JUDGMENT OF THE COURT OF FIRST INSTANCE (Fourth Chamber, Extended Composition)
17 March 2005 (1)

(Dumping – Failure by the Council to adopt a Commission proposal for a regulation imposing a definitive anti-dumping duty – Absence of simple majority necessary for the adoption of a regulation – Obligation to state reasons)

In Case T-177/00,

Koninklijke Philips Electronics NV, established in Eindhoven (Netherlands), represented by C. Stanbrook QC and F. Ragolle, lawyer,

applicant,

v

Council of the European Union, represented by S. Marquardt, acting as Agent, assisted by G. Berrisch, lawyer,

defendant,

ACTION for annulment of the Council's decision of 8 May 2000 to reject the proposal for a Council Regulation (EC) imposing a definitive anti-dumping duty on imports of certain parts of television camera systems originating in Japan, submitted by the Commission of the European Communities on 7 April 2000 (document COM (2000) 195 final),

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Fourth Chamber, Extended Composition),

composed of H. Legal, President, P. Lindh, P. Mengozzi, I. Wiszniewska-Białecka and V. Vadapalas, Judges,

Registrar: H. Jung,

having regard to the written procedure and further to the hearing on 1 December 2004,

gives the following

Judgment

Background to the case

1

By Regulation (EC) No 1015/94 of 29 April 1994, the Council imposed a definitive anti-dumping duty on imports of television camera systems originating in Japan (OJ 1994 L 111, p. 106).

2

Following an investigation, the Council, by Regulation No 1952/97 of 7 October 1997, amended the previous regulation and increased the definitive anti-dumping duty (OJ 1997 L 276, p. 20).

3

In June 1998 the Commission initiated an investigation into the alleged circumvention of the above definitive anti-dumping duty by the assembly in the Community of parts and modules of television camera systems. A complaint to the Commission had been filed by the applicant, who is one of the major producers of such parts in the Community.

4

Given the lack of agreement concerning circumvention proceedings in the World Trade Organisation (WTO), the applicant was asked to withdraw its complaint and the investigation was terminated by the Commission on 9 February 1999 (OJ 1999 L 38, p. 56).

5

On 12 February 1999 the Commission initiated ex officio an anti‑dumping proceeding concerning imports of certain parts of television camera systems originating in Japan (OJ 1999 C 38, p. 2).

6

On 7 April 2000 the Commission drew up a proposal for a Council Regulation (EC) imposing a definitive anti-dumping duty on imports of certain parts of television camera systems originating in Japan (document COM (2000) 195 final).

7

Under Article 6(9) of Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community (OJ 1996 L 56, p. 1), anti-dumping investigations ‘shall in all cases be concluded within 15 months of initiation’. In the present case, that period ended on 12 May 2000.

8

On 8 May 2000 the Council of the European Union issued a press release (Press Release on the 2258th meeting of the Council – ECOFIN, 8204/00 – Press 141) which, under the title ‘Antidumping – Japan’, stated:

‘The Council confirmed the absence of a simple majority in favour of the Commission proposal submitted to the Council on 10 April for a regulation imposing a definitive anti-dumping duty on imports of certain parts of television camera systems originating in Japan.’

Procedure and forms of order sought

9

By application lodged at the Registry of the Court of First Instance on 30 June 2000, Koninklijke Philips Electronics NV brought the present action.

10

By judgment of 29 November 2000 in Case T-213/97 Eurocoton and Others v Council [2000] ECR II-3727, the Court of First Instance, dealing with a case concerning an earlier refusal by the Council to adopt a Commission proposal for a regulation imposing definitive anti-dumping duties on imports of unbleached cotton fabrics in which the Council had raised a plea of inadmissibility, dismissed the action for annulment as inadmissible, finding that, as the Council had not adopted a decision, there was no reviewable act. It also dismissed the action for damages because there was no fault on the part of the Council.

11

The applicants at first instance brought an appeal against that judgment before the Court of Justice.

12

By order of 10 May 2001, the proceedings in the present case were suspended pending judgment of the Court of Justice in the appeal against the judgment of the Court of First Instance in Case T-213/97, owing to the similarity of the issues of admissibility and substance in the two cases.

13

By judgment of 30 September 2003 in Case C-76/01 P Eurocoton and Others v Council [2003] ECR I-10091, the Court of Justice set aside the judgment of the Court of First Instance, held the action to be admissible and annulled the Council’s decision on grounds of failure to state reasons.

14

The Court of Justice held, first, with respect to admissibility, that the failure by the Council to adopt the Commission’s proposal for a regulation imposing definitive anti‑dumping duties constituted an adoption of position with respect to that proposal and that it also constituted an implied rejection of that proposal, which became definitive upon the expiry of the 15‑month period provided for in Article 6(9) of Regulation No 384/96, referred to in paragraph 5 above, within which the institutions are to conclude the investigation and, where necessary, to impose definitive anti-dumping duties (paragraphs 57 to 65). The Court held that such a position affected the interests of the applicants who had instigated the anti‑dumping investigation and thus constituted a reviewable act which had produced binding legal effects capable of affecting the appellants’ interests (paragraphs 66 and 67).

15

Second, on the substance, the Court of Justice noted that the appellants were only arguing, in support of their action for annulment, that the Council had disregarded the obligation to state reasons by not indicating why it had rejected the Commission’s proposal for a regulation imposing a definitive anti‑dumping and set aside the Council’s decision for failure to state reasons.

16

The Court of Justice held, first, that when the Council decides not to adopt a proposal for a regulation imposing definitive anti‑dumping duties, it should provide an adequate statement of reasons which shows clearly and unambiguously why, in the light of the provisions of Regulation No 384/96, there is no need to adopt the proposal, and, second, that compliance with the obligation to state reasons therefore required the act in question to indicate the absence of dumping or corresponding injury or that the Community interest did not call for intervention on its part (paragraphs 87, 89 and 91).

17

Finding that, in that case, the only reason put forward for the failure to adopt the proposal for a regulation imposing a definitive anti‑dumping duty submitted by the Commission was the lack of a majority in favour of that proposal, the Court of Justice found that such information concerning the result of the voting in the Council could not satisfy the obligation to state reasons laid down by Article [253] EC and, consequently, annulled the contested decision (paragraphs 93 to 95).

18

However, the Court of Justice dismissed the appellants’ claim for damages, noting that an inadequacy in the statement of reasons for a legislative measure is not sufficient to cause the Community to incur liability (paragraph 98).

19

The proceedings in the present case were recommenced following the judgment of Court of Justice. The Court of First Instance asked Koninklijke Philips Electronics NV and the Council to submit their observations on the inferences to be drawn from that judgment. The parties submitted their observations on 21 November 2003. The applicant also stated that it was withdrawing the claim for damages originally included in its action.

20

The defendant submitted its statement in defence on 9 March 2004.

21

In addition, by letter of 5 November 2004, further to the notification of the hearing, the applicant restricted the arguments in its action to the plea relating to failure to state reasons in the contested decision and referred to the arguments put forward in Case C-76/01 P.

22

At the hearing on 1 December 2004, the Court of First Instance noted the absence of the parties and closed the oral procedure.

23

Koninklijke Philips Electronics NV claims that the Court of First Instance should:

–

annul the Council’s decision of 8 May 2000 to reject the proposal for a Council Regulation (EC) imposing a definitive anti-dumping duty on imports of certain parts of television camera systems originating in Japan (document COM (2000) 195 final);

–

order the Council to pay the costs

24

The Council contends that the Court should:

–

rule on the action for annulment in the light of the judgment of the Court of Justice in Case C-76/01 P.

Pleas in law and arguments of the parties

25

With respect to admissibility, the applicant submits that it follows from the judgment of the Court of Justice in Case C-76/01 P that its action is admissible.

26

On the substance, as its form of order sought originally stood, the applicant submitted, as its principal plea, that the Council had no power to reject the Commission’s proposal. In the alternative, assuming that the Council had the power to reject the Commission’s proposal, the applicant stated that the decision was unlawful for three reasons. It was vitiated by a manifest error of assessment of the facts found by the Commission, a disregard of the procedural rights of the claimants and a failure to state adequate reasons as follows from the judgment of the Court of Justice in Case C-76/01 P.

27

In its letter of 5 November 2004, the applicant restricted its arguments in the action, referring to the arguments put forward in the appeal in Case C-76/01 P, and informed the Court that its action for annulment was based solely on the plea alleging failure to state adequate reasons in the contested decision. The applicant also reiterated that it was withdrawing its claim for damages.

28

The Council, which recognised in its statement of defence that, pursuant to the judgment of the Court of Justice in Case C-76/01 P, the present action was admissible, acknowledged that it also followed from that judgment that the contested decision did not contain an adequate statement of reasons and, for that reason, should be annulled.

Findings of the Court

Admissibility

29

According to the case-file, on 8 May 2000 the Council published the press release referred to in paragraph 8 above, stating that the written procedure relating to the imposition of a definitive anti-dumping duty had ended negatively. At the end of the voting procedure, the Council thus adopted a position on the Commission’s proposal, as the Court held in Eurocoton and Others v Council in respect of circumstances analogous to those of the present case.

30

The maximum period of 15 months allowed to the institutions within which to conclude the investigation and, where necessary, to impose definitive anti-dumping duties in accordance with Article 6(9) of Regulation No 384/96 expired several days later on 12 May 2000. It follows that the Council’s position on the proposal for a regulation, which constituted an implied rejection of that proposal, became definitive on that date.

31

As held by the Court of Justice in Eurocoton and Others v Council, the failure to adopt that proposal, which determined definitively the Council’s position in the final phase of the anti-dumping proceedings, affected the interests of the applicants, whose complaint had instigated the anti-dumping investigation (see paragraph 3 above).

32

The rejection of the proposal for a regulation submitted by the Commission has all the characteristics of a reviewable act within the meaning of Article 230 EC, in that it produced binding legal effects capable of affecting the applicant’s interests. The legislative nature of the procedure in the context of which the Council adopted its definitive position is not such as to alter that conclusion (see Eurocoton and Others v Council, paragraphs 68 to 73).

33

It follows from the foregoing that this action is admissible.

The sole plea: failure to state reasons in the contested decision

34

Article 253 EC provides: ‘[r]egulations, directives and decisions adopted jointly by the European Parliament and the Council, and such acts adopted by the Council or the Commission, shall state the reasons on which they are based and shall refer to any proposals or opinions which were required to be obtained pursuant to this Treaty’.

35

As the Court of Justice held in Eurocoton and Others v Council, cited above, when the Council decides not to adopt a proposal for a regulation imposing definitive anti-dumping duties, it should provide an adequate statement of reasons which shows clearly and unambiguously why, in the light of the provisions of Regulation No 384/96, there is no need to adopt the proposal (paragraph 89). Compliance with the obligation to state reasons therefore requires the act in question to indicate the absence of dumping or corresponding injury or that the Community interest does not call for intervention on its part (paragraph 91).

36

The Court finds that, in the present case, as in the case before the Court of Justice, the Council’s position on the proposal, submitted by the Commission, for a regulation imposing a definitive anti-dumping duty on the imports in question here is apparent from the press release from the Council referred to in paragraph 8 above, which gives, as the sole ground for rejecting that proposal, the lack of a simple majority in favour of it.

37

In accordance with the findings of the Court of Justice in Eurocoton and Others v Council, such a statement does not satisfy the obligation to state reasons under Article 253 EC.

38

Consequently, the contested decision should be annulled on the same ground of the Council’s failure to state reasons in the decision rejecting the proposal for a regulation submitted to it by the Commission.

Costs

39

Under Article 87(2) the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Council has been unsuccessful and the applicant has applied for costs, the Council must be ordered to pay the costs.

On those grounds,

THE COURT OF FIRST INSTANCE (Fourth Chamber, Extended Composition)

hereby:

1.

Annuls the Council’s decision of 8 May 2000 to reject the proposal for a Council Regulation (EC) imposing a definitive anti-dumping duty on imports of certain parts of television camera systems originating in Japan, submitted by the Commission of the European Communities on 7 April 2000 (document COM (2000) 195 final).

2.

Orders the Council of the European Union to pay the costs.

Legal	Lindh	Mengozzi
Wiszniewska-Białecka		Vadapalas

Delivered in open court in Luxembourg on 17 March 2005.

H. Jung H. Legal

Registrar President

1 –

Language of the case: English.