JUDGMENT OF 23.4.1956 -JOINED CASES 7 AND 9/54 INDUSTRIES SIDERURGIQUES LUXEMBOURGEOISES V HIGH AUTHORITY

In Joined Cases 7 and 9/54

THE COURT composed of: M. Pilotti, President, J. Rueff and O. Riese (Presidents of Chambers), P. J. S. Serrarens, L. Delvaux, Ch. L. Hammes and A. van Kleffens, Judges, Advocate General: K. Roemer Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts

1 — Facts and procedure

By application of 11 October 1954 (Application 7/54) the Groupement des Industries Siderurgiques Luxembourgeoises (Group of Luxembourg Iron and Steel Industries, hereinafter referred to as ‘the Groupement’) requested that

‘The Court should: Declare that the present application is admissible as to form and well founded; Annul the implied decision of refusal of the High Authority taken after the Groupement had sent its letter of 14 July 1954; Declare, consequently, that the High Authority must, by means of a decision or recommendation, order: 1. that the activities of the Office Commercial du Ravitaillement, as the sole importer of coal into the Grand Duchy of Luxembourg, should be brought to an end; 2. that the Caisse de Compensation attached to the Office Commercial du Ravitaillement by the Ministerial Order of 8 March 1954 should be prohibited and abolished; Order the High Authority to pay the costs.’

The applicant annexed to that application:

1) A copy, certified by the applicant, of the letter which it had sent to the President of the High Authority on 14 July 1954;

2) A copy of the Decree of the Grand Duke of 30 April 1945 and of the Ministerial Order of 8 March 1954.

It subsequently lodged at the Court:

its statute (articles governing its activities); an authority to represent the Groupement from its President, Mr Leopold Bouvier, in favour of Alex Bonn, Advocate in Luxembourg;

a certificate attesting that Alex Bonn is a member of the Luxembourg Bar.

The defendant informed the applicant by letter of 27 November 1954 that the Caisse de Compensation ‘is not of such a nature as to have any effects which are incompatible with the Treaty and it cannot therefore be prohibited’.

Following that letter, the applicant, ‘so as to avoid a fruitless argument on questions of admissibility’, lodged a second application (Application 9/54) on 23 December 1954, the subject-matter of which was the same as that of the previous application and which requested moreover that

‘The Court should: Declare that the present application, which has only been lodged in so far as is necessary, is admissible and well founded; While maintaining the application of 11 October 1954 and requesting primarily that the Court should find the conclusions contained therein well founded, annul in so far as is necessary the decision of refusal of the High Authority, following from its letter of 27 November 1954, of the request of the Groupement of 14 July 1954; Declare, consequently, that the High Authority must, by means of a decision or recommendation, order: 1. that the activities of the Office Commercial du Ravitaillement, as sole importer of coal into the Grand Duchy of Luxembourg, should be brought to an end; 2. that the Caisse de Compensation attached to the Office Commercial du Ravitaillement by the Ministerial Order of 8 March 1954 should be prohibited and abolished; Order the High Authority to bear the costs.’

By decision of 7 January 1955, the High Authority gave the Luxembourg Government the period up to 31 March 1955 either

to repeal the order confirming the activities of the Office Commercial du Ravitaillement,

or to amend its provisions so that they were in accordance with the Treaty.

After two requests for an extension of the period had been made by the defendant and granted by Order of the President on 11 November and on 9 December 1954, the defendant lodged on 12 January 1955 its defences relating to the two above-mentioned applications.

The defence relating to Application 7/54 contends that:

‘The Court should: 1. Take note that the High Authority has an address for service in Luxembourg within the meaning of Article 31 (2) of the Rules of Procedure of the Court at its offices at 2, Place de Metz; 2. Take note that the High Authority leaves the decision as to the formal admissibility of the application to the discretion of the Court; 3. Declare that there is no need to give judgment on the head of the application requesting the annulment of the implied decision of refusal of the request that the activities of the Office Commercial du Ravitaillement should be brought to an end, because this request has become purposeless; 4. Declare that there is no need to give judgment on the head of the application requesting the annulment of the implied decision of refusal of the request that the Caisse de Compensation for solid fuels should be closed and abolished, since this application has become purposeless; In any case dismiss the above-mentioned head of the application as unfounded; 5. Order the applicant to bear the costs, fees and expenses.’

The defence relating to Application 9/54 puts forward the same submissions except that the last subparagraph of the fourth paragraph is replaced by the following words:

‘Taking into consideration solely the submissions which were put forward in so far as is necessary and which were directed against the decision of refusal following from the letter of the High Authority of 27 November 1954, dismiss the above-mentioned head of the application as unfounded and reject any other wider or contrary submissions.’

On 13 January 1955 an order of the President of the Court fixed the date by which the reply was to be lodged at 15 February.

On 7 February 1955 the applicant requested the Court to extend that period to 25 March 1955 so as to ‘know what attitude the Luxembourg Government would adopt with regard to that decision’ (that of 7 January 1955) ‘in order to put forward its own point of view in its reply’.

That request was granted in an order of the President of the Court of 11 February 1955.

The replies relating to the two applications were lodged on 22 March 1955.

In the reply relating to Application 7/54 the applicant claims that:

‘The Court should: Dismiss the pleas of inadmissibility and the arguments put forward by the defendant; I. Declare that the application containing two heads of claim, which are moreover related, is formally admissible; II. A. Take note that the applicant, without prejudice to the statement of reasons upon which the decision adopted by the High Authority on 7 January 1955 concerning the Office Commercial du Ravitaillement was based, considers that as a result of that decision its application has become purposeless within the limits settled by the decision; and order the defendant to bear the costs relating thereto; B. (a) Declare that the application originally directed against the implied decision of refusal resulting from the silence of the High Authority stands in spite of the letter of the High Authority of 27 November 1954 which has no relevance to the dispute; (b) Declare that the application is well founded and accordingly; 1. Declare that the Caisse. de Compensation established by the Ministerial Order of 8 March 1954 constitutes a special charge contrary to Article 4 (c) of the Treaty; 2. Declare that the Caisse de Compensation established by the Ministerial Order of 8 March 1954 constitutes discrimination contrary to Article 4 (b) of the Treaty; Declare that the operation of the Caisse de Compensation is closely linked to the existence of the monopoly of the Office Commercial du Ravitaillement on imports and that the abolition of the latter must of necessity involve the abolition of the Caisse de Compensation: Declare that the levy, which amounts to an increase in the price of solid fuels for non-domestic use, is in breach of the decisions adopted by the High Authority on the basis of Article 63 (2) (a) of the Treaty, that is, Decisions Nos 4/53 of 12 February 1953, 6/53 of 13 March 1953,15/54 of 19 March 1954, 19/54 of 20 March 1954 and 20/54 of 20 March 1954; 3. Declare in any case that the operation of the Caisse de Compensation established by the Ministerial Order of 8 March 1954 infringes the most fundamental principles of the Common Market as established by the Treaty; Consequently: Declare that the High Authority must order, by means of a decision or recommendation, that the Caisse de Compensation attached to the Office Commercial du Ravitaillement by the Ministerial Order of 8 March 1954 should be prohibited and abolished; Order the High Authority to pay the costs, fees and expenses, without prejudice.’

The reply relating to Application 9/54 puts forward the same submissions except for the two following amendments:

First paragraph:

‘The Court should: Join the two applications because they are related; Dismiss the pleas of inadmissibility and the arguments put forward by the defendant’:

After II B (a): the following paragraph is added:

‘In the alternative and if the refusal of the High Authority resulting from its letter of 27 November 1954 must be considered as an express decision, declare the application against that decision admissible’.

By order of the President of 25 March 1955, Cases 7/54 and 9/54 were joined ‘for all procedural purposes’.

In the common rejoinder in Joined Cases 7 and 9/54, following the order for joinder, the defendant contends that

‘The Court should: Find that the conclusions previously put forward are well founded.’

The following four events occurred between the lodging of the reply and the lodging of the rejoinder:

1) The issue of the Decree of the Grand Duke of 2 April 1955 amending the system of import tax and turnover tax on solid mineral fuels;

2) The issue of the Ministerial Order of 12 September 1955 repealing with effect from 2 April 1955 the Ministerial Order of 8 March 1954 concerning the operation, so far as solid fuels is concerned, of the Caisse de Compensation attached to the Office Commercial du Ravitaillement;

3) The issue of the Ministerial Order of 30 September 1955 repealing the Ministerial Order of 8 March 1954 on the importation of solid fuels and declaring the importation thereof to be free, the Government reserving to itself certain rights of intervention. That Order was to take effect from 1 October 1955;

4) The lodging, a few hours before the lodging of the rejoinder, of an application to intervene on the part of the Luxembourg Government, claiming that:

‘The Court should: Take note of the Luxembourg Government's application to intervene; declare that application to intervene admissible and well founded; moreover, take note that the intervener supports the submissions of the High Authority requesting that the application lodged by the Groupement should be dismissed; Order the applicant in the main action to bear the costs of the application to intervene.’

The applicant in the main action contested that the application to intervene was well founded in the written observations which it submitted pursuant to Article 71 (3) of the Rules of Procedure. The Court examined the application in accordance with Article 71 (4) when the parties had presented oral argument and the Advocate General had delivered his opinion at the hearing on 19 November 1955.

By order of 24 November 1955, the Luxembourg Government was ‘granted leave to intervene’, while ‘the examination of the submissions and arguments put forward in the application to intervene and of their admissibility was reserved for the final judgment’.

At the hearing on the same date, the Court informed the parties that it would accept until 7 December 1955‘preparatory notes on the future oral argument which the parties consider appropriate to submit to it as a result of the hearing on the application to intervene’.

The applicant made use of that option and submitted ‘additional observation’ on 6 December 1955.

These observations relate in particular to the following points:

The Groupement rejects the arguments put forward by the High Authority in its rejoinder which are based on the fact that the Luxembourg iron and steel industry has not ‘declared that the Decree of the Grand Duke of 2 April 1955 is incompatible with the provisions of the Treaty’, the economic effects of which Decree ‘are identical to those of the Ministerial Order of 8 March 1954’. It states that it has not hitherto declared that the new system is incompatible with the provisions of the Treaty because it considered it appropriate to await the decision of the Court in the proceedings pending before it.

The Groupement on the contrary bases an argument in favour of its reasoning on ‘the attitude adopted by the Luxembourg Government which abolished the Caisse de Perequation (Equalization Fund)’ since this attitude ‘seems to indicate that it felt, to say the least, such serious doubts with regard to the previous system that it preferred to avoid a judgment of the Court’. The Groupement considers that it is possible ‘that a State of the Community can achieve, by virtue of powers which it has reserved to itself, certain economic results, particularly for social purposes, by means of a system which is compatible with the Treaty, while another system leading to the same result would not be in accordance with the provisions of that Treaty.’

The Groupement refutes, moreover, the arguments of the Luxembourg Government based on

the applicant's lack of capacity to institute proceedings in view of the special nature of the proceedings;

the interpretation of Article 4 of the Treaty which, according to the intervener, cannot ‘provide a sufficient basis for an application nor a sufficient basis for a decision of the Court’;

the fact that ‘the applications have become purposeless and that the Groupement has no interest in proceeding with them.’

After the rejoinder had been lodged on 30 September 1955, the written procedure was closed in accordance with Article 34 (1) of the Rules of Procedure of the Court. In accordance with Article 34 (1) of the Rules of Procedure of the Court, the President appointed Jacques Rueff as Judge-Rapporteur on 30 September 1955.

The preliminary report laid down in Article 34 of the Rules of Procedure concluded that a preparatory inquiry was necessary. By order made at the hearing on 30 November 1955 the Second Chamber of the Court requested the parties to provide certain written information before 14 December 1955.

The parties supplied the information requested on 12 December.

By order of 14 December 1955, the Second Chamber of the Court ordered the closure of the preparatory inquiry and fixed the time-limit laid down in Article 45 of the Rules of Procedure for the lodging by the parties of their final written conclusions at 7 January 1956.

Those conclusions were lodged on 4 and 7 January respectively. They confirm the previous conclusions.

In accordance with Article 45 (2) of the Rules of Procedure of the Court, the President of the Court fixed the date for the oral proceedings at 1 February 1956.

The hearings were held on 1, 27 and 8 February 1956.

During those hearings the parties presented oral argument.

At the hearing on 8 February 1956 the Advocate General delivered the following opinion:

In Case 7/54

‘The first head of claim in the application should be dismissed as inadmissible and the second head of claim declared unfounded;

The applicant should be ordered to bear the costs, including the costs of the application to intervene’.

In Case 9/54

‘The application should be dismissed as inadmissible and the applicant should be ordered to bear the costs, including the costs of the application to intervene’.

2 — Submissions and arguments of the parties

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

1) As regards the admissibility of Case 7/54, the defendant relies on the following arguments:

a) May ‘two distinct issues be raised’ in the same application? The defendant raises this question in its defence and then specifies in the rejoinder that the applicant provides no evidence to show that the two questions are related. It declares, however, that it ‘has not raised the formal inadmissibility of the application originating the proceedings’ and that it ‘preferred to leave that point to the discretion of the Court’. The applicant replies in the affirmative and observes, first, that secondly, that and that the fact that they are related authorizes it to refer to the decision given by the Court in the judgment in Case 1/54.

‘There is no provision prohibiting a party from making its application relate to several heads of claim; such a plea of inadmissibility cannot be inserted to supplement the rules’;

‘the two heads of claim contained in a single application are evidently closely related whatever the attitude adopted by the High Authority towards the two applications’

b) Does not the letter of 27 November 1954 stating the reasons upon which the refusal of the defendant was based make Application 7/54 inadmissible? The defendant maintains, first, that a new factor of this kind involves ‘the amendment of the original conclusions’, … and thus ‘the amendment of the very subject-matter of the proceedings’… ‘the putting forward by the applicant of fresh submissions’, in other words a ‘genuine renewal of the procedure’. In its opinion it is impossible to permit ‘the action to be continued on the basis of Article 35’. In its reply the applicant defends the admissibility of the first application by maintaining that ‘the right to lodge an application against the implied decision of refusal was acquired on the expiry of the period of two months laid down in Article 35 of the Treaty’. In its rejoinder the defendant does not raise any new argument to that reply. It refers to its previous defence and specifies that it ‘certainly did not wish to raise a formal plea of inadmissibility to the applicant's application’. In fact, it admits that ‘the comments of the High Authority could not in any case result in preventing the Court from giving a decision on the substance of the problem’. This argument is therefore simply submitted to the Court because ‘although it has no practical significance for the purposes of the proceedings instituted by the applicant, it has an interest as a matter of principle for the executive of the Community which awaits guidance from the case-law of the Court so as to be able to take account thereof in its future actions’.

c) Does the applicant still have a legal interest in proceeding with its action at law after the repeal by the Ministerial Order of 12 September 1955, as from 2 April 1955, of the Ministerial Order of 8 March 1954 concerning the operation of the Caisse de Compensation for solid fuels attached to the Office Commercial du Ravitaillement? Since the reply had already been received at the Court at the date on which this new factor occurred, the Second Chamber asked the applicant during the above-mentioned preparatory inquiry: The applicant replied to these questions that:

‘Do the rules with which the Luxembourg Government has replaced the system in question seem to the applicant to give it what it would have obtained if the High Authority had not refused its request of 14 July 1954?

If the answer is in the affirmative, in what, in its opinion, does the interest which it retains in proceeding with its action at law consist?’

‘The new system established by the Luxembourg Government maintains the previous special charge and the previous discrimination under a different form. However, since the Caisse de Compensation has been abolished for the future, applications such as those lodged by the Groupement have become purposeless as regards the future:

On the other hand, as the Luxembourg Government maintained the Caisse de Compensation for the period prior to 2 April 1955, the question at issue, which is whether the Caisse de Compensation is compatible with the provisions of the Treaty, remains unanswered with regard to the past and must be decided by the Court, which has exclusive jurisdiction over it. The measure of the interest of the Groupement in the question is the amount of the equalization increases which are payable by the Luxembourg iron and steel industry for the period in question, from 1 March 1954 to 31 March 1955, in other words 28171984 Belgian francs.’

d) Does the applicant have the capacity to institute proceedings in view of the special nature of the dispute? The intervener considers that The Groupement rejects that argument by declaring that The defendant in the main action does not support the intervener's argument on this point. In fact it declares that

‘the Groupement is an association of producer undertakings in the steel sector; on the other hand, with regard to the coal sector, its nature is that of a consumer organization. The dispute brought before the Court by the applications lodged by the Groupement relates however exclusively to coal. The Luxembourg Government considers that only a coal-producing undertaking or an association of such undertakings has capacity to institute such proceedings; on the other hand, an association of undertakings which institutes proceedings and which, in this instance, can only institute proceedings in its capacity as an organization representing consumers does not have such capacity’.

‘the provisions of the Treaty relating to applications to the Court make no distinction according to the product which is the subject-matter of them. It is impossible to speak of a “steel”, “coal”, “mineral” or “ferrous scrap” application. The proposed distinction is contrary to the wording of the Treaty and cannot be accepted’.

‘the High Authority, whilst recognizing the interest which it would have for the purposes of the present proceedings in supporting the argument put forward on this point by the Luxembourg Government, prefers nevertheless to leave the decision on this point to the discretion of the Court’.

2) As regards the plea of infringement of the Treaty, the applicant states that by maintaining the Office Commercial du Ravitaillement and the Caisse de Compensation, the Luxembourg Government has failed to fulfil the obligation on Member States under Article 86 of the Treaty and that the High Authority should have recorded that failure in application of Article 88. In order to show that the Office Commercial du Ravitaillement and the Caisse de Compensation are not in conformity with the Treaty, it relies on Articles 3 (b), 4 (b), 4 (d) and 66 (7) on the one hand and Article 4 (c) on the other. Since the applicant has stated that, as a result of the decision of 7 January 1955, its application ‘had become purposeless within the limits settled by the decision’, there is no need to refer to the arguments relating to the legality of the Office Commercial du Ravitaillement in relation to the Treaty. The arguments concerning that office are only summarized here to the extent to which they have a bearing on the corresponding problem raised by the Caisse de Compensation. The arguments invoked by the parties with regard to the Caisse de Compensation attached to the Office Commercial du Ravitaillement may be summarized as follows:

I) The Caisse de Compensation is incompatible with the decisions adopted by the High Authority on the basis of Article 63 (2) on the system of prices for solid fuels in the Common Market. The defendant replies by recalling that:

‘The maximum prices are imposed on coal-producing undertakings and the fixing of maximum prices does not prevent duties, taxes or any other general charge being levied on the products at the time of consumption or at any stage of distribution’.

II) The abolition of the Office Commercial du Ravitaillement deprives the Caisse de Compensation of its substantive and legal basis and must entail the abolition of the latter. According to the applicant, ‘the Office can only increase the price of fuels if it is itself the buyer and reseller of those fuels, that is, if it holds the monopoly on their importation into the Grand Duchy of Luxembourg’. For that reason ‘it follows from the recitals in the preamble to the decision of the High Authority of 7 January 1955 that the latter … intended to abolish the Office's import monopoly in solid fuels’. The defendant replies that its decision of 7 January 1955 which declared that the activities of the Office were incompatible with the provisions of the Treaty ‘has nothing to do with the legality of the equalization of domestic coal’, for ‘the abolition of the monopoly which was requested by the High Authority involved the necessity of amending the detailed rules for the collection of the levy but certainly did not involve the necessity of abolishing the equalization system in addition’.

‘Consequently … the abolition of the import monopoly of the Office deprives the Caisse de Compensation of its substantive and legal basis and must therefore entail the abolition of the latter’.

III) The Caisse de Compensation is incompatible with the fundamental principles of the Common Market. This argument was only raised in the reply. The applicant states therein that: … In the opinion of the applicant, however, ‘the levy cannot be considered as a fiscal charge’. Whilst making all reservations as to the admissibility of that submission which does not appear in the applications, reservations based on Article 22 of the Statute of the Court of Justice and Article 29 of the Rules of Procedure, the defendant replies in the rejoinder that It declares, however, that it does not understand

‘The fundamental principles of the Common Market as conceived in the Treaty must have the practical effect of obtaining for all consumers in the Common Market who buy the same product of the Community from the same producer the same ex works price’.

‘Only the actual transport costs and the fiscal charges in force in each Member State may be added to that ex works price in order to make up the delivered price.’

‘there is nothing to prevent the Member States from imposing on industries or products of the Community duties or charges in order to use the receipts therefrom in whole or in part for the purpose of subsidizing domestic coal’.

‘why a purely fiscal system is permissible and, on the other hand, an equalization system the economic effects of which are wholly comparable, if not identical, must be considered as incompatible with the provisions of the Treaty.’

IV) The equalization system established by the Caisse de Compensation infringes the provisions of Article 4 (c) of the Treaty. The applicant states in its letter of 14 July 1954 to the High Authority and in the application that the establishment of the Caisse de Compensation for solid fuels ‘involved the levying of a special charge on consumers of solid fuel for non-domestic use’. This argument is put forward in the reply in which the applicant studies the effects of the levy separately according to whether the levy relates to hard coke or industrial coal:

a) So far as hard coke is concerned, it states, with supporting figures, that ‘the levy exclusively affects the Luxembourg iron and steel industry since the latter is practically the only consumer of that type of fuel in the Grand Duchy of Luxembourg’ and that consequently ‘the Luxembourg Government specifically intended to make the Luxembourg iron and steel industry alone bear the financing of the subsidy for solid fuels for domestic use by introducing an equalization levy on hard coke’.

b) So far as imported industrial coal is concerned, the applicant states that the levy ‘affects the operation of undertakings in the industries which come within Article 80 of the Treaty, that is, industries producing industrial coal which supply this type of fuel to the industry of the Grand Duchy of Luxembourg’. However, it ‘is imposed on those undertakings in their capacity as competitiors with liquid fuel’. The levy therefore constitutes, in its opinion, ‘national intervention in the prices of products of the Community by means … of special charges, intervention which is in itself prohibited by the Treaty’. The defendant replies that: So far as the coal industry is concerned, a special charge cannot be imposed on it for that industry ‘does not exist in Luxembourg’; So far as the iron and steel industry is concerned, the levy is not imposed on it alone since the levy is imposed on all the industries in Luxembourg which are coal consumers. It concludes from this that the levy‘is incontestably in the nature of a general charge’; Because of its very limited amount the levy is not capable ‘of affecting the conditions of competition in the Common Market’. In the rejoinder, the defendant, whilst admitting that ‘in view of the industrial structure of Luxembourg, charges imposed on non-domestic consumers are in fact essentially imposed on the iron and steel industries to a doubtless considerable extent’ refuses to conclude ‘that the economic structure of Luxembourg precludes the Government from taking any economic measures in relation to the industries including fiscal measures as they would all have to be treated as special measures for the iron and steel industry and on those grounds prohibited’. Regardless of the rebuttal of the arguments of the applicant, the defendant puts forward with regard to various points of the Treaty the interpretation which seems to it to be in accordance with the intention of those who drafted it and to be capable of shedding light on the question whether the Caisse de Compensation is compatible with the Treaty: It first suggests a criterion enabling a distinction to be made between special charges and general charges: ‘In the first place, it is necessary for that subsidy, aid or charge to be of a special nature, that is, for it to concern exclusively undertakings or products of the Community’… ‘As soon as the subsidy, aid or charge concerns a group which includes the undertakings or products of the Community but goes beyond them what is involved is a general measure which could only come if necessary within the application of Article 67’; It then establishes a distinction ‘between subsidies, aids or charges affecting undertakings and those affecting products of the Community’. In the second case ‘any subsidy, aid or special charge applicable to a product of the Community at any one point of distribution is prohibited only if its indirect result is either to distort competition or to involve a benefit for or advantage to undertakings of the Community’; The defendant finally justifies its restrictive interpretation of the wording of Article 4 (c) by means of two arguments based, first, on Article 11 of the Convention on the Transitional Provisions and, secondly, on the ‘power retained by the Member States, in particular in tax matters’. The first argument, an argument reasoning to the converse, is based on the fact that ‘the provision refers only to charges imposed on products of the Community themselves’. The second argument is based on the fact that the Member States have the right to increase or to create charges or duties ‘even if they are imposed only on products of the Community’; it is therefore ‘permissible to impose on those products a charge which is not in the nature of a tax and which, on the one hand, has the same economic effects and, on the other, is not incompatible with the other prohibitions laid down by Article 4’.

V) The equalization system established by the Caisse de Compensation is alleged to infringe Article 4 (b) of the Treaty. The application states that ‘the establishment in the Grand Duchy of Luxembourg of a Caisse de Compensation for solid fuels has involved… the creation of discrimination between consumers of solid fuels for non-domestic use of the European Coal and Steel Community and Luxembourg consumers of this type of fuel The reply states that this discrimination comes within Article 4 (b) (special charge) and not within Article 67 (an action by a Member State which is liable to provoke a serious disequilibrium). In fact, the levy:

a) is not a duty: it does not serve “to cover all public charges” since the Ministerial Order of 8 March 1954“allocates it specially and exclusively”;

b) “may not be considered as a charge either since a charge consists in a levy imposed on certain individuals for a specific service provided for them by the Administration”. In addition, the instrument avoids those words and is moreover an order, “whereas under Luxembourg law a charge can only be introduced by a law pursuant to Article 99 of the Constitution”. In the opinion of the applicant therefore “the revenue thereby obtained is in the nature of a price and … consequently, the equalization levy is nothing other than a price increase”. The defence refutes the argument based on Article 4 (b) by assuming that the levy constitutes a general charge permitted by Article 4 (c) and that the differences between the general charges of the countries of the Community cannot constitute the discrimination referred to in Article 4 (b). The defendant adds that “the fact that a general measure adopted by one of the Member States does not correspond to the general measures adopted by the other Member States can never be considered as discrimination”… “Substantial differences exist between the legislation of other Member States in particular in the tax and social security fields”, because Member States have remained sovereign in those matters. For that reason: Article 26 of the Treaty gives the Council of Ministers the task of harmonization; Article 67 of the Treaty enables the High Authority to intervene “in cases in which national measures of economic policy would have a repercussion in competition for coal and steel”. In the rejoinder the defendant adds to these arguments its interpretation of the concept of discrimination. In its opinion, “the concept of discrimination prohibited by Article 4 … as stated specifically in particular as regards prices by Article 60 (1) and as regards transport by the first paragraph of Article 70, involves a difference in treatment between comparably placed persons. The difference in treatment therefore ceases to constitute prohibited discrimination when it is justified by a difference in the situations of the persons concerned”. However, “… the governments, precisely because they are sovereign in the field of general economic policy, may apply differ ent treatment to groups of persons which differ economically and socially”. Finally, the important factor, according to the defendant, is to examine “whether the difference in treatment established by one government between groups of interested, persons within the context of its economic policy distorts competition in the market.” The interpretation of the defendant is completed by the following reply to the questions put during the preparatory inquiry:

“The principal intervention measures taken by the High Authority in fields which may reveal certain similariteis with the subject-matter of the present proceedings have been the following:

1. By Decision No 25/53 (Journal Officiel of 13 March 1953, p. 83) adopted under Article 11 of the Convention on the Transitional Provisions, the High Authority decided on the abolition, reduction or continuation under specific conditions of certain special charges imposed on German coalmines. By Decision No 17/54 of 20 March 1954 (Journal Officiel of 24 March 1954, p. 266), the High Authority decided on the abolition of all special charges imposed on German coalmines, including those concerning price reductions for supplies to domestic consumers. This abolition was decided on in application of the provisions of Article 11 of the Convention on the Transitional Provisions and of Article 4 (c) of the Treaty because they were special charges imposed on undertakings of the Community. There is no contradiction between those decisions and the position which the High Authority has adopted with regard to the request made by the Groupement des Industries Siderurgiques Luxembourgeoises.

2. A ministerial order adopted in France on 30 March 1953 had established an equalization system for domestic coal imported from other countries of the Community. This question formed the subject-matter of an application to the Court of Justice by the Belgian Government (Case 4/53), an application which was subsequently withdrawn. Because of the intervention of the High Authority, certain substantial amendments were made to the French system so as to eliminate discriminatory effects which were incompatible with the provisions of the Treaty.

3. By Decisions No 29/53 (Journal Officiel of 21 May 1953, p. 129) and No 23/54 (Journal Officiel of 31 March 1954, p. 293) of 30 March 1953 and 29 March 1954, the High Authority authorized the Netherlands Government, under the third paragraph of Article 24 of the Convention on the Transitional Provisions, to retain until 31 March 1955 an equalization fund financed by a levy on the Netherlands coal production. A similar authorization was not necessary for the Luxembourg equalization fund because it was not financed by a levy on national coal production and therefore did not require any authorization from the High Authority under the above-mentioned Article 24.

4. The French Government had, in April 1954, issued an order for the purpose of correcting the distortion resulting from the difference between domestic inland waterway freights and international inland waterway freights. The High Authority had indicated that the above-mentioned system contained discriminatory elements which were incompatible with the provisions of the Treaty. As a result of an exchange of correspondence and after conculting the Council of Ministers under Article 2 (4) of the Convention on the Transitional Provisions, the French Government, deferring to the point of view of the High Authority, amended the above-mentioned order so as to remove from the equalization system which it had adopted all elements which were incompatible with the provisions of the Treaty.”

3) So far as the submission alleging the infringement of essential procedural requirements is concerned, the applicant claims ‘in the alternative… that the implied decision of refusal is vitiated by nullity for infringement of essential procedural requirements, inasmuch as it is not based on any express ground’. The express refusal of the defendant occurred before the defendant had lodged its defence and the High Authority did not therefore formally give its views on that submission; it merely pointed out that the decision requested by the applicant was ‘now express and states in detail the reasons on which it is based, since the High Authority clearly explained in its letter of 27 November 1954 … the legal reasons why it was unable to accept the point of view of the Groupement’.

LAW

THE COURT

for the purpose of giving judgment in the present cases, puts forward the following considerations in law:

1. Consequences of the joinder of Applications 7/54 and 9/54

The order of 25 March 1955 joining Applications 7/54 and 9/54 does not preclude their separate examination in the present judgment.

Part One

Application 7/54

A — The Admissibility of Application 7/54

I — The regularity of the procedure

The applicant has annexed to its application a copy of the letter which it had sent to the High Authority on 14 July 1954 and this date has not been contested by the defendant. That document may consequently be considered as ‘documentary evidence of the date on which the request was lodged’ required under the second paragraph of Article 22 of the Statute of the Court of Justice of the ECSC. The application, which was lodged less than a month after the expiry of the period of two months laid down in Article 35 of the Treaty, was submitted within the prescribed period.

In accordance with the opinion of the Advocate General the two heads of claim contained in the application are obviously related.

The fact that they have been put forward in the same application cannot call in question the admissibility of that application.

Moreover, the defendant does not raise the formal inadmissibility of the application originating the proceedings and leaves the decision on this point to the discretion of the Court.

II— The capacity ofthe applicant to raise the matter with the High Authority in application of Article 35 of the Treaty

Application 7/54 requests the annulment of the implied decision of refusal which is to be inferred under Article 3 5 of the Treaty from the silence of the High Authority for two months with regard to the request made by the applicant in its letter of 14 July 1954.

The expression ‘as the case may be’ in Article 35 must be considered as giving the power to raise a matter with the High Authority to those persons specified in that article who have an interest in the decision which the High Auhtority is required to take or in the recommendation which it is required to make.

The decisions requested from the High Authority by the applicant's letter of 14 July 1954 were certainly of interest to the applicant.

Article 35 moreover enables ‘undertakings or associations’ to raise a matter with the High Authority.

The associations referred to in that expression may only be assocations of undertakings within the meaning given to the word ‘undertaking’ by Article 80 of the Treaty for the purposes of the whole Treaty.

If in fact this were not so, an association could find itself in a position to institute proceedings where none of the individual members of which it is formed could have done so on its own.

In the absence of any indication to the contrary, the Treaty does not establish such differences in the treatment of an association and the members of which it is formed.

The Groupement des Industries Siderurgiques Luxembourgeoises, the applicant, is certainly an association of undertakings, because it groups in a co-operative society undertakings carying out production activities in the steel sector within one of the territories referred to in the first paragraph of Article 79.

The first paragraph of Article 35 gives the States, the Council or undertakings and associations the power to raise a matter with the High Authority only wherever the High Authority is required by the Treaty or by rules laid down for the implementation thereof to take a decision or make a recommendation and fails to fulfil this obligation.

The applicant alleges that Articles 86 and 88 of the Treaty placed the High Authority under a duty to take a decision or make a recommendation concerning the Caisse de Compensation attached to the Office Commercial du Ravitaillement.

Under Article 86 the Member States undertake to refrain from any measures incompatible with the Common Market referred to in Articles 1 and 4.

Article 88 requires the High Authority, if it ‘considers that a State has failed to fulfil an obligation under this Treaty’, to record this failure in a reasoned decision.

For that reason, the High Authority was certainly required by the Treaty to take a decision if it considered the Caisse de Compensation to be incompatible with the Common Market referred to in Articles 1 and 4.

Therefore, it was certainly for the applicant to raise the matter with the High Authority in application of the first paragraph of Article 35.

III — The capacity of the applicant to institute proceedings before the Court of Justice against the implied decision of refusal which is to be inferred from the silence of the High Authority

The applicant has claimed that

‘The Court should: Annul the implied decision of refusal of the High Authority taken after the Groupement des Industries Siderurgiques Luxembourgeoises had sent its letter of 14 July 1954’

and the applicant considers that ‘this implied decision of refusal is vitiated by nullity for infringement of the Treaty and in the alternative for infringement of essential procedural requirements’.

The proceedings instituted by the applicant under the third paragraph of Article 35 of the Treaty are therefore proceedings for annulment on the ground of infringement of the Treaty and infringement of essential procedural requirements as provided in Article 33 of the Treaty and are therefore subject to the conditions thereof.

Under the second paragraph of Article 33, undertakings or the associations referred to in Article 48 may institute like proceedings and, without its being necessary to specify the scope of this requirement in cases in which an application is lodged pursuant to an article of the Treaty other than Article 35, the applicant association may be considered as one of the associations referred to in Article 48 of the Treaty.

However, the Luxembourg Government in its application to intervene stated that ‘the applicant, whilst coming within the jurisdiction of the Community in other respects, does not have the capacity to institute proceedings before the Court of Justice in view of the special nature of the dispute’.

The Luxembourg Government supports its claim by observing that the dispute brought before the Court relates exclusively to coal, that only a coal-producing undertaking or an association of such undertakings has capacity to institute such proceedings, but that on the other hand an association of undertakings which institutes proceedings and which in this instance, can only institute proceedings in its capacity as an organization representing consumers does not have such capacity.

As regards the admissibility of the submissions put forward by the intervener, the defendant has left the decision on this point to the discretion of the Court. Article 34 of the Statute of the Court of Justice limits the submisions made in an application to intervene to supporting or requesting the rejection of the submissions of one of the parties.

Nevertheless there is no need to inquire whether the intervener, in view of the provisions of Article 34 of the Statute of the Court of Justice, was justified in contesting the admissibility of the appication, since its admissibility must in this instance be examined of the Court's own motion.

In the opinion of the Advocate General, there is no provision of the Treaty which requires that the speciality of the producers must be linked to the special field of the dispute.

The silence of the Treaty on this point cannot be interpreted to the disadvantage of the undertakings and associations.

For this reason the applicant's right to institute proceedings before the Court cannot in this instance be contested.

The applicant has not alleged that the implied decision of refusal was vitiated by misuse of powers affecting it and for that reason it could not institute proceedings against that decision unless that decision was a decision concerning it which was individual in character.

This requirement involves two distinct characteristics with regard to the decision: it must be individual in character and must concern the applicant.

The Treaty, by requiring that decisions which are capable of being annulled by the institution of proceedings by undertakings or associations must be individual in character when they do not involve a misuse of powers affecting such undertakings or associations, debars individuals, whenever no misuse of powers affecting them is alleged, from obtaining judgment on general decisions or recommendations.

In these circumstances, it is sufficient, in order that an undertaking or association may be able to institute proceedings against a decision or recommendation, for that decision or recommendation to be not general but individual in character and it is not necessary for the decision to manifest this character in relation to the applicant.

The implied decision of refusal which is to be inferred from the silence of the High Authority can only express the refusal of the decision requested by the applicant in its letter of 14 July 1954.

This decision is thus deemed to state that there is no need to record in a reasoned decision that by authorizing the Office Commercial du Ravitaillement to increase the price of solid fuels for non-domestic use by the Order of 8 March 1954 the Government of the Grand Duchy of Luxembourg has failed to fulfil an obligations under the Treaty.

This decision refers solely to one particular activity of a public body referred to by name, in other words the Office Commercial du Ravitaillement, and is a decision which is individual in character.

Moreover, the implied decision of refusal contested by the applicant permits the continuation of a system which imposes on the undertakings which form the Groupement des Industries Siderurgiques Luxembourgeoises an additional charge of 8 francs per metric ton of coal consumed by them and as such concerns a group formed in order ‘to carry out…all transactions deemed by the law to be business transactions so as to ensure the smooth running and the development of the Luxembourg iron and steel industry and in particular the industry of its members’.

For those reasons the implied decision of refusal, the annulment of which is requested, is in the present case individual in character and concerns the applicant which therefore had the capacity to institute proceedings against it.

IV — The interest of the applicant in proceeding with its action at law after the repeal by Ministerial Order of 12 September 1955 with effect from 2 April 1955 of the Ministerial Order of 8 March 1954 concerning the operation of the Caisse de Compensation attached to the Office Commercial du Ravitaillement

In reply to the questions put during the preparatory inquiry, the applicant claimed that the Luxembourg Government maintained the Caisse de Compensation for the period prior to 2 April 1955 and that therefore the question at issue, which is whether the Caisse de Compensation is compatible with the provisions of the Treaty, remains unanswered with regard to the past.

In the rejoinder the defendant left the decision on that point to the discretion of the Court.

The Court acknowledges that the applicant has an interest in proceeding with its action.

For the above-mentioned reasons the application is admissible.

B — The substance of Application 7/54

I — The subject-matter of the application

a) The applicant's claim that the activities of the Office Commercial du Ravitaillement should be brought to an end The High Authority took a decision on 7 January 1955, in other words after the applications had been lodged, that the Order of the Minister for Economic Affairs of the Luxembourg Government of 8 March 1954 confirming the activities of the Office Commercial du Ravitaillement with regard to the importation of solid fuels constitutes a measure which is incompatible with the provisions of the Treaty. In the opinion of both the applicant and the defendant this decision must be considered as the positive outcome of the head of claim in the application concerning the Office Commercial du Ravitaillement. Therefore, the application has become purposeless in relation to that head of claim.

b) Consequences of the letter of the High Authority of 27 November 1954 stating, after the expiry of the period of two months, the reasons upon which its refusal to take the decision requested by the applicant with regard to the Caisse de Compensation is based

In its defence, the High Authority states that the letter of 27 November 1954 transformed its silence into an express refusal which stated in detail the reasons upon which it was based.

It claims that, in these circumstances, the action brought on the basis of Article 35 has no legal foundation and the application has become purposeless.

The letter setting out the reasons of the High Authority was received after the expiry of the period of two months laid down in the third paragraph of Article 35.

At the end of that period the implied decision of refusal referred to in that paragraph was inferred to exist and the applicant finally acquired the right to institute proceedings.

Moreover, the subject-matter of the proceedings is not the silence of the High Authority but its refusal to take a decision within the meaning of Article 14 of the Treaty which, according to the applicant, it was under a duty to take.

The letter indicating the reasons for the refusal of the High Authority does not affect the existence of that refusal which was finally established at the end of the period of two months laid down in the third paragraph of Article 35 of the Treaty.

The implied decision of refusal which is to be inferred at the end of that period from the silence of the High Authority does not substantially change the situation resulting therefrom but only gives it positive expression so that the proceedings laid down in the third paragraph of Article 35 may be instited against it.

The letter of 27 November 1954 stating the reasons upon which the decision was based has not altered that situation any further.

In these circumstances, in the opinion of the Advocate General, that letter has not deprived the application of its subject-matter or prevented the applicant from proceeding with its action based on Article 35 of the Treaty.

II — The compatibility of the Caisse de Compensation with the provisions of the Treaty

The applicant contests the implied decision of refusal of the High Authority concerning the Caisse de Compensation on the ground of infringement of the Treaty and in particular of Articles 4 (b) and 4 (c) thereof and, in the alternative, on the ground of infringement of essential procedural requirements inasmuch as it is not based on any express reason.

It is necessary to examine the two submissions separately.

C — Submission concerning infringement of the Treaty

I — Is Article 4 directly applicable or only as provided in this Treaty?

Article 4 declares that the practices listed in paragraphs (a), (b), (c) and (d) thereof are “incompatible with the Common Market. . and accordingly… abolished and prohibited … as provided in this Treaty”.

Certain of those practices are referred to in other provisions of the Treaty and, in particular, any action by a Member State which is liable to have appreciable repercussions on conditions of competition in the coal or the steel industry in Article-67 of the Treaty, special charges in Article 67 (3) and in Article 11 and the third paragraph of Article 25 of the Convention on the Transitional Provisions.

Under Article 84 of the Treatry, the words “this Treaty” mean the provisions of the Treaty and its Annexes, of the Protocols annexed thereto and of the Convention on the Transitional Provisions.

For that reason, the provisions contained in all those instruments are equally binding and there is no question of contrasting them with one another but only of considering them in conjunction with one another so as to apply them appropriately.

The Court has already decided in its judgment in Case 1/54, under II (a), that “Articles 2, 3, and 4 of the Treaty … constitute fundamental provisions establishing the Common Market and the common objectives of the Community… In authorizing the High Authority to define the prohibited practices, the Treaty obliges it to take into account all the aims laid down in Articles 2, 3 and 4”. For the same reasons, the provisions of Article 4 are sufficient of themselves and are directly applicable when they are not restated in any part of the Treaty. Where, however, the provisions of Article 4 are referred to, restated or elaborated on in other parts of the Treaty, the texts relating to one and the same provision must be considered as a whole and applied simultaneously.

II — Is the levy imposed by the Caisse de Compensation a special charge prohibited by Article 4 (c) of the Treaty?

Article 4 (c) prohibits special charges imposed by States, in any form whatsoever. It is necessary to seek the criteria for recognizing a special charge, which is abolished and prohibited by Article 4 (c) in the circumstances referred to, in particular, in Article 67 (3).

The Treaty does not specify the characteristics which establish the special nature of a charge but Article 67 (3) thereof gives an example of a charge described as special because it is imposed on the coal or steel undertakings within the jurisdiction of a State in comparison with the other industries in the same country. The special nature of that charge is evidently based on the fact that it only affects a proportion of the industries which, because they are subject to the jurisdiction of the same State, are comparably placed in relation to that State.

However, the fact that they are comparably placed only supplies a relative and transitory criterion because it depends on the scope of its field of application. A charge which is general in relation to all the undertakings of a State may cease to be so and become special if all the undertakings of the Community are considered.

In those circumstances it is necessary, where doubts exist, to reinforce the criterion of comparability by comparing the result to which it leads with that intended by the Treaty.

Under Article 2 of the Treaty the objective of the Community is in particular progressively to bring about conditions which will of themselves ensure the most rational distribution of production at the highest possible level of productivity, while safeguarding continuity of employment and taking care not to provoke fundamental and persistent disturbances in the economies of Member States. Article 67 makes this requirement more precise by authorizing the High Authority to compensate for the harmful effects of an action taken by Member States when such action is liable, by substantially increasing differences in production costs otherwise than through changes in productivity, to provoke a serious disequilibrium. It follows from this, by reasoning to the converse, that the Treaty authorizes action taken by Member States when it does not substantially increase differences in production costs or increases them through changes in productivity.

In the light of that provision, the most rational distribution of production in accordance with Article 2 is that which is based in particular upon the composition of production costs resulting from output, that is, from the physical and technical conditions particular to the various producers.

In the first analysis, without its being possible to consider this criterion by itself as decisive, a charge may be presumed to be special and therefore abolished and prohibited by the Treaty if, by affecting unequally the production costs of comparably placed producers, it introduces into the distribution of production distortions which do not result from changes in productivity.

It is necessary to inquire whether, having regard to the above-mentioned criteria and presumptions, the levy imposed by the Caisse de Compensation in application of the Ministerial Order of 8 March 1954 is a special charge within the meaning of the Treaty.

Under Article 1 of the above-mentioned Order, the Office Commercial du Ravitaillement is authorized to increase the prices of solid fuels for non-domestic use wherever they come from, whatever the quality and whoever the consumer. The charge imposed on solid fuels for non-domestic use might be special if it affected only a part of the undertakings subject to the jurisdiction of the Government of the Grand Duchy of Luxembourg and it would then be the charge which the parties have both agreed to call the charge imposed on the undertakings. It is possible to state that it would then indeed affect the composition of production costs otherwise than through changes in productivity.

However, the increase imposed by the Caisse de Compensation on solid fuels for non-domestic use regardless of the quality or the consumer affects all consumers of solid fuels for non-domestic use equally and is obviously not a special charge according to this criterion.

Since hard coke is affected in the same way as other types of fuel it is not therefore subject to a special charge in spite of the situation whereby the iron and steel undertakings are the principal if not the only consumers of that product.

The charge imposed on solid fuels for non-domestic use in the Grand Duchy of Luxembourg might also be special if it affected only some of the solid fuels for non-domestic use consumed by Luxembourg industry and would therefore be the charge which the parties have called the charge imposed on products.

The effect of such a charge would certainly be to vary the composition of production costs resulting from output for Luxembourg consumers of non-domestic coal and thus to introduce distortions in the distribution of their purchases within the Common Market.

However, the increase in price imposed by the Caisse de Compensation is levied in Luxembourg on all solid fuels for non-domestic use regardless of their origin. As such it affects equally all producers of the Community who sell in Luxembourg coal for non-domestic use, just as it would affect the producers of the Grand Duchy of Luxembourg if coalmines were to be discovered and worked there.

Having regard to this criterion too the charge introduced by the Ministerial Order of 8 March 1954 is not a special charge.

In the present case it does not seem that the levy imposed by the Caisse de Compensation might show itself to be of a special nature in relation to other criteria. In these circumstances, it is not a special charge which is abolished and prohibited by Article 4 (c) of the Treaty.

III — Is the levy imposed by the Caisse de Compensation a measure or practice which discriminates and which is abolished and prohibited by Article 4 (b) of the Treaty?

The Treaty abolishes and prohibits measures or practices which discriminate between producers, between purchasers or between consumers.

The concept of discriminatron is specified in Article 60 of the Treaty which indicates that practices involving, within the Common Market, the application of dissimilar conditions to comparable transactions, are discriminatory.

A charge, even if it is not special, may directly or indirectly involve effects which discriminate between producers, between purchasers or between consumers. It is therefore necessary to inquire whether the levy imposed by the Caisse de Compensation must be considered as a measure or practice which discriminates and which is abolished and prohibited by the Treaty.

The applicant rergards the levy imposed by the Caisse de Compensation as a measure which discriminates between consumers of hard coke and industrial coal who are established in Luxembourg, on the one hand, and those of the other Member States, on the other.

It is true that normally the increase in prices of solid fuels for non-domestic use introduced by the Ministerial Order of 8 March 1958 affects only Luxembourg consumers of that fuel and not consumers of the other Member States.

It therefore creates a difference between the respective production costs of the two groups of consumer.

This difference could only be removed by the abolition of that increase in prices within the Grand Duchy of Luxembourg or the introduction of an analogous increase in price in the other Member States.

The abolition of and prohibition on special charges does not adversely affect the right of the Member States to impose general charges of their nationals.

It is irrelevant whether the charge is in the form of a duty or tax or in the form of an equalization levy having the same economic results and the same financial impact.

Several provisions of the Treaty, in particular Article 62 thereof, and Articles 24 and 25 of the Convention on the Transitional Provisions provide for the use for certain purposes of national equalization schemes or arrangements or of equalization levies.

On the other hand, in the opinion of the Advocate General, although the Treaty does not deprive the Government of the Grand Duchy of Luxembourg of the power to impose a general charge on coal consumers subject to its jurisdiction, it is evidently impossible for it to have that charge extended to the consumers of other Member States.

The Treaty nowhere provides for the equalization of the charges established by the Member States in the fields which come within their respective jurisdictions. Article 26 of the Treaty is confirmation that the Treaty has not taken away from the Member States the responsibility for their general economic policy since it requires the Council “to harmonize the action of the High Authority and that of the Governments which are responsible for the general economic policies of their countries”.

It follows from Article 67 that not all action by a Member State which is liable to have appreciable repercussions on conditions of competition in the coal or the steel industry coming within the jurisdiction of the Community is necessarily abolished and prohibited by the Treaty or therefore necessarily constitutes a measure or practice which discriminates and is prohibited by Article 4 (b) of the Treaty, because it empowers the High Authority, by the grant of an aid, to compensate for, in other words, to tolerate and in practice to authorize in certain circumstances, the harmful effects of this interference with competition.

Moreover, Article 67 provides in detail for the intervention of the High Authority only with regard to actions taken by the Member States which have “appreciable” repercussions on conditions of competition in the coal or the steel industry or are capable, by “substantially” increasing the differences in production costs otherwise than through changes in productivity, of provoking a “serious disequilibrium”.

It follows from all these reasons that the Treaty has recognized that the abolition and prohibition of discriminatory measures and practices laid down by Article 4 (b) could not have the effect of creating absolute equality in the conditions of competition of the coal and steel industries coming within the Community nor of eliminating all interference with the conditions of competition resulting from actions taken by Member States substantially increasing differences in production costs otherwise than through changes in productivity.

The persistence of differences in conditions of competition is a necessary and inevitable consequence of the partial nature of the integration brought about by the Treaty and does not involve discrimination forbidden by the Treaty.

Article 67 confirms this interpretation since it gives the High Authority power to compensate for and thus to cancel out the effects of interference with competition which the provisions of the Treaty have not eliminated and thus to prevent that interference with competition from jeopardizing, because it continues after the establishment of the Common Market, the task with which the Community was entrusted in Article 2 of the Treaty “in harmony with the general economy of the Member States”.

In the light of the above-mentioned principles it is necessary to inquire whether the increase in the price of solid fuels for non-domestic use resulting from the Ministerial Order of 8 March 1954 constitutes a measure or practice which discriminates between consumers and is abolished and prohibited by Article 4 (b) of the Treaty.

The form of the charge imposed on consumers of solid fuels for non-domestic use makes it impossible to judge whether it is or is not a discriminatory measure or practice prohibited by Article 4 (b) of the Treaty.

It is not important under these circumstances to know whether it constitutes a duty, a tax or an increase in price.

Thus the Treaty does not prohibit the increase in price resulting from the Ministerial Order of 8 March 1954 and its effects are necessarily limited to the territory of the Grand Duchy of Luxembourg.

At the very most the High Authority could, if it had considered that the action of the Government of the Grand Duchy of Luxembourg involved harmful effects for the coal and steel undertakings coming within the jurisdiction of that government, have authorized it to grant an appropriate aid.

The High Authority considered that the levy imposed by the Caisse de Compensation “is not capable of distorting competition either for the sale of coal or for the sale of steel products, because it has little effect on the cost price of steel produced by the Luxembourg iron and steel industry”.

The applicant contests this statement and considers that the price of hard coke accounts for about 30 % of the cost price of products of the iron and steel industry and that therefore the increase in its price distorts, by its very serious effect on the cost price of those products, the conditions of competition between the Luxembourg producers and those of the other countries of the Community.

Since the applicant does not allege in these proceedings that the High Authority has been guilty of a misuse of powers or has manifestly failed to observe the provisions of the Treaty or any rule of law relating to its application, the Court must therefore merely inquire whether, in law, the increase in price imposed on solid fuels for non-domestic use by the Ministerial Order of 8 March 1954 infringes the Treaty or any rule of law relating to its application.

The above-mentioned considerations show that by imposing on solid fuels for non-domestic use the increase in price resulting from the Ministerial Order of 8 March 1954, the Government of the Grand Duchy of Luxembourg has adopted a measure coming within general economic policy for which, under Article 26 of the Treaty, it is still responsible and that that measure is not a discriminatory practice prohibited and abolished by Article 4 (b) of the Treaty.

IV — Should the abolition of the import monopoly conferred on the Office Commercial du Ravitaillement have involved the abolition of the Caisse de Compensation which had been attached to it?

The Ministerial Order of 8 March 1954 which authorized the Office Commercial du Ravitaillement to increase the price of solid fuels for non-domestic use, states clearly in its preamble that the Caisse de Compensation is attached to the Office Commercial du Ravitaillement.

The Ministerial Order of 8 March 1954 confirming the activities of the Office Commercial du Ravitaillement with regard to the importation of solid fuels was repealed by the Ministerial Order of 30 September 1955.

The applicant claimed in its reply that the abolition of the import monopoly of the Office Commercial du Ravitaillement should have involved the abolition of the Caisse de Compensation.

The two problems of the legality, with regard to the Treaty, of the contested equalization system, on the one hand, and of the monopoly conferred on the body to which the management of that equalization system had been entrusted, on the other, are independent.

Therefore, the decision of the High Authority of 7 January 1955 declaring that the Order of the Minister for Economic Affairs of the Luxembourg Government adopted on 8 March 1954 in order to confirm the activities of the Office Commercial du Ravitaillement was incompatible with the provisions of the Treaty cannot affect the compatibility with the provisions of the Treaty of the Caisse de Compensation, the abolition of which the High Authority has refused to request.

V — Does the levy imposed by the Caisse de Compensation infringe the decisions of the High Authority fixing, in application of Article 63 (2) (a) of the Treaty, maximum prices for hard coke and industrial coal from certain coalfields?

The applicant has alleged that the increase in price imposed by the Caisse de Compensation is contrary to Decisions Nos 15/54, 19/54 and 20/54 of the High Authority on the establishment of price lists applicable to coal from certain coalfields.

The maximum prices are imposed on coal-producing undertakings and the fixing of the maximum prices does not prevent the products from being subject to duties, taxes or any other general charge at the time of consumption or at any stage whatever of distribution.

In those circumstances, the levy imposed by the Caisse de Compensation does not infringe the decisions of the High Authority fixing maximum prices.

VI — Is the Caisse de Compensation incompatible with the fundamental principles of the Common Market?

The applicant regards the existence and the operation of the Caisse de Compensation as an infringement of the fundamental principles of the Common Market.

In support of its opinion it sees the equalization levy as a system of double prices which is unfavourable to Luxembourg consumers of solid fuel for non-domestic use in comparison with other consumers of the European Coal and Steel Community.

It states that the fundamental principles of the Common Market must ensure that all consumers of the Common Market who buy the same product of the Community from the same producer buy it at the same ex works price.

Contrary to the opinion of the applicant, the increase in price resulting from the Order of 8 March 1954 does not affect the ex works price of the solid fuels purchased by Luxembourg consumers but only the price at which the solid fuels are sold on arrival to consumers subject to the jurisdiction of the Government of the Grand Duchy of Luxembourg.

It is unimportant that the levy imposed by the Caisse de Compensation takes the form of a price increase since it constitutes, by its nature and effects, a levy on the value of the solid fuels consumed in the Grand Duchy of Luxembourg for non-domestic purposes.

Although it creates a double price for solid fuels consumed within the Grand Duchy, this is only because the price charged to consumers of non-domestic coal differs from that paid by consumers of domestic coal.

This double price, by making Luxembourg consumers of solid fuels for non-domestic use bear the financing of the Caisse de Compensation exclusively, does not constitute, as the applicant alleges, a further infringement of the principles of the Common Market since the two groups of consumers are not comparably placed.

The object of the price increase introduced by the Ministerial Order of 8 March 1954 is specified in the recitals of the preamble thereto.

According to those recitals the purpose of the system for the equalization of the price of fuel for industrial use and the price of fuel for domestic use is essentially to maintain the official prices in the domestic sector, prevent depreciation in workers' purchasing power and maintain the level of wages and salaries linked to a sliding scale.

None of. those objectives shows an intention to distort competition or may be considered contrary to the fundamental principles of the Common Market as set out in particular in Article 2 of the Treaty.

The replies of the High Authority to the written questions addressed to it during preparatory inquiry show that there is no disparity between the principles upon which its decisions concerning various systems of equalization were based and those which determined its attitude to the Caisse de Compensation of the Grand Duchy of Luxembourg.

For all these reasons, the price increase resulting from the Ministerial Order of 8 March 1954 is not incompatible with the basic principles of the Common Market.

D — The submissions concerning the infringement of essential procedural requirements

The applicant claims in the alternative that the implied decision of refusal is vitiated by nullity for infringement of essential procedural requirements inasmuch as the grounds for it are not stated.

Article 88 of the Treaty provides that “if the High Authority considers that a State has failed to fulfil an obligation under this Treaty, it shall record this failure in a reasoned decision”.

Consequently, the duty to give a statement of the reasons upon which it is based applies to the decision which, in the applicant's view, the High Authority was required to take with regard to the Government of the Grand Duchy of Luxembourg.

There is nothing in the wording of Article 88 to justify the view that such a duty exists with regard to a refusal to take a decision under that article.

Consequently, the lack of a statement of reasons upon which the implied decision of refusal was based does not constitute an infringement of the provisions of Article 88 of the Treaty.

E — Costs

Under Article 60 of the Rules of Procedure of the Court, the unsuccessful party shall be ordered to pay the costs, but the Court may nevertheless order that the parties bear their own costs in whole or in part where each party succeeds on some and fails on other heads.

Application 7/54 relates to two distinct heads of claim: the Office Commercial du Ravitaillement and the Caisse de Compensation for solid fuels.

As a result of the decision of the High Authority of 7 January 1955 concerning the Office Commercial du Ravitaillement, the first head of claim in Application 7/54 has become purposeless.

The parties have agreed that judgment should not be delivered on that head of the application.

However, the decision taken on 7 January 1955 by the High Authority complies with the request of the applicant for a declaration that the Office Commercial du Ravitaillement is incompatible with the Treaty.

If that decision had been taken within the period of two months which started to run with the letter of 14 July 1954 raising the matter with the High Authority, it would have met the first head of the applicant's claim. Therefore, in spite of the fact that that application did not proceed to judgment, it may be considered that the first head of the applicant's claim was well founded.

The second head of claim in Application 7/54, which seeks the annulment of the implied decision of refusal of the High Authority, is dismissed.

The applicant and the defendant may be considered as having each succeeded on one of the heads of claim in their conclusions.

The application to intervene relates only to the second head of claim in the application on which the applicant has failed.

In these circumstances, it is necessary to order that each of the main parties must bear its own costs and that the applicant must bear the costs of the intervener.

Part Two

Application 9/54)

Application 9/54 was lodged only in as far as was necessary.

It specifies that “the right to institute proceedings has been acquired and therefore the written reply stating the reasons upon which the decision was based cannot remove or alter that right or, once the application has been lodged, place the applicants under a duty to lodge a fresh application”.

“Supposing, however, that an interested party should maintain the contrary, in other words, that the above-mentioned letter of 27 November 1954 constitutes an express decision of refusal which breaks the silence of the High Authority, the applicants have an interest, in order to avoid a fruitless argument on questions of admissibility, in lodging by this document, an application in so far as is necessary against the refusal of the High Authority of their request”.

The Court has held that Application 7/54 is admissible.

For that reason, Application 9/54, which was lodged merely in so far as was necessary, is purposeless.

There is therefore no need to give judgment.

E — Costs

There is no need to give judgment on Application 9/54.

However, the applicant was justified in considering it necessary to lodge that application since the High Authority, without formally declaring that the letter of 27 November 1954 made Application 7/54 inadmissible by transforming the implied decision into an express decision, put forward and developed this opinion in its defence.

Consequently, all the parties have failed to recognize the admissibility of Application 7/54 in the same way.

For that reason, the parties, including the intervener, must be ordered to bear their own costs relating to Application 9/54.

Upon reading the pleadings; Upon hearing the main parties and the intervener; Upon hearing the opinion of the Advocate General; Having regard to Articles 4, 33, 35, 48, 67, 80, 86 and 88 of the Treaty, Having regard to the Protocol on the Statute ot the Court ot Justice; Having regard to the Rules of Procedure of the Court of Justice and the Rules of the Court on costs ; Taking note of the applicant's statement that, without prejudice to the statement of reasons for the decision adopted by the High Authority on 7 January 1955 concerning the Office Commercial du Ravitaillement, it considers that as a result of that decision its application has become purposeless within the limits settled by that decision; THE COURT hereby:

I In Case 7 /54 (a) Declares that there is no need to proceed to judgment on the first head concerning the Office Commercial du Ravitaillement; (b) Dismisses the application on the second head concerning the Caisse de Compensation attached to the Office Commercial du Ravitaillement; Orders the main parties to bear their own costs; Orders the applicant to bear the costs of the intervener.

(a) Declares that there is no need to proceed to judgment on the first head concerning the Office Commercial du Ravitaillement;

(b) Dismisses the application on the second head concerning the Caisse de Compensation attached to the Office Commercial du Ravitaillement; Orders the main parties to bear their own costs; Orders the applicant to bear the costs of the intervener.

II Declares that there is no need to proceed to judgment in Case 9/54; Orders the parties, including the intervener, to bear their own costs.