Instituto Chemioterapico Italiano SpA v. European Community Commission

The Commercial Solvents Corporation (CSC) (plaintiff) was incorporated in New York. CSC enjoyed a world monopoly in the production of 1-nitropropane, which was the raw material needed for the industrial-scale production of aminobutanol. Aminobutanol was used as an emulsifier and as the raw material in the production of ethambutol, which was used to treat pulmonary tuberculosis. CSC owned 51 percent of the shares in the Italian company Instituto Chemioterapico Italiano SpA (ICI) (plaintiff). By virtue of its majority stake, CSC could appoint ICI’s directors and determine ICI’s policy. In July and October 1970, ICI bought 1-nitropropane from a small Italian ethambutol producer and resold the 1-nitropropane as an emulsifier to small European paint manufacturers on the condition that the manufacturers not resell the nitropropane for pharmaceutical purposes outside the European Economic Community (EEC). The Laboratorio Chimico Farmaceutico Giorgio Zoja, SpA (Zoja) purchased aminobutanol from ICI, which ICI obtained from CSC. In November, Zoja attempted to buy more aminobutanol from ICI, but ICI responded that CSC no longer had aminobutanol for sale to ICI. In April 1971, Zoja filed an application with the European Commission (commission) (defendant), complaining about its inability to obtain a regular supply of aminobutanol. The commission ruled that CSC exercised such control over ICI that CSC and ICI should be treated as a single undertaking. The commission further ruled that the CSC-ICI group violated Articles 85 and 86 of the treaty that created the EEC (EEC Treaty or Treaty of Rome) by refusing to supply aminobutanol to Zoja. The commission based its decision on CSC’s majority stake in ICI and the fact that CSC’s annual reports listed ICI as a CSC subsidiary. Additionally, the commission inferred that ICI’s refusal to sell aminobutanol for the manufacture of ethambutol was due to CSC and that CSC was involved in ICI’s prior unsuccessful attempt to acquire Zoja. CSC and ICI appealed to the European Court of Justice (ECJ), arguing that the commission did not have jurisdiction over CSC because CSC (1) was based in the United States and did no current business in the EEC and (2) did not have enough control over ICI to justify treating CSC and ICI as a single undertaking. The advocate general recommended that the ECJ reject CSC and ICI’s appeal.