JUDGMENT OF 18. 1. 1979 — JOINED CASES 103 TO 109/78 SOCIÉTÉ DES USINES DE BEAUPORT v COUNCIL
In Joined Cases 103 to 109/78
THE COURT composed of: H. Kutscher, President, J. Mertens de Wilmars and Lord Mackenzie Stuart (Presidents of Chambers), A. M. Donner, P. Pescatore, M. Sørensen, A. O'Keeffe, G. Bosco and A. Touffait, Judges, Advocate General: J.-P. Warner Registrar: A. Van Houtte
gives the following
JUDGMENT
Facts and Issues
The facts of the case, procedure, conclusions and submissions and arguments of the parties may be summarized as follows:
I — Facts and procedure
The basic regulation on the common organization of the market in sugar, Regulation No 3330/74, establishes (see Article 23 et seq. thereof) a division into three categories of the quantities of sugar produced by producers. Each Member State fixes for each of its sugar refineries within the basic quantity allotted to it by the regulation and on the basis of the output of those sugar refineries during the 1968/69 to 1972/73 marketing years the basic annual quota called ‘Quota A’ and allots it that quota. In the same way, it establishes a Quota B the amount of which is fixed annually by the Council at a certain percentage of the basic quotas. Quota A sugar and Quota B sugar may be bought by the intervention machinery at the intervention price, subject in the case of Quota B sugar to the payment of a levy 25 % of that price which must be paid to the intervention agency and is designed to contribute to the reabsorption (and exportation) of surpluses. On the other hand the sugar over and above Quotas A and B, known as C Sugar, cannot be sold on the Community market but must be exported out of the Common Market. These quota rules are valid from 1 August 1975 to 31 July 1980.
In addition to those provisions the Council adopted Regulation No 3331/74 on the basis of Article 24 (3), Article 2 of which permits the Member States to reduce, under certain circumstances enumerated exhaustively, the basic quotas of their producer undertakings; that increase may not exceed, for the whole period from 1 August 1976 to 31 July 1980, 5 % of the ‘original’ basic quota.
Council Regulation No 298/78 completed the contents of the latter provision by adding to Article 2 of Regulation No 3331/74 a paragraph 3 providing as follows:
‘By way of derogation from the first, second and third subparagraphs of Article 24 (2) of Regulation (EEC) No 3330/74 and paragraph 1 of this article, the French Republic may, under the plans for restructuring the sugar-cane and sugar sectors in its overseas departments, reduce the basic quota for each undertaking established in these departments by a quantity not exceeding, for the entire period 1 July 1977 to 30 June 1980, 10 % of the basic quota applicable to each undertaking during the 1976/1977 sugar marketing year. Further, for the 1977/78 marketing year, the reduction in the basic quota may not exceed the difference between the basic quota originally applicable for this marketing year and the production achieved within this basic quota. The French Republic shall allocate the amended quotas before the end of the marketing year preceding that of their application. However, for the 1977/78 sugar marketing year, the amended quotas shall be allocated before the end of the said marketing year. The restructuring plans and the resultant measures affecting the basic quotas shall be communicated forthwith to the Commission.’
The fourth recital of the preamble to Regulation No 298/78 states that the reason for this increase in what is known as the ‘operating volume’ is the desire to permit quotas which have not been used up to be transferred by the undertakings in Guadeloupe and Martinique to the quota allocated to the undertakings in Reunion.
On 28 April 1978 the applicants lodged the present applications for the annulment of Regulation No 298/78.
On 3 July 1978 the defendant lodged a document under Article 91 of the Rules of Procedure requesting the Court for a decision on a preliminary objection of inadmissibility without going into the substance of the case.
After hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure on the admissibility of the applications without any preparatory inquiry.
By order of 11 October 1978 the Court allowed the intervention of the Syndicat Général des Producteurs de Sucre et de Rhum des Antilles Françaises. Under Article 93 (5) of the Rules of Procedure the intervention was only allowed as from the oral procedure on the admissibility of the applications.
By order of 6 November 1978 the Court decided to join Cases 103/78, 104/78, 105/78, 106/78, 107/78, 108/78 and 109/78 for the purposes of the written and oral procedure.
II — Conclusions of the parties
The defendant claims that the Court should :
Declare that the application for annulment lodged by the seven applicants is inadmissible because it does not comply with the conditions laid down in the second paragraph of Article 173;
Order the applicants to pay the costs.
The applicants contend that the Court should:
Dismiss the Council's objection of inadmissibility since, on the on hand, that objection has not been formulated in accordance with the requirements laid down by Article 91 of the Rules of Procedure of the Court and since, on the other, it is clear that the regulation complained of is of direct and individual concern to the applicants and that in any case in the present instance the examination as to admissibility cannot be dissociated from the examination of the substance of the case.
III — Submissions and arguments of the parties
In its document raising a preliminary objection the Council claims that the application is inadmissible because it is lodged against a regulation of general effect which is not of direct and individual concern to the applicants.
It refers to the judgment of 16 March 1978 in Case 123/77, Unione Nazionale Importatori e Commercianti Motoveicoli Esteri (UNICME) and Others v Council of the European Communities [1978] ECR 845, in which the Court held that ‘the regulation will not produce effects in individual cases until it is implemented by the …authorities’ (paragraph 18 of the decision). In the present case it is clear, by reference to Article 1 of Regulation No 298/78, that the new paragraph 3 requires for ‘each undertaking’ a decision of reduction.
Even though the seven applicants produce all the sugar in Guadeloupe and Martinique Regulation No 298/78 cannot be considered to be of individual concern to them. Nor can Regulation No 298/78 be considered to be of direct concern to them. This regulation merely contains a provision authorizing a Member State within the context of its own powers to reduce the quotas of the sugar undertakings of those departments. On the contrary, the Council's measure is not of direct concern to the applicants. The applicants claim that the Council has begun to discuss the substance of the case before even raising in limine litis the objection of inadmissibility. This is contrary to Article 91 of the Rules of Procedure which provides that an application on a preliminary objection must be made by a separate document.
They observe that the facts in Case 123/77 are different from those in the present case in which the number and the individual nature of the sugar producers is determined completely before any other decision has been adopted.
The situation in the case in question is similar to that in Cases 62/70, Wemher A. Bock v Commission of the European Communities [1971] ECR 897, and Joined Cases 106 and 107/63, Alfred Toepfer and Getreide-Import Gesellschaft v Commission of the EEC [1965] ECR 405. The applicants are incontestably individually concerned since Regulation No 298/78 aims only to reduce the quotas which have been allocated to them in order to transfer them to other undertakings on the ground that they have not completely used up those quotas. This follows clearly from the fourth recital of the preamble to the regulation.
The applicants allege that Regulation No 298/78 affects their interests adversely per se before any implementation by the French national authorities.
The first direct effect of that regulation is to abolish henceforth the right of those sugar-producing undertakings in Martinique and Guadeloupe to nave the alteration of their quota limited to 5 % for the period from 1 July 1978 to 30 June 1980. The system laid down in Regulation No 3330/74 and Regulation No 3331/74 did not authorize the Council to adopt during the period in question further regulations empowering the Member States to alter the percentage of the ‘operating volume’. In fact the infringement by the Council of Regulation No 3330/74 and Regulation No 3331/74 is of immediate and direct concern to the applicants. For this reason the problem of admissibility is closely linked to the problem of the substance of the case.
Moreover, the right given by Regulation No 3330/74 and Regulation No 3331/74 to the sugar producers in the Community to retain their basic quotas unchanged within an ‘operating volume’ clearly defined for a specific period constitutes for those producers an important factor in their industrial assets. Any possible downward alteration of those quotas has a direct and immediate adverse effect on that asset value.
Regulation No 298/78 is therefore of direct concern to the applicants even before any decision has been adopted by the French Government.
IV — Oral procedure
The parties presented oral argument at the hearing on 30 November 1978. The Advocate General delivered his opinion at the hearing on 13 December 1978.
Decision
1. The applications, which were entered on the Court Register on 28 April 1978, are for the annulment of Council Regulation (EEC) No 298/78 of 13 February 1978 amending Regulation (EEC) No 3331/74 on the allocation and alteration of the basic quotas for sugar (Official Journal 1978, No L 45, p. 1).
2. The Syndicat Général des Producteurs de Sucre et de Rhum des Antilles Françaises is intervening in support of the applicants' submissions.
3. Article 24 of Regulation (EEC) No 3330/74 of the Council of 19 December 1974 on the common organization of the market in sugar (Official Journal 1974, No L 359, p. 1) provides for the allocation by Member States of basic quotas to undertakings; Article 24 (3) stipulates that ‘the Council … shall adopt the general rules for the application of this article and any derogations therefrom’.
4. The Council adopted on the same date and pursuant to that provision Regulation (EEC) No 3331/74 on the allocation and alteration of the basic quotas for sugar.
5. Article 2 of the latter regulation provides for derogations from Article 24 of Regulation (EEC) No 3330/74.
6. In its original version that article provided for two derogations, one of a general nature in Article 2 (1) and the other of a special nature in Article 2 (2) in respect of the Republic of Italy.
7. The contested regulation amended Article 2 of Regulation No 3331/74 by adding to the two existing paragraphs a paragraph 3 which provides as follows :
‘3. By way of derogation from the first, second and third subparagraphs of Article 24 (2) of Regulation (EEC) No 3330/74 and paragraph 1 of this article, the French Republic may, under the plans for restructuring the sugarcane and sugar sectors in its overseas departments, reduce the basic quota for each undertaking established in these departments by a quantity not exceeding, for the entire period 1 July 1977 to 30 June 1980, 10 % of the basic quota applicable to each undertaking during the 1976/77 sugar marketing year.
Further, for the 1977/78 marketing year, the reduction in the basic quota may not exceed the difference between the basic quota originally applicable for this marketing year and the production achieved within this basic quota.
The French Republic shall allocate the amended quotas before the end of the marketing year preceding that of their application. However, for the 1977/78 sugar marketing year, the amended quotas shall be allocated before the end of the said marketing year.
The restructuring plans and the resultant measures affecting the basic quotas shall be communicated forthwith to the Commission.’
8. The recitals of the preamble to the contested regulation justify this addition on the ground that it is desirable to make it possible for a part of the French Republic's basic quantity assigned by Regulation (EEC) No 3330/74 to its overseas departments which is not used up in other overseas departments, in other words Guadeloupe and Martinique, to be allocated to an overseas department, in other words Reunion.
9. The applicants consider that their ‘established rights’ have been adversely affected by Regulation (EEC) No 298/78 and request its annulment under Article 173 of the Treaty.
Admissibility
10. The Council, the defendant, raised an objection of inadmissibility against the applications under Article 91 of the Rules of Procedure by document of 3 July 1978 and requested the Court to decide on that preliminary objection without examining the substance of the case.
11. It maintains that the applications for annulment do not comply with the conditions laid down in the second paragraph of Article 173 of the Treaty in that the contested measure does not constitute a decision adopted in the form of a regulation and is not of either direct or individual concern to the applicants.
12. The applicants allege that the contested measure constitutes a decision adopted with regard to clearly defined undertakings and is of direct and individual concern to them.
13. As regards the nature of the contested measure, the fourth subparagraph of Article 24 (2) of Regulation No 3330/74 fixes the basic quantities for each Member State, making a distinction in the case of France between Metropolitan France, for which the basic quantity is fixed at 2530000 tonnes of white sugar, and the French overseas departments, for which that quantity is fixed at 466000 tonnes of white sugar.
14. Thus the territory of the Community is divided for the purposes of the allocation of the basic quotas into as many parts as there are Member States, France being divided into two different zones.
15. Article 2 of Regulation No 3331/74, by providing for derogations from the rules as to the distribution of the basic quotas, which are necessary so as to take into account any changes in the structure of the sugar industry, introduced from its origin both a general derogation applicable to all Member States, in other words to all parts of the Common Market listed in Article 24 of Regulation No 3330/74, and a special derogation in respect of a single part of the Common Market, in other words the Republic of Italy, having regard to the special situation in the sugar sector in that country.
16. These derogations do not constitute general or special exceptions to the rules governing the distribution of the basic quotas but are an integral part of those very rules so as to form a legislative whole aiming on the one hand to provide legal certainty for the undertakings concerned and, on the other, effective administration capable of adapting itself, within certain limits, to changes in the structure of the sugar sector.
17. It is necessary to conclude from this that the nature of the original text of Article 2 of Regulation No 3331/74 is purely that of a regulation and that it cannot therefore be considered to constitute in certain respects a decision.
18. The amendment made by the contested regulation has not changed the nature of the provision, since paragraph 3 which has been added thereto contains merely an additional derogation which does not concern certain individual undertakings but a part of the territory which is expressly referred to in Article 24 of Regulation No 3330/74 and in respect of which a separate basic quantity has been fixed.
19. It is necessary therefore to conclude from this that the amendment made by the contested regulation shares is, in the same way as Article 2 of Regulation No 3331/74, in the nature of a regulation.
20. Moreover, the contested regulation is not of direct or individual concern to the applicants.
21. Although it is true that they could have been concerned by the use which the Member State might make of the derogating rule adopted, paragraph 3 added to that article nevertheless provides expressly that ‘the French Republic may…’ reduce the basic quota for each undertaking", thus leaving to that Member State the decision whether or not to reduce the basic quotas and, if the answer is in the affirmative, to decide whether the basic quotas of all or of certain undertakings are to be reduced.
22. It is therefore clear that only the measures adopted by the French Republic under the derogating rule laid down by Regulation No 298/78 could be of direct and individual concern to the applicants.
23. It is necessary to conclude from this that the conditions laid down in the second paragraph of Article 173 of the Treaty are not fulfilled in the present case so that the applications must be dismissed as inadmissible.
Costs
24. Under Article 69 (2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs if they have been asked for.
25. In the present case the applicants and the intervener have failed in their submissions.
26. It is therefore necessary to order them to pay the costs.
On those grounds, THE COURT, hereby:
1 Dismisses the applications as inadmissible;
2 Orders the applicants to pay the costs of the applications;
3 Orders the intervener to pay the costs of the intervention.