JUDGMENT OF 3. 3. 1971 — CASE 2/70 RIVA v COMMISSION

In Case 2/70

THE COURT composed of: R. Lecourt, President, A. M. Donner (Rapporteur) and A. Trabucchi, Presidents of Chambers, R. Monaco, J. Mertens de Wilmars, P. Pescatore and H. Kutscher, Judges, Advocate-General: K. Roemer Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Summary of the facts

The facts may be summarized as follows:

The applicant, an iron and steel undertaking, took over the undertaking Riva & C, S.a.s. (hereinafter referred to as ‘Riva’) on 25 February 1966.

By a decision of 18 December 1963 addressed to Riva, the High Authority of the ECSC amended the figures which that firm had previously declared and fixed the tonnage of bought scrap assessable under the former imported scrap equalization scheme for the period from 1 November 1957 to 30 November 1958 at 25721 metric tons. Accordingly, by another decision of the same date, it fixed the amount owed by Riva on 31 May 1963 under the said scheme at Lit. 33190121. Following notification of these decisions, the applicant complained that the latter did not take account of the reduced output of the electric furnaces during the running-in period.

In a letter of 10 September 1964, the Directorate-General for Steel of the High Authority ‘confirmed’ to Riva that ‘with reference to the terms of the conversation of 6 July 1964 … taking into account the factors explained by your undertaking with regard to the running-in period of the electric furnaces, the officers of the High Authority consider it advisable to have the problem in question examined by an expert. For this purpose, Mr Ernst Studer has been appointed …’.

In a letter of 23 September 1965, the High Authority informed Riva that, following the information supplied by the administrative officers of the Italian Government on the electric power consumed by this firm, the assessable tonnage for the period from 10 March 1957 to 31 December 1957 had been fixed at 22548 metric tons and that the amount of the contribution owing on 31 December 1965 therefore came to Lit. 256071350.

In a letter of 9 February 1966 addressed to the High Authority, Riva replied in particular that the decisions of 18 December 1963 had become final; any other sums owing in excess of those fixed by those decisions were outside the limitation period; Riva was therefore astonished to learn that the High Authority, in its letter of 23 December 1965, had assessed an additional 22548 metric tons for the period from 10 March 1957 to 31 January 1958. Furthermore, Riva had to express reservations as to the accuracy of the figures contained in the letter of 23 December 1965.

In a letter of 17 May 1966 addressed to the High Authority the applicant stated that, as had been said in the letter of 9 February 1966, ‘The period from 30 March to 1 November 1957 which is now remote must be considered as falling outside the limitation period’.

By a decision of 4 December 1969, of which the applicant was informed on 13 December, the defendant:

fixed the applicant's assessable tonnage at 45740 metric tons and specified the fractions of this figure respectively to the various periods falling between 10 March 1957 and 30 November 1958;

‘revoked and replaced by the present decision’ the decision of 18 December 1963 fixing the quantity of scrap subject to equalization contributions at 25721 metric tons.

The decision is based in particular on the following considerations:

At the outset Riva had stated that it began to produce steel in January 1958 and had declared in respect of the period from January 1958 to November 1958 a total of 15037 metric tons.

When audits were carried out by the High Authority to check the accuracy of these figures, Riva was unable to supply adequate accounting documents; it merely produced a summary of purchases of ferrous scrap.

To remedy these defects, the High Authority requested the undertaking in a letter of 27 November 1961 to send the invoices relating to the consumption of electric power; from the invoices sent it emerged that during the period from January to November 1958 the firm had consumed 20243622 kWh in the production of steel.

On the basis of this figure the decisions of 18 December 1963 were adopted.

Subsequently, ‘the Committee of experts convened for the purpose of completing and perfecting the system of estimating the consumption of ferrous scrap in electric furnaces produced new factors taking account, inter alia, of the influence of arisings from steelworks on the production of ingot steel and consequently on the tonnage of ferrous scrap constituting the basis of assessment to contributions; … these factors in particular enable technical omissions relating to the decisions of 18 December 1963 to be corrected’.

‘As regards the period of steel production to be taken into account for the purpose of determining contributions under the equalization schemes, the Commission now possesses particulars relating to the consumption of electric power in the furnaces, including the period from 10 March to 31 December 1957; it emerges from these data, supplied by the administrative officers of the Italian Government in April 1965, that, contrary to its declarations, the undertaking produced steel even before 1 January 1958 and consumed during that period a total of 18237800 kWh in the production of steel’.

In these circumstances, the Commission is obliged to redetermine the applicant's consumption of ferrous scrap. By virtue respectively of Article 2 of Decision No 13/58 (O.J. No 10 of 30.7.1958) and Article 15 of Decision No 16/58 (the same number of the Official Journal), this assessment is to be made by means of an estimate drawn up by the institution on its own authority for the period not covered by declarations (March to December 1957) and by means of a correction made on the institution's own authority for the period when the declarations were not supported by accounting documents (January to November 1958).

Thus the defendant had been led to calculate the tonnage of ferrous scrap assessable in particular on the basis of the quantities of electric power consumed by Riva and of the mathematical relationship which the defendant considered it had to work out between those quantities and the volume of steel produced and between the latter and the quantities of ferrous scrap used. These calculations are based in particular on the assumption that for each of the undertaking's two electric furnaces the ‘running-in period’ was three months (March to May 1957 for the first and June to August 1957 for the second furnace).

By another decision, adopted and notified on the same dates, and based on the aforementioned decision, the defendant:

declared that the applicant was required to pay to the ECSC the sum of Lit. 275005963 plus interest at 5 % per annum with effect from 1 January 1969;

‘revoked and replaced by the present decision’ the decision of 18 December 1963 fixing the amount of contributions at Lit. 33190021;

stressed that the decision was enforceable.

The present application, directed against these two individual decisions, was lodged at the Court Registry on 14 January 1970.

II — Conclusions of the parties

The applicant has claimed that the Court should:

‘by reason of the limitation period and on all the grounds set out in the application, declare illegal and annul the contested decisions of 4 December 1969 of the Commission of the European Communities referred to at the commencement of this application, with all the legal consequences, including those relating to the costs of the proceedings’.

The defendant has contended that the Court should dismiss the application and order the applicant to bear the costs.

III — Procedure

The course of the procedure may be summarized as follows:

Under the terms of its application, the applicant has claimed ‘as a preliminary submission’ that the President of the Court should ‘order the suspension of operation of the contested decisions in accordance with Article 33 of the Protocol on the Statute of the Court of Justice and the second and third paragraphs of Article 39 of the Treaty’.

In a letter of 14 January 1970, the Registrar of the Court indicated to the applicant that:

in accordance with Article 83 (3) of the Rules of Procedure, the application for suspension of operation must be made by a separate document;

until such document is lodged with the Registry, ‘the request for suspension of operation made in the application originating the proceedings will be dealt with solely with the substance of the case, in accordance with the normal legal procedure’.

In its statement of defence, the Commission, whilst invoking, with reasons in support, the ‘irregularity’ and ‘inadmissibility’ of the application, declares that ‘it will refrain from enforcing its claim for recovery of the debt against Riva before the Court has pronounced judgment on the substance of the main application’.

In its statement in reply the applicant makes no further mention of the request in question.

After hearing the report of the Judge-Rapporteur and the views of the Advocate-General, the Court decided to open the oral procedure without a preparatory inquiry.

The oral observations or the parties were presented at the hearing on 12 January 1971.

The Advocate-General delivered his opinion on 2 February 1971.

IV — Submissions and arguments of the parties

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

1. In its application, the applicant makes the following points in particular:

A — Objection of ‘res judicata’

Since Riva did not take advantage of its right to lodge an application against the decisions of 18 December 1963, they have become ‘finally enforceable’. Consequently, the examination of the faas the existence of which is implied by these decisions must be considered final also in relation to the defendant. To claim the contrary amounts to acknowledging that the Commission has the power to make further claims on undertakings ad infinitum. In this case, such a consequence is even more unjust inasmuch as, by the very terms of the contested decisions, the correction in respect of the period from January to November 1958 was to enable ‘technical omissions contained in the decisions of 18 December 1963 to be corrected’.

B — Objection based on the limitation period

The claim for payment made for the first time in the letter of 23 December 1965, relates to a period at least seven years before this date (March to November 1957, in respect of the greater part of the contested amount; the following period, up to November 1958, in respect of a smaller part). It therefore falls outside the limitation period.

This principle is not unknown to the Community legal system, as is shown by:

Article 40 of the Protocol on the Statute of the Court of Justice of the ECSC;

Article 1 of Decision No 5/65 of the High Authority of 17 March 1965 (OJ, English Special Edition 1965-1966, p. 38) according to which claims of the High Authority in respect of levies under Articles 49 and 50 of the ECSC Treaty shall be barred after a period of three years.

The same principle inspires Article 2 of General Decision No 14/64 of the High Authority of 8 July 1964 (OJ, English Special Edition 1963-1964, p. 162) according to which: ‘Undertakings must be able to produce, for inspection by officials and agents of the High Authority entrusted with the task of checking or verification, their business books and accounting documents for the current calendar year and for not less than the five preceding calendar years’.

In the absence of an express provision on the period of limitation for contributions to the equalization scheme, recourse must be had to this analogy. For this purpose, it is undeniable that the said contributions bear ‘the closest resemblance to’ the levies referred to by Articles 49 and 50 of the ECSC Treaty and consequently it must be admitted that they are subject to the three-year period of limitation provided for by Decision No 5/65.

C — The substance of the case

The figures which the defendant obtained by induction from the consumption of electric power do not correspond to reality. In particular, there is no basis for the presumption whereby the period from 10 March to 31 December 1957 is considered in the decisions at issue as a period of full production whereas, for this period, only three months are described as running-in months (production being nevertheless considered to have reached, as from the second month, figures corresponding to a high output).

It was, on the contrary, a period of testing the plant and of experimentation; heavy energy consumption yielded almost no production, since the activity of the undertaking was limited to testing and training staff, in the main from the agricultural sector, with systematic and continual rerunning of the machinery and no positive results as regards industrial production.

2. The defendant, in its statement of defence, asserts in particular as follows:

A — Inadmissibility of the application in so far as it is directed against the provisions of the decisions at issue which revoked the decisions of 18 December 1963

This inadmissibility derives from the fact that the applicant has no interest since it can gain nothing from the annulment of that part of the contested decisions.

The decisions of 18 December 1963 in fact failed to take account of a factor favourable to the applicant, namely, its own resources of ferrous scrap which must be deducted from the aggregate consumption so as to obtain the quantity liable to contribution. For this reason, the new decisions reduced to 24373 metric tons the figure of 25721 metric tons liable to contribution fixed by the previous decisions in respect of the period from January to November 1958; the result of this is a reduction amounting to Lit. 4873744 in the contributions due for this period. In support of this figure the defendant produces detailed calculations.

B — The objection of ‘res judicata’

The objections made in this connexion by the applicant must be considered not from the point of view of res judicata but from that of the ‘authority of the decided case’, in other words, the nature of the authority attached to an administrative decision.

The administration has the power, and sometimes even the duty, to withdraw an illegal or inopportune measure which has proved to be contrary to the public interest. As regards more particularly the exercise of the power in question with respect to notices of assessment, it cannot be made subject to a condition as to time; in fact, the public interest — which requires the equal treatment of those subject to the law as regards contributions and the strict accuracy of the content of the measures adopted in the field at issue—‘is present always and at all times’. This viewpoint is confirmed by the case-law of the Court on the equalization of ferrous scrap.

Furthermore, the considerations under A above must induce the applicant to withdraw this submission.

C — The objection based on the limitation period

The laws of Member States only have in common the fact that they recognize the principle of the limitation of actions; on the other hand they differ as to the periods of time which must elapse for this purpose and as to the grounds upon which they may be suspended or discontinued.

The legal system of the ECSC contains no express provision on the general principle of the limitation of actions. Consequently an essential and indispensable condition for putting into operation as a general principle the established rule of the limitation of actions with the legal system of the ECSC is lacking.

Nor can one apply by analogy the period of limitation provided for general levies. These in fact are the Community's own sources of revenue so that it may appear advisable to sacrifice the rights of the creditor in favour of legal certainty. On the other hand, the revenue from the equalization levy is intended for the undertakings themselves. To accept the applicant's argument would amount to favouring undertakings which are in arrears to the detriment of those which pay promptly.

The lack of provisions in the rules at issue is not the result of a lacuna but is explained ‘by the need not to bind the Commission to predetermined limitation periods in its delicate task of winding up the scheme and ensuring the observance of the provisions on equalization’. This task depends in the main on the promptness with which undertakings discharge their obligations, and, in particular, that of declaring the prices and quantities of scrap imported or purchased within the Community. In support of these considerations the defendant cites the judgment of the Court in Joined Cases Nos 14, 16, 17, 20, 24, 26 and 27/60 and 1/61 (Rec. 1961, especially pp. 337 and 338).

Finally, it is not for the applicant to blame the defendant for a delay which it has caused itself. In fact:

it always failed to supply the High Authority and later the Commission with data relating to the movements of bought scrap during the period from 10 March to 31 December 1957;

it was only in September 1964, on the occasion of the expert inquiry carried out by Mr Studer, the engineer, that serious indications were found that the furnaces had been in production during the year in question;

these facts were studied in detail by officers of the High Authority; it was only after these facts had been confirmed by the information supplied by the Italian administrative authorities in April 1965, relating to the electric power consumed by the furnaces, that it was possible to assess the scrap consumed during the period in question and to inform the undertaking thereof (letter of 23 December 1965);

it is not difficult to infer from the text of the letter of the High Authority of 10 September 1964‘On the one hand, the concern of the officers of the High Authority that the date of commencement of production by the undertaking should be established on the basis of documentation and, on the other, that the undertaking persisted in supplying information in this connexion which it knew to be inaccurate’.

Furthermore, the undertaking was aware of the provisional nature of the facts serving as the basis for the decisions of December 1963, as is shown by the following passage from a letter of 10 July 1962 addressed to Riva by the High Authority: ‘… according to the documentation at present in our possession and without prejudice to any verification of the facts on which the calculation is based, the assessable tonnage of your undertaking for the period from January to November 1958 is as follows’.

D — The substance of the case

The applicant does not deny that Riva was in production and accordingly produced steel during the period from 10 March to 31 December 1957.

In taking as the running-in period the first three months' production of each furnace, the defendant based its decision on criteria generally applied in estimates which it made on its own authority and also on the data relating to the applicant's plant which were ascertained by means of an exhaustive expert inquiry. The assertion that the trial period covered the whole of the production shown for 1957 is in clear contradiction with technical principles and the economics of production. The contested decisions have accepted for the period of normal production a coefficient of 850 kWh per metric ton of liquid steel produced. This coefficient represents absolute maximum value on the chart of the consumption of electric power in respect of furnaces having a capacity of 10 metric tons. According to the committee of experts referred to above, this coefficient, because of its high level, is designed specifically to compensate also for any reduced output of the furnaces during their initial stage of production.

As regards the running-in periods, the said decisions have adopted even higher coefficients, namely 935 kWh for the first and 901 kWh for the second furnace.

This procedure must be considered quite exceptional and enables very generous allowance to be made for the particular difficulties which the applicant experienced during the initial stage of its iron and steel production.

3. In its reply the applicant makes the following points in particular: It first of all declares that it takes note of the explanations given by the defendant in regard to the corrections made in favour of the undertaking. In these circumstances, the undertaking has in fact no interest in adhering to its application in so far as the new decisions have replaced the previous decisions. The dispute therefore concerns the debts relating to the period from March to November 1957, which were indicated for the first time in the two decisions of 4 December 1969. In this request, the applicant maintains the objection relating to the period of limitation. There is no doubt that, in view of the absence of any legal provisions, the principles which the Court is called upon to define in this connexion are an integral part of Community law; but this does not mean the rules contained in the respective laws of Member States. In fact, in creating the Community legal system, Member States began with the premise that this system should reflect the legal principles common to the said States. The principle of prescription in relation to property rights is accepted by all the Member States. It must therefore be presumed that these States did not submit themselves to a legal system which refuses to recognize the consolidation of economic situations which remain uncontested for a reasonable length of time. In this case, the silence observed by the legislature cannot be interpreted in accordance with the maxim ‘ubi voluit dixit, ubi tacuit noluit’; on the contrary, it is reasonable to admit that the legislature simply failed to take account of the problem at issue. The sole question to be resolved is therefore that of the period of limitation. To determine this, there are no other means than to have recourse to analogy. In this connexion, the applicant insists that the equalization levy shows features sufficiently similar to the general levy for the period of limitation of three years prescribed for the latter also to apply in the present case. In fact, in both cases the obligation to contribute derives from an economic fact relating to production; the provisions in force prescribe that declarations shall be made by undertakings and provide for corrections made by the institution on its own authority; the contributions are calculated and levied by reference to periods; it is necessary to avoid subjecting undertakings to the serious inconvenience of demands dating back a long way and consequently unrelated to the present state of production and sales. If this parallel is not accepted, at least the limitation period of five years provided in Article 40 of the Protocol on the Statute of the Court of Justice of the ECSC should be applied by analogy. For if this limitation period applies to the claims of undertakings against the administration it is only fair to accept the same limitation period for claims of the latter against the former. Moreover, Article 2 of General Decision No 14/64 can also be interpreted to this effect. This provision recognizes by implication that the Community cannot rely, as against undertakings, on rights which are based on documents dating back more than five years from the current year. In fact, although the Community has authorized undertakings to destroy their documents after a certain time has passed, this is because it does not consider that it is entitled to claim debts dating back further. It is unjust to acknowledge that the administration has the power to assert such claims when undertakings, not through any fault on their part, no longer possess the facts which may prove that the alleged debt does not exist. When applied to this case, all these considerations lead to the following results: the defendant's claims are based on facts which occurred during the period from March to November 1957 whereas the defendant raised them for the first time in its letter of 23 December 1965, in other words eight years later. The period of limitation therefore applies in any case. The applicant moreover destroyed the documents relating to the period in issue before receipt of the aforementioned letter, and such action was in complete conformity with Decision No 14/64. The defendant is acting unjustly in raising documentary evidence against the applicant which the latter can no longer refute with the aid of its own documentation.

4. The defendant, in its rejoinder, makes the following assertions:

A — The period of limitation

With the aid of many quotations, the defendant endeavours to show that the arguments put forward by the applicant are incompatible with the case-law of the Court. In fact, the Court has constantly emphasized the provisional nature of the assessment of contributions to the equalization scheme until the closure of the final account; in addition, it has decided that the period of limitation cannot start to run before the date of that closure.

As regards equalization, the rigid application of the ordinary rules on the limitation of actions would have disagreeable consequences since it would favour certain undertakings to the detriment of their competitors; pursuing this course of reasoning, the defendant puts forward certain factors relating to the winding up of the scheme in question.

Even if, hypothetically, the period of limitation had begun to run, it was discontinued several times by acts of the High Authority revealing its intention to determine the actual date of commencement of the iron and steel production of the undertaking, more particularly by the letters of 10 July 1962 and of 10 September 1964.

Recourse to the Community provisions governing the period of limitation in respect of the general levy does not enable the applicant to succeed in its point of view. In fact, the first paragraph of Article 1 of Decision No 5/65 of the High Authority provides that: ‘in the absence of declarations of production or in the event of incomplete or inaccurate declarations being made wilfully or through negligence, the period of limitation shall be six years’. In view of the conduct of the undertaking, the application by analogy of the said provisions therefore leads one to accept the limitation period of six years. In addition, Article 3 of Decision No 5/65 provides for the dicontinuance of the period of limitation ‘by the dispatch … of a letter … notifying the undertaking of the High Authority's intention to carry out verification’; the period of limitation of six years was thus discontinued by the letters of the High Authority of 10 July 1962 and 10 September 1964.

As regards Decision No 14/64, it must be observed that:

it ‘does not authorize iron and steel undertakings to destroy their accounting documents (if its aim was such it would conflict with Italian law which provides that undertakings must keep the said documents for ten years): the only inference that can be made from Decision No 14/64 is that undertakings which no longer possess the documents in question after five years have elapsed are not liable to the penalties laid down in Article 47 of the Treaty;

it does not concern levies or equalization, but only the regulation of prices’.

B — The substance of the case

In its application, the applicant hardly ‘touched on’ this submission; the reply was ‘completely silent on the matter’. In these circumstances, the defendant merely refers to the arguments advanced in the statement of defence.

5. At the oral hearing the applicant stressed above all the submission relating to the period of limitation. It claimed that it is a fundamental legal principle which, as such, is an integral part of Community law despite its alleged incompatibility with a system such as that of the equalization of scrap. The applicant has contested, on the one hand, the case-law of the Court in that the latter has recognized the principle of prescription only in cases where the Community legislature has determined limitation periods and, on the other, the arguments advanced by the defendant relating to the concept of prescription. In particular, the dies a quo is the day when the creditor can actually exercise his right, which in the present case is 31 October 1957. Furthermore, any interruption of the period of limitation can only take place by means of a formal notice, which the two letters invoked by the defendant did not constitute.

6. The defendant has reiterated the main points of its written observations and stated in particular that the Court has not (recognized prescription as a general principle of Community law.

Grounds of judgment

1. By application dated 12 January 1970, lodged at the Registry on 14 January 1970, the undertaking Acciaierie e Ferriere Riva S.p.a. has brought before the Court an application for the annulment, under Article 33 of the Treaty establishing the European Coal and Steel Community, of Decisions Nos 1166 and 1167 of the Commission of the European Communities of 4 December 1969 implementing the provisions relating to the equalization of imported ferrous scrap and scrap treated as such and determining, in respect of the undertaking Riva & Co. S.a.s., which was taken over by the applicant, the tonnage of bought scrap assessable to equalization contributions and the sums payable.

2. Since the decisions were notified to the applicant on 13 December 1969 the application was lodged within the prescribed period.

3. The applicant: (a) invoking, first of all, the principles of res judicata and limitation of actions objects to the fact that the decisions in dispute have, in revoking decisions of the High Authority of 18 December 1963, extended the reference period 1 November 1957 to 30 November 1958 to a period from March 1957 to 30 November 1958 and thereby increased the tonnage forming the basis of its contribution from 25721 to 45740 metric tons of bought scrap and the corresponding debt from Lit. 33190021 to Lit. 275005363; (b) complains that the figures adopted in its case by the Commission do not correspond to reality and proposes to show in detail that the presumptions on which the contested decisions were based are unfounded.

The submission relating to the principle of res judicata

4. By the contested decision, No 1166, the Commission revoked the decision of the High Authority of 18 December 1963 fixing the amount of scrap serving as the basis for equalization contributions at 25271 metric tons and replaced it by a fresh assessment of 45740 metric tons.

5. It emerges from the recitals in the preamble to the contested decision that it is based essentially on two considerations; first, fresh criteria of technical evaluation enabled the quantities of scrap assessable to contributions which were adopted for the period referred to in the decision of 18 December 1963 (1 November 1957 to 30 November 1958) to be corrected to the advantage of the undertaking; secondly, it was established that, contrary to the data on which that previous decision had been based, the undertaking did not commence steel production on 1 January 1958 but as early as 10 March 1957.

6. The applicant, invoking what it calls the ‘principle of res judicata’ contests, first of all, the Commission's power to revoke its previous decisions and to modify their content. Since the applicant did not take advantage of its right of appeal against the decision of 18 December 1963, the latter became final, not only in relation to the undertaking concerned, but also in relation to the Community authorities.

7. In common financial arrangements such as those for the equalization of ferrous scrap which are based on the strict interdependence of the payments made by each of the participants, above all equality of treatment between contributions must be ensured by eliminating all possibility of discrimination between them. The Commission therefore had the right and the duty, in the very interest of the contributors to the equalization scheme, to see that the latter always operated on just principles, which were both legally and factually sound. In consequence, it was its duty to rectify all legal or factual errors and all assessments which experience showed to be inaccurate or incomplete.

8. In addition, although it is true that the applicant did not bring legal proceedings against the decision of 1963, it does however emerge from the file that it requested the competent authority to take account of supplementary information on the running-in period of the electric furnaces. The officers concerned agreed to have the facts put forward by the applicant examined by an expert and requested the undertaking to supply the documents necessary to determine its consumption of electric power and it was precisely when this expert inquiry was made that the fresh data on the commencement of the undertaking's steel production, on which the contested decision is based, emerged.

9. Having itself requested a further examination of the data on which the decision of 1963 was based, it is not for the applicant to challenge the results of the new examination by invoking the principles of legal certainty. The submission must therefore be dismissed as unfounded.

The submission relating to the limitation period

10. The applicant alleges secondly that the power to impose on it the obligation to contribute to the equalization scheme has lapsed by prescription. In this connexion, it relies on the fact that eight years passed between the end of the period in dispute, from 10 March to 31 December 1957, and the first official notice that it would have to pay contributions in respect of that period, namely the letter of 23 December 1965.

11. Whilst recognizing that the written rules which govern the relationship between the Community and undertakings as regards equalization do not contain any specific provision on the limitation of actions, it considers nevertheless that in this respect the limitation of actions derives from the general principles of law which govern all relationships under the Community legal system. In this connexion, both the national provisions on limitation of actions and those exacted by general Decision No 5/65 of the High Authority of 17 March 1965 on the barring by time of claims in respect of levies provided for in Articles 49 and 50 of the ECSC Treaty (Official Journal, English Special Edition 1965-1966, p. 38) are applicable by analogy.

12. The applicant also relies on Article 2 of the general Decision No 14/64 of the High Authority of 8 July 1964 on business books and accounting documents which undertakings must produce for inspection by officials or agents of the High Authority carrying out checks or verifications as regards prices. Since this provision requires undertakings to be able to produce their documents for the current calendar year and for the five preceding calendar years the applicant claims that it follows that the powers of checking and verification can be exercised only during this same period.

13. The absence of provisions relating to the barring by time of the powers of organizations competent to draw up estimates on their own authority of the quantities and periods for which undertakings are subject to the duty to contribute to the equalization scheme is explained by the desire of the legislature that in this respect the principle of distributive justice should prevail over that of legal certainty. In fact, the very nature of the operation of an equalization scheme such as that in question implies that the verification of costs, on the one hand, and of the basis of contributions, on the other, can only be carried out a posteriori and must be capable of amendment until the closure of the accounts of the scheme.

14. It is only by general Decision No 19/65 of the High Authority relating to the drawing up of final statements for price equalization in regard to imported scrap and scrap treated as such (Official Journal 1965, p. 3290) that a final closure of the accounts was envisaged, with the result that those contributing could consider that the verification and accounting operations were coming to an end. However, the applicant itself admits that it was informed of the attitude adopted with regard to it by the officers concerned before the publication of this decision. Consequently, the submission must be dismissed.

The substance of the case

15. In the originating application the applicant has alleged that the figures adopted by the contested decisions do not correspond to reality. It proposed to show that there was no basis for the presumption adopted in the decisions at issue whereby the period from 10 March to 31 December 1957 was considered as a period of full production.

16. It alleges that this was a period of testing of the plant and experimentation, for which a heavy consumption of electric power, the basis factor in the determination by the institution on its own authority of the basis of contribution, yielded almost no production. In its statement of defence, the defendant has explained the calculations on which the contested decision is based and has declared that it adopted in respect of the first three months at issue criteria suited to the special characteristics of a running-in period.

17. Neither in its reply nor during the oral procedure did the applicant contest the explanation put forward by the defendant. It also failed to develop its complaints as it had proposed to do in its originating application. In these circumstances, since the applicant has failed to establish that its application is well-founded, it must accordingly be dismissed.

Costs

18. Under Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs. The applicant has failed in its submissions.

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Coal and Steel Community, especially Articles 33 and 53; Having regard to the Protocol on the Statute of the Court of Justice of the European Coal and Steel Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities; THE COURT hereby:

1 Dismisses the application;

2 Orders the applicant to pay the costs.