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

Legal background

'to contribute to the raising of the standard of living in the Member States and to the development of relations with the other countries by creating the conditions necessary for the speedy establishment and growth of nuclear industries'.

fuels'. The implementation of that obligation is the subject of Title II, Chapter 6 (Articles 52 to 76 of that Treaty), which establishes a common system of supplies of ores, source materials and special fissile materials.

'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.'

Exclusive right of the Agency to conclude supply contracts

Procedure for balancing supply and demand

'Potential users shall periodically inform the Agency of the supplies they require, specifying the quantities, the physical and chemical nature, the place of origin, the intended use, delivery dates and price terms, which are to form the terms and conditions of the supply contract which they wish to conclude.

Similarly, producers shall inform the Agency of offers which they are able to make, stating all the specifications, and in particular the duration of contracts, required to enable their production programmes to be drawn up. Such contracts shall be of not more than 10 years' duration save with the agreement of the Commission.

The Agency shall inform all potential users of the offers and of the volume of applications which it has received and shall call upon them to place their orders by a specified time-limit.

When the Agency has received all such orders, it shall make known the terms on which it can meet them.

If the Agency cannot meet in their entirety all the orders received, it shall, subject to the provisions of Articles 68 and 69, share out the supplies proportionately among the orders relating to each offer.

Agency rules, which shall require approval by the Commission, shall determine the manner in which demand is to be balanced against supply.'

'The Agency shall meet all orders unless prevented from so doing by legal or material obstacles.'

against the supply of ores, source materials and special fissile materials (OJ, English Special Edition 1959-1962, p. 46, hereinafter 'the Rules').

'If, in respect of a specific product and where in particular the Agency takes the initiative, the Commission, having heard the Advisory Committee, finds that the situation on the market shows a clear surplus of supply over demand, it may, by means of an appropriate directive, call upon the Agency to apply the simplified procedure ...'

'...

(c) the supply contract shall include at least the following information:

1. designation of the contracting parties,

2. quantities of materials to be supplied,

3. annual calendar of delivery dates,

4. nature of the materials to be supplied,

5. country of origin of the materials to be supplied. If the supplier is unable to provide this information at the time of entering into the contract, he shall give the user and the Agency an undertaking that he

will subsequently inform them in writing of the country of origin of each part delivery,

6. price and terms of payment,

7. duration of the contracts;

(d) the contract shall, for the purposes of its conclusion, be submitted to the Agency for signature within 10 working days;

...

(f) the Agency shall act, either by concluding or refusing to conclude the contract, within 10 working days from the date of receipt thereof;

(g) a refusal to conclude the contract shall be notified to the parties concerned in a reasoned decision. This decision may be referred to the Commission in accordance with the provisions of Article VIII(3) of the Statutes of the Euratom Supply Agency;

...'

Prices

'Save where exceptions are provided for in this Treaty, prices shall be determined as a result of balancing supply against demand as provided in Article 60; the national regulations of the Member States shall not contravene such provisions.'

'The Council may fix prices, acting unanimously on a proposal from the Commission', while the Agency 'may propose to the users who have placed orders that prices be equalised'.

Energy Community by Commission Decision 90/117/Euratom of 27 February 1990 (OJ 1990 L 68, p. 2, hereinafter 'the Trade Agreement'), applies to nuclear matters, in accordance with Article 2(1) thereof. Article 14 lays down that goods are to be 'treated between the Contracting Parties at market-related prices'.

'(a) more secure conditions of supply and reduced risks of sudden fluctuations in energy prices through:

...

- geographical diversification of the Community's external sources of supply,

...'

Facts and procedure before the Court of First Instance

'1 The applicant [KLE] ... owns and operates a nuclear power station in Lower Saxony, Germany. It states that it follows a medium-term fuel supply policy and concludes supply contracts at regular intervals to cover its fuel requirements for up to five trading years.

2 In June 1993 it invited tenders for the supply of natural uranium in the form of uranium hexafluoride (UF6). On 10 and 22 November 1993, it concluded a supply contract with the company which had made the most attractive offer, British Nuclear Fuels plc (hereinafter "BNFL"), established in the United Kingdom. Under that contract, 400 tonnes of natural uranium in the form of UF6 were to be delivered by 31 March 1995 at the latest to an enrichment company established within the Community. The purchase price agreed was US $22 per kilogram, excluding VAT. The contract was silent as to the place of origin of the uranium to be supplied, but BNFL undertook to inform KLE and the ... Agency ... of the country of origin on the occasion of each partial delivery at the latest. The contract stated that it was to take effect only with the agreement of the Agency.

3 Article 5 bis (d) of the Rules ... provides that under a "simplified procedure" a supply contract is, for the purposes of its conclusion, to be submitted to the Agency for signature. Under Article 5 bis (f), the Agency then has 10 working days within which to act, either by concluding or by refusing to conclude the contract.

4 On 29 November 1993 the Agency received for signature the contract proposed by KLE and BNFL.

5 By letter of 10 December 1993, received on 13 December 1993, the last day of the period for signature of 10 working days, the Agency asked KLE and BNFL for information as to the origin of the uranium which was the subject of the contract. On 14 December 1993 BNFL informed the Agency that the uranium would come from the Commonwealth of Independent States (CIS), probably Russia.

6 By letter of 20 December 1993 the Agency informed the parties that its policy was to see to it that users in the European Atomic Energy Community (hereinafter "the Community") "[did] not become overdependent on any single source of supply beyond reasonable limits, and that the acquisition of nuclear materials from CIS Republics [took] place at fair prices related to those of the market (i.e. reflecting cost of production and compatible with prices of producers in market economy countries)". The Agency stated that its policy of diversification was aimed at confining the proportion of supplies from the CIS to 20 to 25% of individual Community users' needs. It considered that the contract submitted by KLE might make it too dependent on uranium from the CIS. It calculated that, taking into account total deliveries to KLE during the previous three years, KLE was entitled to acquire about 45 tonnes a year of natural uranium of CIS origin. KLE had, however, already contracted for quantities far exceeding the level of reasonable dependency for several years. Moreover, the proposed prices did not reflect normal production costs and were not comparable with prices charged in market economy countries. The Agency therefore considered that it was not appropriate to conclude the contract, but still asked the parties to submit their comments before it took a final decision.

7 On 29 December 1993 KLE referred the matter to the Commission under the second paragraph of Article 53 of the Treaty, alleging that the Agency had failed to act.

8 On 6 January 1994 it was notified of Decision No 1/94 of the Agency concerning the supply contract submitted on 29 November 1993. Pursuant to that decision, the Agency signed the contract of 10 and 22 November 1993 between KLE and BNFL with the addition of a condition that the

natural uranium to be supplied could not come directly or indirectly from the CIS.

9 On 10 January 1994 the Commission informed KLE's representatives that in its opinion the Agency's decision communicated to KLE on 6 January had been taken within the time-limit laid down, so that the reference to the Commission was now devoid of purpose.

10 By letter of 20 January 1994 KLE made additional submissions in the procedure initiated on 29 December 1993, to take account of Decision No 1/94.

11 By another letter of the same date, it referred Decision No 1/94 to the Commission pursuant to the second paragraph of Article 53 of the Treaty.

12 With respect to the first procedure, concerning the Agency's alleged failure to act, the Commission adopted on 4 February 1994 Decision 94/95/Euratom relating to a procedure in application of the second paragraph of Article 53 of the Euratom Treaty (OJ 1994 L 48, p. 45). It rejected the requests made by KLE, which were based on the claim that the Agency had not taken a decision within the time-limit and asked the Commission in particular to instruct the Agency to conclude the contract of 10 and 22 November 1993. The Commission considered that the Agency had not failed to act, since it had been entitled to complete its documentation and the period of 10 working days had therefore not started to run until the date when the additional information requested was received, namely 14 December 1993, and had not expired until 6 January 1994, the date on which Decision No 1/94 was actually taken.

13 With respect to the procedure concerning Decision No 1/94, the Commission adopted on 21 February 1994 Decision 94/285/Euratom relating to a procedure in application of the second paragraph of Article 53 of the Euratom Treaty (OJ 1995 L 122, p. 30). It considered that the Agency's decision was lawful on its merits and therefore rejected KLE's requests.

14 In those circumstances, KLE considered that the supply contract at issue could not be performed. BNFL and KLE did not proceed with it.

15 On 8 and 14 March 1994 KLE and BNFL concluded a new contract for the supply of 400 tonnes of uranium in the form of UF6 at a price of US $27 per kilogram, subject to the condition that the uranium did not come directly or indirectly from the CIS. That contract was concluded by the Agency on 30 March 1994.'

The contested judgment

Case T-149/94

'35 The geographical origin of the materials to be supplied is thus one of the principal elements of a supply contract which have to be communicated to the Agency under Article 5 bis of the Rules. It is essential for the Agency to know the geographical origin of the supplies in order to ensure reliability of supply - the aim of the supply policy pursued - as will be shown by the examination of Case T-181/94 (see in particular paragraphs 92 to 94 below).

36 Moreover, it is clear from the actual wording of Article 5 bis (c) of the Rules that later communication of the country of origin is permissible only if the supplier was unable to provide that information at the time of entering into the contract.

37 In the present case, it is apparent that KLE and its supplier had agreed, at least implicitly, that the materials would come from the CIS ...

38 By not stating the geographical origin of the uranium in the supply contract, even though it had been agreed between the parties at least implicitly, KLE was itself the cause of the Agency's administrative difficulties in coming to a decision. In those circumstances, KLE was not entitled to rely on Article 5 bis (f) of the Rules, which provides for a period of 10 working days within which the Agency must act, for cases which do not present any problems.

39 On the other hand, the Court considers that in the present case the Agency was entitled, before the period provided for in Article 5 bis (f) of the Rules

expired, to request the parties to provide the missing documentation by communicating to it the origin of the materials to be supplied. Neither Article 5 bis (f) of the Rules nor the Treaty precluded such a request, which was on the contrary justified in the circumstances of the case.

40 It appears from the documents in the case that the Agency took its decision on 6 January 1994, which was the 10th working day from 14 December 1993, the date when it received the information it had asked for. Such a lapse of time was reasonable and did not infringe Article 5 bis (f) of the Rules or breach the principles of proportionality and legal certainty relied on by the applicant.

41 Accordingly, the first and second pleas must be rejected as unfounded.'

Case T-181/94

The claim for annulment

'85 The supply system established by Chapter 6 of the Treaty must be considered in the light of the aims of the Community. In this regard, it is apparent from the structure of the Treaty that the task of the Agency is to guarantee one of the essential aims which the Treaty assigns to the Community, in Article 2(d), namely reliability of supplies, in accordance with the principle of equal access to resources laid down in Article 52(1) of the Treaty. This is clear from Article 52(2)(b) of the Treaty, which establishes that specialised body expressly for that purpose and confers on it in principle exclusive rights in order to ensure that Community users receive regular and equitable supplies of nuclear materials both from the Community and from non-member countries. Under that provision, the system for ensuring supplies must be operated by the Agency, which, in order to perform its task, has the exclusive right to conclude contracts for the supply of those products from inside or outside the Community (see Joined Cases T-458/93 and T-523/93 ENU v Commission [1995] ECR II-2459, paragraph 57).

86 In particular, the simplified procedure introduced by Article 5 bis of the Rules does not deprive the Agency of its exclusive rights (ENU v Commission, paragraph 73). Even within the framework of the simplified procedure, the Agency therefore has the right to object to a contract which might prejudice the achievement of the objectives of the Treaty.

87 Moreover, the principle of balancing supply and demand must as a general rule be observed in the exercise of the Agency's exclusive right to conclude supply contracts. That obligation, which applies as a matter of principle, follows in particular from Article 60 and the first paragraph of Article 65 of the Treaty, which concern the balancing mechanism, from Article 67, which states that prices are to be determined by that balancing exercise, and from the second paragraph of Article 65, which provides that if the Agency decides on the geographical origin of supplies from outside the Community it is obliged to secure conditions for the user which are at least as favourable as those specified in the order.

88 The Treaty provides for one specific exception, however, to observance of the principle of supply and demand. Under the first paragraph of Article 61,

the Agency is obliged to meet all orders, "unless prevented from so doing by legal or material obstacles". As the Commission rightly submits, the Agency must therefore ascertain in each case whether there are any legal or material obstacles to meeting the order.

89 In the present case, the Commission argues that there were three such obstacles, that is to say, one deriving from the requirements of the policy of diversification of external sources of supply, one relating to the level of prices stemming from the Trade Agreement, and one deriving from the obligation to ensure equal access to resources.

90 It should be noted to begin with that where decisions concerning economic and commercial policy and nuclear policy are involved, the Agency has a broad discretion when exercising its powers. In those circumstances, review by the Court must in any event be confined to identifying any manifest error of assessment or misuse of powers (ENU v Commission, paragraph 67).

91 With respect to the first obstacle, the Commission considers that the prices offered in the CIS are so low that Community users are tempted to cover as much of their requirements as possible with nuclear materials from the CIS. It submits that if unlimited imports from the CIS were allowed, Community undertakings would become dependent on that source of supply. There would be a twofold disadvantage. First, continuity of supplies could not be guaranteed in the long term. Second, alternative sources might disappear. The Commission recalls that a policy of diversification was approved by the Council in its Resolution of 16 September 1986. It submits that the risk that massive imports of nuclear materials from the CIS at prices considerably lower than Western prices would imperil the reliability of supplies in the Community is thus an obstacle within the meaning of the first paragraph of Article 61 of the Treaty.

92 The Court considers that the Agency may lawfully bar imports of nuclear materials if those imports are liable to jeopardise the achievement of the aims of the Treaty, in particular by their effect on sources of supply. Such a risk may be regarded as a legal obstacle, within the meaning of the first paragraph of Article 61 of the Treaty, to meeting an order (ENU v Commission, paragraph 64). To put it differently, in order to ensure geographical diversification of external sources of supply, the Agency has a discretion - exercising its exclusive right to conclude contracts for the supply of ores and other nuclear fuels so as to ensure reliability of supplies in accordance with the principle of equal access to resources, in conformity with the task conferred on it by the Treaty - to bar certain imports of uranium which would reduce such diversification (ENU v Commission, paragraph 68).

93 In the present case, with respect to the possible existence of a threat to reliability of supplies, it is common ground that the volume of supplies from the CIS imported into the Community has increased substantially since 1990. The Commission argues that there is a structural deficiency of world production as compared to use of uranium, but KLE does not accept that. According to a diagram of natural uranium production and consumption in the West from 1994 to 2004, submitted by KLE, nominal production capacity will exceed demand in 2000. However, it should be noted that, according to that diagram, demand will still exceed supply between 1994 and 2000.

94 In those circumstances, at the time when the Commission adopted Decision 94/285, the possibility could not be ruled out that ensuring a regular and equitable supply in accordance with Article 2(d) of the Treaty could be jeopardised if imports of nuclear materials from the CIS were permitted to continue in unlimited quantities and replaced supplies from other sources for a certain time without there being any guarantee of continuity of supplies in the long term.

95 The existence of the first legal obstacle relied on by the Commission must therefore be accepted.

96 With respect to the second obstacle, the Commission submits that the supply system established by the Treaty aims at ensuring that nuclear materials are imported into the Community at market-related prices. That principle has in particular been recognised by Article 14 of the Trade Agreement as applicable in relations between the Community, on the one hand, and the USSR or subsequently the CIS States, on the other.

97 As the Commission observes, the Court of Justice has held that an international agreement concluded by the Community may create rights and obligations for undertakings.

98 It held as follows with respect to the Convention on the Physical Protection of Nuclear Materials, Facilities and Transports (Ruling 1/78 [1978] ECR 2151, paragraph 36):

"The tasks to be carried out by the Community will relate in essence to the supply arrangements and the management of the nuclear common market ... The relevant provisions of the Treaty, together with the provisions of the Convention itself, which, once it has been concluded by the Community, will form an integral part of Community law, will provide an appropriate legal basis for the necessary implementing measures."

99 Article 14 of the Trade Agreement thus forms part of Community law. Moreover, by virtue of Article 64 of the Treaty, the Agency must act, where

appropriate, within the framework of agreements concluded between the Community and a third State.

100 In order to verify whether Article 14 of the Trade Agreement was applied correctly in the present case by the Agency and the Commission, the available data on prices must be analysed. According to a table annexed to the Agency's annual report for 1993, the average price varied, from 1990 to 1993, between US $29.39 and US $21.17 per pound of U3O8 for long-term multiannual contracts and between US $9.68 and US $9.05 per pound of U3O8 for spot market contracts. According to KLE, the actual price set in its contract was US $8.02 per pound of U3O8; according to the Commission, it was only US $6.93 per pound of U3O8. Having regard to the fact that, according to its reply to a written question from the Court, KLE attempted to cover not merely occasional requirements but its basic requirements for a 15-month period by the supply contact in question, that contract, concluded at a price which was even lower than the average spot market price, did not comply with the rule that supplies are to take place at market-related prices.

101 The existence of a second legal obstacle within the meaning of the first paragraph of Article 61 of the Treaty must in those circumstances be regarded as proven.

102 With respect to the third obstacle to concluding the contract, allegedly deriving from the obligation to ensure equal access to resources and to prevent one user from being given a privileged position in relation to competitors, it must be considered that, if imports are to be limited, the application of a permissible threshold of dependence, fixed by reference to the state of the market at a maximum percentage of individual users' consumption, is justified in order to guarantee equal access to resources, in accordance with Article 52(1) of the Treaty.

103 The Agency, within the bounds of its broad discretion, fixed the permissible degree of dependence at a maximum of 25%, taking account inter alia of the existing long-term production capacity of the CIS and of the fact that that represented some 25% of world production.

104 In the present case, it is common ground that KLE had already bought quantities of uranium from the CIS which exceeded that limit.

105 The Commission was thus entitled to find, in that respect, that there was a legal obstacle within the meaning of the first paragraph of Article 61 of the Treaty.

106 Furthermore, contrary to KLE's assertions, the specific provisions on prices in the Treaty, that is to say Articles 67 to 69, cannot be interpreted as precluding the application of the first paragraph of Article 61 of the Treaty on the ground that in the simplified procedure the Agency or the Commission may not interfere with the prices negotiated except under the conditions laid down in Articles 68 or 69. The aim of Article 61 is in fact to enable the Agency, where there is a legal or material obstacle of whatever kind to meeting an order, to block that order, thus derogating if need be from the balancing of supply and demand, a principle which applies with respect to prices by virtue of Article 67. Moreover, contrary to KLE's claims, the Agency did not in any way fix the price by inserting in the contract a clause on the origin of the materials to be delivered.

107 For all the above reasons, the Agency did not commit an error of law or manifest error of assessment when it refused to conclude the supply contract in question unconditionally and inserted in that contract a condition that the uranium was not to come from the CIS.

108 The Commission's decision confirming that of the Agency cannot therefore be declared unlawful.

109 The first and second limbs of the first plea are thus unfounded and must be rejected.'

'113 The Agency seeks to ensure reliability of supplies and to guarantee continuity of supplies to Community users. It is inter alia in the interest of the Community nuclear industry that a particular source of supply should not become too large in relation to alternative sources. It is likewise in the interest of the Community as a whole and consistent with the aim of developing trade with other countries that imports should take place at market-related prices, as shown in particular by Article 14 of the Trade Agreement. As the Court has already stated above, Decision 94/285 thus corresponds to the requirements of the supply policy. It does not therefore conflict with the task of the Community.'

Treaty, under which traders are guaranteed the freedom to obtain supplies from a supplier of their choice established in another Member State.

'117 The freedom of an undertaking to obtain supplies from a supplier of its choice established in another Member State must be exercised within the limits laid down by the Treaty and set out above, in particular in such a way as to ensure that reliability of supplies is not jeopardised. In the present case, KLE's contract came up against certain legal obstacles which, under the first paragraph of Article 61 of the Treaty, restrict that freedom. While KLE's supplier was indeed a company established in the Community, it acted only as an intermediary, the source of the materials to be supplied being the CIS.'

'125 With respect to the allegation relating to the principle of legal certainty, it must be stated that the measures on which the Agency's approach is based, namely the Council Resolution, which sets out in the second indent of point 5(a) the aim of geographical diversification of the Community's external sources of supply, and the Trade Agreement, which provides in Article 14 that prices must be market related, have both been published in the Official Journal of the European Communities. The principle of equal access to resources is laid down in Article 52(1) of the Treaty itself.

126 Moreover, in the Agency's annual report for 1992 (see the general survey of the supply situation in the Community), it was stated that imports of natural uranium from the CIS accounted for some 25% of net Community requirements and that contracts had already been concluded for future deliveries of very substantial quantities from that source. The level of supplies of materials from the CIS was regarded as critical by the Agency and the Commission, since if the trend observed from 1990 onwards were to continue, reliability of supplies in the future might be threatened. The report explained that a working group of experts, set up within the Advisory

Committee, had concluded that the materials and services from the CIS were being offered on the Community market at prices which were unrelated to production costs in the West. The report stated that the Commission and the Agency considered that corrective measures were justified, based principally on the exclusive right to conclude contracts. It also stated that the Agency's policy had in general been favourably received.

127 Having regard to the existence of easily accessible sources of information which a reasonably diligent trader in this very particular and clearly identified sector must be taken to know, it cannot be said that there was a lack of transparency.

128 Consequently, the complaint alleging breach of the principle of legal certainty must be rejected.

129 It was the Agency itself which adopted an internal guideline figure relating to the "permissible degree of dependence", a guideline under which each trader in the Community is allowed to cover no more than about 25% of his requirements with materials from the CIS.

130 While that upper limit of permissible dependence was admittedly not published as such, that circumstance cannot make Decision 94/285 unlawful. That threshold was simply an internal assessment criterion which the Agency took into account to ensure equal access to resources for Community users. It was not a strict rule, since the development of the situation on the market in question required a flexible approach. Moreover, in the circumstances of the case, KLE should have understood that, since it had already bought large quantities of materials from the CIS, further imports on its part might be regarded as contrary to the interests of the Community.

131 As to the principle of equal treatment, KLE appears to consider in its written pleadings that the principle is infringed if, in assessing the situation, no account is taken of the varying degree of dependence on nuclear materials from the CIS of undertakings established in the different Member States. At the hearing, however, it argued that the unlawful difference in treatment consisted in the Commission's failure to fulfil its duty of ensuring that all traders submit their contracts for the supply of nuclear materials to the Agency for conclusion. On that point, the Commission replied at the hearing that it knew of no case in which a contract had not been submitted to the Agency.

132 Furthermore, the Agency applies a threshold of permissible dependence in order to ensure equal access to resources for undertakings established in the Community. Such an approach is justified on the basis of Article 52(1) of the Treaty. The Agency and the Commission cannot be required to take account of the particular circumstances prevailing in different Member

States. On the other point, KLE has not shown that there were cases in which the Agency and the Commission failed to object to an infringement of Article 5 bis of the Rules.

133 In those circumstances, the complaint alleging breach of the principle of equal treatment cannot be upheld.

134 Finally, on the principle of proportionality ...

135 Application of [the second paragraph of Article 65 and Articles 70 and 72 of the Treaty] would not ... have been able to solve the problem, in that the Agency, considering the aims of its supply policy, had to block imports from the CIS at non-market-related prices. Moreover, the contract was approved on condition that the materials did not come from the CIS. Such a condition cannot be disproportionate, for the reasons stated above, in particular in paragraphs 92 to 94.

136 The complaint alleging breach of the principle of proportionality must therefore be rejected as well.'

'140 On the basis of the analysis above (see in particular paragraphs 85 to 109), it appears that in the present case the Agency followed the path outlined by the Council and Commission and acted within the bounds of its broad discretion to take decisions in the field of economic and commercial policy and of nuclear policy (ENU v Commission, paragraph 67). In any event, in so far as KLE disputes the Agency's powers, it should be noted that Decision 94/285 was adopted by the Commission. In exercising its power of review of the act of the Agency referred to it by KLE under the second paragraph of Article 53 of the Treaty, the Commission adopted the Agency's assessment as its own. It thus approved the details of the supply policy and its implementation by the Agency, in accordance with the procedure established by the Treaty.'

relationship between the powers of the Agency and the Treaty and had not explained why KLE would become dependent on uranium from the CIS or in what respect the purchase price agreed in the supply contract did not correspond to the conditions of the market economy or was not related to market prices.

'144 The Court has already noted (see paragraph 46 above) that the reasons stated for a measure must disclose clearly and unequivocally the reasoning of the Community authority which adopted it, so as to enable the persons concerned to ascertain the reasons for the measure and thus to defend their rights and so as to enable the Community judicature to exercise its supervisory jurisdiction, and that the scope of the obligation to state reasons must be assessed in the light of its context.

145 The Commission made it clear in its decision that the Agency is not obliged to meet orders where there are legal or material obstacles to doing so (point 14 of Decision 94/285). It went on to mention the supply policy, the general objective of diversification of sources of supply and the measures on which it is based, such as the Council Resolution (points 15 and 16). It then referred first to Article 64 of the Treaty, under which the Agency may act within the framework of agreements concluded between the Community and a third State, and second to the Trade Agreement, in particular Article 14 thereof (point 21). Finally, the Commission explained that an increase in the proportion of total supplies from the CIS, which at that time was set at 20 to 25%, would be difficult to reconcile with the Community's long-term supply interests (point 33).

146 In view of the context and of the fact that it was preceded by the letter of 20 December 1993, referred to in paragraph 6 above, and by the decision which was the subject of the first action, Decision 94/285 discloses clearly and unequivocally the principal reasons for the refusal to conclude the contract submitted by KLE.'

'149 As already stated above (see paragraph 53), the concept of misuse of powers has a precisely defined scope in Community law and refers to cases where an administrative authority exercises its powers for a purpose other than that for which they were conferred on it. In that respect, it has been consistently held that a decision may amount to a misuse of powers only if

it appears, on the basis of objective, relevant and consistent evidence, to have been taken for purposes other than those stated.

150 KLE has not shown that the Agency and the Commission pursued an aim other than that of implementing the Euratom supply policy.'

The claim for damages

The appeal

Admissibility of the appeal as a whole

of German law. In the circumstances of the case, such an irregularity is not so substantial as to make the appeal formally inadmissible, since in any event it is apparent from the contested judgment, annexed to the appeal, that KLE is established in Lingen.

Substance

Case T-149/94

(a) Article 5 bis (f) of the Rules and the provisions of Chapter 6 of the Treaty relating to supply

should not have had the effect of postponing the time-limit laid down in Article 5 bis (f) of the Rules.

difficulties in coming to a decision. It submits that the Court had no basis for restricting the accelerated procedure under Article 5 bis (f) of the Rules to cases which do not give rise to any problems.

(b) The rules on the division of powers

(c) The obligation to state reasons

as the Community authority which issued the act, not the Commission, which was under an obligation to state reasons. The Agency's request for information and its extension of the time-limit, which adversely affected the parties to the contract, both lacked a statement of reasons, in breach of Article 162 of the Treaty and Article 5 bis (g) of the Rules.

(d) Alleged misuse of powers by the Agency

Case T-181/94

The claim for annulment

(a) The extent of the Agency's powers and the existence of legal obstacles to conclusion of the contract

to conclude a contract as a whole, without making any amendments, where it considers that there is a legal obstacle. It does not on the other hand have the right to amend the substance of the contract by adding conditions.

uranium deposits in the world does not fall within the 'supply policy' of the Agency.

(b) The aims of Articles 1 and 2 of the Treaty

(c) The principle of legal certainty

Court of First Instance nevertheless refers to in paragraph 125 of the contested judgment.

'... the measures on which the Agency's approach is based, namely the Council Resolution, which sets out in the second indent of point 5(a) the aim of geographical diversification of the Community's external sources of supply, and the Trade Agreement, which provides in Article 14 that prices must be market related, have both been published in the Official Journal of the European Communities ...'.

factual arguments without putting forward any point of law which could call into question the assessment made by the Court of First Instance.

(d) The requirement of equal treatment

(e) The principle of proportionality

gives the Agency the right to intervene in the contractual relationship in order to determine the geographical origin of the supplies. Even in that case, however, the Agency can act only if it secures for the user conditions which are at least as favourable as those specified in the order. Application by analogy of the second paragraph of Article 65 is excluded because in the present case the conditions of supply were altered to the detriment of the parties to the contract, so that only the obligation under the first paragraph of Article 61 applies. Since there was no legal or material obstacle to performance of the contract, the Agency was obliged to conclude it. If there really had been a legal obstacle to performance of the contract, the first paragraph of Article 61 would have required the Agency to refuse to conclude it. KLE submits that by nevertheless concluding it and adding a condition to it, the Agency exceeded its powers.

(f) The rules on the division of powers

(g) The obligation to state reasons

supplies from the CIS and why the purchase price agreed in the contract did not correspond to market conditions.

repeating the main points of Decision 94/285 in paragraph 145 of the contested judgment, the Court adopted the Commission's statement of reasons and thus rejected the applicant's complaints.

(h) Misuse of powers

The claim for damages

Costs