO AS ' ' ALFER ' ' ), A COMPANY ESTABLISHED IN PISOGNE , BROUGHT AN ACTION UNDER THE SECOND PARAGRAPH OF ARTICLE 36 OF THE ECSC TREATY REQUESTING THE COURT TO DECLARE VOID AN INDIVIDUAL DECISION , DECISION NO C(82)1631/4 OF THE COMMISSION OF 24 NOVEMBER 1982 , IMPOSING A FINE ON THE APPLICANT PURSUANT TO ARTICLE 58 ( 4 ) OF THE ECSC TREATY AND ARTICLE 12 OF THE GENERAL DECISION , DECISION NO 1831/81 OF 24 JUNE 1981 ESTABLISHING FOR UNDERTAKINGS IN THE IRON AND STEEL INDUSTRY A MONITORING SYSTEM AND A NEW SYSTEM OF PRODUCTION QUOTAS IN RESPECT OF CERTAIN PRODUCTS ( OFFICIAL JOURNAL 1981 L 180 , P . 1 ), OR , IN THE ALTERNATIVE , TO REDUCE THE FINE IMPOSED .

2 IT APPEARS FROM THE DOCUMENTS BEFORE THE COURT THAT UNTIL JUNE 1980 ALFER CARRIED OUT PROCESSING FOR ANOTHER COMPANY AND THAT THIS ACCOUNTED FOR APPROXIMATELY 60% OF ITS PRODUCTION . IN JUNE 1980 THE COMPANY FOR WHICH ALFER WORKED WENT INTO LIQUIDATION . SINCE THAT DATE ALFER HAS THEREFORE BEEN OBLIGED TO SELL ITS PRODUCTION SOLELY ON ITS OWN BEHALF .

3 BY THE AFORESAID GENERAL DECISION , NO 1831/81 , THE COMMISSION INTRODUCED A NEW QUOTA SYSTEM IMPOSING ON EVERY UNDERTAKING A QUAOTA NOT ONLY ON ITS PRODUCTION BUT ALSO ON THE PART THEREOF WHICH COULD BE DELIVERED IN THE COMMON MARKET . FOR THE PURPOSE OF FIXING THE PRODUCTION AND DELIVERY QUOTAS , THE SYSTEM WAS BASED ON A REFERENCE PERIOD WHICH COINCIDED WITH THE PERIOD DURING WHICH ALFER WAS STILL CARRYING OUT PROCESSING FOR ANOTHER UNDERTAKING .

4 IT WAS FOR THAT REASON THAT THE COMMISSION , ON THE BASIS OF DECISION NO 1833/81 OF 3 JULY 1981 FIXING THE RATES OF ABATEMENT FOR THE THIRD QUARTER OF 1981 IN PURSUANCE OF DECISION NO 1831/81 ( OFFICIAL JOURNAL 1981 L 184 , P . 6 ), ALLOCATED TO ALFER FOR THE SAID QUARTER A PRODUCTION QUOTA OF 18 057 TONNES FOR PRODUCTS OF CATEGORIES V AND VI , WHEREAS ITS DELIVERY QUOTA WAS ONLY 5 079 TONNES . THE COMMUNICATION NOTIFYING ALFER OF THOSE QUOTAS WAS DATED 10 AUGUST 1981 .
5 ON 28 AUGUST 1981 ALFER SENT A LETTER TO THE COMMISSION INFORMING IT THAT , ALTHOUGH ALFER HAD NO OBJECTION TO THE PRODUCTION QUOTA , IT COULD NOT , ON THE OTHER HAND , ACCEPT THE DELIVERY QUOTA , SINCE IT HAD BEEN CALCULATED ON A REFERENCE QUANTITY BASED ON A PERIOD DURING WHICH ALFER CARRIED OUT PROCESSING FOR ANOTHER UNDERTAKING ACCOUNTING FOR APPROXIMATELY 60 % OF ITS TOTAL PRODUCTION , THAT PART OF ITS PRODUCTION SUBSEQUENTLY BEING SOLD BY THE OTHER UNDERTAKING IN THE COMMON MARKET .

6 ALFER RECEIVED NO REPLY TO THAT LETTER , BUT THE COMMISSION , BY DECISION NO 2804/81 OF 23 SEPTEMBER 1981 ( OFFICIAL JOURNAL 1981 L 278 , P . 1 ), PROVIDED ITSELF WITH A LEGAL BASIS FOR REMEDYING SITUATIONS SUCH AS THAT OF ALFER . ARTICLE 8 OF DECISION NO 1831/81 , AS AMENDED BY DECISION NO 2804/81 , PROVIDES THAT , IF AN UNDERTAKING CAN PROVE THAT THE REFERENCE QUANTITIES FIXED HAVE CAUSED IT GRAVE DIFFICULTY , THE COMMISSION MAY MAKE APPROPRIATE ADJUSTMENTS THERETO INTER ALIA IN A CASE WHERE THE UNDERTAKING ' S DELIVERIES IN THE COMMON MARKET ACCOUNT FOR LESS THAN 90% OF ITS TOTAL PRODUCTION OVER THE BEST 12 MONTHS .

7 BY LETTER DATED 4 NOVEMBER 1981 THE COMMISSION THEREFORE INFORMED ALFER THAT , ON THE BASIS OF THE ABOVE-MENTIONED ARTICLE , IT WAS INCREASING ITS DELIVERY QUOTA TO 15 091 TONNES FOR THE THIRD QUARTER OF 1981 . IT IS APPARENT FROM THE LETTER THAT THE INCREASE IN THE DELIVERY QUOTA WAS CALCULATED ON THE BASIS OF A REFERENCE QUANTITY EQUAL TO 90% OF ALFER ' S REFERENCE PRODUCTION , THAT IS TO SAY THE MAXIMUM PROVIDED FOR BY DECISION NO 2804/81 . SINCE ALFER WAS NOTIFIED OF THE NEW QUOTA AFTER EXPIRY OF THE THIRD QUARTER , THE COMMISSION AUTHORIZED ALFER TO CARRY FORWARD TO THE FOURTH QUARTER THAT PART OF THE INCREASE IN THE QUOTA WHICH COULD NOT BE USED DURING THE THIRD QUARTER .

8 ALFER HAS NOT CHALLENGED BEFORE THE COURT EITHER THE FIRST COMMUNICATION , DATED 10 AUGUST 1981 , OR THE SECOND , DATED 4 NOVEMBER 1981 , NOTIFYING IT OF THE QUOTAS .

9 BY LETTER DATED 25 FEBRUARY 1982 , THE COMMISSION COMPLAINED THAT ALFER HAD EXCEEDED BY 2 402 TONNES THE DELIVERY QUOTA SPECIFIED IN THE SECOND COMMUNICATION AND INVITED IT TO SUBMIT ITS OBSERVATIONS PURSUANT TO ARTICLE 36 OF THE ECSC TREATY . IN ITS REPLY OF 9 MARCH 1982 , ALFER STATED INTER ALIA THAT IT WAS PREPARED TO REDUCE BY 2 402 TONNES ITS DELIVERIES IN THE COMMON MARKET DURING A SUBSEQUENT QUARTER IN ORDER TO COMPENSATE FOR THE AFORESAID EXCESS .

10 BY THE CONTESTED DECISION OF 24 NOVEMBER 1982 , THE COMMISSION FOUND THAT THE QUOTA HAD BEEN EXEEDED AND , APPLYING THE NORMAL RATE OF 75 ECU PER TONNE PROVIDED FOR IN ARTICLE 12 OF DECISION NO 1831/81 , IMPOSED ON ALFER A FINE OF 180 150 ECU , THAT IS TO SAY LIT 241 498 291 .
11 BY ITS PRESENT APPLICATION , ALFER SEEKS A DECLARATION THAT THE DECISION IS VOID OR , IN THE ALTERNATIVE , A REDUCTION IN THE FINE . IN SUPPORT OF ITS APPLICATION IT CLAIMS THAT THE FIRST QUOTA NOTIFIED TO IT ON 10 AUGUST 1981 WAS MANIFESTLY UNJUST , THAT THE SECOND QUOTA NOTIFIED TO IT ON 4 NOVEMBER 1981 WAS NOT RECEIVED UNTIL AFTER THE EXPIRY OF THE THIRD QUARTER AND WAS THEREFORE RETROACTIVE AND THAT THE COMMISSION ACTED INCONSISTENTLY IN AUTHORIZING ALFER TO CARRY FORWARD THE UNUSED PART OF THE QUOTA TO THE FOLLOWING QUARTER , WHILST REFUSING ALFER ' S OFFER TO REDUCE DELIVERIES IN A SUBSEQUENT QUARTER IN ORDER COMPENSATE FOR THE EXCESS .

12 THE FIRST TWO SUBMISSIONS CANNOT BE UPHELD SINCE THEY RELATE TO TWO INDIVIDUAL DECISIONS WHICH WERE NOT CHALLENGED BEFORE THE COURT IN DUE TIME . AS REGARDS THE THIRD SUBMISSION , IT MUST BE OBSERVED THAT A REDUCTION OF DELIVERIES DURING A SUBSEQUENT QUARTER CANNOT RECTIFY A PREVIOUS IRREGULARITY , SINCE THE QUOTA SYSTEM IS APPLIED ON A QUARTERLY BASIS .

13 THE COMMISSION WAS THEREFORE CORRECT IN FINDING , IN THE CONTESTED DECISION , THAT THE APPLICANT HAD FAILED TO COMPLY WITH ITS OBLIGATIONS UNDER COMMUNITY LAW AND IN IMPOSING A FINE ON IT . CONSEQUENTLY , THE CLAIM FOR A DECLARATION THAT THE CONTESTED DECISION IS VOID MUST BE DISMISSED .

14 SINCE THE APPLICANT HAS CLAIMED , IN THE ALTERNATIVE , THAT THE FINE SHOULD BE REDUCED , IT IS NECESSARY TO EXAMINE WHETHER THE CIRCUMSTANCES TO WHICH IT REFERS CAN JUSTIFY SUCH A REDUCTION .

15 THE COMMISSION ADMITS THAT THE QUOTA SET OUT IN ITS FIRST COMMUNICATION WAS UNJUST AND THAT THE SECOND WAS NOTIFIED TO THE UNDERTAKING TOO LATE FOR IT TO BE ABLE TO ADJUST ITS DELIVERIES FOR THE QUARTER IN QUESTION . IT EMPHASIZES , HOWEVER , THAT AT THE TIME THE GENERAL DECISION IN FORCE DID NOT ALLOW IT TO TAKE ACCOUNT OF THE UNDERTAKING ' S DIFFICULTIES , THAT BY DECISION NO 2804/81 OF 23 SEPTEMBER 1981 IT OBTAINED AS QUICKLY AS POSSIBLE THE LEGAL BASIS NECESSARY FOR THAT PURPOSE , THAT IN ALLOCATING THE QUOTA NOTIFIED TO ALFER ON 4 NOVEMBER 1981 IT MADE FULL USE THEREOF AND THAT THE FACT THAT ALFER EXCEEDED EVEN THAT MAXIMUM QUOTA SHOWS A LACK OF EFFORT ON THE PART OF ALFER TO LIMIT ITS DELIVERIES DURING THE QUARTER IN QUESTION .

16 IT IS CLEAR FROM THE QUOTA SYSTEM AND IN PARTICULAR DECISION NO 1833/81 FIXING THE RATES OF ABATEMENT FOR THE THIRD QUARTER OF 1981 THAT THE QUOTAS FIXING THE QUANTITIES WHICH COULD BE DELIVERED IN THE COMMON MARKET WERE , IN ANY EVENT , APPRECIABLY LOWER THAN THOSE IMPOSED ON PRODUCTION . IN DELIVERING IN THE COMMON MARKET ALMOST THE WHOLE OF ITS PRODUCTION QUOTA , WHICH IT HAD IN NO WAY CHALLENGED , ALFER FAILED TO ACT PRUDENTLY .

17 ON THE OTHER HAND , IT MUST BE ADMITTED THAT THE COMMISSION COULD HAVE FORESEEN SUCH SITUATIONS AND SHOULD HAVE DRAFTED ITS GENERAL DECISIONS IN A MANNER WHICH WOULD HAVE ENABLED IT TO RECTIFY THEM QUICKLY . IN ANY EVENT , ALFER RIGHTLY COMPLAINS THAT THE COMMISSION TOOK NO ACTION IN ITS CASE UNTIL ITS DECISION OF 4 NOVEMBER , THAT IS TO SAY , WELL AFTER THE END OF THE QUARTER IN QUESTION , WHEREAS IT WAS AWARE OF THE PROBLEM CONFRONTING THE UNDERTAKING ON RECEIPT OF ITS LETTER OF 28 AUGUST . SINCE IT WAS THUS INFORMED OF THE EXCEPTIONAL DIFFICULTIES ENCOUNTERED BY THE UNDERTAKING IN OBSERVING THE DELIVERY QUOTA ALLOCATED BY THE FIRST DECISION , THE COMMISSION OUGHT TO HAVE INDICATED IN GOOD TIME WHAT ITS INTERVENTIONS WERE WITH REGARD TO REMEDYING THE UNJUST SITUATION AND HOW THE UNDERTAKING MIGHT TACKLE ITS DIFFICULTIES WITHOUT INCURRING THE RISK OF EXCEEDING THE FINAL QUOTA . IN VIEW OF THOSE OMISSIONS , THE COMMISSION MUST BEAR A LARGE PART OF THE RESPONSIBILITY FOR THE FACT THAT THE QUOTA WAS EXCEEDED .

18 ON THE BASIS OF THOSE CONSIDERATIONS , THE FINE MUST BE REDUCED FROM 180 150 TO 20 000 ECU , THAT IS TO SAY LIT 26 810 800 .

COSTS
19 PURSUANT TO 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 SO FAR AS THE MOST IMPORTANT ASPECT OF THE CASE IS CONCERNED , IT MUST BE ORDERED TO PAY THE COSTS .

ON THOSE GROUNDS ,
THE COURT ( FIFTH CHAMBER )
HEREBY :
1 . REDUCES THE FINE IMPOSED ON THE APPLICANT FROM 180 150 ECU TO 20 000 ECU , THAT IS TO SAY LIT 26 810 800 ;

2.DISMISSES THE REMAINDER OF THE APPLICATION ;

3.ORDERS THE COMMISSION TO PAY THE COSTS .