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THE SUBSTANCE OF THE CASE
THE SUBMISSION CONCERNING THE LACK OF COMPETENCE OF THE HIGH AUTHORITY FOR THE PURPOSES OF ARTICLES 1 AND 10 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS
1 . THE APPLICANTS MAINTAIN THAT THE POWERS OF THE HIGH AUTHORITY UNDER THE CONVENTION ON THE TRANSITIONAL PROVISIONS WITH REGARD TO THE EXAMINATION OF THE RATES AND CONDITIONS REFERRED TO IN THE FOURTH PARAGRAPH OF ARTICLE 70 OF THE TREATY WHICH WERE IN FORCE WHEN THE HIGH AUTHORITY WAS SET UP COULD BE EXERCISED ONLY DURING THE TRANSITIONAL PERIOD WHICH ENDED AT MIDNIGHT ON 9 FEBRUARY 1958 . THEY ALLEGE THAT THE CONTESTED DECISION, WHICH CONVEYS A REFUSAL TO APPROVE THOSE RATES AND CONDITIONS, WAS ADOPTED ON 12 FEBRUARY 1958, THAT IS, THE DATE ON WHICH IT WAS NOTIFIED TO THE GOVERNMENT OF THE FRENCH REPUBLIC, SINCE THE DATE OF THE NOTIFICATION OF A MEASURE IS AT THE SAME TIME THAT ON WHICH IT BECOMES VALID .
THEREFORE, THE APPLICANTS CLAIM THAT THE CONTESTED DECISION IS ILLEGAL BECAUSE OF THE LACK OF COMPETENCE OF THE HIGH AUTHORITY AT THE DATE ON WHICH IT WAS NOTIFIED, THAT IS, 12 FEBRUARY 1958 .
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THIS ARGUMENT IS NOT WELL FOUNDED .
IT APPEARS FROM THE ORAL ARGUMENTS AND FROM THE EXPLANATIONS FURNISHED AT THE HEARING THAT THE CONTESTED DECISION WAS TAKEN ON THE EVENING OF 9 FEBRUARY 1958 AND THAT ON THAT DATE IT WAS LAID DOWN IN EVERY DETAIL, AS IS PROVED BY THE PRODUCTION OF THE DRAFTS DISCUSSED AT THE MEETING AND BY THE MINUTES THEREOF .
IN ORDER TO ENTER INTO FORCE THAT DECISION HAD TO BE NOTIFIED TO THE GOVERNMENT OF THE FRENCH REPUBLIC AND, IN ACCORDANCE WITH THE RULES OF GOOD ADMINISTRATION, NOTIFIED AS QUICKLY AS POSSIBLE - WHICH WAS DONE . NEVERTHELESS, THAT DOES NOT IN ANY WAY ALTER THE FACT THAT IN THIS CASE THE DECISION WAS VALIDLY ADOPTED ON 9 FEBRUARY 1958, THAT IS, DURING THE TRANSITIONAL PERIOD .
THUS THERE IS NO DOUBT THAT THE CONTESTED DECISION WAS TAKEN WITHIN DUE TIME .
2 . THE APPLICANTS THEN ALLEGE THAT BY REASON OF THE ECONOMIC AND SOCIAL CONSEQUENCES WHICH MAY FOLLOW FROM THE ABOLITION OF THE SPECIAL INTERNAL RATES AND CONDITIONS, THE INTERESTED PARTIES ARE ENTITLED TO CLAIM THE GRANT OF THE AIDS PROVIDED FOR IN ARTICLE 23 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS .
SINCE THE ABOLITION OF THE RATES AT ISSUE WAS DECIDED UPON AFTER THE EXPIRY OF THE TRANSITIONAL PERIOD OR ON THE EVE OF THE EXPIRY THEREOF, THE HIGH AUTHORITY IS SAID TO HAVE DEPRIVED THE APPLICANTS OF THE POSSIBILITY OF CLAIMING THE GRANT OF THOSE AIDS .
THIS COMPLAINT CANNOT BE ACCEPTED BECAUSE AT THE TIME WHEN THE ABOLITION OF THE RATES AT ISSUE WAS DECIDED UPON THE APPLICANTS WERE STILL ENTITLED TO THE GRANT OF THOSE AIDS AND HAD THE POSSIBILITY OF DOING SO .
IN FACT THE LAST PARAGRAPH OF ARTICLE 23 OF THE CONVENTION PROVIDES THAT AID MAY BE GRANTED BY DECISION OF THE HIGH AUTHORITY WITH THE ASSENT OF THE COUNCIL DURING THE TWO YEARS FOLLOWING THE END OF THE TRANSITIONAL PERIOD .
THE SUBMISSION CONCERNING THE INFRINGEMENT OF ESSENTIAL PROCEDURAL REQUIREMENTS UNDER THE FIRST PARAGRAPH OF ARTICLE 15 OF THE TREATY
THE APPLICANTS MAINTAIN THAT THE SEVENTH PARAGRAPH OF ARTICLE 10 OF THE CONVENTION PLACES THE HIGH AUTHORITY UNDER A DUTY TO CONSULT THE COMMITTEE OF EXPERTS PROVIDED FOR BY THE FIRST PARAGRAPH OF THAT ARTICLE .
UNDER THE FIRST PARAGRAPH OF ARTICLE 15 OF THE TREATY IT WAS NECESSARY TO MENTION IN THE DECISION THAT THAT FORMALITY HAD BEEN CARRIED OUT . BECAUSE THAT MENTION WAS OMITTED, THE DECISION IS INVALIDATED BECAUSE OF AN INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT .
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THAT ARGUMENT CANNOT BE ACCEPTED .
IT IS IMPORTANT ABOVE ALL TO KNOW WHETHER IN THIS CASE THE HIGH AUTHORITY HAD TO OBTAIN THE OPINION OF THE COMMITTEE OF EXPERTS .
IN THIS CONNEXION THE APPLICANTS STATE THAT THE PROVISIONS OF THE FIRST TO SIXTH, EIGHTH AND NINTH PARAGRAPHS OF ARTICLE 10 OF THE CONVENTION, WHICH LAY DOWN THE TASKS OF THE COMMITTEE OF EXPERTS, MUST BE INTERPRETED AS APPLYING ALSO TO THE SEVENTH PARAGRAPH, PARTICULARLY IN VIEW OF ITS POSITION WITHIN THE CONTEXT OF THAT ARTICLE .
THAT ARGUMENT CAN ONLY BE ACCEPTED IN SO FAR AS IT IS UNNECESSARY TO INTERPRET THE PROVISIONS CONCERNED STRICTLY .
IN FACT UNDER THE FIRST PARAGRAPH OF ARTICLE 10 OF THE CONVENTION, THE HIGH AUTHORITY MUST CONVENE THE COMMITTEE OF EXPERTS TO STUDY THE ARRANGEMENTS TO BE PROPOSED TO THE GOVERNMENTS FOR THE CARRIAGE OF COAL AND STEEL IN ORDER TO ATTAIN THE OBJECTS SET OUT IN ARTICLE 70 OF THE TREATY .
UNDER THE FOLLOWING PARAGRAPH, THOSE ARRANGEMENTS ARE INTENDED TO FORM THE SUBJECT-MATTER OF AGREEMENTS BETWEEN THE GOVERNMENTS, THE HIGH AUTHORITY MERELY PROPOSING THEM AND INITIATING NEGOTIATIONS BETWEEN MEMBER STATES AND, WHERE APPROPRIATE, BETWEEN MEMBER STATES AND THIRD COUNTRIES CONCERNED .
THEREFORE IT IS IMPOSSIBLE TO EXTEND THE APPLICATION OF THE ABOVEMENTIONED PROVISIONS TO THE CASE ENVISAGED BY THE SEVENTH PARAGRAPH OF THE SAME ARTICLE WHICH CONCERNS EXCLUSIVELY THE MEASURES TO BE TAKEN BY THE HIGH AUTHORITY ALONE .
MOREOVER, THE INTERVENTION OF THE COMMITTEE OF EXPERTS, WHICH IS LAID DOWN IN THE FIRST PARAGRAPH OF ARTICLE 10 OF THE CONVENTION, CONCERNS THE MEASURES SET OUT IN THE THIRD PARAGRAPH OF THAT ARTICLE . THOSE MEASURES, FIRST, ONLY RELATE TO THE APPLICATION OR INTRODUCTION OF TRANSPORT TARIFFS WITH REGARD TO TRAFFIC BETWEEN THE MEMBER STATES AND, SECONDLY, THEIR PURPOSE IS TO ACHIEVE THE HARMONIZATION, ON A COMMUNITY BASIS AND UNDER CERTAIN CONDITIONS, OF THE RATES AND CONDITIONS OF EVERY KIND FOR THE CARRIAGE OF COAL AND STEEL . THESE MEASURES ONLY CONCERN INTERNATIONAL TRANSPORT BETWEEN THE MEMBER STATES .
FOR THAT REASON THE PURPOSE OF THOSE MEASURES IS QUITE DIFFERENT FROM THAT OF THE MEASURES PROVIDED FOR IN THE SEVENTH PARAGRAPH OF ARTICLE 10 OF THE CONVENTION, WHICH IS CONCERNED WITH THE APPROVAL OF OR PROHIBITION ON SPECIAL RATES AND CONDITIONS WHICH ONLY CONCERN DOMESTIC TRAFFIC AND WHOSE RETENTION OR MODIFICATION DO NOT TEND TO HARMONIZE PROGRESSIVELY INTERNATIONAL TRANSPORT TARIFFS IN THE COMMUNITY AS A WHOLE .
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THEREFORE THE HIGH AUTHORITY WAS NOT BOUND IN THIS CASE EITHER TO CONSULT THE COMMITTEE OF EXPERTS BEFOREHAND OR A FORTIORI TO MENTION THE OPINION OF THAT COMMITTEE . THE SUBMISSION CONCERNING THE INFRINGEMENT OF ESSENTIAL PROCEDURAL REQUIREMENTS IS THEREFORE UNFOUNDED .
THE ALTERNATIVE SUBMISSION CONCERNING THE INFRINGEMENT OF ARTICLE 4 ( B ) AND THE FOURTH PARAGRAPH OF ARTICLE 70 OF THE TREATY AND THE SEVENTH PARAGRAPH OF ARTICLE 10 OF THE CONVENTION ON THE TRANSITIONAL PROVISIONS
1 . THE APPLICANTS MAINTAIN THAT THE HIGH AUTHORITY HAS CONTRAVENED THE FOURTH PARAGRAPH OF ARTICLE 70 AND ARTICLE 4 ( B ) OF THE TREATY AND THE SEVENTH PARAGRAPH OF ARTICLE 10 OF THE CONVENTION BY TAKING A DECISION TO ABOLISH CHAPTER 3, PARAGRAPH IV AND CHAPTER II, PARAGRAPH I OF TARIFF N . 7 OF THE SOCIETE NATIONALE DES CHEMINS DE FER FRANCAIS AND CHAPTER 3, PARAGRAPH I, WITHIN THE CONTEXT OF ITS APPLICATION TO TRANSPORT FROM THE MINES IN THE PYRENEES, AND CHAPTER 12, PARAGRAPH 1, OF TARIFF N . 13 OF THE SOCIETE NATIONALE DES CHEMINS DE FER FRANCAIS, AS BEING SPECIAL INTERNAL RATES AND CONDITIONS APPLIED IN THE INTEREST OF ONE OR MORE COAL - OR STEEL-PRODUCING UNDERTAKINGS .
IT IS NECESSARY TO EXAMINE WHETHER THE SPECIAL INTERNAL RATES AND CONDITIONS REFERRED TO IN THE FOURTH PARAGRAPH OF ARTICLE 70 OF THE TREATY COME WITHIN THE APPLICATION OF THE PROVISIONS OF ARTICLE 4 ( B ) AND THE EXTENT TO WHICH THOSE PROVISIONS ARE APPLICABLE TO THEM .
ARTICLE 4 ( B ) PROHIBITS MEASURES 'WHICH DISCRIMINATE BETWEEN...CONSUMERS, ESPECIALLY IN...TRANSPORT RATES AND CONDITIONS '. AS THAT PROHIBITION IS AN ESSENTIAL CONDITION FOR THE ESTABLISHMENT AND THE FUNCTIONING OF THE COMMON MARKET, IT CANNOT BE SUBJECT TO ANY EXCEPTION OR GIVE RISE TO DEROGATIONS SAVE AS OTHERWISE PROVIDED IN THE TREATY .
WHERE THE PROVISIONS OF ARTICLE 4 ARE REFERRED TO, REPEATED OR AMPLIFIED IN OTHER PARTS OF THE TREATY, THE PROVISIONS RELATING TO THE PROHIBITION ON DISCRIMINATION MUST BE CONSIDERED AS A WHOLE AND BE APPLIED SIMULTANEOUSLY .
THE PROVISIONS OF ARTICLE 4 ( B ) OF THE TREATY ARE REPEATED FIRST PARAGRAPH OF ARTICLE 70 WHICH PROVIDES THAT IT IS NECESSARY TO APPLY SUCH RATES AND CONDITIONS FOR THE CARRIAGE OF COAL AND STEEL AS WILL AFFORD COMPARABLE PRICE CONDITIONS TO COMPARABLY PLACED CONSUMERS .
THEREFORE THE MANDATORY NATURE OF THE PRINCIPLE OF NON-DISCRIMINATION LAID DOWN IN ARTICLE 4 ( B ) OF THE TREATY AND ITS APPLICATION TO RATES AND CONDITIONS FOR THE CARRIAGE OF COAL AND STEEL ARE CONFIRMED IN THE FIRST PARAGRAPH OF ARTICLE 70 .
2 . UNDER THE FIRST PARAGRAPH OF ARTICLE 70 OF THE TREATY THE DISCRIMINATORY NATURE OF SPECIAL INTERNAL RATES AND CONDITIONS CONSISTS IN THE FACT THAT THEY AFFORD DIFFERENT PRICE CONDITIONS TO COMPARABLY PLACED CONSUMERS .
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THE COMPARABILITY OF THE SITUATION OF CONSUMERS MUST, WITHIN THE CONTEXT OF THE ABOVEMENTIONED ARTICLE, BE APPRAISED SOLELY ON THE BASIS OF THE MEANS OF TRANSPORT IN QUESTION .
IT IS NECESSARY TO REJECT THE ARGUMENT OF THE APPLICANTS THAT A COMPARISON BETWEEN COAL - AND STEEL-PRODUCING UNDERTAKINGS MUST NOT BE RESTRICTED TO THEIR SITUATION SOLELY FROM THE POINT OF VIEW OF TRANSPORT BUT THAT THIS COMPARISON MUST TAKE INTO ACCOUNT ALL THE CIRCUMSTANCES IN WHICH THEY ARE PLACED, IN PARTICULAR THE PLACE OF PRODUCTION, THE PROFITABILITY OF THE DEPOSITS WORKED AND THE FACT OF BEING IN AN ECONOMICALLY LESS FAVOURED REGION .
EVEN IF IT WERE APPLIED WITH CAUTION, THE RESULT OF THAT ARGUMENT WOULD BE THAT EVERY UNDERTAKING WOULD BE COMPARABLE ONLY TO ITSELF AND THUS THE CONCEPT 'COMPARABLY PLACED' AND THEREFORE THAT OF 'DISCRIMINATION' WOULD BE RENDERED MEANINGLESS .
3 . IT APPEARS FROM ARTICLE 4 OF THE TREATY THAT IN ARTICLE 70 THE INTENTION OF THE AUTHORS OF THE TREATY WAS TO ELIMINATE DISTORTIONS IN THE COMMON MARKET BY THE HARMONIZATION OF TRANSPORT RATES AND CONDITIONS AND THUS TO ENSURE THAT THE COMMON MARKET WOULD FUNCTION IN ACCORDANCE WITH THE PRINCIPLES LAID DOWN BY THE TREATY .
IN GIVING EXPRESSION TO THAT INTENTION THEY CANNOT HAVE BEEN UNAWARE THAT THE TRANSPORT INDUSTRY IS A BRANCH OF INDUSTRY WHICH IS INDEPENDENT OF THAT OF THE PRODUCTION OF COAL AND STEEL AND THAT IT HAS ITS OWN PROBLEMS, NEEDS AND PROCEDURES . NOR CAN THEY HAVE FAILED TO UNDERSTAND THAT SO LONG AS THAT INDUSTRY HAS NOT BEEN INTEGRATED INTO THE COMMON MARKET ITS DISTINCT NATURE MUST BE RESPECTED AND THAT IT MUST MERELY BE PREVENTED FROM JEOPARDIZING THE OBJECTIVES OF THE TREATY BY ITS ACTIONS .
THEREFORE, AS REGARDS INTERNATIONAL TRANSPORT, ARTICLE 70, WHILST ENVISAGING THE FUTURE HARMONIZATION OF NATIONAL RATES AND CONDITIONS LEAVES TARIFF POLICY UNCONTROLLED AND CONFINES ITSELF TO THE REQUIREMENT THAT WITHIN EACH NATIONAL SYSTEM ANY DISCRIMINATION BASED ON THE POINT OF DEPARTURE OR DESTINATION MUST BE ABOLISHED .
SIMILARLY - AS IS SHOWN BY THE FIFTH PARAGRAPH - IN RESPECT OF INTERNAL TRANSPORT, MEMBER STATES ARE FREE TO PRACTISE THEIR OWN COMMERCIAL POLICY, SUBJECT TO THE PROVISIONS OF THE TREATY .
THERE CAN BE NO DOUBT THAT THE STATES OR TRANSPORT UNDERTAKINGS WOULD COME INTO CONFLICT WITH THOSE PROVISIONS IF, IN SETTING THEIR RATES AND CONDITIONS, THEY TOOK INTO ACCOUNT THE ADVANTAGES AND DISADVANTAGES OF THE LOCATION OF UNDERTAKINGS PRODUCING COAL OR STEEL OR THE QUALITY OF THE DEPOSITS WORKED .
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THE TREATY REQUIRES RATHER THAN IN DRAWING UP THEIR TARIFF PROVISIONS THE STATES OR UNDERTAKINGS SHOULD CONSIDER TRANSPORT CONDITIONS ALONE AND, THEREFORE, THE COMPARABILITY OF THE DIFFERENT ROUTES AND LOCATIONS FROM THE POINT OF VIEW OF TRANSPORT .
4 . UNDER THE FOURTH PARAGRAPH OF ARTICLE 70 OF THE TREATY SPECIAL INTERNAL RATES AND CONDITIONS ARE THOSE WHICH ARE APPLIED IN THE INTEREST OF ONE OR MORE COAL - AND STEEL - PRODUCING UNDERTAKINGS .
THE RATES AND CONDITIONS IN QUESTION, WHICH ALLOW PRICE REDUCTIONS TO CERTAIN CONSUMERS BUT WHICH ARE NOT JUSTIFIED BY THE TRANSPORT CONDITIONS OF THE CONSUMERS WHO BENEFIT FROM THEM, AFFORD DIFFERENT PRICE CONDITIONS TO CONSUMERS WHO ARE OR WHO MIGHT BE COMPARABLY PLACED WITH REGARD TO TRANSPORT . THEY THEREFORE CONSTITUTE RATES AND CONDITIONS PROHIBITED BY ARTICLE 4 ( B ) AND THE FIRST PARAGRAPH OF ARTICLE 70 .
MOREOVER, THE COMMON MARKET IS BASED ON THE PRINCIPLE THAT CONDITIONS OF COMPETITION BETWEEN COAL - AND STEEL-PRODUCING UNDERTAKINGS MUST RESULT FROM THEIR NATURAL AND UNDISTORTED PRODUCTION CONDITIONS . ALL SPECIAL INTERNAL RATES AND CONDITIONS INVOLVING AN ELEMENT OF AID OR SUBSIDY CONTRAVENE THAT PRINCIPLE IN THAT THEIR EFFECT IS ARTIFICIALLY TO ALTER THE PRODUCTION CONDITIONS WHICH ARE CHARACTERISTIC OF THE UNDERTAKINGS WHICH BENEFIT FROM THEM . THEY ARE ALSO PROHIBITED BY ARTICLE 4 ( C ) OF THE TREATY .
THE APPLICANTS ALLEGE THAT THE PROHIBITION LAID DOWN IN ARTICLE 4 ( C ) SHOULD HAVE BEEN APPLIED IN THE CIRCUMSTANCES LAID DOWN IN ARTICLE 67, ACCORDING TO WHICH IF AN ACTION BY A MEMBER STATE WHICH IS LIABLE TO HAVE APPRECIABLE REPERCUSSIONS ON CONDITIONS OF COMPETITION IN THE COMMON MARKET IS HAVING HARMFUL EFFECTS ON THE COAL OR STEEL UNDERTAKINGS WITHIN THE JURISDICTION OF THAT STATE, THE HIGH AUTHORITY MAY AUTHORIZE IT TO GRANT AID TO THESE UNDERTAKINGS .
THIS ARGUMENT MUST BE REJECTED BECAUSE ARTICLE 67 MERELY LAYS DOWN PROTECTIVE MEASURES WHICH THE COMMUNITY MAY ADOPT AGAINST AN ACTION BY A MEMBER STATE WHICH, WHILST HAVING AN APPRECIABLE EFFECT ON CONDITIONS OF COMPETITION IN THE COAL AND STEEL INDUSTRY, DOES NOT IMMEDIATELY AND DIRECTLY CONCERN THAT INDUSTRY .
SUCH PROTECTIVE MEASURES, FAR FROM CONTRAVENING ARTICLE 4 ( C ), ARE INTENDED ONLY TO COMPENSATE FOR THE ECONOMIC DISADVANTAGES WHICH RESULT IN THE COMMON MARKET FROM AN ACTION BY A MEMBER STATE WHICH THE HIGH AUTHORITY DOES NOT HAVE THE POWER TO BRING TO AN END DIRECTLY .
5 . HOWEVER, THE FOURTH PARAGRAPH OF ARTICLE 70 ENABLES THE HIGH AUTHORITY TO AGREE TO THE APPLICATION OF SPECIAL INTERNAL RATES AND CONDITIONS WHICH APPEAR TO BE COMPATIBLE WITH THE PRINCIPLES OF THE TREATY .
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IT IS NECESSARY TO APPRAISE THE COMPATIBILITY OF SUCH RATES AND CONDITIONS WITH THOSE PRINCIPLES ON THE BASIS OF THE SECOND PARAGRAPH OF ARTICLE 2 OF THE TREATY ACCORDING TO WHICH THE COMMUNITY MUST PROGRESSIVELY BRING ABOUT CONDITIONS WHICH WILL OF THEMSELVES ENSURE THE MOST RATIONAL DISTRIBUTION OF PRODUCTION AT THE HIGHEST POSSIBLE LEVEL OF PRODUCTIVITY .
THAT DISTRIBUTION IS BASED IN PARTICULAR UPON THE COMPOSITION OF PRODUCTION COSTS FROM OUTPUT, THAT IS, FROM THE PHYSICAL AND TECHNICAL CONDITIONS UNDER WHICH THE VARIOUS PRODUCERS OPERATE AND THEIR INDIVIDUAL EFFORTS .
THUS THE AGREEMENT REFERRED TO IN THE FOURTH PARAGRAPH OF ARTICLE 70 CAN ONLY BE GIVEN IF THE PROTECTIVE RATES AUTHORIZED ENABLE THE UNDERTAKINGS IN WHOSE FAVOUR THEY ARE MADE TO OVERCOME EXCEPTIONAL TEMPORARY DIFFICULTIES RESULTING FROM UNFORESEEABLE CIRCUMSTANCES WHICH ARE LIKELY TO RESULT IN A SITUATION IN WHICH THE COMPOSITION OF PRODUCTION COSTS NO LONGER CORRESPONDS TO THEIR NATURAL CONDITIONS .
THE APPLICANTS MAINTAIN THAT SUCH AGREEMENT COULD ALSO BE GIVEN IF ACCOUNT WERE TAKEN OF THE REQUIREMENTS OF REGIONAL POLICY . THEY INVOKE THE PRINCIPLES LAID DOWN IN ARTICLE 80 ( 2 ) OF THE EEC TREATY IN SUPPORT OF THEIR STATEMENT .
THIS ARGUMENT CANNOT BE ACCEPTED . SINCE THE INTEGRATION AIMED AT BY THE TREATY ESTABLISHING THE EUROPEAN COAL AND STEEL COMMUNITY IS ONLY PARTIAL, THE HIGH AUTHORITY IS NOT IN A POSITION TO APPRAISE ALL THE FACTORS UPON WHICH REGIONAL POLICY DEPENDS AND IS NOT AUTHORIZED TO ADAPT ITS ACTION TO THE REQUIREMENTS OF SUCH A POLICY .
6 . THE TARIFFS IN QUESTION AFFORD REDUCTIONS IN PRICE AS COMPARED WITH THE RATES AND CONDITIONS OF GENERAL APPLICATION WHICH ARE LAID DOWN IN CHAPTER 1 OF TARIFFS N.S 7 AND 13 OF THE SOCIETE NATIONALE DES CHEMINS DE FER FRANCAIS AND THEY THEREFORE CONSTITUTE SPECIAL INTERNAL RATES AND CONDITIONS .
THEY WERE INTRODUCED IN ORDER TO COUNTERACT THE STRUCTURAL DIFFICULTIES EXPERIENCED BY THE APPLICANTS WITH REGARD TO THEIR PRODUCTION CONDITIONS IN COMPARISON WITH COMPETING UNDERTAKINGS .
THE REASON FOR THE REDUCTIONS IN PRICE GRANTED BY THOSE MEASURES IS NOT THAT, WITH REGARD TO TRANSPORT, THE APPLICANTS ARE NOT COMPARABLY PLACED IN RELATION TO COMPETING UNDERTAKINGS .
THE APPLICANTS WRONGLY ALLEGE THAT THE TARIFFS IN QUESTION WERE APPLIED IN THE INTERESTS OF THE CARRIERS AS WELL AS IN THAT OF USERS AND THAT THAT FACT PROVES THAT THOSE TARIFFS ARE NOT SPECIAL INTERNAL RATES AND CONDITIONS APPLIED IN THE INTEREST OF ONE OR MORE COAL - OR STEEL-PRODUCING UNDERTAKINGS .
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COMPETITIVE TARIFFS ENABLE THE CARRIER TO MAINTAIN ITS TRAFFIC IN FACE OF REAL OR POTENTIAL COMPETITION FROM ANOTHER MEANS OF TRANSPORT .
IN THE PRESENT CASE, THE TARIFFS IN QUESTION, AS SPECIAL INTERNAL RATES AND CONDITIONS WERE APPLIED PRIMARILY IN THE INTEREST OF USERS .
THE APPLICANTS HAVE NOT BROUGHT EVIDENCE THAT THOSE TARIFFS WERE INTRODUCED PRIMARILY IN THE INTEREST OF THE CARRIER . THEREFORE THEY ARE SPECIAL INTERNAL RATES AND CONDITIONS REFERRED TO IN THE FOURTH PARAGRAPH OF ARTICLE 70 OF THE TREATY AND SUBJECT TO THE PROHIBITION LAID DOWN IN ARTICLE 4 ( B ) AND THE FIRST PARAGRAPH OF ARTICLE 70 .
7 . THE RATES AND CONDITIONS IN QUESTION WERE IN FORCE WHEN THE HIGH AUTHORITY WAS SET UP AND THEREFORE THEY COME WITHIN THE APPLICATION OF THE SEVENTH PARAGRAPH OF ARTICLE 10 OF THE CONVENTION . THAT ARTICLE DOES NOT INTRODUCE ANY DEROGATION FROM THE RULES LAID DOWN IN ARTICLE 4 ( B ) AND IN THE FIRST AND FOURTH PARAGRAPHS OF ARTICLE 70 BUT MERELY PLACES THE HIGH AUTHORITY UNDER A DUTY, DURING THE TRANSITIONAL PERIOD, TO ALLOW SUCH TIME FOR THE MODIFICATION OF PROTECTIVE RATES AND CONDITIONS IN FORCE AT THAT DATE AS MAY BE NECESSARY TO AVOID ANY SERIOUS ECONOMIC DISTURBANCE .
THE APPLICANTS MAINTAIN THAT THE PERIOD LAID DOWN IS NOT SUFFICIENT TO OBVIATE SUCH DISTURBANCES .
THAT COMPLAINT MUST BE REJECTED IN LIMINE BECAUSE IT WAS RAISED FOR THE FIRST TIME AND WITHOUT ANY FURTHER COMMENT IN THE REPLY .
MOREOVER THE APPLICANTS HAVE NOT BROUGHT SUFFICIENT EVIDENCE OF THEIR ALLEGATION TO ENABLE THE COURT TO APPRAISE THAT SITUATION .
THE ALTERNATIVE SUBMISSION CONCERNING THE INFRINGEMENT OF THE GENERAL OBJECTIVES LAID DOWN IN ARTICLES 2 AND 3 OF THE TREATY
1 . THE APPLICANTS ALLEGE THAT THE CONTESTED DECISION CONTRAVENED THE SECOND PARAGRAPH OF ARTICLE 2 AND ARTICLE 3 ( C ), ( D ) AND ( G ) OF THE TREATY . IN CASES 27/58 AND 29/58, THEY ALSO ALLEGE THAT THERE HAS BEEN AN INFRINGEMENT OF ARTICLE 3 ( B ).
IT IS NECESSARY TO STATE THAT THE OBJECTIVES LAID DOWN IN ARTICLES 2 AND 3 CANNOT ALL BE ATTAINED AT THE SAME TIME AND TO THE HIGHEST DEGREE . TO ENSURE THE LEGALITY OF THE DECISION TAKEN BY THE HIGH AUTHORITY IN THIS FIELD, IT IS SUFFICIENT FOR THOSE OBJECTIVES TO HAVE BEEN REASONABLY OBSERVED ACCORDING TO THE SPECIAL FEATURES AND THE POSSIBILITIES OF THE CASE IN QUESTION AND TO HAVE BEEN PURSUED FOR THE PURPOSES OF THE COMMON INTEREST REFERRED TO IN THE FIRST PARAGRAPH OF ARTICLE 3 . THAT INTEREST IS NOT LIMITED TO THE SUM OF THE INDIVIDUAL INTERESTS OF THE UNDERTAKINGS IN THE COMMUNITY . IT GOES BEYOND THE RANGE OF THOSE INDIVIDUAL INTERESTS AS IS DEFINED IN RELATION TO THE GENERAL AIMS OF THAT COMMUNITY WHICH ARE LAID DOWN IN ARTICLE 2 .
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2 . UNDER THE SECOND PARAGRAPH OF ARTICLE 2 OF THE TREATY 'THE COMMUNITY SHALL PROGRESSIVELY BRING ABOUT CONDITIONS WHICH WILL OF THEMSELVES ENSURE THE MOST RATIONAL DISTRIBUTION OF PRODUCTION AT THE HIGHEST POSSIBLE LEVEL OF PRODUCTIVITY, WHILE SAFEGUARDING CONTINUITY OF EMPLOYMENT AND TAKING CARE NOT TO PROVOKE FUNDAMENTAL AND PERSISTENT DISTURBANCES IN THE ECONOMIES OF MEMBER STATES '.
THAT PROVISION, WHILE EXPRESSING TWO RESERVATIONS, CLEARLY STATES THE ESSENTIAL OBJECTIVE OF THE COMMON MARKET, ACCORDING TO WHICH THE GENERAL POLICY OF THE HIGH AUTHORITY MUST BE TO PROMOTE - AND THIS ALSO APPLIES IN THE APPLICATION OF ARTICLE 70 - THE PROGRESSIVE ESTABLISHMENT OF CONDITIONS WHICH WILL OF THEMSELVES ENSURE THE MOST RATIONAL DISTRIBUTION OF PRODUCTION .
THE AUTHORS OF THE TREATY REALIZED THAT THIS POLICY COULD HAVE THE RESULT THAT CERTAIN UNDERTAKINGS MIGHT BE FORCED TO CEASE OR CHANGE THEIR ACTIVITY . THIS APPEARS IN PARTICULAR FROM THE CONVENTION ON THE TRANSITIONAL PROVISIONS, OF WHICH THE SEVENTH PARAGRAPH OF ARTICLE 10 HAS BEEN APPLIED IN THE PRESENT CASE .
THE CONVENTION MAKES PROVISION BOTH FOR ESTABLISHING THE COMMON MARKET BY PUTTING AN END TO SITUATIONS WHICH ARE INCOMPATIBLE WITH THE PRINCIPLES OF THAT MARKET AND ARE OF SUCH A NATURE AS TO JEOPARDIZE THE ACHIEVEMENT OF THE OBJECTIVES DEFINED NOTABLY IN ARTICLES 2 AND 3, AND FOR REMEDYING THE DISADVANTAGEOUS CONSEQUENCES WHICH THE ESTABLISHMENT OF THE COMMON MARKET COULD HAVE IN CERTAIN CASES .
IT EXPRESSLY PROVIDES, IN ARTICLE 23 IN PARTICULAR FOR MEASURES OF READAPTATION WHICH CAN EVEN TAKE THE FORM OF THE SETTING UP OF NEW UNDERTAKINGS NOT SUBJECT TO THE TREATY, AND FOR ASSISTANCE BOTH TO UNDERTAKINGS AND TO WORKERS .
THE FACT THAT THE CONTESTED DECISIONS MIGHT RESULT IN A TEMPORARY REDUCTION IN EMPLOYMENT AND IN THE CLOSURE OF SOME UNDERTAKINGS CANNOT RENDER THOSE DECISIONS ILLEGAL ON GROUNDS OF INFRINGEMENT OF ARTICLES 2 AND 3 . IT COULD BE ARGUED THAT, ON THE CONTRARY, SUCH MEASURES ARE NECESSARY IN ORDER TO ENABLE THE COMMON MARKET TO ACHIEVE ITS STATED OBJECTIVES, SINCE THE DISAPPEARANCE OF UNDERTAKINGS WHICH COULD ONLY SUBSIST WITH THE HELP OF CONSTANT AND MASSIVE SUBSIDIES WOULD STRENGTHEN ITS RESISTANCE TO CRISIS .
HOWEVER THE FIGURES AND CALCULATIONS SUBMITTED TO THE COURT DO NOT PROVIDE SUFFICIENT EVIDENCE AT LAW FOR THE PROPOSITION THAT FULL EMPLOYMENT AND THE PRODUCTIVITY OF THE UNDERTAKINGS ARE SERIOUSLY THREATENED BY THE CONTESTED DECISIONS . MOREOVER, IT IS NECESSARY TO REMIND THE APPLICANTS THAT NOTHING IN THOSE DECISIONS STANDS IN THE WAY OF A FURTHER REQUEST BASED THIS TIME DIRECTLY ON THE FOURTH PARAGRAPH OF ARTICLE 70 IF, BEFORE THE EXPIRY OF THE PERIOD LAID DOWN, CIRCUMSTANCES SEEM TO JUSTIFY A NEW SPECIAL RATE .
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IT WOULD IN ANY CASE BE CONTRARY TO THE MEANING OF THE TREATY TO AUTHORIZE EXISTING SPECIAL RATES ON THE SOLE GROUND THAT IT WOULD BE DIFFICULT OR IMPOSSIBLE FOR THE UNDERTAKINGS CONCERNED TO ADAPT THEMSELVES TO THE COMMON MARKET .
CONSEQUENTLY, THE SECOND PARAGRAPH OF ARTICLE 2 OF THE TREATY MAY NOT BE RELIED ON IN SUPPORT OF THE PROPOSITION THAT, IN APPLYING THE FOURTH PARAGRAPH OF ARTICLE 70, THE HIGH AUTHORITY IS REQUIRED, AS A GENERAL RULE, TO AUTHORIZE SPECIAL RATES WHEN THE PROFITABILITY OF AN UNDERTAKING MIGHT BE ADVERSELY AFFECTED IF SUCH RATES DID NOT EXIST .
THE APPLICANTS MAINTAIN MOREOVER THAT THE CONTESTED DECISION IS LIKELY TO PROVOKE FUNDAMENTAL AND PERSISTENT DISTURBANCES IN THE FRENCH ECONOMY AND THAT THEREFORE THAT DECISION CONTRAVENES THE SECOND PARAGRAPH OF ARTICLE 2 .
THAT ARGUMENT MUST BE REJECTED AS THE EXISTENCE OF SUCH DISTURBANCES MAY ONLY, BECAUSE OF THEIR GENERAL EFFECT ON THE NATIONAL ECONOMY, BE INVOKED BY THE STATE CONCERNED AND UNDER THE PROCEDURE LAID DOWN IN ARTICLE 37 . THE GOVERNMENT OF THE FRENCH REPUBLIC HAS NOT INTERVENED IN THESE PROCEEDINGS AND HAS NOT MADE USE OF THE PROCEDURE OPEN TO IT UNDER THAT ARTICLE .
3 . THE APPLICANT IN CASE 27/58 ALLEGES THAT THE CONTESTED DECISION CONTRAVENES ARTICLE 3 ( B ) IN THAT THE ABOLITION ORDERED THEREIN OF CHAPTER 3, PARAGRAPH I OF TARIFF N . 13, CONSIDERED IN THE CONTEXT OF ITS APPLICATION TO TRANSPORT FROM THE MINES IN THE PYRENEES, AND OF CHAPTER 12, PARAGRAPH I, WOULD ENTAIL SUCH AN INCREASE IN TRANSPORT COSTS THAT THE APPLICANT WILL NO LONGER HAVE ACCESS TO THE SOURCES OF PRODUCTION IN CONDITIONS COMPARABLE TO THOSE OF SIMILAR INDUSTRIES .
THAT ARGUMENT CANNOT BE ACCEPTED, SINCE THE APPLICATION OF ARTICLE 3 ( B ) MUST COMPLY WITH THE REQUIREMENT LAID DOWN IN THE SECOND PARAGRAPH OF ARTICLE 2 ACCORDING TO WHICH THE MOST RATIONAL DISTRIBUTION OF PRODUCTION AT THE HIGHEST POSSIBLE LEVEL OF PRODUCTIVITY MUST BE BASED ON THE COMPOSITION OF PRODUCTION COSTS RESULTING FROM THE PHYSICAL AND TECHNICAL CONDITIONS PARTICULAR TO THE VARIOUS PRODUCERS .
THE RATES AND CONDITIONS IN QUESTION HAVE THE RESULT OF DISTORTING BY MEANS OF AID OR SUBSIDIES THE COMPOSITION OF THE PRODUCTION COSTS OF THE APPLICANT UNDERTAKING AND ARTIFICIALLY EQUATE THE PRODUCTION CONDITIONS IN WHICH THAT UNDERTAKING FINDS ITSELF WITH THOSE OF SIMILAR INDUSTRIES WHICH ARE NOT ENTITLED TO REDUCED RATES .
4 . IN THE THREE CASES THE APPLICANTS MAINTAIN THAT THE CONTESTED DECISION, BY ABOLISHING THE RATES AND CONDITION IN QUESTION, THEREBY ENTAILING A RISE IN PRODUCTION COSTS, JEOPARDIZES THE ESTABLISHMENT OF THE LOWEST PRICES UNDER THE CONDITIONS LAID DOWN IN ARTICLE 3 ( C ).
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THIS ARGUMENT MUST BE REJECTED . IN FACT, IN VIEW OF THE SECOND PARAGRAPH OF ARTICLE 2, THE ESTABLISHMENT OF THE LOWEST PRICE MUST COMPLY WITH THE FUNDAMENTAL PRINCIPLE OF COMPETITION WHICH IS AT THE BASIS OF THE COMMON MARKET AND THE LOWEST PRICE MUST RESULT FROM THE NATURAL PRODUCTION CONDITIONS TO WHICH THE PRODUCERS ARE SUBJECT . THE RATES AND CONDITIONS IN QUESTION HAVE PRECISELY THE EFFECT OF DISTORTING THOSE CONDITIONS SO THAT THE PRICE WHICH CAN BE ESTABLISHED BY MEANS OF THEM IS NOT THE LOWEST WHICH COMPETITION WOULD ALLOW .
MOREOVER, ALTHOUGH ARTICLE 62 OF THE TREATY PROVIDES THAT THE HIGH AUTHORITY MAY, BY DEROGATION FROM THE PRINCIPLE PROHIBITING ALL AID, AUTHORIZE EQUALIZATION PAYMENTS TO PREVENT COAL FROM BEING PRICED AT THE LEVEL OF THE PRODUCTION COSTS OF THE MINES WHICH HAVE THE HIGHEST COSTS, THAT DEROGATION IS HOWEVER ONLY ALLOWED IN SO FAR AS IT IS RECOGNIZED THAT THOSE MINES SHOULD BE TEMPORARILY MAINTAINED IN SERVICE IN ORDER THAT THE TASKS LAID DOWN IN ARTICLE 3 MAY BE PERFORMED .
THEREFORE THE RATES AND CONDITIONS IN QUESTION, BEING PERMANENT AID, COULD NOT BE AUTHORIZED .
5 . THE APPLICANTS WRONGLY ALLEGE THAT THE ABOLITION OF THE RATES AND CONDITIONS IN QUESTION, WHICH INVOLVES AN INCREASE IN THE COST PRICE, JEOPARDIZES THE ATTAINMENT OF THE OBJECTIVES LAID DOWN IN ARTICLE 3 ( D ) AND ( G ).
IN FACT IT FOLLOWS FROM THE FOREGOING CONSIDERATIONS THAT THE ATTAINMENT OF THOSE OBJECTIVES IS BASED ON COMPLIANCE WITH NATURAL AND UNDISTORTED CONDITIONS OF PRODUCTION IN COAL AND STEEL UNDERTAKINGS AND THAT IT PRECLUDES ANY AID .
AS REGARDS IN PARTICULAR THE OBJECTIVE LAID DOWN IN ARTICLE 3 ( G ), IT IS NECESSARY TO RECALL THAT THE FOURTH PARAGRAPH OF ARTICLE 54 PROHIBITS THE FINANCING OF A PROGRAMME OR THE OPERATION OF THE INSTALLATIONS THEREIN PLANNED IF IT WOULD INVOLVE SUBSIDIES, AIDS, PROTECTION OR DISCRIMINATION CONTRARY TO THE TREATY .
THEREFORE IT WAS NECESSARY TO PROHIBIT THE RETENTION OF THE RATES AND CONDITIONS IN QUESTION AS BEING AID CONTRARY TO THE TREATY SINCE THEY DO NOT COMPLY WITH THE CONDITIONS WHICH ARE NECESSARY FOR THE ATTAINMENT OF THE OBJECTIVE LAID DOWN IN ARTICLE 3 ( D ) AND ( G ).
UNDER ARTICLE 60 ( 1 ) OF THE RULES OF PROCEDURE OF THE COURT OF JUSTICE OF THE ECSC, THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .
IN THE PRESENT CASE, THE APPLICANTS HAVE FAILED IN ALL HEADS OF THEIR APPLICATIONS .
THEY MUST THEREFORE BE ORDERED TO PAY THE COSTS OF THE PROCEEDINGS .
THE COURT
HEREBY :
1 . DISMISSES THE APPLICATIONS IN JOINED CASES 27, 28 AND 29/58 AS UNFOUNDED;
2 . ORDERS THE APPLICANTS TO PAY THE COSTS .
