Report for the Hearing in Joined Cases C-13/92, C-14/92, C-15/92 and C-16/92

I — Facts and procedure

1. Council Regulation (EEC) No 1101/89 of 27 April 1989 on structural improvements in inland waterway transport (OJ 1989 L 116, p. 25) seeks to eliminate structural overcapacity in inland waterway transport. For that purpose, it introduces a scrapping premium, which is paid to owners for any vessel which they scrap. In order to ensure that the effects of scrapping are not negated by additional capacity being brought into service at the same time, Article 8(1 )(a) of the regulation provides that, for a period of five years from its entry into force, newly constructed vessels may be brought into service only where: That scheme is known as the ‘old for new’ scheme. Article 8(3)(a) lays down transitional provisions under which the owner of a newly constructed vessel is not required to scrap an equivalent tonnage or pay a special contribution where the following three conditions are fulfilled: The first proposal for a regulation on structural improvements in inland waterway transport submitted by the Commission to the Council (proposal of 19 May 1988, OJ 1988 C 297, p. 13) merely indicated that the scrapping of an equivalent tonnage or the payment of a special contribution would not be required in respect of ‘vessels which the owner proves were under construction on the date on which the scrapping scheme was instituted’. By letter of 6 September 1988, the International Union for Inland Navigation stated that in its opinion that wording was not sufficiently strict and proposed wording identical to that ultimately adopted by the Council. The Parliament gave its opinion on the Commission proposal on 16 December 1988 (OJ 1988 C 326, p. 50). In that opinion, the Parliament incorporated the three conditions proposed by the International Union for Inland Navigation. The Commission amended its proposal on 23 December 1988 (OJ 1988 C 31, p. 15) by including the three cumulative conditions set out above, which were ultimately incorporated in the regulation. Regulation No 1101/89, pursuant to Article 11 thereof, entered into force on the date of its publication (28 April 1989). That article provides that the regulation ‘shall apply with effect from 1 May 1989’.

‘— the owner of the vessel to be brought into service scraps a tonnage of carrying capacity equivalent to the new vessel without receiving a scrapping premium; or

— where the owner scraps no vessel, he pays into the fund covering his new vessel or into the fund chosen by him in accordance with Article 4 a special contribution equal to the scrapping premium fixed for a tonnage equal to that of the new vessel;

— where the owner scraps a tonnage smaller than that of the new vessel to be brought into service, he pays into the fund in question a special contribution equivalent to the scrapping premium corresponding at the time to the difference between the tonnage of the new vessel and the tonnage scrapped.’

‘— construction was under way on the date of entry into force of this regulation,

— work already carried out represents at least 20% of the steel weight or 50 tonnes, and that

— delivery and commissioning is to take place within the six months following entry into force of this regulation.’

2. The company Driessen en Zonen v o f (in Case C-13/92) placed an order on 14 December 1988 with the Van Eijk Scheepsbouw shipyard for the construction and delivery of a steel hull for a vessel for inland navigation, which was to be delivered, subject to force majeure, no later than during the fourth week of 1990. The vessel was registered on 27 January 1990. By letter of 14 March 1989, the shipyard, in response to a question concerning the ‘old for new’ rule, stated that if the order were cancelled a payment of HFL 550000 would be due. By letter of 23 June 1989, the Deputy Inspector General of Transport informed Driessen that it had not met the first and second conditions laid down in Article 8(3)(a) of Regulation No 1101/89 and requested proof that the vessel had been put into service before 1 November 1989. That letter was amended by a letter of 30 October 1989 stating that the conditions for the application of Article 8(3)(a) were met. By letter of 5 January 1990, the Minister van Verkeer en Waterstaat (Minister of Transport and Water Resources) stated that the letter of 30 October 1989 was incorrect and that the vessel did not satisfy the condition of having been brought into service within the six months following the entry into force of the regulation and that, consequently, Driessen would have to meet one of the obligations laid down in Article 8(1 )(a) of the regulation. The hull was delivered by the shipyard in the second week of 1990 and was put into service on 17 February 1990. By letter of 1 February 1990, Driessen requested that it be released, by reason of force majeure, from compliance with the condition laid down in Article 8(3)(a) regarding commissioning within six months. By letter of 10 July 1990, that request was rejected. Mr A. Molewijk (in Case C-14/92) placed an order on 25 November 1988 with the Grave BV shipyard for the construction of a vessel for inland navigation, to be delivered no later than 31 March 1990. That vessel was registered on 22 December 1988. By letter of 18 March 1989, Molewijk informed the shipyard of its intention to discuss possible cancellation of the order but on being informed, by letter of 21 March, that the penalty payable on cancellation would be HFL 1120000, it decided not to cancel the order and asked the shipyard to ensure that the vessel was launched before 1 November 1989. The shipyard responded that it could not do so. The vessel was delivered on 7 April 1990 and put into service on 21 April 1990. By decision of 27 March 1990, the defendant in the main proceedings required Mr Molewijk to pay HFL 873933 by way of special contribution provided for in the second indent of Article 8(l)(a) of Regulation No 1101/89. Following negotiations commenced in November 1988, Motorschiff Sayonara Basel AG (in Case C-15/92) concluded a verbal agreement in February 1989 with the Scheepswerf Slob BV shipyard for the construction of a hull for a self-propelled vessel. That agreement was recorded in a document prepared and signed on 1 March 1989, in which it was agreed that, subject to force majeure, delivery would be on 31 January 1990. By letter of 28 May 1990, the defendant in the main proceedings required the company to pay the special contribution referred to in the second indent of Article 8(1 )(a) of Regulation No 1101/89. The vessel concerned was first used for carriage of goods on 22 June 1990. Following negotiations commenced in 1988, C. Mourik en Zoon v o f (in Case C-16/92) placed an order with Gebr. Buys Scheepsbouw BV on 18 February 1989 for the construction of a steel vessel for inland navigation. The contract was signed on 25 February 1989. On 12 July 1989, Mourik provided the defendant minister with information supporting an application under the ‘old for new’ scheme. By letter of 13 October 1989, the minister informed Mourik that the vessel under construction did not meet the condition laid down in Article 8(3)(a) of the regulation, according to which work already carried out had to represent at least 20% of the steel weight or 50 tonnes. The vessel was delivered and put into service in April 1990. By decision of 9 April 1990, the defendant required Mourik to pay immediately a special contribution under the second indent of Article 8(1 )(a) of Regulation No 1101/89 because the work carried out had not accounted for 20% of the steel weight or 50 tonnes and because the vessel had been put into service in mid-1990.

3. The four plaintiffs in the main proceedings before the College van Beroep voor het Bcdrijsleven seek annulment of the decisions requiring them to pay the special contribution. That court considered that by not taking account of circumstances of the kind in which the plaintiffs in the main proceedings found themselves, the transitional provisions of Regulation No 1101/89 affected them seriously in that their investment commitments for construction of the vessels in question could not be unilaterally cancelled. According to the national court, the public interest does not require the transitional provisions to be applied according to the practice actually followed, that is to say without a distinction being drawn between orders placed with large shipyards, which were in a position to meet the requirements of the transitional conditions, and those placed with small shipyards, which were not able to do so. The national court also considers that the parties to the main proceedings were not able to anticipate, and could not have anticipated, the entry into force of the transitional rules finally adopted.

4. Considering, therefore, that an assessment of the validity of certain provisions of the relevant Community regulation was called for, the College van Beroep voor het Bedrijsleven, by orders of 8 November 1991, decided to stay the proceedings pending a ruling from the Court of Justice under Article 177 of the EEC Treaty on the following question:

‘Are the special contribution rules provided for in the second indent of Article 8(l)(a) of Council Regulation (EEC) No 1101/89 and the transitional rules provided for in Article 8(3)(a), taken in conjunction with each other, invalid in so far as they take no, or at least insufficient, account of a situation such as that at issue in the present proceedings?’

5. The orders for reference were received at the Court Registry on 22 January 1992. Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice (EEC), written observations were submitted: on 14 May 1992 by Driessen en Zonen v o f, represented by A. M. Bleeker-Van Velzen, of the Rotterdam Bar, on 22 May 1992 by A. Molewijk, Motorschiff Sayonara Basel AG and Mourik en Zoon v o f, represented by J. J. Feenstra, of the Rotterdam Bar, on 20 May 1992 by the Netherlands Government, represented by B. R. Bot, Secretary General in the Ministry of Foreign Affairs, acting as Agent, on 14 May 1992 by the Council, represented by P. Woodland and G. Houttuin, of its Legal Service, acting as Agents, on 18 May 1992 by the Commission, represented by T. Van Rijn and X. Lewis, of its Legal Service, acting as Agents. By order of 28 February 1992, the President joined the four cases for the purposes of the procedure and judgment. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory enquiry and to assign the case to the Fifth Chamber.

II — Summary of the written observations submitted to the Court

6. Driessen en Zonen v o f, the plaintiff in the main proceedings in Case C-13/92 (hereinafter ‘Driessen’), claims that the ‘old for new’ scheme is contrary to the principles of legal certainty and equality before the law. It relies first on the judgment of the Court of Justice in Case C-189/89 Stagi [1990] ECR I-4539. In that case, which concerned the validity of a time-limit laid down by a regulation, the Court held that by virtue of the principle of the protection of legitimate expectations a time-limit for obtaining benefits under a regulation should not be set in such a manner as to deny that benefit to certain Community producers on the ground that they were fulfilling a commitment made under another Community regulation. The plaintiff considers that its situation also involves a time-limit, namely delivery of the vessel within a period of six months after entry into force of the regulation. Thus, boatowncrs who, on the basis of the Commission's first proposals, considered that they were covered by the transitional rules and therefore chose a relatively small shipyard with extended delivery periods suffer specific damage. The regulation should therefore be declared invalid for breach of the principle of the protection of legitimate expectations. Driessen also denies that the rules, in their present form, are necessary since there is no overcapacity in the containership sector. It states that its two vessels were used to 100% capacity in 1990 and 1991. Even if those rules were necessary to uphold an important public interest, that interest should not arbitrarily place at a disadvantage a specific category of boatowners, namely those who ordered their vessels from small shipyards. The six-month period may be appropriate for preventing fraud, but that does not offset the disadvantage suffered by boatowners such as the applicant as a result of those rules. Driessen also claims that the ‘old for new’ scheme has ‘indirect’ or ‘material’ retroactive effect. Thus, the situation in which it finds itself did not arise under the old rules but had not yet crystallized when the new rules entered into force. On the contrary, the event which gave rise to the legal situation, namely the placing of the order for construction of a vessel, occurred and was completed before the date of entry into force of the new rules. In the alternative, Driessen claims that if the Court considers that there is no retroactive effect, there is at least ‘immediate effect’. ‘Immediate effect’ means that new rules, although unfavourable to the persons concerned, arc applicable as regards the future effects of situations arising in the past which had not been finalized when the new rules entered into force. The Community legislature does not enjoy unfettered powers for the outright application of new rules to existing contracts. It must take account of the principles of the protection of legitimate expectations and proportionality. The rules for applying the principle of the protection of legitimate expectations, laid down by the Court in Case 74/74 CNTA v Commission [1975] ECR 533 and Case 84/78 Tomadini [1979] ECR 1801 are: there must be a sufficiently substantial legitimate expectation based on the conduct of the institutions and confirmed by the person concerned; that legitimate expectation must deserve protection; and it must be respected when transitional measures are adopted, subject to any conflicting Community interest of superior rank. Those three requirements are, in the applicant's view, met in the present case. In its view, the Commission's proposal gave the impression that circumstances such as those of the plaintiff would be covered by the transitional rules and, therefore, the plaintiff considered that it was not running any risk by having its vessel built. Even though the plaintiff would have had to take account sooner or later of rules concerning scrapping, there was no reason for it to expect such strict transitional rules, which were introduced so belatedly that even the specialized press made no mention of imminent amendments which might be made before publication in the Official Journal. Finally, it is not apparent how the public interest militates against the adoption of transitional rules taking account of Driessen's situation. As regards proportionality, Driessen considers that even if the Community legislature reached the conclusion that transitional rules were necessary, no argument can possibly justify the arbitrary distinction subsequently made by those rules. That consideration is based on the plaintiff's view that the transitional rules are contrary to the principle of equal treatment, since they are in breach of the principle of nondiscrimination: the plaintiff has suffered loss by being treated differently from others who are in similar situations, without there being any possible justification for that difference of treatment.

7. A. Molewijk, Motorschiff Sayonara Basel AG and C. Mourik en Zoon v o f, the plaintiffs in the main proceedings in Cases C-14/92, 15/92 and 16/92 respectively (hereinafter ‘the plaintiffs’), allege invalidity on five grounds. First, they consider that when the regulation was drawn up, the Parliament's right of consultation was infringed since, pursuant to Article 75 of the EEC Treaty, the Parliament should have been consulted when substantial amendments were made to the Commission's proposal after its approval by the Parliament (Case 138/79 Roquette v Council [1980] ECR 3333 and Case 20/85 Roviello [1988] ECR 2805). Secondly, they allege infringement of the principle of legal certainty. They maintain that when they concluded contracts for the construction of new vessels, the regulation at issue was not in force and its content had not been published and that, after the regulationentered into force, the contracts could not be cancelled without payment of substantial compensation to the shipyards. The construction of a vessel cannot be compared to other commercial transactions and cannot be dissociated from its commissioning. The contract cannot be divided into two parts, one covered by the old rules and the other by the new. Delivery and commissioning must be seen as the culmination of a long series of previous events. The applicability of the regulation should therefore be linked with events occurring before its entry into force. Under the transitional rules at issue, the scrapping conditions apply to factual situations originating at a time when the regulation had not yet been adopted. The regulation in question thus has retroactive effect, which is prohibited in all but exceptional cases where the aim pursued requires it and the legitimate expectations of the persons concerned are duly observed (Case 98/78 Racke [1979] ECR 69). In the present case, neither of those conditions is satisfied. Thus, the transitional rules arc not needed for attainment of the aim pursued by the regulation. The existence of overcapacity may be regarded as having been an important feature of the inland navigation market since the mid-1970s and for a very long time the Community legislature saw no need to undertake structural improvements. The plaintiffs consider that the sudden and draconian restructuring introduced by the regulation was not so urgent as to justify its being made retroactive. Furthermore, the plaintiffs were entitled to expect, until the end of March 1989, that the contracts which they had concluded could be implemented without problems and that the commissioning of the vessels would not be conditional upon payment of a special contribution. The transitional rules thus do not take account of the legitimate expectations of the plaintiffs, who placed their orders with small shipyards. Thirdly, the plaintiffs maintain that the transitional rules frustrate their legitimate expectations because they could not have foreseen that the Council would suddenly adopt a decision on structural improvements of inland waterway transport or that the regime adopted would have implications for vessels whose construction had been decided upon at an earlier stage, since the first indication of the implementation of that scheme was the amended Commission proposal published on 7 February 1989, after the orders for the vessels had been placed or when negotiations preceding the orders were already at a very advanced stage, with small shipyards which take more than a year to build a vessel. Fourthly, the plaintiffs allege that the Council infringed the principle of proportionality by going further than was necessary for the scrapping regime to operate effectively. In their view, the principle of proportionality requires the legislature to do no more than is strictly necessary to ensure that a measure is effective and to take account of any individual interests which might be affected by the planned measure (Case 11/82 Piraiki-Patraiki [1985] ECR 207). Thus, the wish to avoid a large volume of orders placed to evade the ‘old for new’ rules could easily have been satisfied by requiring the persons concerned to prove by means of notarially attested documents that the orders had been placed before 28 April 1989, the dale of entry into force of the regulation. As regards the two additional conditions, their sole effect is to undermine significantly the interests of those undertakings which placed their orders with small shipyards. Finally, the plaintiffs consider that the principle of equal treatment has also been infringed, since the provision at issue, in particular the second and third conditions, is more detrimental to undertakings which placed their orders with small shipyards than to operators whose vessels were under construction in larger yards, which were capable of completing construction within the six months following entry into force of the regulation.

8. The Netherlands Government refers to the background to the adoption of Regulation No 1101/89 and states that the cumulative conditions imposed by the transitional rules originate from proposals submitted by trade organizations representing the inland waterway transport sector, such as the International Union for Inland Navigation (hereinafter ‘the UINF’) and the European Boatowners' Organization (hereinafter ‘the OEB’), at the beginning of September 1988. Trade circles in the Netherlands could not have been unaware of the tightening up of the transitional rules as compared with the Commission's initial proposal since, between May 1988 and February 1989, several trade journals devoted articles to the problems of structural improvement and the conditions which the transitional rules should apply for the benefit of vessels being built when the regulation was adopted. The conditions reported in the press are those which were finally adopted in the regulation. In an opinion sent on 14 October 1988 to the defendant minister, the Nederlandse Sociaal Economische Raad indicated that it would prefer the ‘old for new’ regime to contain stricter rules and reiterated the proposals of the UINF and the OEB. The Netherlands Government states that all the orders at issue in the main proceedings were placed after the time at which, to the certain or at least possible knowledge of the plaintiffs, the trade organizations concerned had adopted a coordinated view regarding a set of rules for structural improvements to inland waterway transport in Western Europe. That shared view recognized the need for strict transitional rules imposing the conditions which were subsequently incorporated in the regulation at issue. In Cases C-15/92 and C-16/92 the order was placed after publication of the amendment made to the Commission's proposal. In the light of those facts, the Netherlands Government doubts that the boatowners concerned, in making their investment decisions, were unable to take account of the consequences of choosing a particular shipyard or the duration of the construction work in relation to the applicability of the Community measures for structural improvements. They could, or at least should, have taken account of the fact that the Commission's proposal had been made more severe. The Netherlands Government also considers that, by virtue of settled case-law, the Community institutions enjoy a considerable degree of latitude in their pursuit of the aims of the Treaty (Case C-350/88 Delaere v Commission [1990] ECR 426), that view having been expressly confirmed with respect to implementation of the common transport policy (Case 97/78 Schumalla [1978] ECR 2311 and Case 13/83 Parliament v Coimai [1985] ECR 1513). The Court merely verifies whether the measure at issue is vitiated by a manifest error or misuse of powers or whether the institutions manifestly exceeded the limits of the discretion available to them (Case 55/75 Balkan Import-Export [1976] ECR 19 and Case 331/88 The Queen v FEDESA [1990] ECR I-4023). The Netherlands Government also considers that there has been no breach of the principle of the protection of legitimate expectations or of any other general legal principle. The institutions allowed themselves largely to be guided by the wishes of the industry itself. The parties should have taken account of the fact that the transitional rules, as laid down in the Commission's initial proposal, would be reformulated. Furthermore, the plaintiffs were not entitled to assume that the proposal would remain entirely unchanged, since a Commission proposal may be amended by the Council. As regards the significance of the reports of the transitional rules appearing in the press, the Netherlands Government refers to the judgment in Case 97/76 Merkur [1977] ECR 1063. In view of the position adopted by the trade organizations, the reports in the Dutch press, the course of the Community legislative procedure and the position taken in the Netherlands by the Social Economische Raad, it cannot be contended that the plaintiffs could not have anticipated the introduction of the transitional rules when they took their decision to invest. They could at least have included appropriate clauses in their construction contracts to protect themselves against unforeseeable supervening circumstances. Furthermore, the conditions for application of the transitional rules are reasonable and justified, whether viewed separately or together, since the protection which those rules seek to ensure can only reasonably be provided for projects which are at an advanced stage and of which completion may be expected within a short period. The Netherlands Government therefore considers that the Community legislature could not have been required to take account of the specific circumstances of the plaintiffs and of the fact that they had chosen small shipyards. It states that the plaintiffs are the only undertakings in the entire sector of inland navigation concerned which exceeded — to a considerable extent — the period of six months. Finally, as regards breach of the principle of equal treatment, the Netherlands Government considers that the placing of an order with a small shipyard represents a choice freely made by the persons concerned, and they arc responsible for its consequences. The fact that the application of a condition did not have the same effect on the plaintiffs as on other persons is a consequence of the choice made and cannot be regarded as involving any breach of the principle of equal treatment. The fact that the problem of nonobservance of the six month time-limit was not raised elsewhere in the Community is also evidence of the nondiscriminatory nature of that requirement. Consequently, the Netherlands Government suggests that the answer to be given to the national court should be that consideration of the question submitted has not disclosed any fact or circumstance such as to affect the validity of the provisions concerning the special contribution in the second indent of Article 8(l)(a) of Regulation No 1101/89 in conjunction with the transitional rules in Article 8(3)(a).

9. Before examining the legal arguments, the Council observes that a comparison of the stages of the legislative process with the chronology of events indicates that the plaintiffs took action to anticipate the possible consequences of the regulation. The Council considers that, in adopting the regulation at issue, it merely exercised its legislative prerogatives in the normal way. In its view, it is not incumbent on the legislature to foresee every detrimental consequence for individuals of the measures which it adopts but rather to act in accordance with objective criteria conforming with the aims pursued. The aim of the regulation in question is to reduce overcapacity in inland waterway transport: one way of achieving that aim is by the scrapping of vessels under the ‘old for new’ scheme and the payment of a special contribution where appropriate. The choice of means is a matter for the Council which, according to settled case-law, enjoys a degree of latitude in evaluating complex economic situations, subject to compliance with the Treaty and observance of the general principles of Community law. That applies particularly where, as in this case, the common transport policy is involved (Schumalla, cited above). In this case, the decisive factor is the time-limit of six months beyond which vessels brought into service ceased to qualify for exemption from the special contribution. The reason for that time-limit was the need to ensure that the system operated effectively, making certain that boatowners did not forestall the measures intended to restrict the number of vessels on the inland waterway network by placing orders for new vessels before the entry into force of the regulation. The Council insists that it did not lay down those conditions arbitrarily but, like the Parliament before it when making amendments and the Commission in its amended proposal, it merely followed the suggestions on that point made by the trade organizations. Indeed, by letter of 6 September 1988 the UINF suggested the provision which was included in the regulation as adopted. As regards the allegation that the regulation is retroactive, the Council states that it is not but is merely applied to current contracts for the construction of vessels. The Community legislature's right to regulate existing legal situations cannot be challenged where the action taken is in conformity with the aims pursued and, in particular, where it is necessary to ensure that the legislative measures involved are effective. In its abovementioned letter, the UINF pointed out in that connection that the ‘old for new’ requirement represented a sine qua non for the effective operation of the rules envisaged as a whole. Without a strict time-limit, like that imposed, the measures adopted might have become effective only after the expiry of a period incompatible with the urgency created by the extent of the crisis. As regards legitimate expectations, it is clear, in the Council's opinion, that the plaintiffs were aware of the Commission's proposal when they ordered the vessels concerned. Nobody could have been unaware of the purpose of the rules and the position taken by the trade organizations. Even if the initial proposal did not include the transitional rules, as set out in the final version, the clear aim pursued by the regulation was to reduce overcapacity, involving in particular a brake on the construction of new vessels. Nor could the plaintiffs have been unaware of the extreme positions taken by their trade associations. Logically, therefore, their attitude should have been marked by ‘legitimate misgivings’. Moreover, as a matter of principle there can be no question of undertakings or individuals concerned by future Community legislation being entitled to expect that the legal position should be frozen as at the time of the Commission's proposal. The case-law of the Court concerning legitimate expectations and legal certainty relates to cases where existing Community rules had been amended retroactively or abruptly in the absence of an overriding public interest such as to justify the damage caused to traders who had entered into commitments on the basis of the previous rules. By contrast, the present case concerns new rules announced well in advance, pursuing a clear objective which necessitated measures of the kind at issue. The Court should therefore confirm the considerable degree of latitude available to the Community legislature in dealing with complex economic situations in which protection of the public interest is imperative. That power does not have to be exercised in such a way that no private interest can be affected (Joined Cases 154, 205, 206, 226 to 228, 263 and 264/78, 39, 31, 83 and 85/79 Valsabbia and Others v Commission [1980] ECR 907) nor is there any implication that immediate application to the relevant legal situations is ruled out (Case 203/86 Spain v Council [1988] ECR 4563, paragraph 19). Such confirmation by the Court woud seem to be particularly justified in this case since no specific Community rules existed in the sphere in question and urgent measures were called for. As regards the principle of equal treatment, the case-law of the Court precludes comparable situations from being treated in a different manner unless the difference in treatment is objectively justified (Case 84/87 Erpelding [1988] ECR 2647, paragraph 29, and Joined Cases C-181/88, C-182/88 and C-218/88 Deschamps and Others [1989] ECR 4381, paragraph 18). In addition, the legislature may depart from that principle where an overriding public interest so requires. In any event, however, the legislature cannot be expected to take account of the circumstances of undertakings or individuals concerned by a piece of legislation, in all their diversity, since that would be an impossible task. In the present case, it cannot be argued that the regulation should have laid down different time-limits according to the size of the shipyards. It was sufficient for the time-limit to be reasonable, as evidenced by the fact that almost all the undertakings concerned were able to comply with it. In the alternative, the Council maintains that, by placing their orders with small shipyards whilst the regulation was in preparation and by failing to take precautions such as the inclusion of a condition subsequent in the construction contract on terms which were not financially unacceptable, the plaintiffs did not behave in the manner of ‘prudent and informed’ businessmen. Accordingly, the Council concludes that there are no grounds for inferring that Article 8(3)(a) of Regulation No 1101/89 is invalid.

10. The Commission states at the outset that the introduction of a Community system for improving the structure of internal waterway transport falls within the ‘wide legislative powers ... as regards the adoption of appropriate common rules’ conferred on the Council, in particular, by Article 75(l)(c) of the EEC Treaty (Case 97/78 Schumalla, cited above). With regard to that discretionary power, the Court has made it clear that the Commission may, in the general interest, exercise its decision-making power according to the requirements of the situation, even to the detriment of certain individual interests (Valsabbia and Others, cited above). The Court has also held that fundamental rights do not constitute unfettered prerogatives and that restrictions may be imposed on the exercise of such rights, provided that the restrictions reflect objectives in the common interest pursued by the Community and do not represent disproportionate and intolerable interference (Case 4/73 Nold v Commission [1974] ECR 491 and Case 5/88 Wachauf [1989] ECR 2639). That applies a fortiori where, as in this case, fundamental rights are not in issue. The prevailing circumstances in inland waterway transport called for Community action, since the fall in prices due to overcapacity accompanied by rising transport costs had made the financial situation of numerous operators in the industry very precarious, representing a threat to the industry as a whole and to small businesses in particular. The Council was therefore pursuing a legitimate objective. Furthermore, the limitation of exemption from the payment of a special contribution was objectively justified and necessary in order to make the system work. The three cumulative conditions, which in fact the industry had requested, were needed to prevent operators from evading the measures intended to limit the introduction of new capacity into the river network in question by placing orders for new vessels before the regulation entered into force. If the Commission's original proposal had been adopted, operators could merely have entered an earlier date on the construction order to avoid paying the special contribution. The Commission considers that the restrictive and cumulative conditions imposed were objectively necessary in order to create an effective system. It also points out that the Court has held that the economic interests of individuals must at times give way to legitimate Community interests (Erpelding, cited above). As regards the alleged retroactive effect of the regulation, the Commission considers that there is none, merely the immediate application of certain provisions to existing contracts. The regulation seeks only to impose restrictions on the introduction of new tonnage as from a specified date, under specific conditions. The Court has recognized that laws amending a legislative provision apply, unless otherwise provided, to the future consequences of situations which arose under the former law (Case 1/73 Westzucker [1973] ECR 729, paragraph 5). The same is true of new legislative provisions which apply to the future effects of situations which arose when no rules existed. As regards the principle of the protection of legitimate expectations, the Commission considers that the plaintiffs are not entitled to rely on it. All the orders were placed after the industry had stated its position, which was widely reported in the specialized press. In Case C-16/92, the vessel was ordered even after publication of the Commission's amended proposal which contained the three cumulative conditions. And even if that had not been the case, the fact remains that, as the Court has held, the scope of the principle of the protection of legitimate expectations cannot be extended to the point of generally preventing new rules from applying to the future effects of situations which arose under the earlier rules (Spain v Council, cited above). Finally, the Commission considers that the principle of equal treatment is not in issue. The three cumulative conditions, in particular the third, were objectively necessary. The six-month period was not fixed arbitrarily since it had been suggested by the industry itself and, moreover, certain information indicated that all the new vessels to be built could have been completed within the six months. Furthermore, in the Netherlands 90% of new vessels were built within that period, whether in small or large shipyards. Also, the Court has held that, whilst the institutions must, in exercising their powers, take care to ensure that the burdens imposed on economic agents do not exceed what is required to achieve the aim which the authorities are to accomplish, it docs not follow that that obligation must be measured against the situation of a specific group of economic agents (Case 5/73 Balkan Import [1973] ECR 1091, paragraph 22). Consequently, the Commission considers that examination of the question submitted has disclosed no factor of such a kind as to affect the validity of Article 8(3)(a) of Regulation No 1101/89.

G. C. Rodriguez Iglesias

Judge-Rapporteur

1 Language of the case: Dutch.