Prasident RuhrkoleC-Verkaufsgesellschaft mbH, Geitling Ruhrkohlen-Verkaufsgesellschaft mbH, Mausegatt Ruhrkohlen-Verkaufsgesellschaft mbH and I. Nold KG v High Authority of the European Coal and Steel Community. (Court Of Justice ) [1960] EUECJ C-38/59 (15 July 1960)

[ Home ] [ Databases ] [ World Law ] [ Multidatabase Search ] [ Help ] [ Feedback ] [ DONATE ] Court of Justice of the European Communities (including Court of First Instance Decisions) You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Prasident RuhrkoleC-Verkaufsgesellschaft mbH, Geitling Ruhrkohlen-Verkaufsgesellschaft mbH, Mausegatt Ruhrkohlen-Verkaufsgesellschaft mbH and I. Nold KG v High Authority of the European Coal and Steel Community. (Court Of Justice ) [1960] EUECJ C-38/59 (15 July 1960) URL: https://www.bailii.org/eu/cases/EUECJ/1960/C3859.html Cite as: [1960] EUECJ C-38/59 [ New search ] [ Help ] IMPORTANT LEGAL NOTICE - The source of this judgment is the web site of the Court of Justice of the European Communities . The information in this database has been provided free of charge and is subject to a Court of Justice of the European Communities disclaimer and a copyright notice . This electronic version is not authentic and is subject to amendment. 61959J0036 Judgment of the Court of 15 July 1960. Präsident Ruhrkolen-Verkaufsgesellschaft mbH, Geitling Ruhrkohlen-Verkaufsgesellschaft mbH, Mausegatt Ruhrkohlen-Verkaufsgesellschaft mbH and I. Nold KG v High Authority of the European Coal and Steel Community. Joined cases 36, 37, 38-59 and 40-59. European Court reports French edition 1960 Page 00857 Dutch edition 1960 Page 00887 German edition 1960 Page 00887 Italian edition 1960 Page 00829 English special edition 1960 Page 00423 Danish special edition 1954-1964 Page 00197 Greek special edition 1954-1964 Page 00529 Portuguese special edition 1954-1961 Page 00525 ++++ 1 . COURT OF JUSTICE - GENERAL JURISDICTION - APPLICATION AND INTERPRETATION OF NATIONAL LAW ( ECSC TREATY, ARTICLE 31 ) 2 . VESTED RIGHTS - MAINTENANCE NOT GUARANTEED BY THE LAW OF THE ECSC 3 . AGREEMENTS - AUTHORIZATION - GROUNDS FOR AUTHORIZATION ( ECSC TREATY, ARTICLE 65 ( 2 )) 4 . COAL - SELLING AGENCIES - FIRST-HAND TRADER - UNJUSTIFIED LIMITATION 1 . THE COURT HAS JURISDICTION OVER THE LEGALITY OF DECISIONS TAKEN BY THE HIGH AUTHORITY, BUT IT IS NOT THE FUNCTION OF THE COURT TO ENSURE RESPECT FOR NATIONAL LAW IN FORCE IN A MEMBER STATE, AND THIS IS TRUE EVEN OF CONSTITUTIONAL LAWS . THEREFORE THE COURT MAY NEITHER INTERPRET NOR APPLY NATIONAL LAW . 2 . COMMUNITY LAW, SUCH AS IT ARISES UNDER THE ECSC TREATY, DOES NOT CONTAIN ANY GENERAL PRINCIPLE, WHETHER EXPLICIT OR OTHERWISE, GUARANTEEING THE MAINTENANCE OF VESTED RIGHTS . 3 . BY ARTICLE 65 ( 2 ), THE HIGH AUTHORITY SHALL AUTHORIZE SPECIALIZATION AGREEMENTS OR JOINT-BUYING OR JOINT-SELLING AGREEMENTS IF IT FINDS THAT THE CONDITIONS SET OUT IN PARAGRAPHS 2 ( A ), ( B ) AND ( C ) ARE FULFILLED . SUCH AUTHORIZATION THEREFORE DEPENDS ON A FINDING WHICH, OF ITS VERY NATURE, COMPRISES AN ASSESSMENT OF THE SITUATION CREATED BY THE FACTS OR ECONOMIC CIRCUMSTANCES, AND FOR THIS REASON IS PARTLY IMMUNE FROM REVIEW BY THIS COURT . THEREFORE THE HIGH AUTHORITY HAS AN ABSOLUTE DUTY TO STATE SPECIFIC REASONS FOR THESE AUTHORIZATIONS AND THIS RULE MUST BE STRICTLY OBSERVED . THOSE REASONS MUST ENABLE THE INTERESTED PARTIES, AS ALSO THE COURT SHOULD OCCASION ARISE, TO CHECK THE INFORMATION ON WHICH THE HIGH AUTHORITY HAS RELIED IN FINDING THAT THE REQUIREMENTS NECESSARY FOR THE GRANTING OF ITS AUTHORIZATION ARE MET SO AS TO BE IN A POSITION TO EXAMINE WHETHER THE AUTHORIZATION WAS RIGHTLY GRANTED AS A MATTER BOTH OF FACT AND OF LAW . 4 . THE ADVANTAGES WHICH THE SELLING AGENCIES MAY DERIVE FROM TRADING WITH THE SMALLEST POSSIBLE NUMBER OF WHOLESALERS DO NOT CONSTITUTE A SUFFICIENT REASON TO JUSTIFY THE RESTRICTION WHICH IS THEREBY IMPOSED ON TRADE, PARTICULARLY SINCE THE VERY PURPOSE FOR WHICH THE SELLING AGENCIES HAVE BEEN CREATED IS TO TAKE AWAY FROM THE MINES THE EFFORT INVOLVED OR ORGANIZING THE SALE OF THEIR PRODUCTS ON A COMMERCIAL BASIS AND THEIR FUNCTION, WHICH IS TO FURNISH WHOLESALERS WITH SUPPLIES, CONSTITUTES THE ESSENTIAL REASON FOR THEIR AUTHORIZED JOINT-SELLING AGREEMENT . I - IN JOINED CASES 1 . PRASIDENT RUHRKOHLEN-VERKAUFSGESELLSCHAFT MBH, HAVING ITS REGISTERED OFFICES AT ESSEN ( CASE 36/59 ), 2 . GEITLING RUHRKOHLEN-VERKAUFSGESELLSCHAFT MBH, HAVING ITS REGISTERED OFFICES AT ESSEN ( CASE 37/59 ), 3 . MAUSEGATT RUHRKOHLEN-VERKAUFSGESELLSCHAFT MBH, HAVING ITS REGISTERED OFFICES AT ESSEN ( CASE 38/59 ), REPRESENTED RESPECTIVELY BY THEIR MANAGERS, 4 . THE MINING COMPANIES OF THE RUHR BASIN, GROUPED TOGETHER WITHIN THE AFORESAID JOINT SELLING AGENCIES AND REPRESENTED BY THE LATTER, ASSISTED BY HANS HENGELER AND BY WERNER VON SIMSON, BOTH ADVOCATES AT THE DUESSELDORF BAR, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG-BERTRANGE AT THE CHAMBERS OF THE SAID WERNER VON SIMSON, APPLICANTS, V HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, ERICH ZIMMERMANN, ACTING AS AGENT, ASSISTED BY PROFESSOR KONRAD DUDEN AND HEINZ ROWEDDER, BOTH ADVOCATES AT THE MANNHEIM BAR, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2 PLACE DE METZ, DEFENDANT, APPLICATION FOR THE ANNULMENT OF CERTAIN PROVISIONS OF DECISION NO 36/59 OF THE HIGH AUTHORITY OF 17 JUNE 1959, PARTLY REPEALING AND PARTLY SUPPLEMENTING DECISION NO 17/59 OF 18 FEBRUARY 1959 ON COMMERCIAL RULES GOVERNING THE JOINT SELLING AGENCIES FOR THE SALE OF COAL FROM THE RUHR, PUBLISHED IN THE JOURNAL OFFICIEL NO 40 OF 8 JULY 1959 . II - AND IN CASE 40/59 I . NOLD KG, A WHOLESALE TRADER IN COAL AND CONSTRUCTION MATERIALS, DARMSTADT, REPRESENTED BY ITS PARTNER WITH PERSONAL LIABILITY, ERICH NOLDD, ASSISTED BY GEORG THOMAS, ADVOCATE AT THE FRANKFURT AM MAIN BAR, AND JOSEF KUEBERL, ADVOCATE AT THE BONN BAR, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF FELICIEN JANSEN, HUISSIER, 21 RUE ALDRINGEN, APPLICANT, V HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, ERICH ZIMMERMANN, ACTING AS AGENT, ASSISTED BY PROFESSOR KONRAD DUDEN AND HEINZ ROWEDDER, BOTH ADVOCATES AT THE MANNHEIM BAR, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2 PLACE DE METZ, DEFENDANT, APPLICATION FOR THE ANNULMENT OR, ALTERNATIVELY, FOR A DECLARATION OF THE INAPPLICABILITY OF ARTICLE 6 ( 1 ) AND ( 2 ) OF DECISION NO 36/59 OF THE HIGH AUTHORITY OF 17 JUNE 1959; I - PRELIMINARY CONSIDERATIONS THE JOINT SELLING AGENCIES OF THE RUHR, ON THE ONE HAND, AND THE NOLD UNDERTAKING, ON THE OTHER, ATTACK THE SAME DECISION OF THE HIGH AUTHORITY ALTHOUGH BY REASON OF DIFFERENT INTERESTS AND FOR OPPOSITE PURPOSES . THE SUBMISSIONS PUT FORWARD BY THESE APPLICANTS, ALTHOUGH DRAWN UP FOR DIVERGENT AIMS, ARE STRICTLY SPEAKING ANALOGOUS . IN ORDER TO AVOID THE POSSIBILITY THAT TWO DIFFERENT JUDGMENTS MIGHT LEAD TO DISCORDANT INTERPRETATIONS, THE COURT DEEMS IT EXPEDIENT TO JOIN THE CASES IN QUESTION SO AS TO DELIVER A SINGLE JUDGMENT . II - ADMISSIBILITY THE APPLICATIONS BROUGHT BY THE JOINT SELLING AGENCIES OF THE RUHR WERE LODGED IN COMPLIANCE WITH THE PRESCRIBED FORMALITIES . THEIR ADMISSIBILITY IS NOT DISPUTED AND DOES NOT GIVE RISE TO ANY OBJECTION BY THE COURT OF ITS OWN MOTION . THEREFORE THEY ARE ADMISSIBLE . THE APPLICATION SUBMITTED BY THE NOLD UNDERTAKING IS IN DUE FORM AND HAS BEEN LODGED WITHIN THE PRESCRIBED PERIOD . THE APPLICANT HAS SUBMITTED TWO SETS OF CONCLUSIONS, ONE AS MAIN CONCLUSIONS AND THE OTHER IN THE ALTERNATIVE . BEFORE EXAMINING THE MAIN CONCLUSIONS IT SHOULD BE NOTED THAT THE NOLD UNDERTAKING HAS STATED THAT ITS INTEREST IN THE ANNULMENT OF THE CONTESTED DECISION WOULD DISAPPEAR OR SERVE NO USEFUL PURPOSE WERE ITS ALTERNATIVE CLAIM FOR A DEROGATION OF THE RULES AT ISSUE IN FAVOUR OF PREVIOUS FIRST-HAND TRADERS TO BE ACCEPTED . THE APPLICANT SUPPORTS ITS ARGUMENTS WITH GERMAN CASE-LAW ON THE INTERPRETATION OF ARTICLE 14 OF THE BASIC LAW OF THE FEDERAL REPUBLIC, WHICH GUARANTEES PRIVATE PROPERTY . IT IS NOT FOR THE COURT, WHOSE FUNCTION IS TO JUDGE THE LEGALITY OF DECISIONS ADOPTED BY THE HIGH AUTHORITY AND, AS OBVIOUSLY FOLLOWS, THOSE ADOPTED IN THE PRESENT CASE UNDER ARTICLE 65 OF THE TREATY, TO ENSURE THAT RULES OF INTERNAL LAW, EVEN CONSTITUTIONAL RULES, ENFORCED IN ONE OR OTHER OF THE MEMBER STATES ARE RESPECTED . THEREFORE THE COURT MAY NEITHER INTERPRET NOR APPLY ARTICLE 14 OF THE GERMAN BASIC LAW IN EXAMINING THE LEGALITY OF A DECISION OF THE HIGH AUTHORITY . P . 439 MOREOVER COMMUNITY LAW, AS IT ARISES UNDER THE ECSC TREATY, DOES NOT CONTAIN ANY GENERAL PRINCIPLE, EXPRESS OR OTHERWISE, GUARANTEEING THE MAINTENANCE OF VESTED RIGHTS . IN THESE CIRCUMSTANCES, THE ALTERNATIVE CLAIM PUT FORWARD BY THE NOLD UNDERTAKING IS NOT ADMISSIBLE, WHEREAS THE ADMISSIBILITY OF THE PRINCIPAL CLAIM IS NOT DISPUTED BY THE DEFENDANT AND DOES NOT GIVE RISE TO ANY OBJECTIONS BY THE COURT OF ITS OWN MOTION . III - SUBSTANCE A - ON THE SUBMISSION AS TO INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT, THE JOINT SELLING AGENCIES AND NOLD, EACH IN RESPECT OF THE ELEMENTS OF THE CONTESTED DECISION WITH WHICH THEY ARE NOT CONTENT, PUT FORWARD THE SUBMISSION OF INFRINGEMENT OF AN ESSENTIAL PROCEDURAL REQUIREMENT, ASSERTING THAT THE NECESSARY REASONS ARE WANTING OR ARE FAULTY . AFTER PROHIBITING ( ARTICLE 65 ( 1 )) CARTELS IN A GENERAL WAY, THE TREATY CONFERS UPON THE HIGH AUTHORITY ( ARTICLE 65 ( 2 )) THE POWER TO AUTHORIZE SPECIALIZATION AGREEMENTS OR JOINT-BUYING OR JOINT-SELLING AGREEMENTS, BUT SUBJECTS THE EXERCISE OF THAT POWER TO A FINDING BY THE HIGH AUTHORITY THAT THE CONDITIONS SET OUT IN SUBPARAGRAPHS ( A ), ( B ) AND ( C ) OF PARAGRAPH ( 2 ) ARE MET . THAT FINDING, BY ITS VERY NATURE, COMPRISES AN ASSESSMENT OF THE SITUATION CREATED BY THE ECONOMIC FACTS OR CIRCUMSTANCES AND, ACCORDINGLY, IS PARTIALLY OUTSIDE THE JURISDICTION OF THE COURT . THE OBLIGATION TO STATE SPECIFIC REASONS FOR DECISIONS GRANTING AUTHORIZATIONS IS RENDERED NECESSARY AND MUST BE STRICTLY OBSERVED BY REASON OF THE FACT THAT REVIEW BY THE COURT IS LIMITED AND THAT THE AUTHORIZATION REQUESTED IS SUBJECT TO THE FINDING BY THE HIGH AUTHORITY THAT THE CONDITIONS SET OUT IN ARTICLE 65 ( 2 ) EXIST AND ARE MET . THOSE REASONS MUST ENABLE THE INTERESTED PARTIES AND, IN THE EVENT OF LEGAL PROCEEDINGS, THE COURT, TO VERIFY THE FACTORS BY VIRTUE OF WHICH THE HIGH AUTHORITY CONCLUDED THAT THE CONDITIONS REQUIRED FOR OBTAINING ITS AUTHORIZATION WERE MET SO AS TO BE ABLE TO EXAMINE WHETHER THAT CONCLUSION WAS RIGHT BOTH IN FACT AND IN LAW . 1 . REFUSAL TO AUTHORIZE THE CRITERION OF 60 000 METRIC TONS THE REASONS WHICH LED THE HIGH AUTHORITY TO REFUSE AUTHORIZATION OF THIS CRITERION ARE SET OUT, GENERALLY, IN THE THIRD, FOURTH, SEVENTH AND EIGHTH RECITALS AND, MORE EXPLICITLY, IN THE NINTH RECITAL IN PART II OF THE STATEMENT OF REASONS . P . 440 IT IS EVIDENT THAT THE COMBINED EFFECT OF THE CRITERION OF 60 000 METRIC TONS APPEARING IN EACH OF THE THREE AGREEMENTS IN QUESTION WOULD IN PRACTICE LEAD TO A LARGE EXTENT TO " TAKING INTO ACCOUNT THE QUANTITIES BOUGHT FROM THE OTHER TWO JOINT SELLING AGENCIES IN EACH CASE " ( JUDGMENT IN CASE 2/56, GEITLING V HIGH AUTHORITY, REC . 1957, P . 43 ). THE SAID CRITERION THEREFORE TENDS TO PREVENT, RESTRICT OR DISTORT COMPETITION BETWEEN THE JOINT SELLING AGENCIES, AND THIS RENDERS IT MORE RESTRICTIVE THAN IS NECESSARY AND PERMISSIBLE FOR THE PURPOSE OF A SCHEME BASED ON THE NEUTRAL INDEPENDENCE OF THE THREE AGENCIES . THE AGENCIES COMPLAIN THAT THE HIGH AUTHORITY HAS OMITTED TO STATE THE REASONS FOR WHICH IT DID NOT EVEN CONSIDER REDUCING THIS CRITERION . ALTHOUGH IT IS TRUE THAT THE DECISION DOES NOT STATE EXPLICIT REASONS ON THIS POINT, IT APPEARS FROM THE CONTEXT OF THE DECISION THAT IN THE OPINION OF THE HIGH AUTHORITY THE OTHER TWO CRITERIA SUFFICE TO ENSURE AN APPRECIABLE IMPROVEMENT IN DISTRIBUTION, SUCH THAT THE POINT OF BALANCE BETWEEN THE FAVOURABLE AND UNFAVOURABLE EFFECTS OF THE AGREEMENT IS BEST OBTAINED BY ABOLISHING THE CRITERION OF 60 000 METRIC TONS AND BY MAINTAINING, IN PRINCIPLE, THE OTHER TWO CRITERIA . FOR THESE REASONS THE COMPLAINT IS UNFOUNDED . 2 . MAINTENANCE IN PRINCIPLE AND THE ALTERATION OF THE AMOUNTS OF THE CRITERIA OF 30 000 ( 20 000 ) AND 9 000 ( 6 000 ) METRIC TONS THE COURT CONSIDERS THAT, IN VIEW OF THE INTERDEPENDENCE OF THESE TWO CRITERIA, IT IS APPROPRIATE TO EXAMINE THE COMPLAINTS CONCERNING THEM TOGETHER . A - THE CONSIDERATIONS PUT FORWARD ON THIS MATTER IN THE STATEMENT OF REASONS ( PART II ), IN SO FAR AS THEY ARE CLEARLY EXPRESSED, MAY BE SUMMARIZED AS FOLLOWS : ( A ) AS REGARDS THE JUSTIFICATION IN PRINCIPLE FOR THESE CRITERIA : THE APPLICATION OF SUCH CRITERIA IS LIKELY TO IMPROVE THE DISTRIBUTION OF THE FUELS OF A JOINT SELLING AGENCY, IN PARTICULAR BY PREVENTING THE DISTRIBUTION NETWORK FROM BEING INSUFFICIENTLY DISTENDED ( CF . FIFTH AND SIXTH RECITALS ); THE CRITERION OF 30 000 ( 20 000 ) METRIC TONS MAKES IT POSSIBLE TO LIMIT DIRECT TRADING TO DISTRIBUTORS WHO, BY REASON OF THE WIDESPREAD SCOPE OF THEIR BUSINESS AND IN PARTICULAR OF THE FACT THAT THEIR BUSINESS INCLUDES A LARGE RANGE OF CATEGORIES AND TYPES OF COAL, MAY BE CONSIDERED AS FIRST-HAND WHOLESALERS ( CF . TENTH RECITAL ); THEREFORE THE SAID CRITERIA SATISFY THE CONDITIONS REQUIRED BY ARTICLE 65 ( 2 ) ( A ) OF THE TREATY AND THEY CONTRIBUTE TO A SUBSTANTIAL IMPROVEMENT IN THE DISTRIBUTION OF FUELS ( CF . FOURTH RECITAL ); P . 441 ( B ) CONCERNING THE JUSTIFICATION FOR REDUCING THE AMOUNT OF THESE CRITERIA TO 20 000 AND 6 000 METRIC TONS RESPECTIVELY : GENERALLY SPEAKING, AND TAKING INTO ACCOUNT EXPERIENCE ACQUIRED DURING THE COURSE OF THE LAST FEW YEARS, THE AMOUNTS OF THE TONNAGES PROPOSED BY THE AGENCIES TEND TO GIVE RISE TO COMMERCIAL EFFECTS WHICH ARE MORE RESTRICTIVE THAN IS NECESSARY FOR AN IMPROVEMENT IN DISTRIBUTION ( CF . THIRD, FOURTH, SEVENTH, AND EIGHTH RECITALS ); THE EFFECT OF THE AMOUNT OF 30 000 METRIC TONS IS TO EXCLUDE TRADERS WHO, WHEN THE VOLUME OF THEIR BUSINESS IS CONSIDERED, MAY BE REGARDED AS FIRST-HAND WHOLESALERS ( CF . TENTH RECITAL ); THE REDUCTION OF THE AMOUNT OF 9 000 METRIC TONS IS JUSTIFIED BY THE FACT THAT PRIOR TO THE ESTABLISHMENT OF THE COMMON MARKET THE SELLING ORGANIZATIONS OF THE RUHR ALLOWED DIRECT SUPPLY TO ANY TRADER DISTRIBUTING 6 000 METRIC TONS OF COAL FROM THE RUHR PER ANNUM ( CF . ELEVENTH RECITAL ); THEREFORE IT WAS NECESSARY TO REDUCE THE CRITERIA PROPOSED BY THE AGENCIES BECAUSE THEY WERE MORE RESTRICTIVE THAN WAS NECESSARY FOR THE PURPOSE OF THE AGREEMENTS IN QUESTION AND BECAUSE THEY MADE IT POSSIBLE FOR EITHER THE AGENCIES OR THE DISTRIBUTORS TO CONTROL OR LIMIT THE OUTLETS OF AN IMPORTANT PART OF THE PRODUCE ( CF . FOURTH, SEVENTH AND EIGHTH RECITALS ). B - ALTHOUGH IT CANNOT BE DENIED THAT CERTAIN QUANTITATIVE RESTRICTIONS MAY " MAKE FOR A SUBSTANTIAL IMPROVEMENT IN DISTRIBUTION " IN SO FAR AS THEY FACILITATE EFFECTIVE AND RATIONAL SALES, IT REMAINS TO BE SEEN WHETHER THE HIGH AUTHORITY HAS SHOWN FIRST THAT THE QUANTITATIVE LIMITS WHICH IT HAS AUTHORIZED MAKE FOR AN IMPROVEMENT IN DISTRIBUTION, SECONDLY WHETHER THEY ARE NOT MORE RESTRICTIVE THAN IS NECESSARY FOR THE PURPOSE OF THE AGREEMENT AUTHORIZED AND, FINALLY, WHETHER CONVINCING REASONS HAVE BEEN GIVEN FOR REDUCING THE CRITERIA FROM 30 000 TO 20 000 METRIC TONS AND FROM 9 000 TO 6 000 METRIC TONS . IT IS THEREFORE NECESSARY TO PROCEED TO A MORE SEARCHING INQUIRY BASED ON THE FOLLOWING CONSIDERATIONS : ( A ) WHY IS THE INTERRELATED MAINTENANCE OF A " COMMUNITY COAL " CRITERION AND AN " AGENCY COAL " CRITERION ESSENTIAL IN ORDER TO ENSURE AN IMPROVEMENT IN DISTRIBUTION? ( B ) WHY DO ACCEPTABLE EXPECTATIONS IN AN IMPROVEMENT IN DISTRIBUTION DEPEND ON DISTRIBUTORS ACCEPTED AS DIRECT TRADERS HAVING AVAILABLE " A LARGE RANGE OF CATEGORIES AND TYPES "? P . 442 ( C ) WHY - SUPPOSING INDEED THAT THIS IS THE CASE - HAS THE HIGH AUTHORITY NOT CONSIDERED THAT THE CLAUSE APPROVED BY ARTICLE 6 ( 3 ) OF DECISION NO 17/59 AS ALTERED BY THE CONTESTED DECISION IS SUFFICIENT? ( D ) HAVE SUFFICIENT REASONS BEEN GIVEN FOR THE REDUCTION OF THE " COMMUNITY COAL " CRITERION FROM 30 000 TO 20 000 METRIC TONS? ( E ) HAVE SUFFICIENT REASONS BEEN GIVEN FOR THE REDUCTION OF THE " AGENCY COAL " CRITERION FROM 9 000 TO 6 000 METRIC TONS? AS TO ( A ) THE STATEMENT OF REASONS FOR THE DECISION, AFTER JUSTIFYING THE PRINCIPLE OF QUANTITATIVE CRITERIA BY ASSERTING THAT THEY MAKE EFFECTIVE AND RATIONAL SALES POSSIBLE, EXPLAINS THE SPECIFIC FUNCTION OF THE " COMMUNITY COAL " CRITERION USING ARGUMENTS BASED ON THE EXTENT OF THE TRADERS' BUSINESSES, WHEREAS IN ORDER TO POINT OUT THE VALUE OF THE " COAL FROM THE SELLING AGENCIES " CRITERION, THE HIGH AUTHORITY DOES NO MORE THAN STATE THAT THE SAID CRITERION " DOES NOT GIVE RISE TO ANY OBJECTION OF PRINCIPLE CONCERNING THE BASIS OF FURNISHING SUPPLIES ". FROM THIS IT IS TO BE CONCLUDED THAT IN THE OPINION OF THE HIGH AUTHORITY THE SPECIFIC PURPOSE OF THE CRITERION OF " AGENCY COAL " IS TO REDUCE THE DISTRIBUTION NETWORK, WHEREAS THE CRITERION OF " COMMUNITY COAL " SERVES A DIFFERENT INTEREST, NAMELY KEEPING CERTAIN DISTRIBUTORS OUT OF DIRECT TRADING WHERE THEY DO NOT MEET THE CONDITIONS REQUIRED FOR BEING FIRST-HAND TRADERS . TURNING TO ANOTHER MATTER, THE HIGH AUTHORITY, IN ITS ANSWER TO THE FIFTH QUESTION PUT TO IT BY THE COURT ON 18 FEBRUARY 1960, AFTER STRESSING THE FUNDAMENTAL DIFFERENCE, WHICH INDEED IS NOT DISPUTED, BETWEEN WHOLESALE AND RETAIL TRADE, ASSERTS THAT " AS REGARDS WHOLESALE TRADE, THAT IS TO SAY, FIRST-HAND TRADING AND SECOND-HAND TRADING, THERE IS NO DIFFERENCE AS REGARDS THE CUSTOMERS ". IN THAT SAME DOCUMENT IT IS ASSERTED THAT " THE REASON FOR THE DISTINCTION BETWEEN THOSE TWO CATEGORIES IS TO PROMOTE THE RATIONALIZATION OF DISTRIBUTION BY LIMITING THE NUMBER OF FIRST-HAND TRADERS WITH WHICH THE JOINT SELLING AGENCIES DEAL DIRECTLY . IT APPEARS FROM THAT EXPLANATION THAT THE DISTINCTION BETWEEN FIRST-HAND TRADING AND SECOND-HAND TRADING DOES NOT CORRESPOND TO OBJECTIVE TECHNICAL OR ECONOMIC REQUIREMENTS, BUT ONLY TO A TRADITIONAL PRACTICE . THE ADVANTAGES WHICH THE AGENCIES MAY DERIVE FROM TRADING WITH THE LOWEST POSSIBLE NUMBER OF WHOLESALERS DO NOT CONSTITUTE A SUFFICIENT REASON TO JUSTIFY THE RESTRICTION WHICH IS THEREBY IMPOSED ON TRADE, PARTICULARLY SINCE THE VERY PURPOSE FOR WHICH THE SELLING AGENCIES HAVE BEEN CREATED IS TO TAKE AWAY FROM THE MINES THE EFFORT INVOLVED IN ORGANIZING THE SALE OF THEIR PRODUCTS ON A COMMERCIAL BASIS AND THEIR FUNCTION, WHICH IS TO FURNISH WHOLESALERS WITH SUPPLIES, CONSTITUTES THE ESSENTIAL REASON FOR THEIR AUTHORIZED JOINT-SELLING AGREEMENT . P . 443 TURNING TO ANOTHER POINT, THE APPLICANT NOLD ARGUES THAT IN FACT THE LIMIT OF 20 000 METRIC TONS FORCES TRADERS TO MAKE PURCHASES FROM THE THREE AGENCIES . IN THE REASONS GIVEN FOR THE CONTESTED DECISION, THE HIGH AUTHORITY HAD FOUND THAT THE CRITERION OF 60 000 METRIC TONS, WHICH IT ABOLISHES, IN PRACTICE HAS THE EFFECT OF FORCING MOST OF THE TRADERS WISHING TO OBTAIN THE STATUS OF FIRST-HAND TRADERS TO GET ON TO THE BOOKS OF THE THREE AGENCIES . THE REASON FOR THIS WAS THE FACT THAT IN A LARGE NUMBER OF CASES AND IN PARTICULAR IN CERTAIN SALES AREAS, IT IS ONLY COAL FROM THE RUHR WHICH IS CONSUMED . THUS, THAT CRITERION - AS THE HIGH AUTHORITY STATED - LED " TO RESTRICTING THE INDEPENDENCE OF THE JOINT SELLING AGENCIES ". THE INDEPENDENCE OF THE THREE AGENCIES IS AN ESSENTIAL PREREQUISITE OF THE AUTHORIZATIONS FOR JOINT SALES UNDER DISCUSSION . ANY RESTRICTION LIABLE TO JEOPARDIZE IT MUST BE PROHIBITED . THE CRITERION OF 20 000 METRIC TONS, ALTHOUGH LESS RESTRICTIVE THAN THE FORMER CRITERION, STILL HAS THE ADVANTAGE NOTED ABOVE ALTHOUGH TO A LESSER DEGREE . IN EFFECT, THE AUTHORIZED AGREEMENTS TEND, THROUGH THE MECHANISM OF THE 20 000 METRIC TONS CLAUSE, TO FAVOUR IN GENERAL, OR AT LEAST IN FACT, PURCHASES OF COAL FROM THE RUHR, BECAUSE IF A TRADER DOES NOT PURCHASE THE 20 000 METRIC TONS FROM ONE AGENCY, WHILE WISHING TO CONTINUE TO PURCHASE THE MINIMUM OF 6 000 METRIC TONS SO AS TO REMAIN ELIGIBLE FOR ACCEPTANCE BY THAT AGENCY, HE IS FORCED, IN MOST CASES, TO PURCHASE THE REMAINDER OF 14 000 METRIC TONS FROM THE OTHER AGENCIES . THUS, THROUGH THE COMBINED EFFECT OF THE THREE PARALLEL AGREEMENTS, THE AGENCIES MUTUALLY FAVOUR EACH OTHER, AND THIS IS CONTRARY TO THAT COMPETITION WHICH OUGHT TO EXIST BETWEEN THEM AND WHICH IS THE VERY BASIS FOR THE AUTHORIZATION GRANTED . ALTHOUGH IT APPEARS FROM INFORMATION PRODUCED BY THE DEFENDANT IN ITS ANSWERS TO THE QUESTIONS PUT BY THE COURT THAT A CERTAIN NUMBER OF ACCEPTED TRADERS HAVE NOT BEEN OBLIGED TO GET THEMSELVES ENTERED IN THE BOOKS OF THE THREE AGENCIES IN ORDER TO ACHIEVE THE LIMIT OF 20 000 METRIC TONS, IT IS TO BE NOTED THAT THOSE PARTICULAR TRADERS NOT ONLY SELL COAL BUT ALSO BROWN COAL AND COKE . SINCE THAT POSSIBILITY, OR ADVANTAGE, IS NOT OPEN TO TRADERS WHO ONLY PURCHASE COAL, THE LATTER ARE IN MOST CASES FORCED TO PURCHASE AT LEAST 20 000 METRIC TONS FROM JUST ONE AGENCY OR TO MAKE PURCHASES FROM THE THREE AGENCIES . AS TO ( B ) ALTHOUGH RESTRICTION OF DIRECT DELIVERIES ONLY TO CUSTOMERS PLACING ORDERS OF A LARGISH AMOUNT WITH THE AGENCY CONCERNED IS OBVIOUSLY CAPABLE OF PROMOTING THE RATIONALIZATION OF SALES, NEVERTHELESS IT IS NOT PROVEN THAT THE EXTENT OF THE RANGE OF CATEGORIES AND TYPES OF COAL HELD BY THE TRADERS MANIFESTLY CONSTITUTES A CRITERION FOR LIMITING THE NUMBER OF TRADERS ACCEPTED FOR THE ADVANTAGE OF DIRECT PURCHASES FROM THE MINES . P . 444 THE COURT, WITHOUT JUDGING THE SOUNDNESS OF THAT CRITERION, IS OF THE OPINION THAT MORE SPECIFIC AND FULLER REASONS SHOULD BE FORTHCOMING BEFORE IT IS APPLIED . AS TO ( C ) EVEN IF IT SHOULD BE ESTABLISHED THAT IT IS NECESSARY TO LIMIT DIRECT DELIVERIES FROM THE MINES TO TRADERS HOLDING A WIDE RANGE OF CATEGORIES AND TYPES, THE QUESTION ARISES WHY THE PROVISION IN ARTICLE 6 ( 3 ), AS AMENDED, OF DECISION NO 17/59, WAS NOT CONSIDERED SUFFICIENT IN THAT RESPECT, BECAUSE THAT PROVISION, WHICH IS NOT CONTESTED IN THE PRESENT APPLICATIONS, ALLOWS THE AGENCIES TO REFUSE TO SELL TO TRADERS WHO CANNOT SHOW THAT THEY HOLD SUCH A RANGE OF CATEGORIES AND TYPES, AND THIS IS REGARDLESS OF ANY QUALITATIVE CRITERION . THE STATEMENT OF REASONS DOES NOT INCLUDE ANY WORTHWHILE INFORMATION ON THIS POINT . IT RESULTS FROM THE FOREGOING THAT THE MAINTENANCE OF THE CRITERION OF 30 000 ( 20 000 ) METRIC TONS IS NOT SUPPORTED BY SUFFICIENT REASONS AT LAW . AS TO ( D ) AS THE COURT HAS FOUND ABOVE THAT INSUFFICIENT REASONS HAVE BEEN GIVEN FOR THE AUTHORIZATION OF THE CRITERION OF " COMMUNITY COAL ", THE AFOREMENTIONED INSUFFICIENT REASONS DO NOT RENDER IT ANY THE MORE POSSIBLE TO ASSESS THE QUESTION WHETHER THE HIGH AUTHORITY WAS JUSTIFIED AND WITHIN ITS RIGHTS IN REDUCING THAT CRITERION FROM 30 000 TO 20 000 METRIC TONS . THEREFORE THE COMPLAINT PUT FORWARD BY THE AGENCIES ON THIS POINT MUST BE ACCEPTED AND UPHELD . AS TO ( E ) IN SUPPORT OF THE REDUCTION OF THE CRITERION OF " AGENCY COAL " FROM 9 000 TO 6 000 METRIC TONS, THE STATEMENT OF REASONS ONLY SAYS " THAT THIS TONNAGE IS ESTABLISHED TAKING INTO ACCOUNT THE FACT THAT PRIOR TO THE ESTABLISHMENT OF THE COMMON MARKET THE AGENCIES FOR THE SALE OF COAL FROM THE RUHR ACCEPTED FOR DIRECT SUPPLIES A WHOLESALE TRADER DISTRIBUTING 6 000 METRIC TONS OF COAL FROM THE RUHR PER ANNUM ". THIS LINE OF REASONING IS IRRELEVANT . THE MERE REFERENCE TO RULES IN FORCE PRIOR TO THE ESTABLISHMENT OF THE COMMON MARKET IS NOT CONCLUSIVE BECAUSE IT IS OBVIOUS THAT NOTICEABLY DIFFERENT SITUATION ARE INVOLVED, AND THAT WITHOUT SPECIFIC JUSTIFICATION IT WOULD BE WRONG TO TREAT AS ON THE SAME FOOTING : A SET OF RULES GOVERNING A NATIONAL MARKET AND A SET OF RULES GOVERNING A CONSIDERABLY ENLARGED MARKET : A SET OF RULES ADOPTED AT A TIME OF NORMAL SUPPLY AND DEMAND OR EVEN OF SCARCITY WITH A SET OF RULES ADOPTED IN A PERIOD OF PLENTY; A SET OF RULES ESTABLISHED UNDER AN OCCUPATION REGIME AND A SET OF RULES ENVISAGED IN A PERIOD OF NORMAL POLITICAL CONDITIONS . P . 445 SINCE THE REDUCTION OF THE CRITERION OF " AGENCY COAL " IS NOT SUPPORTED BY SUFFICIENT REASONS AT LAW, THE COMPLAINT RAISED AGAINST IT BY THE AGENCIES MUST BE UPHELD . IT THEREFORE BECOMES SUPERFLUOUS TO EXAMINE THE COMPLAINT PUT FORWARD BY NOLD AGAINST THE SAME CRITERION . B - THE SUBMISSIONS AS TO INFRINGEMENT OF THE TREATY AND MISUSE OF POWERS TAKING INTO ACCOUNT THE GROUNDS SET OUT ABOVE, IT IS NOT NECESSARY TO EXAMINE THE OTHER COMPLAINTS MADE BY THE APPLICANT PARTIES WITH THE EXCEPTION OF THE COMPLAINTS MADE BY THE AGENCIES CONCERNING THE CRITERION OF 60 000 METRIC TONS OTHER THAN THE COMPLAINT ALREADY REJECTED ABOVE, AND THE COMPLAINT OF MISUSE OF POWERS . 1 . THE COMPLAINT OF INFRINGEMENT OF THE TREATY THE HIGH AUTHORITY MAY ONLY AUTHORIZE SPECIALIZATION AGREEMENTS OR JOINT-BUYING OR JOINT-SELLING AGREEMENTS IF IT FINDS THAT THE REQUIREMENTS LAID DOWN BY ARTICLE 65 ( 2 ) EXIST AND ARE MET . THE HIGH AUTHORITY CONSIDERED THAT IT WAS ITS DUTY TO ABOLISH THE CRITERION OF 60 000 METRIC TONS, HAVING FOUND THAT THE SAID CRITERION TENDED TO PREVENT, RESTRICT OR DISTORT COMPETITION BETWEEN THE AGENCIES, AND THAT THIS NOT ONLY MEANT THAT THE AUTHORIZED AGREEMENT AGREEMENT WAS MORE RESTRICTIVE THAN WAS NECESSARY FOR ITS PURPOSE BUT ALSO THAT IT DID NOT MEET THE REQUIREMENTS OF ARTICLE 65 ( 2 ) ( C ). THE HIGH AUTHORITY, HAVING JUSTIFIED THAT ABOLITION BY A SUFFICIENT AND APPROPRIATE STATEMENT OF REASONS, HAS NOT INFRINGED THE PROVISIONS OF ARTICLE 65 . THE AGENCIES HAVE FAILED TO FURNISH PROOF OF THEIR ALLEGATION . 2 . THE COMPLAINT AS TO MISUSE OF POWERS THE AGENCIES ALLEGE IN THE ALTERNATIVE THAT THERE HAS BEEN A MISUSE OF POWERS BY REASON OF THE REFUSAL OF THE HIGH AUTHORITY TO AUTHORIZE THE QUANTITATIVE CRITERIA IN FORCE PRIOR TO THE CONTESTED DECISION . IT IS ASSERTED THAT THE HIGH AUTHORITY HAS USED THE POWERS OF AUTHORIZATION CONFERRED UPON IT IN ORDER TO ATTEMPT TO IMPOSE A NEW SET OF COMMERCIAL RULES ABSOLUTELY DIFFERENT FROM THE FORMER RULES . IT HAS THUS USED ITS POWERS FOR THE ILLICIT PURPOSE OF IMPLEMENTING A POLICY OF AID TO THE MIDDLE CLASSES, AND THIS IS CONTRARY TO ARTICLE 65, FOR THAT ARTICLE CANNOT CONSTITUTE A BASIS FOR AN ECONOMIC OR SOCIAL POLICY . THE DEFENDANT DENIES THOSE ALLEGATIONS . IT ARGUES THAT IN LOWERING THE LEVEL OF THE QUANTITATIVE CRITERIA IT HAS PURSUED ONE PURPOSE ONLY, NAMELY CONFORMITY WITH ARTICLE 65 OF THE TREATY . THE ALLEGATION OF THE AGENCIES CANNOT BE ENTERTAINED . THEY DO NOT PRODUCE PROOF THAT THE NEW COMMERCIAL RULES HAVE BEEN IMPOSED BY THE HIGH AUTHORITY FOR A PURPOSE OTHER THAN THAT IN RESPECT OF WHICH POWERS OF AUTHORIZATION HAVE BEEN CONFERRED UPON IT BY ARTICLE 65 OF THE TREATY . NOTHING PROVES, ESTABLISHES OR EVEN SUGGESTS AS AGAINST THE HIGH AUTHORITY THAT IT PURSUED A POLICY OF AID TO THE MIDDLE CLASSES . NO ACT IS ADVANCED IN THAT REGARD BY THE AGENCIES WHICH GIVES A SHADOW OF TRUTH TO THEIR ASSERTION . THE FACT ITSELF THAT A RATHER SMALL NUMBER OF TRADERS OF AVERAGE SIZE CAN HAVE ACCESS TO THE SOURCES OF PRODUCTION AND ARE NOT EXCLUDED FROM DIRECT SUPPLIES CANNOT OF ITSELF BE EVIDENCE OF A POLICY OF AID TO THE MIDDLE CLASSES . MOREOVER, SUCH A POLICY COULD ONLY BE PRESUMED FROM A SUFFICIENTLY SPECIFIC SET OF CONDITIONS AND CIRCUMSTANCES WHICH ARE LACKING IN THE PRESENT CASE . THEREFORE THIS SUBMISSION IS UNFOUNDED . ARTICLE 69 OF THE RULES OF PROCEDURE PROVIDES THAT THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS AND THAT THE COURT MAY ORDER THAT THE PARTIES SHALL BEAR THEIR OWN COSTS IN WHOLE OR IN PART WHERE THEY FAIL RESPECTIVELY ON ONE OR SEVERAL HEADS . SINCE EACH OF THE PARTIES HAS FAILED IN PART TO SUBSTANTIATE ITS CONCLUSIONS COSTS MUST BE AWARDED AS STATED IN THE OPERATIVE PART OF THE JUDGMENT BELOW . THE COURT HEREBY : 1 . DECLARES THAT APPLICATIONS NOS 36/59, 37/59 AND 38/59 ARE ADMISSIBLE; 2 . DECLARES THAT APPLICATION NO 40/59 IS ADMISSIBLE WITH THE EXCEPTION OF ITS CONCLUSIONS IN THE ALTERNATIVE; 3 . ANNULS ARTICLE 2 OF DECISION NO 36/59 OF THE HIGH AUTHORITY OF 17 JUNE 1959, IN SO FAR AS IT REPLACES ARTICLE 6 ( 1 ) AND ( 2 ) AND ARTICLE 9 OF DECISION NO 17/59 OF THE HIGH AUTHORITY OF 18 FEBRUARY 1959; 4 . ORDERS THAT IN CASES 36/59, 37/59 AND 38/59 THE DEFENDANT SHALL BEAR ITS OWN COSTS AND HALF OF THE COSTS OF EACH OF THE APPLICANTS, THE REMAINDER TO BE BORNE BY THE LATTER; 5 . ORDERS THAT THE COSTS IN APPLICATION NO 40/59 SHALL BE BORNE IN THE SAME PROPORTIONS . © European Communities, 2001 All rights reserved BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII URL: https://www.bailii.org/eu/cases/EUECJ/1960/C3859.html