JUDGMENT OF THE COURT 28 January 1986 * (1) Compagnie française de l'azote (Cofaz) SA, having its registered office in Paris,

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1 JUDGMENT OF CASE 169/84 JUDGMENT OF THE COURT 28 January 1986 * In Case 169/84 (1) Compagnie française de l'azote (Cofaz) SA, having its registered office in Paris, (2) Société CdF Chimie azote et fertilisants SA, having its registered office in Toulouse, (3) Société chimique de la Grande Paroisse (SCGP) SA, having its registered office in Paris, jointly represented by Dominique Voillemot, of the Paris Bar, with an address for service in Luxembourg at the Chambers of Jacques Loesch, 8 rue Zithe, applicants, v Commission of the European Communities, represented by Marie José Jonczy, a member of its Legal Department, acting as Agent, assisted by Nicole Coutrelis, with an address for service in Luxembourg at the office of Manfred Beschel, a member of the Commission's Legal Department, Jean Monnet Building, Kirchberg, defendant, APPLICATION, at this stage of the procedure, for a decision on the admissibility of the application requesting the Court to declare void the decision of 17 April 1984 whereby the Commission terminated the procedure initiated under Article 93 (2) of the EEC Treaty by letter of 4 November 1983 to the Netherlands Government and which was notified to the applicant by the Commission's letter of 24 April 1984, * Language of the Case: French. 408

2 COFAZ v COMMISSION THE COURT composed of: U. Everling, President of Chamber, acting as President, K. Bahlmann and R. Joliét (Presidents of Chambers), G. Bosco, T. Koopmans, O. Due, Y. Galmot, C. Kakouris and T. F. O'Higgins, Judges, Advocate General: P. VerLoren Van Themaat Registrar: D. Louterman, Administrator after hearing the Opinion of the Advocate General delivered at the sitting on 16 October 1985, gives the following JUDGMENT (The account of the facts and issues which is contained in the complete text of the judgment is not reproduced) Decision 1 By application lodged at the Court Registry on 2 July 1984, Compagnie française de l'azote (Cofaz) SA, Société Cdf Chimie azote et fertilisants SA and Société chimique de la Grande Paroisse SA brought an action under the second paragraph of Article 173 of the EEC Treaty in which they requested the Court to declare void the decision of 17 April 1984 whereby the Commission terminated the procedure initiated under Article 93 (2) of the EEC Treaty against the tariff structure for natural gas prices in the Netherlands by letter of 4 November 1983 addressed to the Netherlands Government. 2 The Commission challenged the admissibility of the application, without expressly raising an objection of inadmissibility under Article 91 of the Rules of Procedure. The Court, pursuant to Article 92 (2) of those Rules, decided to give a decision on the admissibility of the application first without considering the substance of the case. 409

3 JUDGMENT OF CASE 169/84 3 On 1 June 1983 the Syndicat professionnel de l'industrie des engrais azotés (SPIEA) [Trade Association of Producers of Nitrate Fertilizers, hereinafter referred to as 'the Syndicat'], acting inter alia on behalf of the applicants, submitted a complaint to the Commission against the application by the Netherlands of a preferential tariff system to Netherlands producers of nitrate fertilizers for the supply of natural gas intended for the manufacture of ammonia. The Belgian and French Governments, together with a German undertaking, also raised objections to that preferential tariff system which were transmitted to the Commission. 4 On 25 October 1983 the Commission decided to initiate the procedure under Article 93 (2) of the EEC Treaty against the aforesaid tariff system. According to the Commission, the aid scheme in question was a system whereby the Netherlands Government, through Gasunie [the Gas Board], granted special rebates by means of a two-tier tariff structure which had the effect of reducing the cost of natural gas used as a feedstock for Netherlands ammonia producers. By letter of 4 November 1983, the Commission informed the Netherlands Government that it had initiated the above-mentioned procedure. By Notice dated 1 December 1983 given in accordance with Article 93 (2) of the EEC Treaty to the parties concerned regarding a tariff structure for natural gas prices in the Netherlands (Official Journal 1983, C 327, p. 3), the Commission invited those parties to submit their comments. 5 Availing itself of the possibility offered in the aforementioned notice, the Syndicat again made representations to the Commission in a letter dated 6 January 1984 and in its observations confirmed its complaint and provided further particulars thereof. 6 At the same time as the procedure provided for by Article 93 (2), the Commission set in motion the procedure under Article 170 of the EEC Treaty, in response to a complaint from the French Government directed against the same tariff system. In accordance with the procedure under Article 170, the Commission delivered a reasoned opinion on 13 March 1984 in which it found that, by granting through Gasunie a preferential tariff for the supply of natural gas to Netherlands producers of ammonia and of nitrate fertilizers, the Kingdom of the Netherlands had failed to fulfil its obligations under Article 93 of the Treaty. Moreover, the Commission reserved its position with regard to the attitude which it would adopt in connection with the procedure initiated under Article 93 (2). 7 In a memorandum dated 28 March 1984, the Syndicat, still acting on behalf of the applicants, made further representations to the Commission and raised a number of objections to the system of natural gas tariffs which had in the meantime been amended by Gasunie. 410

4 COFAZ v COMMISSION 8 By telex message of 14 April 1984 the Netherlands Government informed the Commission that Gasunie had again amended its industrial tariff structure with retroactive effect from 1 November 1983, thereby abolishing the two tariff systems to which the Syndicat had objected in its complaint of 1 June 1983 and in its observations of 6 January 1984, on the one hand, and in its memorandum of 28 March 1984 on the other. 9 Taking the view that the new tariff system established by Gasunie was compatible with the common market, the Commission decided at its meeting on 17 April 1984 to terminate the procedure which had been initiated under Article 93 (2) of the EEC Treaty against the tariff system established by Gasunie. It notified the Netherlands Government of its decision by letter of 18 May The applicants had already been informed of that decision, through the Syndicat, by letter of 24 April 1984 which was couched in terms broadly similar to those used in the letter addressed to the Netherlands Government. 10 The Commission came to the conclusion that the new tariff system was compatible with the common market essentially for the following reasons: Gasunie had abolished the two-tier tariff system and had added to its internal industrial tariff structure (namely tariffs B E) a new tariff, known as tariff F, for the benefit of the major industrial users in the Netherlands. In order to qualify for that new tariff, users had to consume at least 600 million cubic metres of gas per year and operate 90% of the time or more and they had to accept total or partial interruptions of supplies at Gasunie's discretion or supplies of natural gas having different calorific values. The new tariff, tariff F, formed an integral part of the general tariff structure for users in the Netherlands and did not discriminate between sectors. The value of the rebate granted to the undertakings eligible for the new tariff (by comparison with tariff E) was even lower than the total value of the savings made by Gasunie on account of the volume of consumption by those undertakings and the other aforementioned conditions of the new tariff system. Tariff F was therefore justified in economic terms. 11 After considering the Commission's letter of 24 April 1984, the Syndicat replied on 22 May 1984 setting out its objections to. the Commission's decision to terminate the procedure in question. In its letters of 26 and 27 June 1984, the Commission refuted those objections. 411

5 JUDGMENT OF CASE 169/84 12 It is the decision of 17 April 1984 terminating the procedure under Article 93 (2) that the applicants are seeking to have annulled in this application under the second paragraph of Article 173 of the EEC Treaty. In their application they maintain that the Commission's decision is vitiated by manifest errors in the assessment of essential information, particularly with regard to the appraisal of the total value of the savings made by Gasunie as a result of the conditions for the application of the new tariff. In their view, tariff F is merely an attempt to maintain in a different guise the previous tariff system. 13 The Commission considers that the contested decision is not of individual concern to the applicants, within the meaning of the second paragraph of Article 173. It does not deny that in different circumstances an action may be admissible where it is brought by an undertaking other than that to which a decision terminating an investigation procedure initiated under Article 93 (2) is addressed, but submits that the possibility of bringing proceedings in this case should be interpreted restrictiyely. In its view, there are no attributes peculiar to the applicants which differentiate them from all other persons. Neither the fact of being ammonia producers nor the fact that they were allegedly treated in a discriminatory manner is sufficient, in the Commission's view, to distinguish them individually. In any event, since Articles 92 and 93 of the Treaty did not confer a right on individuals, a decision based on those articles in no way affects the legal position of individuals. Finally, the Commission maintains that the decision is not of individual concern to the applicants because they are not the only producers of nitrate fertilizers in the Community. 14 The Commission considers that the applicants' involvement in the initiation of the administrative procedure does not individually distinguish them either. They merely provided some information and that cannot be compared to the role of complainants in a procedure under Regulation No 17 of the Council of 6 February 1962 (Official Journal, English Special Edition , p. 87) or under Council Regulation (EEC) No 3017/79 of 20 December 1979 (Official Journal 1979, L 339, p. 1). Articles 92, 93 and 94 do not confer a specific status on the applicants. However, even on the assumption that the applicants had a right to request the Commission to bring to an end an aid which was allegedly incompatible with the common market, that would not in itself demonstrate that they had an interest in challenging a decision establishing that the aid was not incompatible with the common market. Since the Court has recognized the direct effect of Article 93 (3), inasmuch as it establishes procedural criteria which the national courts can apply and confers rights on individuals which the national courts must protect, it follows, in the Commission's view, that an infringement of Article 93 (3) may be penalized directly by the national courts. The applicants are not, therefore, denied any redress whatsoever. 412

6 COFAZ v COMMISSION 15 The Commission concludes this line of reasoning with a reference to the case-law of the Court, according to which the Commission enjoys a broad discretion with regard to the application of Article 92. It follows, in its view, first that Article 92 does not have direct effect, and secondly that the Commission alone is responsible for initiating the procedure under Article 93 (2). 16 With regard to the question whether the contested decision is of direct concern to the applicants, the Commission emphasizes that the mere fact that they are competing with undertakings allegedly in receipt of State aid does not constitute a specific circumstance enabling them to claim that the decision affects their position òn the market. In the Commission's view, however, a specific circumstance of that kind is necessary, according to the case-law of the Court, in order for proceedings under Article 173 to be brought. Moreover, the competitive position of the applicants is directly dependent on the gas tariffs charged by their supplier, namely Gaz de France, and not on the gas tariffs which Gasunie charges to Netherlands producers. 17 The applicants maintain on the contrary that from the inception of the procedure until the adoption of the contested decision the issue had remained the same, namely the assessment of a rebate granted to certain users of natural gas in the Netherlands. They consider that the decision is of individual concern to them inasmuch as they are placed at a serious disadvantage by the favourable competitive position enjoyed by their Netherlands competitors. Furthermore, they contend that their involvement in the initiation and course of the procedure distinguishes them individually for the purposes of Article 173. They maintain that the Commission itself recognized their involvement by notifying the contested decision to them. According to the applicants, an undertaking which is adversely affected by an aid has a right similar to that conferred by Article 3 (2) of Regulation No 17 of the Council to request the Commission to give a decision on the legality of the aid. 18 The applicants also consider that the contested decision is of direct concern to them, first because they claim to be detrimentally affected by a distortion of competition, and secondly because that adverse impact is the result of the Commission's decision. In so far as the products manufactured by the Netherlands producers are marketed within the Community, the applicants claim that the decision affects their position on the market. 413

7 JUDGMENT OF CASE 169/84 19 In the applicants' view, it is apparent from the recent case-law of the Court that account should be taken of the principles on which Articles 164 and 173 are based. Accordingly, the absence of regulations which accord the applicants specific rights during the administrative procedure is not a decisive factor. Moreover, the applicants consider that the contested decision is of direct concern to them on the ground that it entered into force immediately, without being implemented by any Community or national measure. 20 It should be stated, by way of a preliminary observation, that in order to examine the admissibility of the application and without considering the substance of the case, it is necessary to take as a basis the applicants' contentions to the effect that tariff F, which was added by Gasunie to its industrial tariff structure and was applied to natural gas supplied to the major users in the Netherlands, constitutes an aid granted by the Netherlands Government in favour of the three Netherlands producers of ammonia and nitrate fertilizers. 21 In the first place it must be borne in mind that, in accordance with the second paragraph of Article 173, a natural or legal person may, under the conditions set out in the first paragraph of that article, institute proceedings against a decision addressed to another person only if that decision is of direct and individual concern to the former. Accordingly, the applicants' right of action depends on whether the decision addressed to the Netherlands Government whereby the Commission terminated the procedure initiated under Article 93 (2) against the Netherlands is of direct and individual concern to them. 22 It is clear from a consistent line of decisions of the Court that persons other than those to whom a decision is addressed may claim to be concerned within the meaning of the second paragraph of Article 173 only if that decision affects them by reason of certain attributes which are peculiar to them, or by reason of circumstances in which they are differentiated from all other persons, and by virtue of these factors distinguishes them individually just as in the case of the person addressed (judgment 0f 15 j u j y n Case 25/62 Plaumann v Commission [1963] ECR 95). 23 More particularly, as regards the circumstances referred to in that judgment, the Court has repeatedly held that where a regulation accords applicant undertakings procedural guarantees entitling them to request the Commission to find an infringement of Community rules, those undertakings should be able to institute proceedings in order-to protect their legitimate interests (judgments of 25 October 414

8 COFAZ v COMMISSION 1977 in Case 26/76 Metro v Commission [1977] ECR 1875, 5 October 1983 in Case 191/82 Fediol vcommission [1983] ECR 2913, and 11 October 1983 in Case 210/81 Demo-Studio Schmidt vcommission [1983] ECR 3045). 24 In its judgment of 20 March 1985 in Case 264/82 (Timex Corporation v Council and Commission [1985] ECR 849) the Court pointed out that it was necessary to examine in that regard the part played by the undertaking in the administrative proceedings. The Court accepted as evidence that the measure in question was of concern to the undertaking, within the meaning of the second paragraph of Article 173 of the EEC Treaty, the fact that the undertaking was at the origin of the complaint which led to the opening of the investigation procedure, the fact that its views were heard during that procedure and the fact that the conduct of the procedure was largely determined by its observations. 25 The same conclusions apply to undertakings which have played a comparable role in the procedure referred to in Article 93 of the EEC Treaty provided, however, that their position on the market is significantly affected by the aid which is the subject of the contested decision. Article 93 (2) recognizes in general terms that the undertakings concerned are entitled to submit their comments to the Commission but does not provide any further details. 26 With regard to the position of the applicants whilst the Commission's investigation concerning the aid in question was in progress, it should be noted that on 1 June 1983 they lodged a complaint with the Commission concerning the preferential tariff system in favour of Netherlands producers of nitrate fertilizers. In their complaint, they laid particular emphasis on their competitive position in relation to the three Netherlands producers and on the adverse effects of the aid. Moreover, the applicants complied with the Commission's request to submit their comments under Article 93 (2). 27 With regard to the impact of economic factors as a whole on the market in nitrate fertilizers, the applicants have pointed out that, according to their calculations, the preferential tariff system represents an annual transfer of approximately HFL 165 million to the three Netherlands producers of ammonia. According to the applicants in France the cost of natural gas represents approximately 80% of the ex-works cost price of ammonia which, in its turn, is the raw material from which nitrate fertilizers are manufactured. They have also argued that they compete directly with the three Netherlands producers of nitrate fertilizers who, between 415

9 JUDGMENT OF CASE 169/ and 1982, more than triplied their volume of exports of nitrate fertilizers to France and whose share of the French market rose between 1980 and 1982 from 9% to 21.7%. 28 It is not for the Court, at this stage of the procedure, when it is considering whether the application is admissible, to make a definitive finding on the competitive relationship between the applicants and the Netherlands undertakings. It is sufficient to note that the applicants have adduced pertinent reasons to show that the Commission's decision may adversely affect their legitimate interests by seriously jeopardizing their position on the market in question. 29 In those circumstances, the fact that, according to the Commission, a fourth undertaking which is not in competition with the applicants also qualifies for tariff F is immaterial. Again on the assumption that the aid in question falls within the scope of Article 92, the advantage gained from a tariff system by an outside undertaking not in competition with the applicants does not detract from the validity of the argument that a system of that kind may distort or threaten to distort competition between the other undertakings and does not affect the substantive nature of the damage allegedly sustained by the applicants. 30 As regards the question whether the Commission's decision to terminate the procedure is of direct concern to the applicants, it is sufficient to observe that the decision has left intact all the effects of the tariff system set up, whilst the procedure sought by the applicants would lead to the adoption of a decision to abolish or amend that system. In those circumstances, it must be held that the contested decision is of direct concern to the applicants. 31 It follows that the contested measure is a decision of direct and individual concern to the applicants, within the meaning of the second paragraph of Article 173 of the Treaty. 32 For all those reasons, the application must be declared admissible and the proceedings must take their course. 416

10 COFAZ v COMMISSION Costs 33 The costs should be reserved. On those grounds, THE COURT, before giving judgment on the substance of the case, hereby: (1) Declares that the application is admissible; (2) Reserves the costs. Everling Bahlmann Joliet Bosco Koopmans Due Galmot Kakouris O'Higgins Delivered in open court in Luxembourg on 28 January P. Heim Registrar U. Everling President of Chamber, acting as President 417

JUDGMENT OF THE COURT 28 March 1985 *

CICCE v COMMISSION JUDGMENT OF THE COURT 28 March 1985 * In Case 298/83 Comité des industries cinématographiques des Communautés européennes (CICCE), the registered office of which is at 5 Rue du Cirque,