DELIVERED ON 25 SEPTEMBER 1984 (*1)

Table of contents

A — Facts of the case

B — Opinion

II. Substance

(a) Unlawful intervention at the marketing stage?

(b) Misuse of discretion

(aa) Unforeseeable developments of the market?

(bb) The sale and its consequences

(cc) Disturbance of the market

(c) Détournement de pouvoir

(d) Insufficient grounds for the decision

(a) Legal certainty and legitimate expectation

(b) Intervention amounting to expropriation?

(c) The measure of damages

III. The claim for damages brought by the applicant in Case 264/81

C — Proposal for a decision

Mr President,

Members of the Court,

The actions before the Court, which arise out of the same facts and are therefore to be dealt with together, seek declarations that two Commission regulations adopted in connection with the sale of olive oil from stocks held by the Italian intervention agency AIMA are void.

A —

The facts of this case have already given rise to an application for the adoption of interim measures in which the applicants in Case 232/81 sought to have the operation of those Commission regulations suspended. For a detailed description of the facts of the case, therefore, I would refer to the Order of the President of the Court of 21 August 1981 ([1981] ECR 2193) and to the two Reports for the Hearing, which are before the Court, and will restrict myself to drawing the Court's attention briefly to what appeared to me to be the essential facts.

Commission Regulation No 71/81 of 21 January 1981 (Official Journal L 11, 13.1.1981, p. 5) provided for some 33000 tonnes of virgin olive oil from intervention purchases made during the 1977/78 olive marketing year to be divided into six lots of about 5500 tonnes each and offered for sale at a fixed price of LIT 210000 per 100 kg. The Commission decided upon this procedure, which differed from the usual practice of sale by tender, because the goods in question had been put up for sale without success on several occasions, because production of olive oil in the 1980/81 marketing year was expected to be plentiful and because of the danger of deterioration due to storage. In order not to interfere with the normal sale of production from the then current marketing year, purchasers were required to put up a guarantee to ensure that the oil, which was sold as lampante grade oil, would either be refined, or be marketed outside the Italian and Greek markets.

Sale was to commence on the tenth day following the posting of notice of sale, which was to take place not later than 31 January 1981. Withdrawal of the oil was to take place over specified periods of time commencing on 15 March 1981.

The selling price which had been fixed and the conditions of payment were apparently so attractive that even on 2 February 1981, the first day on which applications could be submitted, 60 undertakings made offers, each for the purchase of all the lots available. The regulation in question provided that in such a case AIMA was to determine the purchaser by drawing lots.

However, the drawing of lots did not take place until four months later, on 1 June 1981. The reason for the delay was that some of the undertakings who had made offers contested the admissibility of offers made by other undertakings which had been created immediately before the sale procedure. After investigation by AIMA, all 60 undertakings were finally allowed to take part in the drawing of lots, as a result of which the applicants in Case 232/81 and the applicant in Case 264/81 were designated as purchasers.

The Italian intervention agency, which had informed the Commission in a letter of 16 May 1981 that because the selling price was much below the then current market price the purchasers stood to make an extraordinarily high profit, was reluctant for that reason, even after the drawing of lots, to release the oil. Several of the applicants brought proceedings before the Italian courts with a view to obtaining possession of the oil.

In a reply dated 22 June 1981 to written question No 81/81, submitted by several Members of the European Parliament, which criticized the procedure for the tender and sale, the competent Member of the Commission, Mr Dalsager, stated that the Commission considered that when the decision was adopted the conditions existed for sales in accordance with the procedure laid down in Community rules. In addition, so as to supply all traders, the Commission had subsequently decided to put up for sale, in small lots, 26000 tonnes of olive oil from intervention purchases made during recent years (Official Journal C 186, 27.7.1981, p. 12).

On 3 August 1981, the Commission adopted Regulation No 2238/81 retroactively repealing Regulation No 71/81. In the preamble to Regulation No 2238/81 it stated that the sale had been delayed because of the aforementioned complaints and that because conditions on the olive oil market had altered in the meanwhile sale on the conditions originally laid down would have resulted in serious disturbance on the market. Accordingly, ‘the overriding general interest’ made it necessary to cancel the sale. Parallel measures were to be taken in order to safeguard the position of the traders affected.

Those measures were provided for in Commission Regulation No 2239/81, adopted on the same day (Official Journal L 218, p. 28), under which the same quantity of oil was once again put up for sale. The sale was restricted at the outset to those undertakings to whom lots had been allocated previously. Sale was no longer to take place at a fixed price but to the highest bidder, subject to a minimum selling price. The olive oil was to be sold not later than 10 September and was to be ready for withdrawal on 15 September 1981.

On 10 August 1981 the applicants in Case 232/81, and on 2 October 1981 the applicant in Case 264/81, brought proceedings under Article 173 of the EEC Treaty seeking a declaration that the two regulations of 3 August 1981 were void.

In the event that its action was dismissed or only part of the regulation was declared void, the applicant in Case 264/81 also brought a claim for damages, either in addition to or in the alternative to its main claim, the details of which are to be found in the Report for the Hearing.

In addition to their main claim the applicants in Case 232/81 sought immediate suspension of the operation of the aforementioned regulations by way of an application for interim measures. The President of the Court of Justice granted part of that application and, inter alia suspended operation of Regulation No 2239/81 inasmuch as the applicants were required to pay, in respect of the lot allocated to them, only so much of the price tendered as was equal to the amount which they would have had to pay under the terms of the sale obtaining under Regulation No 71/81. Payment of the remainder was suspended until judgment had been given in the main action.

B —

My opinion on those claims is as follows :

I — Admissibility of the application for annulment

Without expressly raising a formal objection, the defendant submits that the actions are inadmissible because the two regulations are not of direct and individual concern to the applicants within the meaning of the second paragraph of Article 173 of the EEC Treaty. Regulation No 2238/81 repealed Regulation No 71/81, which was of general measure which does not cease to be a regulation by virtue of the fact that the number and the names of the undertakings which had been drawn by lot could be determined.

Like the applicants, I cannot agree with those objections. The second paragraph of Article 173 of the EEC Treaty makes the admissibility of an application by an individual for the annulment of a measure dependent upon the fact that the contested measure, although in the form of a regulation, is in reality a decision which is of direct and individual concern to the applicant. As this Court has emphasized, inter alia in the Alusuisse case, (2) the primary purpose of the provision is to prevent the Community institutions from being able, merely by choosing the form of a regulation, to exclude an application by an individual challenging a decision of direct and individual concern to him. In other words, legal protection is also given, as the court recently decided in the Differdange case, (3) to a person who, although not a person to whom the contested measure is addressed, is in fact affected by it in the same way as if he were the person to whom it is addressed. Thus, the decisive element is not the form of the contested measure but rather its content and, in particular, the legal effects that it produces or is intended to produce.

It is clear from the preambles to the regulations in question that their sole and exclusive purpose was to set aside the legal effects of the sale of a certain quantity of olive oil which had been allocated to the applicants on the basis of the drawing of lots carried out pursuant to Regulation No 71/81. The preamble to Regulation No 2238/81 states that ‘quantities could be sold by those operators at prices which would shut other operators out of the market’. Accordingly, ‘it is ... necessary to cancel the sale in question; ... in order to take account of the situation of these operators, measures are to be taken in parallel’. That the regulations in question were of direct and individual concern to the applicant can also be seen from Regulation No 2239/81 which reserves the sale of the quantities of oil in question exclusively for tenderers who have been ‘individualized’ by the drawing of lots carried out pursuant to Regulation No 71/81.

Since for those reasons I am of the opinion that there can be no doubt that the contested measures are of direct and individual concern to the applicants, their applications must be regarded as admissible.

II — Substance of the applications for annulment

As I have said, the contested regulations are concrete and individual measures: they are in reality individual acts which are merely in the form of a regulation and whose purpose is, as may be seen from the preamble to Regulation No 2283/81, to set aside the sale to be carried out on the conditions laid down in Regulation No 71/81 because of a fear of disturbance on the market. In the view of the applicants, the two measures must be declared void essentially on the grounds of failure to respect essential requirements of form, infringement of the general principles of law and misuse of discretion.

I consider it right that, in examining in detail the grounds for this application, I should first turn my attention to the criticisms based on substantive law, and deal with the alleged defects of form and procedure thereafter.

(a)

The applicants complain that in adopting the regulations in question the Commission has exceeded the bounds of the discretion

granted to it by the EEC Treaty and the secondary legislation dealing with the organization of markets. It is clear both from the provisions of the Treaty, in particular Article 42, and from Regulation No 136/66 on the establishment of a common organization of the market in oils and fats, that the Commission may act only to protect competition at the production stage and not at the marketing stage. In this case, the Commission repealed Regulation No 71/81 solely for the purpose of protecting the applicant's competitors, which were likewise in the olive oil trade.

In my opinion, that argument is unconvincing for several reasons. As the Council stated in the preamble to Regulation No 26/82 (Official Journal, English Special Edition 1959-1962, p. 129), Article 42 of the Treaty provides inter alia that whether the rules on competition laid down in the Treaty are to apply to production of and trade in agricultural products is a matter to be decided under the common agricultural policy. As regards the establishment of the common organization of agricultural markets, Article 40 (2) expressly provides that that organization is to take the form, inter alia, of common rules on competition, which are to protect both production of and trade in agricultural products. The rules of Community law deriving from secondary sources must also be interpreted in the light of those provisions.

However, it is a distinctive feature of the olive oil market, as the Court heard in particular during Mr Guida's testimony, that there are several intermediate processing and marketing stages between cultivation of the olives and supplying the consumer with olive oil through the retail trade. Apparently, no general valid conclusions can be drawn as to whether and to what extent cultivation, further processing and supply to the consumer are linked to one another. On account of those special market conditions, it is entirely justified to apply the common competition rules to all the production and marketing stages.

Accordingly, the intervention mechanisms provided for by the common organization of the market in olive oil apply in principle, as is borne out by the preamble to Council Regulation No 1562/78 of 29 June 1978 (Official Journal L 185, p. 1) modifying the common organization of the market in oils and fats, to marketing as well as to production.

As a means of regulating the market so that producers receive a fair income and consumers pay a fair price, Article 12 of that regulation provides that the intervention agencies designated by the producer States are to buy in, in accordance with the rules therein laid down, olive oil which is offered to them. Article 12 (2) provides that the intervention agencies are to sell within the Community the olive oil bought in by them under conditions such that the market at the production stage is not disturbed.

Since so-called lampante grade oil, if it is to be used as edible oil, must always be refined, trade in that intermediate product must also be regarded as part of the production stage, with the consequence that the Commission, contrary to the view of the applicants, is obliged, in accordance with the letter and purpose of that provision, to ensure that the common competition rules are applied in regard to the sale of lampante grade oil.

That the Commission may act to protect competition not just at the production stage but also at the marketing stage is clear from the terms of Council Regulation No 2754/78 (Official Journal L 331, 28.11.1978, p. 13) and of Commission Regulation No 2960/77 (Official Journal L 348, 30.12.1977, p. 46), which determine when and how olive oil may be sold. The preambles to both regulations state that oil held by the intervention agencies must be put up for sale first of all without any discrimination between Community purchasers, and secondly on the most favourable economic terms. The preambles also state that sale by tender appears to be the most appropriate system for that purpose.

A different method of sale may be used, according to the second sentence of Article 2 (1) of Regulation No 2754/78, only where special conditions so warrant. According to Article 2 (2) the conditions of sale by tender, or by any other method, must ensure equal access and treatment for all parties.

It follows from those provisions that if the Commission has decided on a sale by tender at a fixed price and this procedure results in either some of the parties being unjustifiably favoured or the sale's being carried out other than on the most favourable economic terms, it is in principle obliged to bring the conditions of sale into line with those requirements. The complaint that the Commission exceeded its discretion in acting at the marketing stage rather than at the production stage is thus unfounded.

The applicants also contend in support of their application that the Commission misused its discretion in cancelling the sale on the ground that it would result in serious disturbance of the market. In the first place, market conditions did not develop in an unforeseeable way and in the second place there was in fact no disturbance on the market after the second sale by tender. Even if it is accepted that proceeding with the sale on the basis of Regulation No 71/81 would have led to disturbance of the market, the contested measures were not of such a nature as to eliminate such disturbances and were in contradiction to the Commission's earlier position. The applicants are therefore of the opinion that the sale in question was cancelled not in the overriding general interest, as stated in the preamble to Regulation No 2238/81, but solely for the purpose of reducing their profit margins.

In reply the Commission reiterates its view that the way in which the olive oil market would develop could not be foreseen when Regulation No 71/81 was adopted. Because of the increase in prices the applicants, who are among the largest undertakings in the olive oil market, would have made vast profits at the expense of the taxpayer and, because of the large lots which had been allocated to them, would be in a position to exclude their competitors from the market. The Commission was thus obliged to exercise its power to regulate the market and to intervene in the procedure to cancel the sale.

It should first of all be noted in regard to this point that even though the Commission has a broad discretion in the exercise of its functions in regard to the supervision and management of the market, the proper and appropriate exercise of that discretion must be subject to review by the Court of Justice. In particular, the exercise of that discretion is wrongful if a measure ought to have been taken under other circumstances or on other grounds but not under the circumstances which actually existed or on the grounds or for the motives which were actually relied upon. Consequently, consideration must first be given to the question whether, as the Commission states, conditions on the olive oil market had in fact actually and unforeseeably developed in such a way that if the sale had taken place, serious disturbance of the market would have been likely to result.

The Commission states in particular that when Regulation No 71/81 was adopted in January, an above-average olive harvest, and consequently a relatively high yield of lampante grade oil, was being forecast. However, the harvest proved to be smaller than expected. The lower production of lampante grade oil as a result, the relative shortage of that oil on the world market and the devaluation of the green lira led to an unforeseeable increase in prices.

By contrast, Mr Guida explained in his evidence that the price of lampante grade oil in the 1980/81 marketing year rose only by about 15%. That rise could be explained, inter alia, by the monthly increases in the intervention price, by the devaluation of the green lira and by the devaluation of the Italian currency. The price increase could also be explained by the fact that demand for olive oil is usually greater in the summer. The development of prices during the period in question must therefore be considered “normal”. The witness also explained that during the period in question, and contrary to the Commission's view, there was no “shortage” of lampante grade oil in the sense that the needs of the refineries or of the consumer could not be met. The fact that very little lampante grade oil was offered to the intervention agencies merely proved that the producers were able to dispose of that product on the market.

It follows that when the Commission adopted Regulation No 71/81 on 12 January 1981 it should have already been able to predict the development of market conditions and the “normal” price increase by taking the ordinary degree of care. The fact that 60 undertakings, some of which had only just been created, had apparently made a correct assessment of the state of the market, such that they were prepared, on the very first day on which offers were accepted, to tender all the available lots, also tends to support that conclusion.

As regards the expected yield and the alleged shortage of lampante grade oil, it should also be recalled in this connection that, according to the information supplied by the Commission, the olive oil harvest takes place in Italy between November and April. The greater part of the crop is harvested in December, January and February and is more or less immediately processed into olive oil. Thus the Commission should already have been able to determine the actual size of the olive crop and the expected quantity of lampante grade oil when Regulation No 71/81 was adopted on 12 January 1981, or at the latest by the end of February.

Even if that had not been possible, the Commission could have learned at the latest from the weekly report on olive oil (No 323) of the Advisory Committee for the period from 9 to 14 February 1981 that olive oil production was likely to be less than the expected 640000 tonnes. It also appears from the telex sent by the Italian Ministry of Agriculture on 4 April 1981 that according to information supplied by the Italian Statistical Office (Istat), olive oil production in Italy was likely to be 610000 tonnes.

In a telex dated 12 February 1981 AIMA had asked, in the meantime, that the sale be suspended so as to enable it to verify the regularity of the offers. The competent director at the Commission indicated his agreement with the proposed suspension by a telex of 18 February 1981 and expressly stated that there was no need to amend Regulation No 71/81.

By a letter of 16 May 1981, AIMA informed the President of the Commission and the competent Member of the Commission, Poul Dalsager, that the investigations were complete. It also informed them that the situation in the olive market had changed radically since the regulation in question had been adopted in that there had been a steep increase in price, which had in the meantime reached LIT 250250 per 100 kg. Since the fixed price of LIT 210000 per 100 kg laid down in Regulation No 71/81 was therefore insufficient, the sale to be carried out under that regulation should be cancelled and a new sale by tender, corresponding to real market conditions, should take place.

Thus at that point, at the very latest, the Commission knew definitively of the changed market conditions and ought therefore to have cancelled the sale forthwith. Such a measure was not taken. Instead, as is clear from a telex sent by the Italian Ministry of Agriculture on 5 June 1981, the purchasers were designated by the drawing of lots. The Minister referred once again in this telex to the political and economical consequences, which, it was feared, the sales would provoke and called upon the Commission not to proceed with the sale.

However, the drawing of lots identified the purchasers individually. Because the Commission, though fully aware of the market situation, did not stop the drawing of lots, it gave those taking part the impression that it saw no reason at that time to stop the sale on account of the changed market conditions.

As a result of the drawing of lots the purchasers acquired an unassailable right, in the form of an individual right in public law to acquire certain assets. Their legal position as regards those assets is a result of the fact that Regulation No 71/81 did not permit the Commission to cancel the allocation of lots without consulting the applicants once the drawing of lots had taken place. As may be seen from the preamble to Regulation No 2238/81 and Regulation No 2239/81, the Commission was quite obviously acting on the basis that the applicants had such an unassailable right to acquire assets. The preamble states, inter alia, that the consignments put up for sale had been “allotted” to tenderers by drawing lots pursuant to Article 6 (1) of Regulation No 71/81 and that on the grounds which have already been stated, it was necessary to cancel “the sale in question” while taking “account of the situation of [those] operators”.

In particular, the unassailable claim in public law vested in the applicants by the drawing of lots is independent of whether or not contract of sale in civil law was concluded between the intervention agency and the designated undertakings in connection with the drawing of lots, or even whether or not there was in fact an agreement to transfer title in rem. Contrary to the Commission's view, therefore, no significance is to be attached to the fact that the intervention agency did not immediately inform the tenderers, by registered letter with acknowledgement of receipt, of the result of their participation in the invitation to tender, as required by Article 10 of Regulation No 2960/77 as amended by Regulation No 883/79 (Official Journal L 111, 4.5.1979, p. 16). As the applicants correctly point out, the intervention agency has, in particular, no discretion as to whether or not the goods will be sold but is responsible solely for ensuring that the sale is properly conducted.

To sum up, therefore, it may be said that it was not the changed market conditions which created the risk of serious disturbance of the market but at most the Commission's intervention in the tendering procedure provided for in Regulation No 71/81, which came so late as to amount to a misuse of discretion.

It must further be stated that the Commission has not succeeded in demonstrating conclusively that proceeding with the sale on the original conditions would actually have led to serious disturbance of the market. It is generally not clear in what way the marketing of several fairly large lots of oil at relatively favourable prices could have led to direct disturbance of the market when, according to the information supplied by the Commission, there were shortages and prices were rising.

As may be inferred from the preambles to the regulations in question, the truth is that the Commission feared that the six undertakings, because of the high profit they would make, would achieve an economically dominant position which would enable them to disrupt the market by means of selling prices fixed by them alone. In other words, what the Commission feared was not a direct disturbance of the market, but the possibility of indirect disturbance.

Moreover, Mr Guida's evidence does not support the Commission's argument that serious disturbances of that kind or the exclusion of other operators from the market was to be feared. In any case the actual possibility of exercising influence of that kind on the market is dependent upon a number of hypotheses which are difficult to prove. Such a possibility would only exist, for example, if the undertakings in question had, by means of the purchase they had made, acquired a dominant market position. Because of the lack of transparency in the olive-oil market, we do not know precisely what proportion of the total quantity of lampante grade oil on the Italian market was represented by the quantities which were sold. According to the applicants, that proportion was only 8%, while the Commission speaks of 30%. It must also be borne in mind that the Commission is itself the cause of any risk, if that is the right word, that might exist of such a dominant position being acquired, by virtue of the fact that it organized the sale of fairly large lots at a fixed price under the terms of Regulation No 71/81. The applicants are also correct in their view that the provisions of Regulation No 2239/81, under which the same lots were reserved for the same tenderers at a slightly higher, but none the less still favourable, price, were to a certain extent in contradiction with the sale which had been cancelled in that they did not directly eliminate the danger of exercising an influence on the market of the kind associated with a dominant position.

As proof of the disturbance of the market which was allegedly to be expected, the Commission has produced only several telex messages referring to such a risk, sent by competing undertakings after the lots had been drawn.

However, the Commission could not tell us how many undertakings and which categories of economic operators — cooperatives, the refining industry, the manufacturers of equipment, wholesalers, retailers, etc. — would have been threatened by a sale under the original conditions. Clearly, it had also failed to ascertain the stocks held by the individual undertakings before it adopted the contested regulations.

Finally, the Commission could not say with certainty that the undertakings in question would relinquish their profit margins in order to exclude their competitors from the market or that they would use their profits to disturb the market.

It must therefore be concluded that in cancelling the sale, the Commission allowed itself to be influenced purely by an abstract, hypothetical risk of disturbance of the market which, moreover, was attributable solely to its own breach of duty. However, such a risk as will be shown, is not sufficient to justify depriving the applicants of their right to acquire assets.

According to the applicants, since there was no actual risk of their disturbing the market directly it is clear that the Commission misused its discretion in such a way as to amount to a “détournement de pouvoir”, in so far as its purpose in adopting the contested regulations was not to protect the market but primarily to reduce the profits (admittedly considerable) that the applicants stood to make.

Even if a risk of that kind were sufficient to justify such an intervention, the fact remains that from the procedural point of view the regulation contains an inadequate statement of the reasons on which it is based. This Court has consistently held (see, as typical of many judgments, that in Case 166/78) that in the case of general acts, the requirements of Article 190 of the Treaty are satisfied if the statement of reasons explains in essence the measures concerned. As I said at the beginning, the contested measures, in spite of their being in the form of regulations, are not general and abstract rules but in reality a series of individual decisions. The grounds for those individual decisions should have been set out in detail so that both the person affected by them and the Court of Justice would be in a position to verify their conformity with Community law. The applicants are therefore correct when they state that the contested measures are also defective because the obligation to state the reasons for them has not been respected.

Infringement of the general principles of the law.

The adoption of Regulation No 2238/81 also infringes the general principles of legal certainty and legitimate expectation. As I have already explained, the applicants were individually identified by the drawing of lots and thereby acquired a right to acquire assets. Regulation No 71/81 must be regarded as a measure which produces effects in favour of an identifiable class of persons. As regards its effects therefore, it constitutes a general measure in favour of those persons, that is, a group of individual acts which confers favourable individual right upon them. Accordingly, the general principles of law concerning revocation of administrative acts of that kind must be applied, mutatis mutandis, to their repeal, whose declared purpose was to cancel the sales in question.

In principle therefore, a balance must be struck between the public interest and the private interests involved, and it must be decided which principle is to have priority in each individual case. According to the Court's case-law, unlawful administrative decisions may always be revoked unless in a particular case the existence of vested rights makes that impossible (see judgment in Case 15/60). Decisions conferring rights on the individual may also be revoked, even though those decisions are in conformity with the law, if the persons affected by them cannot rely on the principle of legitimate expectation. If, for example, a prudent and discriminating trader could foresee the adoption of stricter Community measures, he cannot then, as this Court held, inter alia, in the Liihrs case, plead legitimate expectation if such a measure is in fact adopted. It is settled in the case-law of the Court (see Joined Cases 42 and 49/59 and Case 159/82) that the retroactive withdrawal of a lawful administrative measure which has conferred rights on the individual is always contrary to the principles of legal certainty and legitimate expectation.

If Regulation No 2238/81 is examined in the light of those principles, it will immediately be noted that the measure in question is a retroactive withdrawal of a measure which conferred rights on the undertakings affected by it. By the Commission's own admission and also according to the answer given by the competent Member of the Commission, Mr Dalsager, on 22 June 1981, that measure was regarded as lawful, at least at the time it was adopted in January 1981. The most that can be said against that is that the measure may have become unlawful, quasi de facto, as a result of the altered market conditions and the traders concerned ought to have been able to recognize this.

Against that view, however, it must be observed that in general a measure which was originally lawful, as long as it exists, benefits from the presumption of continuing lawfulness. The traders concerned were further entitled to rely on the lawfulness of the sale because, in spite of several months having passed and in spite of several warnings from AIMA in the meantime, the Commission did not stop the drawing of lots but allowed it to take its normal course. The delay cannot therefore be regarded as the responsibility of the undertakings, which, if the sale had taken place in accordance with the provisions laid down, would have been designated on 12 February and would have withdrawn the quantities of oil that they had purchased on the original conditions.

Finally, another factor to be borne in mind in considering whether the confidence which the applicants placed in the validity of the original measure, and their acquired rights, are worthy of protection, is that pursuant to Article 5 of Regulation No 71/81 those traders were under a unilateral and irrevocable obligation, evidenced by a guarantee, to fulfil the terms of any contract which might be concluded. Had prices fallen rather than risen they would, as part of their commercial risk, have had to carry the loss. Correspondingly, it is no more than right and proper that, having undertaken such obligations, their legitimate expectation of a possible profit be also protected.

The further grounds advanced by the applicants that the contested regulations constituted an unlawful interference with their property is also connected with the protection of vested rights. The applicants contend that in Italian law, in particular, but also in the laws of all the Member States, an interference which deprives a person of his property or which has a similar effect is only permissible if there is a legal basis for it, if it is in the general interest and if compensation is paid. All three of those conditions are absent in this case.

The Commission contends that the regulations are not measures of expropriation, but merely measures taken in the context of its power to regulate the market. Even if Regulation No 2238/81 is to be regarded as a measure of expropriation, Regulation No 2239/81 provides for adequate compensation. That regulation enabled the six undertakings to acquire the lots of oil in question at an extremely favourable price and they were thus adequately compensated.

In the light of what I have said, there is no need to go any further into this question of expropriation, since the regulations in question should already be declared void for the reasons I have explained. I will therefore just summarize my views on the questions raised by this line of argument, purely for the sake of completeness.

As the Court has decided, inter alia in the Hauer and Testa cases, one of the fundamental rights which is protected under Community law in accordance with the constitutional concept common to the Member States is the right to property. In this connection, there is no need to go any further into the question of whether the applicants had acquired title to the lots of oil put up for sale since individual property rights acquired under public law must be regarded as property when they give rise to a legal situation which approaches that of a property owner. As I have explained, that question must be answered in the affirmative in this case. A withdrawal of such proprietary rights must be assessed not in the context of the social obligations of property but should rather be regarded as an act of expropriation or as an act similar to expropriation.

I think I am right in saying that in the legal systems of all the Member States, such an act requires a statutory basis and may in principle only be carried out in the general interest. That is so not least because of the principles of legal security and of the legality of administrative acts, which also obtain in Community law. However, in reply to an express question, the Commission was unable to cite any legal basis which permits it, in the context of its market management powers, to withdraw vested property rights. An act which purports to do so ought on that ground alone to be declared void, quite independently of the more than doubtful question of whether it was carried out in the general interest.

The question remains, however, as to how compensation is to be assessed, that is, whether merely appropriate compensation must be provided or whether, as the applicants believe, there is a right to compensation in full.

That question raises a series of delicate problems which, in my opinion, do not allow of a simple solution to be obtained by means of a comparison of the different legal systems. However, I do not wish to follow that course, since in the final analysis I share the applicant's opinion that to withdraw the vested rights of the undertakings in question and then give them, by way of compensation, the opportunity to reacquire the same rights at a different price is a course which is not consonant with the principle of the protection of property. My view is that in such a case nothing but full compensation for the value of the right which has been withdrawn can be regarded as adequate.

A different view would only be tenable if the Commission had expressly reserved the right, in Regulation No 71/81, to modify the selling price in the light of economic conditions.

Moreover, even if the solution proposed by the Commission were to be accepted, it is difficult to explain logically why the traders concerned, who originally had a right to acquire the lots of oil in question at a single fixed price, should now, allegedly by way of adequate compensation, pay prices varying between LIT 235000 per 100 kg and LIT 239000 per 100 kg for the individual lots.

From that point of view also, the regulation should be regarded as unlawful. If the Court is of the opinion that the regulations should be declared void on the latter ground, I believe it would be appropriate that the full Court, and not a Chamber, take a position on this question of fundamental importance, which has not yet been ruled upon by the Court.

Procedural defects

Since the substantive complaints have been shown to be well founded, I can deal briefly with the applicant's further complaint regarding defects. The applicants take the view that the provisions in question should also be declared void on the ground that they infringe essential requirements of form in that the procedure laid down in Article 38 of Regulation No 136/66 was not followed. That provision requires that the Management Committee for Oils and Fats should deliver its opinion before any measures are adopted. If the measures proposed by the Commission are not in accordance with the opinion of the committee, they are to be forthwith communicated to the Council.

However, that complaint is based, as the Commission has rightly pointed out, on an erroneous interpretation of the provision in question. That the Committee was consulted is clear from the last recital in the preambles to both regulations, in which it was stated that the Management Committee for Oils and Fats had not delivered an opinion within the time-limit set by its chairman. That means that there was neither a majority for nor a majority against the regulations.

However, pursuant to Article 38 of Regulation No 136/66, the only measures that the Commission must communicate to the Council are those which are not in accordance with the opinion of the Committee. The absence of an opinion by the Committee, as the Court ruled in Schouten and Dulciera with regard to a similarly worded provision in the regulation establishing a common market organization in wheat, in no way affects the validity of the measures adopted by the Commission. This complaint must therefore be rejected as unfounded.

4.The consequences of unlawfulness

Since the action is generally well founded, the Court, in accordance with Article 174 of the EEC Treaty, must declare the contested regulations void. The nullity of Regulation No 2239/81 derives in particular from the close material connection between it and Regulation No 2238/81, which is itself defective.

The Commission proposed that in that case, in accordance with the second paragraph of Article 174 of the EEC Treaty, at least that part of the contested regulations which provided for the abrogation of the facilities for payment be upheld. Those facilities, provided for in Regulation No 71/81, would have the effect of reducing the price that the undertakings concerned would have had to pay per 100 kg of olive oil from LIT 210000 to LIT 189000.

In view of my earlier remarks, I do not believe there is any necessity to decide that the contested regulations are to continue in force to the extent that they abolish the facilities for payment contained in Regulation No 71/80. Those facilities for payment are in fact part of the property rights acquired by the applicants as a result of the drawing of lots and their abrogation would therefore constitute an interference with those vested rights.

The second paragraph of Article 174 must be regarded as a special rule which makes it possible to take account of the normative consequences of instruments such as regulations. As has been shown, the contested regulations, have, however, the effect of individual decisions, so that there is no justification on that ground for regarding individual parts of them as definitive.

III —The claim for damages brought by the applicant in Case 264/81

The effect of the declaration that Regulations Nos 2238/81 and 2239/81 are void is that Regulation No 71/81 remains in force and the sales must take place on the basis of that regulation.

Therefore the claim for damages, brought in the alternative by the applicant in Case 264/81 for the case in which the contested regulations were not declared void, is without purpose.

In reply to a question posed by the Court that applicant expressly explained during the oral procedure that the claim for damages it brought in addition to the main application had been brought merely as a precaution against the possibility that the judgment in the main claim might not lead to its being fully compensated. It explained that the sole purpose of that claim was to keep open the possibility of bringing a claim for damages. No decision can or need therefore be taken at the present stage of the proceedings on that conditional application.

In conclusion, I propose that the Court declare that Commission Regulations Nos 2238/81 and 2239/81 of 3 August 1981 are void and that it dismiss the supplementary claim for damages brought in Case 264/81. If such is the Court's decision, the Commission should also be ordered to pay the costs, as has been asked for in the applicants' pleadings.

As the Commission has also failed in its essential submissions in the proceedings for interim measures, it should also be ordered to pay the costs both of those proceedings and of the intervention.

*

(1) Translated from the German.

(2) Judgment of 6.10.1982 in Case 307/81 Alumine Italia SpA v Coimai and Commission of the European Communities [1982] ECR 3463, at p. 3170.

(3) Judgment of 11.7.1984 in Case 222/83, Municipality of Differdange and Others v Commission of the European Communities [1984] ECR 2889.

(4) Judgment of 12.7.1979 in Case 166/78, Government of the Italian Republic v Commission of the European Communities [1979] ECR 2575.

(5) Judgment of 1.6.1981 in Case 15/60, Gabriel Simon v Court of Justice of the European Communities [1961] ECR 115.

(6) Judgment of 1.2.1978 in Case 78/77, Firma Johann Liihrs v Hauptzollamt Hamburg-Jonas [1978] ECR 169.

(7) Judgment of 22.3.1961 in Joined Cases 42 and 49/59, Société Nouvelle des Usines de Pontheue — Aciéries du Temple v High Authority of the ECSC [1961] ECR 53.

Judgment of 22.9.1983 in Case 159/82, Angélique Verli-Wallace v Commission of the European Communities [1983] ECR 2711.

(8) Judgment of 13.12.1979 in Case 44/79, Liselotte Hauer v Land Rheinland-Pfalz [1979] ECR 3727.

Judgment of 19.6.1980 in Joined Cases 41, 121 and 796/79 Vittorio Testa and Others v Bundesanstalt für Arbeit [1980] ECR 1979.

(9) Judgment of 14.12.1978 in Case 35/78, N.G.J. Schauten BV v Hoofdproduktschap voor Akkerbouw- producten [1978] ECR 2543.

Judgment of 5.4.1979 in Case 95/78, Dulciora SpA v Amministrazione delle Finanze dello Stato [1979] ECR 1549.