Facts
1 By application registered at the Registry of the Court of First Instance on 28 February 1994 Société Commerciale des Potasses et de l' Azote (hereinafter "SCPA") and Entreprise Minière et Chimique (hereinafter "EMC") brought an action under the fourth paragraph of Article 173 of the Treaty establishing the European Community (hereinafter "the EC Treaty") for the partial annulment of the Commission Decision of 14 December 1993 relating to a proceeding under Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings (IV/M.308 ° Kali+Salz/MdK/Treuhand).
2 In their application the applicants claim that the Court of First Instance should:
° declare Article 1 of the decision partially void in so far as it makes the declaring of the concentration compatible with the common market conditional upon compliance with the conditions set out in paragraph 63 of the decision;
° declare the decision partially void in so far as it has accepted the commitment mentioned in paragraph 65 of the decision whereby Kali und Salz AG ("K+S") undertook to modify the corporate structure of Potacan by 30 June 1994.
3 By a separate document received at the Registry of the Court of First Instance on the same day the applicants also sought, under Articles 185 and 186 of the EC Treaty:
° suspension of the operation of the contested decision in that it required K+S to sell shares and/or to withdraw from Kali-Export GmbH ("Kali -Export") and to terminate the contractual distribution relations binding it to SCPA;
° an order suspending the proceedings initiated by the Commission in Case IV/34.774 ° Potacan.
4 On 23 March 1994 the Commission submitted its written observations on the application for interim measures. On 18 April 1994 the parties presented oral observations.
5 Before considering the merits of the application for interim measures it is well to consider the background of the present case and, in particular, the main facts which are at the origin of the case which has come before the Court of First Instance, as appearing from the pleadings and documents lodged by the parties and the oral observations presented at the hearing on 18 April 1994.
6 SCPA holds 25% of the shares in Kali-Export, a company incorporated under Austrian law, through which it effects part of its sales outside the European Community. EMC holds all the shares in SCPA and 50% of the shares in Potacan, a company incorporated under Canadian law, which it jointly controls with K+S.
7 On 14 July 1993 the Commission, pursuant to Article 4(1) of Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings (revised version published in OJ 1990 L 257, p. 13), received notification of a transaction intended to merge the potash and rock salt business of K+S and Mitteldeutsche Kali AG ("MdK") in a joint undertaking created by K+S and the Treuhandanstalt.
8 After considering the notification the Commission decided on 16 August 1993, pursuant to Article 6(1)(c) of Regulation No 4064/89, to initiate proceedings on the ground that the concentration as notified raised serious doubts about its compatibility with the common market.
On 14 December 1993 the Commission adopted a decision declaring, in Article 1, the concentration to be compatible with the common market provided that the conditions and obligations entailed in the parties' commitments vis-à-vis the Commission, mentioned in paragraph 63 of the decision, were respected in full. Article 2 of the decision states that the declaration of compatibility does not cover the non-competition clause contained in Article 20 of the framework agreement relating to the concentration.
9 The commitments referred to in paragraph 63 of the decision are as follows:
"° Kali-Export GmbH, Wien
K+S und das Gemeinschaftsunternehmen scheiden unverzueglich aus der Kali-Export GmbH, Wien, aus. ...
In gleicher Weise werden K+S und das Gemeinschaftsunternehmen den mit Kali-Export GmbH bestehenden Vertretervertrag nach den dort vorgesehenen Kuendigungsregelungen ... kuendigen. Das Gemeinschaftsunternehmen wird ab diesem Zeitpunkt ueber eine eigene Vertriebsorganisation Kali-Export GmbH Wettbewerb machen ... .
° Vertrieb
K+S und das Gemeinschaftsunternehmen werden in der EG ° soweit nichts bereits vorhanden ° eine eigene Vertriebsorganisation einrichten und ihre Produkte ueber dieses Vertriebsnetz zu allgemein ueblichen, kaufmaennischen Gepflogenheiten vertreiben. In Frankreich wird eine Vertriebsorganisation fuer Kaliprodukte einschliesslich -spezialitaeten errichtet werden, die den gesamten franzoesischen Markt umfassen und nach Art und Umfang der Bedeutung des franzoesischen Marktes Rechnung tragen wird. Dies geschieht unter Beachtung des Grundsatzes der Wirtschaftlichkeit.
Die bisherige Zusammenarbeit mit der SCPA als Vertriebspartner fuer den franzoesischen Markt wird ... beendet. Damit wird einerseits SCPA die Erfuellung bereits abgeschlossener Kontrakte mit eigenen Abnehmern, andererseits der Aufbau einer eigenen Vertriebsorganisation des Gemeinschaftsunternehmens ermoeglicht. Ein Verkauf an SCPA zu marktueblichen Bedingungen ist moeglich."
("° Kali-Export GmbH, Vienna
K+S and the JV will withdraw without delay from Kali-Export GmbH in Vienna. ...
In the same way K+S and the JV will terminate the existing agency contract with Kali-Export GmbH ... in accordance with the termination arrangements foreseen therein. After this date, the JV will enter into competition with Kali-Export GmbH via its own distribution organization ... .
° Distribution
K+S and the JV will establish in the EC their own distribution organization ° to the extent not already existing ° and will distribute their products through this distribution network in accordance with normal commercial practice. A distribution organization will be established in France for potash as well as speciality products. This will cover the whole of the French market and its nature and size will be commensurate with the importance of the French market. Its establishment will respect the principle of economic efficiency.
The current cooperation with SCPA as distribution partner in the French market will be terminated by [...] at the latest. It will be possible on the one hand for SCPA to fulfil contracts already agreed with its own customers and on the other hand, for the JV to build up its own distribution organization. The sale to SCPA on normal market conditions is allowed.")
10 Paragraph 65 of the contested decision reads as follows:
"65. Weiterhin hat K+S die Bedenken der Kommission wegen der negativen Auswirkungen des Zusammenschlusses auf die Wettbewerbsverhaeltnisse in der Gemeinschaft zur Kenntnis genommen und die Zusage gemacht, bis zum 30. Juni 1994 die Struktur von Potacan in einer solchen Weise umzuwandeln, dass jeder Partner in die Lage versetzt wird, aus Potacan erlangtes Kali jeweils unabhaengig von dem anderen Partner auf dem Markt der Gemeinschaft zu vermarkten."
("65. Furthermore, in acknowledging the Commission' s concerns about the negative effects of the merger on the conditions of competition within the Community, K+S has undertaken to adapt by 30 June 1994 the structure of Potacan in such a way as to enable each partner to market the potash obtained from Potacan independently of each other on the market.")
11 At paragraph 67 it is added:
"Die Kommission hat davon abgesehen, die Zusage hinsichtlich Potacan zum Gegenstand einer foermlichen Auflage zu machen. Sie hat diese Zusage zur Kenntnis genommen und geht davon aus, dass K+S nach besten Kraeften darauf hinwirkt, mit EMC/SCPA ein Einvernehmen ueber eine Umwandlung von Potacan zu erreichen, die den oben beschriebenen Anforderungen gerecht wird... Sollte es K+S trotz aller Bemuehungen nicht gelingen, ein Einvernehmen mit EMC/SCPA zu erreichen, dann muesste eine geeignete Loesung der wettbewerblichen Probleme, die von der derzeitigen Ausgestaltung des Gemeinschaftsunternehmens Potacan herrueren, im Rahmen des nach der Ratsverordnung Nr. 17/62 anhaengigen Verfahrens gefunden werden." ("The Commission has decided not to impose a formal obligation based on the commitment regarding Potacan. It has taken note of this commitment and it will proceed on the assumption that K+S will make its best efforts to realize, in agreement with EMC, an arrangement for the conversion of Potacan which will meet the abovementioned requirements. ... In the event that K+S is not able to reach an agreement with EMC, despite K+S' s best efforts, an appropriate solution of the competition problems arising from the current form of the Potacan joint venture is to be found in the proceedings under Council Regulation No 17/62.")
12 On 2 July 1993 K+S and EMC notified to the Commission, pursuant to Article 4 of Council Regulation No 17 of 6 February 1962: First Regulation implementing Articles 85 and 86 of the Treaty (OJ, English Special Edition 1959-1962, p. 87), their agreements relating to Potacan (Case IV/34.774 ° Potacan). Following that notification, the Commission, on 1 December 1993, forwarded to K+S and EMC objections relating to infringement of Article 85 of the EC Treaty.
Law
13 Under Articles 185 and 186 of the Treaty and Article 4 of Council Decision 88/591/ECSC, EEC, Euratom of 24 October 1988 establishing a Court of First Instance of the European Communities (OJ 1988 L 319, p. 1), as amended by Council Decision 93/350/Euratom, ECSC, EEC of 8 June 1993 (OJ 1993 L 144, p. 21), the Court of First Instance may, if it considers that circumstances so require, order that application of the contested act be suspended or prescribe any necessary interim measures.
14 Article 104(2) of the Rules of Procedure of the Court of First Instance provides that applications for interim measures referred to in Articles 185 and 186 of the Treaty must state the circumstances giving rise to urgency and the pleas of fact and law establishing a prima facie case for the interim measures applied for. Such measures must be of an interim nature and must not prejudice the final judgment (see the order of the President of the Court of First Instance of 6 July 1993 in Case T-12/93 R CCE Vittel and CE Pierval v Commission [1993] ECR II-785).
Arguments of the parties
15 The applicants consider that the conditions allowing in law the grant of the interim measures applied for are satisfied in the present case. In their view, the contested decision is vitiated by errors of fact and of law and its immediate implementation would cause them serious and irreparable loss.
16 As regards the unlawfulness of the decision, the applicants essentially contend that the contested measure imposes on K+S conditions which bear no relation to maintenance of competition on the Community market and accepts a commitment from K+S in relation to Potacan without having sought their views.
17 The applicants deny that cooperation between K+S, Mdk and SCPA in Kali-Export can have any effect on the competitive conduct of the shareholders of Kali-Export in the Community in so far as sales by Kali-Export take place solely outside the European Community and there is no reimportation.
18 Secondly, the applicants consider that the obligation imposed on K+S to terminate its distribution connections with SCPA is incompatible with the provisions of Regulation No 4064/89 since such a condition can concern only the French domestic market, which, according to the decision itself, is not one of the relevant markets, and furthermore seems to overlook the fact that the distribution ties between K+S and SCPA relate solely to a magnesium product known as kieserite, which contains no potash.
19 The applicants consider, finally, that the Commission cannot accept the commitment proposed by K+S to alter before 30 June 1994 the Potacan structure, since Article 8(2) of Regulation No 4064/89 does not authorize it to accept a commitment which directly concerns the rights of a third party and which is likely seriously to impair the rights of that third party without its consent.
20 As regards the risk of serious and irreparable damage, the applicants contend first that the withdrawal by K+S and MdK from Kali-Export would make it impossible for the latter to continue its business and thus lead to its dissolution. It follows, in the view of the applicants, that SCPA, which has no international sales network for large-scale export sales, would no longer have any effective means of selling its products on the international markets and, more particularly, on the African and Asian markets. At the hearing on the interim application the applicants pointed out that the use of independent agents would not, as a rule, allow SCPA to maintain the commercial and financial position which it has at present, since many agents already work for K+S and the sale of smaller quantities of products would necessarily lead to the payment of a higher rate of commission.
21 Secondly, the applicants state that the requirement to terminate the contract relating to the sale of magnesium (kieserite) products in France would cause SCPA serious damage through the a loss of customers and of profit margin since the product in question represents for SCPA a turnover of some FF 65 million and furthermore it would be very difficult, if not impossible, to find another source of supply since K+S is the sole producer of kieserite in Europe.
22 The applicants also observe that K+S' s commitment, accepted by the Commission, in relation to Potacan in fact consists of an obligation on K+S and EMC to share equally Potacan' s production. Since, unlike K+S, EMC does not have its own network for the sale of its share of the production on international markets, EMC would forego a large source of income. In addition, K+S' s commitment, to which EMC clearly marked its disagreement, risks jeopardizing the viability of Potacan and the very large investments which EMC made in the development of the mine.
23 Finally, the applicants consider that in granting the interim measures requested the Court of First Instance would not harm the interests of the other parties concerned since both K+S' s interest in combining with MdK and the Commission' s interest in upholding healthy competition on the Community market would be safeguarded.
24 As a preliminary point, the Commission submits that the request for an order suspending the procedure in Case IV/34.774 ° Potacan is inadmissible since the main action in no way concerns the Potacan case and furthermore, and in any event, an action for annulment against the initiation of proceedings is itself manifestly inadmissible according to settled case-law of the Court of Justice and the Court of First Instance.
25 As far as demonstration of a prima facie case is concerned, the Commission considers that the applicants have put forward no sound evidence and that, on the contrary, it is the contested decision itself which has clear fumus boni juris. In the Commission' s view, the conditions in question are necessary to terminate the structural ties between K+S and SCPA and to avoid a situation in which effective competition is significantly impaired by reason of the collective dominant position which the joint undertaking and SCPA would occupy in the European Community apart from Germany following the concentration.
26 As regards the risk of serious and irreparable damage, the Commission considers that the applicants have adduced no evidence to show that they cannot await the outcome of the main proceedings without having to suffer damage which would involve serious and irreparable consequences.
27 As regards the condition relating to K+S' s withdrawal from Kali-Export, the Commission states that the export agreement which Kali-Export represents must in any event be amended before 1 July 1994 following the entry into force of the Agreement on the European Economic Area. The Commission considers that SCPA does not depend on Kali-Export for the sale of its products since it is possible for it to use independent agents.
28 As regards the distribution of K+S products in France, the Commission points out that the applicants have two misapprehensions. It is clear from the German version of the decision, which is the sole authentic one, that the commitments described in paragraph 63 of the decision do not relate to kieserite or require the termination of all the distribution contracts concluded between K+S and SCPA. The commitments referred to in paragraph 63 relate only to the obligation on K+S and the joint undertaking to establish their own distribution network in France for potash and speciality products and to the obligation to terminate cooperation between K+S and SCPA as distribution partners.
29 As regards K+S' s commitment in relation to Potacan, the Commission states, as is clearly apparent from paragraph 67 of the decision, that no condition within the meaning of Article 8 of Regulation No 4064/89 was imposed in that respect and emphasizes that in any event the alteration in Potacan' s structure depends on collaboration and EMC' s agreement. Furthermore, in the Commission' s opinion, the alleged damage has no connection with the measure sought, namely suspension of the proceeding initiated under Regulation No 17.
30 As regards the matter of taking account of the respective interests, the Commission emphasizes that the conditions imposed constitute essential parts of its decision declaring the concentration to be compatible with the common market. In those circumstances, if the interim measures now being sought were granted, it would be forced to suspend implementation of the decision as a whole thus preventing K+S' s exercise of its rights over MdK and the joint undertaking and putting in question again the reorganization of the potash industry in the former German Democratic Republic. While denying that the conditions laid down are likely to create an irreversible situation for the applicants, the Commission considers that even if that were so the applicants have not shown that K+S' s commitments expose them to a situation likely to jeopardize their very existence, justifying the adoption of interim measures which would seriously affect the rights and interests of third parties.
Findings of the judge hearing the application for interim measures
A ° Admissibility of the application for an order suspending the proceedings in Case IV/34.774 ° Potacan
31 Under the first paragraph of Article 104(1) of the Rules of Procedure of the Court of First Instance an application to suspend the operation of any measure adopted by an institution is admissible only if the applicant is challenging that measure in proceedings before the Court of First Instance. Under the second paragraph of Article 104(1) an application for the adoption of any other interim measure is admissible only if it is made by a party to a case before the Court of First Instance and relates to that case.
32 It is clear from the documents that in their main application the applicants are not challenging the measure by which the Commission initiated the proceedings in Case IV/34.774 ° Potacan. They confine themselves to pointing out certain contradictions between the conclusions at which the Commission arrived in the contested decision and the position which it adopted when notifying its objections in Case IV/34.774 ° Potacan.
33 It follows from the foregoing that the requested interim measure for an order suspending the proceedings in Case IV/34.774 ° Potacan does not concern a measure the lawfulness of which is being challenged before the Court of First Instance nor does it refer to any case before the Court of First Instance. This application must therefore be declared inadmissible.
B ° The application for a stay of operation of the decision inasmuch as it requires K+S to terminate contractual relations regarding distribution binding it to SCPA and to sell its shares and/or to withdraw from Kali-Export
34 In the view of SCPA, the conditions imposed by the contested decision create a risk of its incurring serious and irreparable damage in that it will be impossible for it to obtain supplies of kieserite in future and furthermore the opportunity of marketing its products on the big export markets will be seriously and irrevocably compromised by the dissolution of Kali-Export.
35 It has been consistently held that the urgent nature of an application for interim measures must be determined with regard to the need to give an interim ruling in order to avoid serious and irreparable damage to the party requesting the interim measure. It is for the party requesting suspension of operation of the measure in question to adduce evidence that it cannot await the outcome of the main proceedings without having to suffer damage which would lead to serious and irreparable consequences for it (see, most recently, the order of the President of the Court of First Instance of 14 December 1993 in Case T-543/93 R Gestevisión Telecinco v Commission [1993] ECR II-0000).
36 As regards the alleged impossibility for SCPA to obtain supplies of kieserite, it should be observed that this conclusion appears to be based on a misinterpretation of the decision. Prima facie it does not impose any obligation on K+S to terminate its contractual relations for distribution with SCPA as regards products other than potash or speciality products. Paragraph 63 of the decision mentions in fact only "potash as well as speciality products" ("kaliprodukte einschliesslich -spezialitaeten"). Kieserite is a magnesium product containing no potash. In those circumstances it does not, prima facie, seem affected by the contested decision, which accordingly deprives the interim measure requested of its purpose.
37 As regards K+S' s obligation to sell its shares and/or to withdraw from Kali-Export it should be observed that the conditions and obligations to which the declaration of compatibility of the concentration between K+S and MdK with the common market is subject include the following commitment:
"K+S und das Gemeinschaftsunternehmen scheiden unverzueglich aus der Kali-Export GmbH, Wien, aus. ..." ("K+S and the JV will withdraw without delay from Kali-Export GmbH in Vienna. ... ").
38 The withdrawal of K+S and the joint venture from Kali-Export will take effect only on ... . Second, it is common ground between the parties that the operation of Kali-Export must in any event be changed before 1 July 1994 following the entry into force of the Agreement on the European Economic Area, although they disagree about the actual scope of such a change. Third, it is not to be excluded that in spite of the small number of potash manufacturers in Europe other partners may be able to take the place of K+S and the joint venture in Kali-Export.
39 Whilst the withdrawal of K+S and the joint venture from Kali-Export may admittedly be prejudicial to SCPA, it nevertheless cannot be said that such withdrawal will on its own necessarily make it impossible for SCPA to market its potash products on the big export markets, as it contended before the Court. Unforeseeable circumstances, such as the difficulties which SCPA might encounter in finding alternatives for the sale of its products after the withdrawal of K+S and the joint venture from Kali-Export do not constitute prima facie a risk of actual or imminent damage but only a future, uncertain and incalculable risk against which, should it materialize, the applicant could assert its rights before the Community judicature (see the order of the President of the Court of First Instance in Case T-24/93 R CMBT v Commission [1993] ECR II-543).
40 It must, however, be added that some of the issues which arise in the present case are not without serious problems of interpretation. This is so in particular with the question whether and to what extent the withdrawal of K+S and the joint venture from Kali-Export entails Kali-Export' s dissolution, thereby affecting the rights of other shareholders of the company and, in particular, those of SCPA.
41 Admittedly, in point 64 of the decision the Commission does not seem to make the dissolution of Kali-Export an independent condition. It reads:
"Durch die Zusage von K+S/MdK, aus der Kali-Export GmbH auszucheiden, wird sichergestellt, dass die Zusammenarbeit von K+S und EMC/SCPA im Rahmen des Exportkartells beendet wird." ("The abovementioned commitment by K+S/MdK to withdraw from Kali-Export GmbH will ensure that cooperation between K+S and EMC/SCPA within the framework of the export cartel is discontinued.").
42 However, the information supplied by the parties to the judge hearing the application for interim measures do not allow him to assess the real significance of the commitment entered into vis-à-vis the Commission by the parties to the concentration ° which the Commission has made a condition of its decision ° and in particular to ascertain the consequences for the rights of third parties so as to be able to consider whether there is any risk of serious and irreparable damage to them. It is therefore appropriate to order the parties to forward to the Court the relevant information to enable it to establish whether and to what extent the commitment entered into by K+S and the joint venture to withdraw from Kali-Export will entail its dissolution.
43 Pending receipt of such information it is also necessary to consider whether the Court should, as a precaution, order operation of Article 1 of the contested decision to be suspended inasmuch as it might entail dissolution of Kali-Export.
44 It must be borne in mind here that when the interim measures sought by applicants may have a serious effect upon the rights and interests of third parties who, not being parties to the case, have not had their views heard, as is the case here with K+S and the joint venture, such measures can be justified only if it would appear that without them the applicants would be exposed to a situation likely to endanger their very existence (see the aforementioned order in CCE Vittel and CE Pierval v Commission).
45 In the present case, it does not seem that the existence of SCPA is endangered. Nevertheless, the judge hearing this application does not have sufficient information to exclude the possibility that the existence of Kali-Export, of which SCPA is one of the four shareholders, may be endangered by implementation of one of the conditions imposed by the contested decision. It does not appear that provisional suspension of the operation of the condition relating to the withdrawal from Kali-Export ° inasmuch as it might entail its dissolution ° is likely to have a serious effect upon the rights and interests of K+S and the joint venture or adversely affect the public interest or the Commission' s interest in the immediate implementation of its decision.
46 In those circumstances and until the judge hearing the application for interim measures is able to give a ruling in the light of information to be communicated to him by the parties in this regard, it appears appropriate, as a protective measure, to order operation of Article 1 of the contested decision to be suspended inasmuch as it might entail the dissolution of Kali-Export.
On those grounds,
THE PRESIDENT OF THE COURT OF FIRST INSTANCE
hereby orders:
1. The parties shall forward to the Court of First Instance within a period of two weeks the relevant information enabling it to ascertain whether and to what extent the commitment by K+S and the joint venture in relation to their withdrawal from Kali-Export will entail Kali-Export' s dissolution.
2. Operation of Article 1 of the Commission Decision of 14 December 1993 relating to a proceeding under Council Regulation (EEC) No 4064/89 on the control of concentrations between undertakings (IV/M.308 ° Kali+Salz/MdK/Treuhand), inasmuch as it might entail dissolution of Kali-Export, is suspended until an order is made terminating the interim proceedings.
3. The remainder of the application for interim measures is dismissed.
4. Costs are reserved.
Luxembourg, 10 May 1994.
