CIRFS and others / Commission

IDENTIFIER
61990CJ0313 | ECLI:EU:C:1993:111 | C-313/90
LANGUAGE
English
ORIGIN
FRA
COURT
Court of Justice of the European Union
ADVOCATE GENERAL
Lenz
AG OPINION
NO
REFERENCES MADE
11
REFERENCED
177
SECTOR
European Community (EEC/EC)
DOCUMENT TYPE
Judgment

Judgment



Parties

In Case C-313/90,

Comité International de la Rayonne et des Fibres Synthétiques (CIRFS), an association governed by French law, based in Paris, and others, represented by Michel Waelbroeck and Alexandre Vandencasteele, of the Brussels Bar, with an address for service in Luxembourg at the Chambers of E. Arendt, 8-10 Rue Mathias Hardt,

applicants,

v

Commission of the European Communities, represented by T. Cusack, Legal Adviser, and M. Nolin, of its Legal Service, acting as Agents, with an address for service in Luxembourg at the office of Roberto Hayder, of its Legal Service, Wagner Centre, Kirchberg,

defendant,

supported by

French Republic, represented by Edwige Belliard, Deputy Director for Legal Affairs in the Ministry of Foreign Affairs, and Géraud de Bergues, Principal Assistant Secretary for Foreign Affairs, acting as Agents, with an address for service in Luxembourg at the French Embassy, 9 Boulevard du Prince Henri,

and

Allied Signal Inc., a company incorporated under American law, based at Morristown, New Jersey (United States of America),

Allied Signal Fibers Europe SA, a limited company incorporated under French law, whose registered office is in Paris,

represented by Jacques Ferry and Alain Piquemal, of the Paris Bar, with an address for service in Luxembourg at the Chambers of Gaston Vogel, 9 Rue Pierre d' Aspelt,

interveners,

APPLICATION for the annulment of the Commission decision of 1 August 1990 by which the Commission indicated that there was no obligation for prior notification of the aid granted to Allied Signal by the French Government for the establishment of a high-strength polyester yarn unit in the Longwy region and that it considered that the content and the intensity of that aid was satisfactory and, in so far as is necessary, of the letter from Sir Leon Brittan, Vice-President of the Commission, of 4 October 1990 confirming that position,

THE COURT (Fifth Chamber),

composed of: G.C. Rodriguez Iglesias, President of the Chamber, M. Zuleeg, R. Joliet, J.C. Moitinho de Almeida, and D.A.O. Edward, Judges,

Advocate General: C.O. Lenz,

Registrar: H.A. Ruehl, Principal Administrator,

having regard to the Report for the Hearing,

after hearing oral argument from the parties at the hearing on 9 July 1992,

after hearing the Opinion of the Advocate General at the sitting on 17 September 1992,

gives the following

Judgment

Grounds

  1. By application lodged at the Court Registry on 12 October 1990, Comité International de la Rayonne et des Fibres Synthétiques (International Rayon and Synthetic Fibres Committee, hereinafter referred to as "CIRFS"), an association governed by French law, AKZO NV ("AKZO"), a company incorporated under Netherlands law, Hoechst Aktiengeselischaft ("Hoechst"), a company incorporated under German law, Imperial Chemical Industries plc ("ICI"), a company incorporated under English law, and SNIA Fibre SpA ("SNIA Fibre"), a company incorporated under Italian law, brought an action under the second paragraph of Article 173 of the EEC Treaty for the annulment of a decision of the Commission of 1 August 1990 and, in so far as is necessary, of a letter from Sir Leon Brittan, Vice-President of the Commission, of 4 October 1990. In the contested decision, the Commission considered that there was no obligation for the prior notification of the aid granted to the Allied Signal company by the French Government for the establishment of a high-strength polyester yarn unit in the Longwy region and that the content and the intensity of that aid was satisfactory. In the letter at issue, Sir Leon Brittan confirmed that view.

Relevant measures and background to the case

  1. By Decision 85/18/EEC of 10 October 1984 on the French regional planning grant scheme ("Prime d' aménagement du territoire") (OJ 1985 L 11, p. 28), the Commission authorized, as compatible with the common market, the award of regional planning grants in certain areas of metropolitan France, including the Longwy region in Meurthe-et-Moselle. According to Article 7, however, the decision is without prejudice to compliance with present or future special rules on aid to particular industries.

  1. On 19 July 1977, the Commission sent a letter to the Member States headed "Aid to the synthetic fibre industry". It included the following statements: "the synthetic fibre industry in the EEC is capable of producing far more than it actually manages to sell"; "the Commission ... feels that, now and for the next two years, Member States should desist from making any decisions to grant aid which would lead to an increase in the present production capacity ... Where regional aid is concerned the synthetic fibre industry should cease to benefit, even when national regulations provide for aid to be granted automatically with no need for prior notice to be given". It was also stated in that letter that the Commission should be informed beforehand of any aid which the Member States proposed granting, irrespective as to whether or not it involved an increase in capacity. It is common ground that the Member States agreed to the “discipline” set out in that letter.

  1. After receiving the replies from the Member States, the Commission sent them in 1978 a memorandum containing a number of explanations as to the interpretation to be given to the discipline, in particular as to its scope, which "covered acrylic, polyester and polyamide fibres for textile or industrial use". It is common ground that that definition of the scope of the discipline was not contested by the addressee Member States at that time.

  1. The discipline laid down in this way was extended every two years and its scope was, where appropriate, broadened, the version in force at the time when this action was brought being set out in a communication of 8 July 1989 (OJ 1989 C 173, p. 5). That communication, entitled "Aid to the synthetic fibres industry", stated in particular that the Commission "will continue to express an unfavourable a priori opinion with regard to proposed aid by Member States ... which has the effect of increasing the net production capacity of companies in the synthetic fibres sector (acrylic, polyester, polypropylene and polyamide fibre and yarn and the texturization of these filaments, irrespective of the nature or type of product or end-use)".

  1. It appears from the documents before the Court that in 1989 CIRFS learned that Allied Signal Inc., an American company, and Allied Signal Fibers Europe SA (“Allied Signal"), its French subsidiary, had contacted the Spanish, Austrian and French Governments in order to examine the possibility of obtaining a subsidy to set up a unit for the manufacture of industrial polyester filaments. CIRFS informed the Commission and asked it to intervene with the Governments concerned. It also entered into direct contact with those governments directly and representatives of Allied Signal in order to inform them of its view that any aid in that sector would be incompatible with the discipline in force.

  1. The negotiations between Allied Signal, on the one hand, and the Spanish and Austrian Governments, on the other, were unsuccessful and consequently no aid was granted by those governments.

  1. On 20 June 1990, CIRFS asked the Commission to intervene with the French authorities with a view to their not granting a subsidy to Allied Signal. On 29 June 1990, AKZO found out that the French Government had decided to award Allied Signal a regional planning grant with a view to setting up in the Longwy region a factory for the manufacture of polyester fibres for an industrial application, namely to supply European tyre manufacturers, and wrote to Sir Leon Brittan, Vice-President of the Commission responsible for competition matters, to let him know of its concern about the award of that aid and to ask him for any comments.

  1. On 1 August 1990, the Commission sent CIRFS a letter in which it stated that the aid in question constituted an application of the French regional planning grant system and that the decision to award the grant had been communicated to the undertaking "before the discipline relating to synthetic fibres was last broadened" and that, consequently, there had been no obligation to give prior notification.

  1. By letter of 4 October 1990 to AKZO, Sir Leon Brittan confirmed the position adopted in that letter and observed, inter alia, that, whilst the relevant discipline was couched in fairly general terms, the Commission had, up to July 1989, interpreted it in a more narrow sense as applying only to fibres intended for use in the textile sector.

  1. The applicants thereupon brought these proceedings.

  1. By orders of 20 March 1991, the Court granted the French Republic, Allied Signal and Allied Signal Fibers Europe leave to intervene in support of the form of order sought by the Commission.

  1. By letter of 7 January 1993, AKZO informed the Court that it wished to discontinue the proceedings in accordance with Article 78 of the Rules of Procedure. By order of 18 February 1993, the President of the Fifth Chamber ordered Case C-313/90 to be removed from the register in so far as it related to the application brought by AKZO.

  1. Reference is made to the Report for the Hearing for a fuller account of the facts, the procedure and the pleas and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

Object of the proceedings

  1. The Court should determine in limine the object of the proceedings.

  1. In their claims the applicants ask the Court to annul the Commission’ s decision of 1 August 1990 and Sir Leon Brittan’ s letter of 4 October 1990. They maintain that, contrary to the analysis carried out by the Commission, the aid at issue falls within the scope of the discipline and therefore ought, in accordance therewith, to have been the subject of prior notification under Article 93(3) of the Treaty.

  1. It is clear from Article 93(3) that the obligation of prior notification is intended to enable the Commission to decide whether or not to initiate the procedure provided for in Article 93(2) of the Treaty. Accordingly, the Commission’ s decision that the contested aid was not subject to that obligation amounts to a refusal to initiate the procedure provided for in Article 93(2) on the ground that it was an existing aid for which prior authorization had already been granted by Decision 85/18, cited above.

  1. The application must therefore be interpreted as seeking the annulment of the Commission’ s refusal to initiate the procedure provided for in Article 93(2) as expressed in the two communications mentioned above.

Admissibility

  1. The interveners have raised an objection of inadmissibility, claiming essentially that the applicants have no locus standi under the second paragraph of Article 173 of the Treaty. The applicants claim that the interveners are not entitled to raise that objection.

  1. In that regard, it should be noted that in its defence the Commission simply asks the Court to dismiss the action on the merits and does not contest the applicant s locus standi. On the contrary, the Commission has argued that to deny competitors of an undertaking to which aid has been granted locus standi to contest a Commission decision refusing to initiate the procedure provided for in Article 93(2) of the Treaty would create a serious shortcoming in the system of legal redress provided for by Article 164 of the Treaty.

  1. As far as the interveners' entitlement to raise the objection of inadmissibility is concerned, it should be noted that, according to the third paragraph of Article 37 of the Statute of the Court of Justice of the EEC, submissions made in an application to intervene may only have the purpose of supporting the submissions of one of the parties. In addition, Article 93(4) of the Rules of Procedure provides that the intervener must accept the case as he finds it at the time of his intervention.

  1. It follows that the interveners were not entitled to raise the objection of inadmissibility, and that the Court is therefore not bound to consider the pleas on which they rely.

  1. However, since this is an objection of inadmissibility involving public policy considerations, the Court should examine it of its own motion under Article 92(2) of the Rules of Procedure (see, in particular, the judgment in Joined Cases C- 305/86 and C-160/87 Neotype Techmashexport v Commission and Council [1990] ECR 1-2945).

  1. To that end, it should first be borne in mind that a measure may be challenged under Article 173 of the Treaty only if it has legal effects (see the judgment in Case 22/70 Commission v Council, the AETR case, [1971] ECR 263).

  1. In that regard, it should be noted in the first place that, by taking the view that the aid was not subject to the prior notification procedure provided for by Article 93(3) of the Treaty, the Commission considered, on the one hand, that the aid in question did not fall within the scope of the discipline and, on the other, that as a regional planning grant covered by Decision 85/18, cited above, it constituted an existing aid.

  1. Furthermore, that contested decision does not constitute a mere preparatory measure for which the possibility of bringing an action against the decision closing the procedure would afford sufficient protection in the event of its being unlawful. The decision refusing to initiate the procedure provided for by Article 93(2) of the Treaty is definitive and therefore cannot be characterized as a mere preparatory measure.

  1. It must therefore be held that the decision at issue has definitive legal effects and may therefore be challenged under Article 173 of the Treaty.

  1. Secondly, in view of the fact that the addressee of the decision is the French Republic, and not the applicants, it should be considered whether the decision is of direct and individual concern to the applicants within the meaning of the second paragraph of Article 173 of the Treaty.

  1. It is undisputed that CIRFS, an association whose membership consists of the main international manufacturers of synthetic fibres, has pursued, in the interest of those manufacturers, a number of actions connected with the policy of restructuring that sector. In particular, it has been the Commission's interlocutor with regard to the introduction of the discipline and its extension and adaptation. Furthermore, during the procedure prior to these proceedings, CIRFS actively pursued negotiations with the Commission, in particular by submitting written observations to it and by keeping in close contact with the responsible departments.

  1. The position of CIRFS in its capacity as negotiator of the discipline is therefore affected by the contested decision. It follows that the application is admissible as far as CIRFS is concerned (judgment in Joined Cases 67, 68 and 70/85 Van der Kooy and Others v Commission [1988] ECR 219).

  1. Since one and the same application is involved, there is no need to consider whether the other applicants are entitled to bring proceedings.

Substance

  1. With a view to showing that the application is entirely without foundation, the French Government and Allied Signal argue that an undertaking which is a third party is not entitled to contest the interpretation which the Commission and the Member States have given to the wording of the discipline. Those interveners point out that the main addressees of a discipline relating to aid are the Member States and that, according to the Court’ s case-law (judgment in Case 310/85 Deufil v Commission [1987] ECR 901), such a discipline constitutes no more than guidelines which merely set out the course of conduct which the Commission intends to follow after the Member States have given their assent to the terms and scope of its communications.

  1. That argument cannot be accepted.

  1. In the first place, this case has to be distinguished from the Deufil case. That case was essentially concerned with the question whether the discipline at issue could embody a derogation from the rules of the Treaty, whereas the question arising in this case is whether such a discipline is capable of having binding effects. Consequently, the Court’ s reasoning in Deufil cannot be transposed to this case.

  1. Secondly, in this case the rules set out in the discipline and accepted by the Member States themselves have the effect, inter alia, of withdrawing from certain aid falling within its scope the authorization previously granted and hence of classifying it as new aid and subjecting it to the obligation of prior notification.

  1. It follows that the fact that the discipline is the outcome of an agreement between the Member States and the Commission cannot alter the objective significance of its terms or its binding effect.

  1. It is therefore necessary to consider the pleas in law put forward by the applicants.

  1. In their first plea, the applicants argue that the discipline applied to industrial fibres at the time when the French Government maintains it took its decision, namely June 1989. They claim that the discipline has been applied since 1977 to the sector of synthetic fibres intended either for industrial or textile applications. In that regard, they base themselves in particular on the text of the discipline of 19 July 1977, which does make any distinction on the basis of the intended use of the fibres, and on the memorandum of 1978, in which the Commission stated that the scope of the discipline covered acrylic, polyester and polyamide fibres for either textile or industrial use.

  1. In its defence and at the hearing, the Commission argued that the discipline was intended to avoid increases of production in sectors in which there was already overproduction and excess production capacity. However, there was only excess capacity in the sector of synthetic fibres for textile applications. Yet the Commission also conceded that initially it had stated that the scope of the discipline covered acrylic, polyester and polyamide fibres for either textile or industrial use. Furthermore, at the hearing it admitted, in the light of the wording of the aforementioned 1978 memorandum, that, at that time, the discipline covered all types of fibres.

  1. It must therefore be held that in 1977, at the time when the discipline entered into force, its scope covered all types of synthetic fibres, including fibres intended for industrial applications.

  1. It remains to be considered whether the scope of the discipline has since been altered with the result that industrial fibres were excluded therefrom at the material time in this case.

  1. In that regard, the Commission has argued that the discipline was amended by a decision of June 1988 by which it authorized the grant of aid to a German manufacturer of synthetic fibres, Faserwerk Bottrop, for the establishment of a new unit for the production of very fine and non-woven discontinuous polypropylene and polyethylene fibres, and which was based on the finding that the unit could not supply the traditional textile and clothing sector, the only sector, in the Commission’ s view, covered by the discipline. According to the Commission, that decision constituted an implied amendment of the discipline which it has subsequently had to take into account in order to comply with the principle of equal treatment. In addition, the Commission considers that CIRFS took note of that implied amendment, in particular in so far as it requested, with a view to the renewal of the discipline in 1989, that it be extended to cover high-strength filaments, that is to say filaments for industrial applications.

  1. That line of argument must be rejected.

  1. A measure of general application cannot be impliedly amended by an individual decision.

  1. Furthermore, neither the principle of equal treatment nor that of the protection of legitimate expectations may be relied upon in order to justify the repetition of an incorrect interpretation of a measure.

  1. Lastly, the reaction of CIRFS in requesting the extension of the scope of the discipline to cover high-strength filaments could not affect the objective interpretation which should be given to that measure.

  1. It must therefore be held that the scope of the discipline was not altered by the Bottrop decision or by any reaction by CIRFS following that decision.

  1. The French Government has also argued that the scope of the discipline was altered between the date when it was adopted and the date on which the aid at issue was granted. It observes that in its letter of 7 July 1987 relating to the renewal of the discipline for 1987 to 1989 the Commission stated that "demand in the Community for synthetic fibre and yarn for textile applications is expected at best to stagnate in the near future ...". The Government concludes from this that, until the rules laid down in the letter of 6 June 1989, which incontestably covers industrial fibres, came into force, it was justified in taking the view that the contested aid fell outside the discipline.

  1. That argument must be rejected.

  1. Since the discipline had been applied since 1977 to the sector of synthetic fibres for textile or industrial applications, it cannot be accepted that its scope could be restricted by a consideration, set out in a letter, concerning the economic situation of the sector.

  1. It must therefore be held that the discipline is applicable and has always been applied to the sector of fibres intended for industrial applications. It follows that the contested aid was subject to the obligation of prior notification and it is unnecessary to determine the exact date on which the aid in question was granted.

  1. In the light of all the foregoing considerations, the decision, notified to CIRFS by a letter from the Commission of 1 August 1990, by which the Commission refused to initiate the procedure provided for in Article 93(2) of the Treaty in respect of the aid granted by the French Republic to Allied Signal with a view to establishing a polyester fibre factory in the Longwy region must be annulled.

Decision on costs

Costs

  1. Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the Commission has been unsuccessful, it must be ordered to pay the costs, with the exception of those of the interlocutory proceedings, which are to be borne by the applicants.

  1. In accordance with the first and second subparagraphs of Article 69(4), the French Republic, on the one hand, and Allied Signal and Allied Signal Fibers Europe, on the other, are to bear their own costs.

Operative part

On those grounds,

THE COURT (Fifth Chamber)

hereby:

  1. Annuls the decision, notified to CIRFS by a letter from the Commission of 1 August 1990, by which the Commission refused to initiate the procedure provided for in Article 93(2) of the EEC Treaty in respect of aid granted by the French Republic to the Allied Signal company;

  1. Orders the Commission to pay the costs, with the exception of those of the interlocutory proceedings, which are to be borne by the applicants. The interveners shall bear their own costs.


Citations

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