CJEC, president, September 29, 1982, No 228-82 R

THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES,

1. By circular of 27 April 1982 Ford Werke AG informed its German distributors that after 1 May 1982 it would no longer accept any orders for right-hand drive vehicles placed with it by those distributors and that the "visit Europe plan" was to be maintained only for left-hand drive vehicles. The Commission considered that that development prevented it from granting the application for negative clearance, or for an exemption under Article 85 (3) of the EEC treaty, which had been submitted to it in 1976 by Ford Werke AG when the latter notified the Haupthandler-Vertrag (main dealer agreement) between it and its German distributors. Within the framework of its examination of that application, it adopted an interim decision on 18 August 1982 requiring Ford Werke AG to resume deliveries of the vehicles referred to in the circular. Ford Werke AG and Ford of Europe incorporated both brought actions for a declaration that that decision was void and applied for the adoption of an interim measure suspending its operation.

2. The applications in Case 228-82 R Ford of Europe Incorporated V Commission of the European Communities and Case 229-82 R Ford Werke AG V Commission of the European Communities have the same subject-matter and it is therefore appropriate to join the cases and to make an order in respect of both applications.

3. According to Article 185 of the treaty, actions brought before the Court of Justice do not have suspensory effect. The Court may, however, as follows from that provision read in conjunction with Article 83 (2) of the rules of procedure of the Court, if it considers that the circumstances so require, direct that the operation of contested measures be suspended. It may also, pursuant to Article 186 of the treaty, prescribe any necessary interim measures.

4. It is clear from the consistent case-law of the Court that measures of this nature cannot be considered unless the factual and legal grounds relied on to obtain them establishing a prima facie case for granting them. In addition there must be urgency in the sense that it is necessary for the measures to be issued and to take effect before the decision of the Court on the substance of the case in order to avoid serious and irreversible damage to the party seeking them. Finally they must be provisional in the sense that they do not prejudge the decision on the substance of the case.

5. In support of their applications, the applicants claim in essence that they are justified :

(a) because the contested decision has no legal basis ;

(b) because the implementation of it before the Court has given its decision in the main actions is likely to cause the applicants grave and irreparable harm.

A - Ford Werke AG's application for suspension of the operation of the decision

6. The decision contested in the main action was adopted as an interim measure when the Commission was considering what course to follow regarding the notification to it in 1976 of the distribution agreement between Ford Werke AG and its distributors in the Federal Republic of Germany and regarding the related application for negative clearance, or for an exemption pursuant to Article 85 (3).

7. That agreement relates to the distribution of Fiesta, Escort, Taunus, Capri and Granada models in the Ford range. Although the parties differ as to whether the agreement also relates to right-hand drive vehicles of those models, it appears from their statements during the hearing, with a degree of probability sufficient for the purposes of this order, that right-hand drive vehicles produced by Ford Werke AG were distributed, in any event partly, to satisfy orders placed by its distributors in the Federal Republic of Germany, in the case of right-hand drive vehicles constructed to German specifications. On the other hand, it is equally probable that the situation was different in the case of the same vehicles but constructed to Bristish specifications.

8. It is incontestable that the procedure followed by the Commission raises delicate questions regarding the exact scope of its powers under the various provisions of Regulation No 17. There is no doubt that the Commission has authority, when required to decide upon an application for exemption under Article 85 (3), to make such exemption subject to certain conditions and to require amendments to be made to the agreement notified. Those amendments may be designed not only to remove certain clauses but also to supplement or extend the scope of the agreement in question. Whilst the Commission is not prima facie prevented, when examining an application for an exemption in respect of a distribution network, from making the grant of the exemption conditional upon extension of the range of products distributed, the fact remains that certain questions arising in these proceedings may give rise to serious dispute. Moreover, the objections which it is possible to raise regarding the procedure selected by the Commission cannot be rejected without further consideration.

9. The foregoing considerations do not, however, of themselves justify the suspension of the operation of the contested decision and it is appropriate to consider in addition whether, as affirmed by the applicant, the upholding of that decision pending judgment by the Court is likely to cause it serious and irreparable damage.

10. In that respect, the applicant states by way of a preliminary observation that it is part of the Ford group, to which Ford Britain also belongs, and that the assessment of the damage which it claims will occur must take into account the interests of the group as a whole and especially the interests which Ford Werke AG and Ford Britain have in common and which derive in particular from the fact that Ford Britain is by a clear margin Ford Werke AG's largest customer. Without prejudice to the judgment to be given in the main action, that view may be accepted, at the stage of the application for the adoption of interim measures, as being a necessarily provisional, but reasonable, appraisal of the interests involved.

11. Moreover, an evaluation of the factors capable of justifying suspension of the operation of the contested measure, by reason of the damage to which the latter is likely to give rise, must take account of the fact that that measure is in itself an interim measure adopted by the Commission in the course of an investigation which has not yet been concluded.

12. The Commission agrees with the finding that the contested interim decision, by requiring the applicant to supply part of the united kingdom car market with right-hand drive Ford vehicles through German distributors and at the German market price is of such a nature as to lead Ford Britain to lower the prices of vehicles of the same type or of a similar type produced by that company itself or purchased by it directly from Ford Werke AG. The Commission acknowledges that that is the aim of its action and emphasizes that its aim is inspired by the interests of consumers. It adds that the expected price reduction would be merely the consequence of normal competition and would therefore be in conformity with the objectives of the treaty whose attainment the Commission must ensure, in particular by implementing Article 85.

13. As the Court stated in its order of 17 January 1980 in Case 792-79 R Camera Care Limited, the Commission must be able, within the bounds of the supervisory task conferred upon it in competition matters by the treaty and Regulation No 17, to take protective measures to the extent to which they might appear indispensable in order to prevent its final decision from becoming ineffective. It is nevertheless necessary for those interim measures to be taken only in cases of proven urgency, in order to prevent the occurrence of a situation likely to cause serious and irreparable damage to the party applying for their adoption or intolerable damage to the public interest. The measures must be of a temporary and conservatory nature and must be limited to what is necessary in the given situation.

14. There is a serious risk that the detrimental effects of the contested decision might, if it were put into operation immediately, exceed those of a conservatory measure and in the meantime cause damage considerably in excess of the inevitable but short-lived disadvantages arising from such a measure. It is therefore appropriate to suspend the operation of the contested decision in a manner such that it is brought within the bounds of a measure which maintains the situation which had come into being immediately before 27 April 1982, by keeping the flow of trade in question at approximately the same level as it had attained on that date. That level was not yet, as the applicant has admitted, of such a nature as to bring about the economic effects of which it declares itself to be apprehensive and which it considers itself entitled to prevent.

15. That result may be obtained by requiring Ford Werke AG to continue to fulfil orders from German distributors for right-hand drive vehicles, but only for an aggregate number of vehicles limited, as a temporary measure, to the level indicated above.

16. It appears nevertheless appropriate in that respect to draw a distinction between the various kinds of right-hand drive vehicles referred to in the circular of 27 April 1982. It is apparent from the statements made during the hearing that Ford Britain does not produce Capri and Granada models or the Escort Ghia and Escort XR3 models which it purchases only from Ford Werke AG. It may be reasonably considered that the effect of parallel imports of those vehicles or types of vehicles will be a matter of less concern than the importation of vehicles of the kinds produced both by Ford Britain and Ford Werke AG. That view must in any case be upheld in the case of the Capri and Granada models.

17. Moreover, the Commission admitted in the course of the hearing that it is at least doubtful whether the delivery of right-hand drive vehicles constructed to Bristish specifications was included in the sales programme referred to in the Haupthandler-Vertrag. It is therefore appropriate to suspend in its entirety the operation of the contested decision as regards that category of vehicles, on the understanding, however, that if Ford Werke AG were to decide to continue to manufacture right-hand drive vehicles constructed to Bristish specifications but to terminate production or delivery of those same vehicles or models constructed to German specifications, in order to avoid the effects of this order, it would lay itself open to the charge of having failed to comply with this order.

18. It is therefore appropriate :

(a) to suspend the operation of Article 1 of the Commission decision of 18 August 1982 (IV/30.696 - distribution system of Ford Werke AG - interim measure) in so far as it requires Ford Werke AG to deliver right-hand drive vehicles, constructed to Bristish specifications, in the Federal Republic of Germany, either directly or through the intermediary of its German distributors, or to execute orders placed by the latter ;

(b) to maintain the operation of the said provision as regards the requirement that Ford Werke AG shall execute orders placed by its German distributors in the same conditions as prior to 1 May 1982 for right-hand drive vehicles, constructed to German specifications, of Fiesta, Escort, Taunus, Capri and Granada models or of other models incorporated in the sales programme to which the Haupthandler-Vertrag relates, so, however, that the scope of that requirement shall be restricted inasmuch as it shall be limited to a total annual delivery of 4 800 vehicles and that the 4 800 vehicles shall be distributed amongst the various models in proportions substantially the same as prior to 27 April 1982 and delivered at reasonable intervals of time ;

(c) in respect of Granada and Capri vehicles, to increase by 20% the delivery requirement determined under Subparagraph (b) above, such supplementary quota to be in addition to the figure of 4 800 vehicles referred to above ;

(d) to direct that the delivery requirement as so limited shall apply until a decision is taken by the Commission terminating the administrative proceedings pending or until delivery of the judgment in the main proceedings ;

(e) to order the Commission to supervise the operation of this order and to order the applicants to furnish the Commission, on first being requested so to do, with all evidence in this respect and also to order the applicants to supply to the Commission and to the president of the Court monthly, beginning on 1 November 1982, statistics of orders received and deliveries effected for each model ;

(f) for the rest, to dismiss the applications for the adoption of interim measures.

B - The application by Ford of Europe incorporated

19. At this stage of the proceedings it does not appear necessary, in order to avoid the damage to which Ford ag has referred, to uphold the application as formulated by Ford of Europe incorporated.

C - Costs

20. At this stage it is appropriate that the costs be reserved.

ORDERS

Hereby :

1. The operation of Article 1 of the Commission decision of 18 August 1982 (IV/30.696 - distribution system of Ford Werke AG - interim measure) is suspended in so far as it requires Ford Werke AG to deliver right-hand drive vehicles, constructed to Bristish specifications, in the Federal Republic of Germany, either directly or through the intermediary of its German distributors, or to execute orders placed by the latter.

2.The operation of the said provision is maintained as regards the requirement that Ford Werke AG shall execute orders placed by its German distributors in the same conditions as prior to 1 May 1982 for right-hand drive vehicles, constructed to German specifications, of Fiesta, Escort, Taunus, Capri and Granada models or of other models incorporated in the sales programme to which the Haupthandler-Vertrag relates, so, however, that the scope of that requirement shall be restricted inasmuch as it shall be limited to a total annual delivery of 4 800 vehicles. The 4 800 vehicles shall be distributed amongst the various models in proportions substantially the same as prior to 27 April 1982 and delivered at reasonable intervals of time.

3. In respect of Granada and Capri vehicles the delivery requirement as determined in paragraph (2) shall be increased by 20%. This supplementary quota shall be in addition to the figure of 4 800 vehicles referred to above.

4. The delivery requirement as so limited shall apply until a decision is taken by the Commission terminating the administrative proceedings pending or until the delivery of the judgment in the main proceedings.

5. The Commission is requested to supervise the operation of this order and the applicants shall furnish it on first being requested to so do with all evidence in this respect. Furthermore the applicants shall supply to the Commission and to the President of the Court monthly, beginning on 1 November 1982, statistics of orders received and deliveries effected on each model.

6. For the rest, the applications for the adoption of interim measures are dismissed.

7. The costs are reserved.