Landmark Cases on European Union Law

(Arranged According to the Subject)

 

 

 

 

 

 

 

 

 

The new legal order

 

Key Principle: The objective of the EC is to establish a common market, the operation of which directly concerns interested parties in the Community.

 

Van Gend en Loos v Nederlandse Administratie der Belastinge (Case 26/62) 1963

Van Gend en Loos, a firm of importers, was required to pay customs duty on urea-formaldehyde (glue) imported from Ger­many into the Netherlands under a law adopted after the creation of the EEC. The importers challenged the payment in the Dutch courts on the basis that the extra duty infringed Arl.25 (ex 12) of the Treaty (prohibiting the introduction of new customs duties). The Dutch court referred questions to the Court of Justice (ECJ) for interpretation under Art.234 (ex 177) procedure.

 

Held: (ECJ) (1) The EC (then known as the EEC) is a new legal order in international law, on behalf of which states have limited their sovereign rights in certain fields and whose sub­jects comprise not only states but also individuals; (2) Art.25 (ex 12) of the Treaty produces direct effects in the relationship between the Member States and their subjects, creating individ­ual rights which national courts must protect. [1963] E.C.R. 1.

 

Commentary

The “new legal order” is recognised in international law as a treaty between sovereign states but also takes effect within the domestic legal systems of the Member States. The order is characterised by the concepts of direct effect and the supremacy of EC law over national law. Where a provision of EC law is directly effective it creates rights and duties which are directly enforceable by individuals before the national courts. The ECJ stated in Van Gend en Loos that to create direct effects a provision must be clear, unconditional and require no further action by Member States.

 

 

Supremacy and direct effect

 

Key Principle: The EC Treaty is an integral part of the legal system of the Member States and must be applied in their courts.

 

Costa v ENEL (Case 6/64) 1964

Ente Nazional Energia Elettrica (ENEL) was created by the Italian Government under a law passed in 1962 to nationalise the electricity industry. Costa refused to pay his electricity bill, on the basis that the nationalisation infringed the Italian Consti­tution and various provisions of the Treaty.

Held: (ECJ) The transfer by Member States from their domes­tic legal systems to the EC system of rights and duties carries with it a permanent limitation of their sovereign rights, against which a later, unilateral act incompatible with EC law cannot prevail. [1964] E.C.R. 585.

 

Italian Minister of Finance v Simmenthal (Case 106/77) 1978 An Italian law introduced after joining the EEC required vet­erinary inspections of beef and veal. The law was challenged before the Italian courts as contrary to Art.28 (ex 30) (prohibiting quantitative restrictions on imports and measures having equi­valent effect).

 

Held: (ECJ) A national court in such circumstances should not apply conflicting national legislation, even in situations where it was adopted after joining the EEC; it should not wait for the decision of a higher national court before acting. [1978] E.C.R. 629.

The Constitutional Treaty provides for the supremacy of Community law over national law in as follows: ‘The Constitu­tion and laws adopted by the institutions of the Union in exercising competences conferred on it shall have pr imacy over the law of the Member States’ (Article 1-6).

 

Commentary

The ECJ recently reconsidered Simmenthal in Ministero della Finanze v In.Co.Ge.90 (Joined Cases C-10-22/97) 1998, holding that it does not follow from Simmenthal that the conflicting national law should be regarded as non-existent. The Court held that where a national law is adopted after an EC law with which it is incompatible, it is for the national authorities to decide on its reclassification.

The Art.234 (ex 177) procedure enables the ECJ to interpret or consider the validity of EC law (see Ch.7). The ECJ has used this procedure to develop the concept of the “new legal order” and to provide authoritative rulings, which apply uniformly throughout all the Member States. The United Kingdom recognised the direct effect of EC law in s.2(l) of the European Communities Act 1972.

 

 

 

Interim relief

 

Key Principle: The full effectiveness of EC law would be impaired if a rule of national law could prevent a court considering  a matter governed by EC law from granting interim relief.

 

R. v Secretary of State for Transport Ex p. Factortame (Case C-213/89) 1990

Following concern about the tenuous nature of the link between the owners of a number of fishing vessels and the United Kingdom, the Merchant Shipping Act 1988 was adopted, setting out stringent rules for the registration of fishing vessels as British. Many vessels owned by Spanish nationals previously registered as British no longer qualified and thus could not share in the United Kingdom fishing quota under the common fisheries policy. The unsuccessful applicants sought judicial review in the United Kingdom and suspension of the relevant parts of the 1988 Act, arguing that the Act contravened various provisions of the Treaty. An injunction against tie Secretary of State was refused. The House of Lords referred questions for interpretation to the ECJ under Art.234 (ex 177).

Held: (ECJ) A national law should be set aside where it prevents the granting of interim relief in a dispute governed by EC law. [1990] E.C.R. 1-2433.

 

Commentary

The ruling of the ECJ followed the interim decision of the same court in an enforcement action brought by the Commission against the United Kingdom under Art.226 (ex 69): Commission v UK (Case C-246/89R), ordering the United Kingdom to suspend the operation of the offending sections of the 1988 Act The House of Lords applied the decision and set aside the rule that an interim injunction cannot be granted against the Crown in R. v Secretary of State for Transport Ex p. Factortame (1991). The ECJ later ruled on the interpretation of the substantive provisions of the Treaty (in Case C-221/89R), holding that Arts 43 (ex 52), etc., were infringed in circumstances where registration was made more difficult for nationals from other Member States than for nationals from the host state.

 

 

The direct effect of regulations, directives and decisions

 

Key Principle: Regulations, directives and decisions are capable of creating direct effects.

 

Grad v Finanzamt Traunstein (Case 9/70) 1970

A haulage contractor challenged a German transport tax on the basis that it infringed a decision addressed to the Member States on VAT and a harmonisation directive imposing a deadline for implementation of the decision.

 

Held: (ECJ) (1) The wording of Art.249 (ex 189) does not prevent individuals from relying in the national courts on decisions addressed to Member States. (2) The decision was directly effective; the directive merely fixed the date on which the VAT regime in the decision took effect. [1970] E.C.R. 825.

 

Commentary

The ECJ adopted the same reasoning in Van Duyn v Home Office (Case 41/74), holding that directives can be directly effective. Regulations are stated in Art.189 to be “of general application”. If they are also clear and unconditional, they may be directly effective: Leonesio v Italian Ministry of Agriculture (Case 93/71).

 

 

 

Key Principle: A directive containing a deadline for imple­mentation is only capable of creating direct effects from the date of the deadline.

 

Pubblico Ministero v Ratti (Case 148/78) 1979 Ratti, a manufacturer of solvents in Italy, was charged with failure to comply with Italian labelling legislation. He claimed that his products were labelled according to EC standards contained in two directives.

 

Held: (ECJ) As the deadline for implementation had been reached in relation to one but not both of the directives, only the directive for which the deadline had expired could be relied upon to create direct effects (and thus to provide a defence to one of the criminal charges). [1972] E.C.R. 119.

 

Commentary

If no deadline is specified in a directive it takes effect on publication in the Official Journal.

 

 

Vertical and horizontal direct effects

 

Key Principle: Treaty provisions are capable of creating dir­ect effects both vertically between the state and individuals and horizontally between individuals.

 

Defrenne v Sabena (Case 43/75) 1976

Ms D, an airline stewardess employed by the Belgian airline Sabena, was paid less  and had to retire earlier  than male stewards. She claimed that this amounted to a breach of Art.119 (now 141) of the Treaty (providing for equal pay for equal work).

 

Held: (Under Art.234 (ex 177)) Art.119 creates direct effects both vertically and horizontally. [1976] E.C.R. 4545.

 

Commentary

The ruling in Defrenne was limited to Treaty provisions. Article 119 was treated as directly effective only from the date of the judgment. This ruling on temporal effect was unusual but not unique and was based on the need for legal certainty. See also Barber v Guardian Royal Exchange (Case C-262/88) (Ch.14, p.175).

 

 

 

Key Principle: Directives are capable of creating direct effects vertically but not horizontally.

 

Marshall v South West Area Health Authority (No.l) (Case 152/84) 1986

Ms M sought to rely on Art.5 of the Equal Treatment Directive 76/207 when she was required to retire at 60 when men did not have to retire until the age of 65. The House of Lords referred questions to the ECJ.

 

Held: (ECJ) (1) Differentiating between retirement ages for men and women contravenes Art.5 of the Directive. (2) The obligation in a directive is addressed to Member States and cannot be enforced against individuals. (3) As an area health authority is a public body, the obligation not to discriminate may be enforced directly against that body. [1986] E.C.R. 723.

 

Commentary

(1)  Marshall established for the first time that directives could not be enforced directly against individuals, unless the individual is a public body (or “emanation of the state”).

(2)   In Foster v British Gas (Case C-18 8/8 9) the ECJ held that a directive could be enforced against a body responsible for providing a public service under state control, possessing special   powers   greater   than   those   normally   applicable between individuals (e.g. privatised utilities such as gas, water and electricity). In NUT v St Mary’s Church of England junior School the Court of Appeal held that the governors of a church school were a public body as they were charged by the state with running the school.

(3) The limitation on the direct effect of directives was upheld in Faccini Dori v Recreb (Case C-91/92). (Ms FD could not rely on the cooling-off period in a consumer protection directive against an Italian company when she sought to cancel a contract for a language course entered into on Milan Station.)

(4) The lack of horizontal direct effect in directives was again confirmed in El Corte Ingles SA v Rivero (Case C-192/94). In this case it was held that Art. 153 (ex 129a) EC (providing that the EC shall contribute to the attainment of a high level of consumer protection) cannot justify the direct effect of a directive on consumer protection which has not been trans­posed into national law.

 

Indirect effect

 

Key Principle: Where a directive is indirectly effective (i.e. not directly effective) national legislation must be interpreted in the light of the wording and purpose of the directive.

 

Von Colson and Kamann v Land Nordhein-Westfalen (Case 14/83) 1984

Ms Von Colson and Ms Kamann had applied for posts as social workers in a German prison. The officials responsible for recruitment refused to appoint the two women, although they had been placed at the top of the list of applicants by the social work committee, because of the problems and risks associated with working in a male prison. They claimed that they should be granted a contract of employment or damages under Art. 6 of Directive 76/207. The German courts made an Art.234 reference.

 

Held: (ECJ) (1) Art.6 of Directive 76/207 does not satisfy the requirements for creating direct effects. (2) The duty of Member States to achieve the results envisaged by the directive and their duty under Art.5 to ensure fulfilment of that obligation binds all authorities within the Member States including the courts. National courts must interpret and apply legislation adopted to implement a directive in the light of the wording and purpose of the directive in order to achieve the objective of the directive. [1986] E.C.R. 1891.

 

Commentary

(1)   Rather than treating the question as one concerned with the supremacy of EC law over national law, the ECJ developed a rule of construction in Yon Cohort derived from Art.249 (ex 189) (Directive binding on Member State to whom addressed, with choice of form and method left to the national authorities) and Art. 10 (ex 5) (Member States must take all appropriate measures to ensure fulfilment of the obligations arising from the Treaty or secondary legislation).

(2)   In Kolpinghuis Nijmegen (Case 80/86) the ECJ repeated the formula in Von Cohort but added that a directive cannot independently create criminal liability where its provisions are infringed. See also Arcaro (Case C-168/95) in which the ECJ held that, where a Member State has failed to transpose a directive, the obligation to interpret national law in line with EC law reaches a limit. An unimplemented directive may not, of itself, serve to determine or aggravate criminal liability of persons acting in contravention of the directive. For an application of the principle in the context of the First Companies Directive 68/15, see Berlusconi (Joined Cases C-387, 391 and 403/02).

(3)   United Kingdom law provides for the implementation of indirectly effective EC law in s.2(2) of the ECA 1972.

 

 

Key Principle: The obligation to interpret national law to comply with a directive applies regardless of whether the national law was adopted before or after the directive.

 

Marleasing SA v La Commercial Internacional de Alimtacion SA (Case C-106/89) 1990

Marleasing SA had sued La Commercial and several other companies in the Spanish courts. M claimed that the defendant companies had been established by Barviesa, who owed M large sums of money, in order to put his assets beyond the reach of his creditors. M sought a declaration that the contract establish­ing the companies was void for lack of cause under the Spanish Equal Treatment Directive 76/207. The House of Lords referred questions to the ECJ.

 

Held: (HL) It is for the United Kingdom court to construe domestic legislation in any field covered by an EC Directive so as to accord with the interpretation of the directive as laid down by the ECJ, if that can be done without distorting the meaning of the domestic legislation. [1993] 1 C.M.L.R. 259.

 

Commentary

(1) The ECJ ruled that it was a breach of Directive 76/207 to dismiss a female employee who was pregnant and who had been recruited for an unlimited term, even if she had been engaged as a maternity leave replacement (see Ch.14, p.186). The House of Lords applied the ruling and inter­preted the United Kingdom law in accordance with the directive.

(2) Webb v EMO represents a clear statement by the House of Lords of the duty of the United Kingdom courts to give effect to EC law when interpreting national law. Webb was decided after Marleasing and should be contrasted with its earlier decision in Duke v Reliance Systems (HL, 1988) in which it had held that it would distort the meaning of the Sex Discrimination Act 1975 to interpret it so as to give effect to Directive 76/207.

(3) The ECJ upheld the liberal approach to statutory interpreta­tion exemplified by cases such as Marleasing in two recent decisions. In Centrosteel Sri v Adipol GmbH (Case C-456/98) it held that the national court is bound, when applying provisions of domestic law, predating or postdat­ing the relevant directive, to interpret those provisions, as far as possible, in the light of the wording and purpose of the directive, so that those provisions are applied in a manner consistent with the result pursued by the directive. In Oceano Grupo Editoral SA v Quintero and Salvat Editores SA v Prades (Joined Cases C-240/98 and C-244/98), it repeated this formula, adding (in the context of the Unfair Contract Terms Directive 93/113) that the requirement to interpret in conformity with the Directive requires the national court, in particular, to favour the interpretation which would allow it to decline of its own motion the jurisdiction conferred on it by an unfair term.

(4)  The ECJ confirmed in Maria Pupino (Case C-105/03) that the duty to interpret national law in line with EC law applies in the area of Police and Judicial Co-operation. The EC had adopted a Framework Decision requiring Member States to guarantee victims the opportunity to be heard in criminal proceedings. Particularly vulnerable victims must benefit from specific treatment. This case arose in the context of criminal proceedings against a former nursery school teacher accused of various abusive practices against the children in her care, all of whom were under five years old at the time. The defendant opposed the Public Prosecu­tor’s request for special arrangements to take the testimony of eight children who were witnesses and victims, arguing that it contravened Italian law. The national court made a reference to the ECJ under Art.234. (The ECJ has jurisdic­tion to give preliminary rulings on Framework Decisions where a Member State declares that it accepts this jurisdic­tion. Italy had made such a declaration.) The Court held that the national court must interpret national law as far as possible in conformity with the wording and purpose of the Framework decision, in order to attain the result which it envisages. The national court must be able to authorise young children claiming mistreatment to give their testi­mony in accordance with arrangements providing for a suitable level of protection.

 

 

Key Principle: National provisions must not make it prac­tically impossible or excessively difficult to exercise rights conferred by EC law.

 

Metallgesellschaft Ltd, Hoechst Ag and Hoechst UK v Com­missioners of Inland Revenue and H.M. Attorney General (Joined Cases C-379/98 & C-410/98) 2001

The applicants were subsidiaries whose parent companies were not resident within the same Member States (the UK and Germany). The subsidiaries challenged the resulting imposition of discriminatory corporation tax (ACT), seeking restitution or compensation in the form of interest which would otherwise have been due.

 

Held: (ECJ) (Old) Art.52 requires that resident subsidiaries and their non-resident parent should have an effective legal remedy In order to obtain reimbursement or reparation of the financial joss suffered and from which the Member State concerned has benefited as a result of the advance payment of corporation tax by the subsidiaries.

 

Commentary

(1)   The ECJ did not accept the UK’s argument that the appli­cant should have refused to comply with national tax law, seeking a remedy through directly effective EC law.

(2)   An individual may not be prohibited from relying on Art. 81 merely because he was a party to an anti-competitive agreement, unless he was significantly responsible for the breach.

 

 

 

 

State liability for breach of EC law

 

Key Principle: A Member State will be liable for non-implementation of a directive in certain circumstances.

 

Francovich, Bonifaci and others v Italy (Cases C-6 & 9/90) 1991

Italy had failed to implement Directive 80/987 on the protection of workers in the event of insolvency. (The directive required the guarantee of payments of outstanding claims for remunera­tion and the creation of guarantee institutions to meet those claims.) Italy’s breach was established by the ECJ in Commission v Italy (Case 22/87). Francovich and Bonifaci had outstanding claims against a company declared bankrupt in 1985. Unable to recover against the company they brought actions in the Italian courts against Italy, requesting that Italy should pay them compensation in the light of the obligation in the directive. Both national courts referred questions to the ECJ to determine the extent of a Member State’s liability.

 

Held: (ECJ) Member States are obliged to compensate individ­uals for breaches of EC law for which they are responsible if three conditions are satisfied:

(1)   The objective of the directive must include the conferring of rights for the benefit of individuals.

(2)   The content of the rights must be identifiable from the directive.

(3)  There must be a causal link between the breach and the damage. [1991] E.C.R. 1-5357.

 

Commentary

(1)   The ECJ in Francovich stated that the full effectiveness of EC law would be impaired if individuals were unable to obtain compensation when their rights were infringed by a breach attributable to a Member State. The principle of state liability is inherent in the scheme of the Treaty. The duty on Member States to compensate derives from Art. 10 (ex 5) which obliges them to ensure fulfilment of their obligations under EC law.

(2)   State liability under Francovich applies to obligations which may not be directly effective and provides a remedy in the event of non-implementation (or inadequate implementa­tion) of EC law. Thus it prevents a state from relying on its own default in implementing EC law.

(3)   The ruling has been of immense importance and has been extended and clarified in a number of later rulings.

(4)   The High Court in Three Rivers District Council v Governor and Company of the Bank of England (1997) held that no action for state liability arose out of the First Banking Directive (the directive at issue in Francovich) as the dir­ective did not intend to confer rights on individuals. This decision is hard to reconcile with that of the Italian court in Francovich; where the court found that the directive did confer rights on the individual members of a group, but that F himself was outside the group.

 

 

Key Principle: States are liable for breaches of EC law where the breach is sufficiently serious.

 

Brasserie du Pecheur SA v Germany (Case C-46/93) and R. v Secretary of State for Transport Ex p. Factortame Ltd (No.3) (Joined Cases C-46/93 and C-48/93) 1996

These cases both concerned the question of the extent of state liability where legislation had been adopted in contravention of directly effective rights. Brasserie du Pecheur arose out of a claim by a French brewery against Germany for losses incurred as a result of the German Beer Purity laws which had been found by the ECJ to infringe Art.28 (ex 30) (Case 178/84). Factortame (see p.5) had led to a finding that the Merchant Shipping Act 1988 infringed EC law. The Spanish trawler owners claimed compention from the United Kingdom courts. An Art.234 reference  as made to the ECJ.

Held: (ECJ) Where a Member State acts in a field where it has wide discretion, it will be liable to an individual for breach of EC law provided:

(1)   the rule of law infringed is intended to confer rights on individuals;

(2)   the breach is sufficiently serious;

(3)   there is a direct causal link between the breach and the damage. [1996] 1 C.M.L.R. 889.

 

Commentary

(1)   The first and third conditions correspond to Francovich. However, the position of the Member States was compared with that of the EC institutions under Art.288 (ex 215) (see Ch.6, p.67). The EC institutions are liable in relation to legislative measures involving choices of economic policy where the breach is “sufficiently serious”, i.e. when it is “manifest and grave” under the Schoppenstedt formula: see Ch.6, pp.67-68.

(2)   It was held that reparation may not be made conditional onfault or on a prior finding by the ECJ and that the amount must be commensurate with the damage sustained. No temporal restriction was placed on the effect of the judgment.

(3)   The German Federal Court applied the ruling of the ECJ in Brasserie du Pecheur v Germany in 1996. It held that there was no direct causal link between the breach of Art.28 (ex 30) and the applicant’s loss. It also found that the infringe­ment in relation to additives was not sufficiently serious. The brewer’s claim against the German Government thus failed.

(4)   The United Kingdom Divisional Court in Factortame (No.5) held in 1997 that the trawler owners were entitled to damages, but not to punitive damages. The House of Lords upheld the earlier findings of fault by the British Govern­ment, namely that there had been a sufficiently serious breach, leaving unchanged the earlier ruling on damages: R. v Secretary of State for Transport Ex p. Factortame (Decision of October 28, 1999) HL.

 

 

Key Principle: Incorrect implementation of an imprecisely worded directive does not necessarily give rise to state liability.

 

R. v H.M. Treasury Ex p. British Telecommunications Pic (Case C-392/93) 1996

BT claimed that the United Kingdom had incorrectly implemented Directive 90/531 covering the procurement (purchasing) procedures of bodies contracting in the telecommunications sector (e.g. BT and Mercury). In particular, BT alleged that the procedures adopted by the United Kingdom for exemption had put BT at a competitive disadvantage. The United Kingdom court referred questions to the ECJ.

 

Held: (ECJ) The three conditions in Brasserie du Pecheur/ Factortame must be satisfied. However, when transposing the directive into national law, the United Kingdom Government had not gravely and manifestly disregarded the limits on the exercise of their power. The breach was not sufficiently serious to impose liability. [1996] All E.R. (EC) 411.

Commentary

(1)   The ECJ appears in Ex p. British Telecommunications to have accepted that the breach was not sufficiently serious because the obligation in the directive was imprecisely worded and could reasonably have borne the interpretation placed on it by the United Kingdom Government. No guidance had been provided to the United Kingdom by the ECJ and the Commission had not objected to the United Kingdom’s implementing regulations.

(2)   See also Denkavit International v Bundesamt fur Ernabring (Case C-283, 291 & 292/94) which also involved incorrect transposition of a directive. The ECJ finding that the breach was not sufficiently serious to lead to liability on the part of Germany was influenced by the fact that most other Member States had adopted a similar approach to Germany’s.

 

 

Key Principle: The mere fact of infringement of EC law may be enough to establish the existence of a sufficiently serious breach.

R. v Minister of Agriculture, Fisheries and Food Ex p. Hedley Lomas (Ireland) Ltd (Case C-5/94) 1996

 

MAFF refused to grant licences to enable Hedley Lomas to export live sheep to Spain because it considered that Spain had not implemented properly an EC directive dealing with the preslaughter condition of certain animals. The Commission investigated but found no breach by Spain. It informed the United Kingdom that its export ban infringed Art.29 (ex 34) and was not justified under Art.30 (ex 36). When proceedings were brought in the United Kingdom courts, an Art.234 reference was made.

 

Held: (ECJ) (1) Recourse to Art.30 (ex 36) is impossible where harmonisation has occurred.

(2)   A Member State may not act unilaterally to avoid a breach of EC law by another Member State.

(3)   Where a Member State does not have to make legislative choices or has only reduced discretion, the mere fact of infringement of EC law may be enough to establish a sufficiently serious breach.

(4)   It is for the national court to determine whether there is a causal link between duty and the damage.

(5)   If state liability is established, the state must make good any loss in accordance with its domestic law on liability. [1996] All E.R. (EC) 493.

Commentary

(1) See also Dillenkofer v Federal Republic of Germany (Joined Cases C-178, etc/94): intentional fault is not an essential precondition to state liability. Here, the German Government had failed to implement the Package Holidays Directive by the deadline. The ECJ held that failure to implement a directive on time was a sufficiently serious breach.

(2)   In Rechberger v Austria (Case C-140/97), in another case involving the Package Holidays Directive, the ECJ found that incorrect transposition of the directive, preventing reimbursement of money in the event of the insolvency of the travel organiser was a sufficiently serious breach. Austria had no margin of discretion over the implementation of the directive.

(3)   In Konle v Austria (Case C-302/97) the ECJ sought to clarify the position on state liability for breach of EC law by states with a federal structure (like Austria). The ECJ held that it is for each Member State to ensure that individuals obtain compensation for damage caused to them by breach of EC law, whichever public authority is responsible for the breach and for payment of compensation. There is no need under EC law to change the law relating to the distribution of power and responsibility within public bodies, provided it is no more difficult for an individual to bring an action for state liability for breach of EC law than to bring an action in relation to rights deriving under national law.

(4)   The ECJ provided further guidance as to discretion in relation to what is a sufficiently serious breach in Haim v Kassenzahrnaarzliche Vereinigung Nordhein (Case 424/97). It held that the existence and scope of discretion must be determined by EC and not national law. It follows that discretion conferred on an individual by national law is irrelevant. EC law does not preclude a public law body, in addition to the Member State, from being liable to make reparation for loss and damage caused to individuals as a result of measures which it took in breach of EC law.

(5)   It was clear from the decision in Brasserie du Pecheur that losses arising from judicial decisions may, in principle, give rise to state liability. In Kobler v Austria (Case C-224/01) the ECJ held that state liability can arise from an infringement of EC law by a decision of a national court of last resort only exceptionally where the court has manifestly infringed the law. The case arose out of a claim by an Austrian professor for recognition of time spent working in universities in other EU Member States for the purpose of a long service increment. (Austrian law required ten years as a professor at an Austrian university to qualify.) The national court withdrew a request for a preliminary ruling from the ECJ. As a result, the applicant lost the increment. The applicant sued the Austrian government for infringement of state liability. This time a preliminary reference was made to the ECJ. The Court held that various factors should be considered when deciding whether the breach was manifest, namely the degree of clarity and precision of the rule infringed, whether the breach was intentional, whether or not the error of law was excusable, the position taken by a Community institution, and non-compliance by the court in its obligation to make a referral to the ECJ under Art.234(3).

 

 

 

 

2. THE INSTITUTIONS OF THE EC AND EU

 

The European Parliament

 

Key Principle: Failure to consult the EP, where required by the Treaty, is a breach of an essential procedural requirement. Roquette Freres S.A. v Council (Case 138/79) 1980 The Council adopted a regulation before it had received the opinion of the EP under Art.34(3) (ex 40(3)). It was challenged by a producer affected by the measure. (See Ch.5, p.59).

Held: (ECJ) Consultation under Art.34(3) is the means whereby the EP participates in the legislative process of the EC. Failure to consult was a breach of an essential procedural requirement, as a result of which the measure concerned was void. [1980] E.C.R. 3393.

 

 

Commentary

The ECJ stated in Roquette Freres that consultation “reflects at Community level the fundamental democratic principle that the peoples should take part in the exercise of power through the intermediary of an intermediate assembly”.

 

r

Key Principle: The EP may take action in the ECJ to protect its prerogative.

 

EP v Council (Re Students’ Rights) (Case C-295/90)

The Commission proposed a directive on residence rights for students undertaking vocational courses based on Art. 7(2) (now repealed) of the Treaty. This basis would have involved the use of the co-operation procedure, with qualified majority voting. After the EP’s opinion had been received the draft was submitted to the Council which amended the legal basis to Art.308 (ex 235), the general power for which a unanimous vote was required.

Held: (ECJ) The EP may bring actions to safeguard its prerogatives. [1992] 3 C.M.L.R. 281.

 

Commentary

Although the EP was not at that time expressly covered by (old) Art 173, the fact that the Council’s action deprived the EP of a second reading was enough to justify a challenge. This right, where there is a threat to the prerogative of the EP, was expressly provided in the revised wording of Art. 173 (now 230) following amendment by the Maastricht Treaty. (See Ch.5, p.53.)

 

Key Principle: If the Council or Commission fails to act, in infringement of the Treaty, the EP may bring an action in the ECJ: Art.232 (ex 175).

 

EP v Council (Case 13/83) 1985

The EP sought a declaration that the Council had infringed the EEC Treaty by failing to adopt a Common Transport Policy. The Council objected, claiming that the EP lacked competence to bring an action under Art.232 (ex 175).

Held: (ECJ) The EP had capacity to bring an action under Art.232 and had observed the conditions of that provision in bringing the action. The action was upheld in part, but rejected where the obligation was too vague to be enforceable.

 

The Council of the European Union

 

Key Principle: Regulations, directives and decisions adopted jointly by the EP and the Council, and such acts adopted by the Council or Commission, shall state the reasons on which they are based and shall refer to any proposals or opinions which were required to be obtained under the Treaty: Art.253 (ex 190).

 

Key Principle: If action by the EC is necessary, in the course of the operation of the common market, to attain one of the objectives of the EC and the Treaty has not provided the necessary powers, the Council shall take the appropriate measures acting on a proposal from the Commission and after consulting the EP.

 

Commission v Council (Case 45/86) 1987

The Commission brought annulment proceedings under Art.230 (ex 173) (see Ch.5) against two regulations adopted by the Council relating to generalised tariff preferences for products from developing countries. The Commission claimed that there was no explicit legal basis stated in the measures. The Council argued that it had intended to base the measures on both Arts 133 (ex 113) (the Common Commercial Policy) and 308 (ex 235).

 

Held: (ECJ) It follows from the wording of Art.308 (ex 235) that its use as the legal basis for a measure is justified only where no other provision of the Treaty gives the EC institutions the necessary power to adopt the measure in question. As Art.133 (ex 113) would have provided an appropriate legal basis, the Council was not justified in relying on Art.308 (ex 235). [1987] E.C.R. 1493.

 

Commentary

(1)   The choice of legal basis determines the procedure which is followed in the adoption of the measure. Article 308 (ex 235), unlike Art.133 (ex 113), requires unanimity in the Council, thus making it possible for individual states to veto a proposed measure.

(2)   As a result of the Maastricht Treaty amendments, the Council has become known as the Council of the EU, with responsibility extending beyond the area of legal control under the EC Treaty to the areas of political co-operation (the Common Foreign and Security Policy, and Police and Judicial Co-operation, as the third pillar was renamed by the ToA). The other institutions remain institutions of the EC.

 

 

Key Principle: The choice of legal base must be based on objective factors which are amenable to judicial review.

 

Commission v Council (Case C-300/89) 1991

The Commission brought annulment proceedings under Art.230 (ex 173) against the Council in relation to a directive harmonising programmes to eliminate pollution caused by waste from the titanium dioxide industry. The directive in question had been based on Art. 130s (now 175) which (following the consultation procedure under the EC Treaty prior to amendment by the TEU) enabled the Council to adopt measures relating to environment protection by unanimity, on a proposal from the Commission after consulting the EP and the Economic and Social Committee. The Commission claimed that the measure should have been adopted under Art.95 (ex 100a) (the cooperation procedure, requiring qualified majority voting and two consultations with the EP) as a single market measure.

 

Held: (ECJ) The measure should have been based on Art.95 (ex 100a), not Art.175 (ex 130s). [1991] E.C.R. 1-2867.

 

Commentary

(1)   While the directive displayed features relating both to the environment and to the establishment and functioning of the internal market, recourse to a dual basis was excluded by the ECJ. An EC measure cannot be treated as an environmental measure merely because it pursues objectives of environmental protection. Action to harmonise national rules on industrial production with a view to eliminating distortion of competition is covered by Art.95 (ex 100a).

(2)   This case was considered under the Treaty of Rome prior to amendment by the Maastricht Treaty. After amendment by the TEU, the co-decision procedure providing for more extensive consultation with the EP, in Art.251 (ex 189b) governed the adoption of internal market rules. Under co-decision the EP became jointly responsible for the adoption of legislation. Environmental measures under Art.175 (ex 130s) are, after amendment by the ToA, also adopted under co-decision, instead of the consultation procedure.

(3)   In EP v Council (Case C-42/97) the EP, by contrast, sought to argue that a Council decision on the adoption of a programme to promote linguistic diversity in the EC should have a dual legal base. The ECJ concluded that the effects on culture were only indirectly incidental; the measure was essentially economic. As a result, it was appropriate for the measure to have been based on Art. 130 EC (now, after amendment, Art. 157 EC) on industry rather than Art. 128 (now, after amendment, Art. 151 EC (culture)).

(4)   The EP mounted another challenge to a measure adopted by the Council in EP v Council (Joined Cases C-164 & 165/97). The regulations in question had been adopted under Art.37 EC (then 37 EC). They were intended to protect forests in the EC from atmospheric pollution and fire. This time the ECJ held that the measures were primarily environmental, even though there would have been repercussions for agriculture, and allowed the EP’s application. See also EP v Council (Case C-189/97) in which the EP failed in its challenge over the adoption of the budget under Art.300(3) (ex 228(3)) EC. The EP claimed that the measure was an agreement with important budgetary implications requiring the EP’s assent, a claim ultimately rejected by the ECJ.

(5) Netherlands v EP and Council (Case C-377/98) arose out of a challenge by the Netherlands (a long-standing opponent of genetic manipulation of animals and plants) to Directive 98/44 on the legal protection of biotechnical inventions.   The Directive lists which inventions involving plants, animals or the human body may be patented. Member States are required to allow the patenting of inventions with an industrial application, making it possible to use biological material. The Dutch government sought to annul the Directive, claiming that it should not be possible to patent plant, animal or human material. It was supported in the action by Italy and Norway. A number of grounds were used including the use of wrong legal base (old Art. 100a). The ECJ dismissed all the claims, holding that the measure was an internal market measure and so properly adopted under (old) Art. 100a, compliance with subsidiary was implicit in the recitals to the Directive: there was no uncertainty, no breach of international law, no infringement of rights of human dignity and no breach of procedural rules. (6) In R. v Secretary of State for Health Ex p. British American Tobacco (Investments) Ltd (Case C-491/01) the legal base of a directive was again at issue, this time in relation to tobacco advertising. The case arose under an Art.234 reference from proceedings before the High Court in which judicial review was sought in relation to the intention and/ or obligation of the UK government to transpose the Directive into UK law. Directive 90/239 was adopted under (old) Arts 95 and 133 of the Treaty, recasting an earlier directive, providing a stronger health warning.   The national  court  sought to clarify whether the Directive was invalid, by lacking an appropriate legal base. The ECJ found that where an EC act has a twofold purpose and one of these is predominant, act must be founded on that as the predominant one. Where, exceptionally, the act pursues sever il objectives which are indissolubly linked, it may have several legal bases. In the case in question, Art.95 was found to be the correct legal base. The incorrect reference to Art. 133 did not, however, make the Directive invalid. It was no more than a formal defect. Having found, in addition, that there were no breaches of the principles of subsidiarity and proportionality (amongst other matters), the ECJ ruled that the Directive was valid.

 

 

 

Key Principle: Where the Treaty confers a specific task on the Commission, it also confers on it the powers which are indispensable to carry out the task.

 

Key Principle: The Commission shall have the task of promoting close co-operation between Member States in the social field. To this end the Commission shall act in close contact with Member States by making studies, delivering opinions and arranging consultations both on problems arising at national level and on those of concern to international organisations: Art.137 (ex 118).

 

 

Germany, France, Netherlands, Denmark and the United Kingdom v Commission (Joined Cases 281, 283 and 287/85) 1987

Germany and the other applicant states sought annulment under Art.230 (ex 173) of Decision 85/381 in relation to the migration policy of non-member countries. The challenge was brought on the grounds that such a policy was outside the social field and that the arrangement of consultation under Art.137 (ex 118) did not empower the Commission to adopt binding measures.

 

Held: (ECJ) (1) The promotion of the integration into the workforce of non-member countries must be held to be within the social field within the meaning of Art.137 (ex 118), in so far as it is linked to employment.

(2) The promotion of cultural integration goes beyond the social field but may be justified under Art.l37(2) (ex 118(2)) (power to arrange consultations). [1987] E.C.R. 3203.

 

Commentary

The ECJ exercised care in this judgement to make it clear that the Commission’s power to take binding decisions (not explicitly provided in Art. 137 (ex 118(2)) is limited to procedural matters.

 

 

Key Principle: Citizens of the EU and natural or legal persons residing or having a registered office in one of the Member States shall have a right of access to EP, Council or Commission documents: Art.255(l) EC (following amendment by the ToA).

 

Key Principle: The public shall have access to measures adopted by the Council unless the release of such documents would undermine the protection of the public interest, individual privacy, commercial and industrial secrecy, the EC’s financial interests or confidentiality requested by natural or legal persons: Art.l of Decision 93/731.

 

 

Carvel & Guardian Newspapers v Council (Case T(194/94) 1995

Carvel, the European Affairs Editor of the Guardian, requested various documents relating to meetings of the Social Affairs and Justice Council in 1993 and the Agriculture Committee in 1994. The Council’s Secretariat refused, stating that the documents related directly to the deliberations of the Council and could not be disclosed. The applicants challenged the decision under Art.230 (ex 173).

 

Held: (CFI) Decision 93/731 requires the balancing of the applicants’ interests in gaining access with the Council’s interests in maintaining confidentiality. By automatically refusing access to the documents the Council had failed to exercise discretion in accordance with the decision. [1995] 3 C.M.L.R. 359.

 

Commentary

(1) After the ruling of the CFI the Council agreed to facilitate the release of minutes of meetings, to broadcast debates on matters of public interest and to release details of votes on legislative acts. Carvel remains dissatisfied and is pursuing a further action against the Council.

(2)   The ToA consolidated various changes on transparency of documents which had been introduced in the Council Rules of Procedure, the code of conduct on access to documents and consequential Council and Commission decisions. The principle in Art.255(l) EC is subject to the Council’s power in Art.255(2) to determine the “general principles and limits on grounds of public and private interest governing the right of access to documents” within two years of the ToA coming into force.

(3)   In Svenska Journalistforbundet v Council (Case T(174/95) the CFI interpreted Art.l of the Regulation as meaning that the Council must consider in relation to each document requested whether disclosure would undermine one of the matters referred to in para.l of the Code of Conduct concerning Public Access to Council and Commission Documents (including public interest, protection of the individual and privacy, etc.). Similar considerations govern the release of Commission documents: Interporc v Commission (Case T-124/96).

(4)   In Council v Hautala (Case C-353/99P) the Council appealed against a decision of the CFI which had annulled its decision to refuse Ms Hautala, an MEP, access to a report on conventional arms policy. The refusal was based on Decision 93/731 regarding public access to documents, under which the Council may refuse access to a document in order to protect public interest in the field of international relations. The Council stated that the report contained sensitive information which would harm the EU’s relations with non-Member States. The ECJ emphasised that the public should have the widest possible access to Council and Commission documents. If a document contains confidential information, partial access must be considered. Refusal of partial access was a disproportionate measure. The Council may not systematically limit the public’s right of access to documents.

 

 

 

 

 

3. FUNDAMENTAL RIGHTS AND GENERAL PRINCIPLES

 

 

Key Principle: Fundamental rights and the general principles of EC law are protected by the ECJ.

 

Stauder v City of Ulm (Case 29/69) 1969

A Commission regulation provided for the recipients of welfare benefits to receive free butter. When the scheme was implemented, the German Government required beneficiaries to produce a coupon bearing their name and address. Stauder claimed that the German decision implementing the scheme infringed the general principles of EC law. An Art.234 (ex 177) reference was made to the ECJ by the German administrative court.

 

Held: (ECJ) The provision in issue contained nothing capable of prejudicing the fundamental human rights enshrined in the general principles of EC law and protected by the Court [1969] E.C.R. 419.

 

Commentary

(1) The tentative statement in Stauder is the first acknowledgment by the ECJ that fundamental rights are recognised by EC law. In its subsequent case law the ECJ has developed its approach to fundamental rights, providing a mechanism to review that validity of action by the EC institutions and by the   Member   States.   Fundamental   rights   and   general principles are most often invoked in annulment proceedings under Art.230 (ex 173) (see Ch.5), to claim damages under Art.288 (ex 215) (see Ch.6) and as a guide to the interpretation of EC law (see Ch.l).

(2)   General principles derive from: (a) international law, e.g. the European Convention of Human Rights, (b) principles which are accepted by the domestic legal systems of the Member States and (c) the decisions of the ECJ.

(3)   The Charter of Fundamental Rights was proclaimed at the Nice European Summit in December 1999. It was based on existing law from various sources particularly the European Convention on Human Rights and Fundamental Freedoms (ECHR). The Charter is divided into seven chapters headed Dignity (including freedom from torture and slavery), Freedoms (liberty, association, expression, property, private and family life), Equality (similar to Art.13 of the EC Treaty, with further references to rights of children, the elderly and persons with disabilities), Solidarity (labour rights based on the earlier European Social Charter), Citizens’ rights (EU citizenship, right to good administration access to documents), Justice (e.g. right to a fair trial), and finally, General Clauses on the scope of Charter. It should be noted that if the Constitutional Treaty is ratified, the Charter will be incorporated into the body of the Treaty.

 

 

Key Principle: Respect for fundamental rights forms an integral part of the general principles of law protected by the ECJ.

 

Internationale Handelsgesellschaft mbH v Einfuhr-und Vor-ratsstelle fur Getreide und Futtermittel (Case 11/70) 1970

The applicants had obtained a licence to export maize from Germany, conditional under an EC regulation on lodging a deposit which acted as a guarantee that the exportation would be carried out while the licence was valid. As the exportation was not completed during the validity of the licence, the German administrative authorities ordered the forfeiture of a large part of the deposit. The applicants challenged the forfeiture on the basis that it contravened certain principles of German law in the Frankfurt administrative court, which made an Art.234 reference to the ECJ.

 

Held: (ECJ) The validity of a measure of EC law cannot be affected by allegations that it contravenes national fundamental rights or national constitutional principles.

(2) The protection of fundamental rights, while inspired by the constitutional traditions common to the Member States, must be ensured within the framework and structure of the objectives of the EC [1970] E.C.R. 1125.

 

Commentary

(1) See also Nold v Commission (Case 4/73) in which the ECJ declared that it would not uphold measures which are incompatible with fundamental rights recognised and protected by the constitutions of the Member States.

(2)   In the early years the German Constitutional Court did notaccept the supremacy of EC law on fundamental rights expressed in decisions such as Handelsgesellschaft. This view was modified in Wunsche Handelsgesellschaft (1987) where the German court accepted that the protection of fundamental rights under EC law had reached the level of German law. However, in Brunner v EU Treaty (1994) the Constitutional Court reasserted its right to review the legitimacy of EC law (see Ch.l).

(3)   In Connolly v Commission (Case C-274/99P), Bernard Connolly, then a high ranking official in the Commission, for personal reasons, published a book in 1995 entitled The Rotten Heart of Europe, which was highly critical of the Commission. After being removed from his post in 1996 he sought unsuccessfully to annul the decision ordering the removal before the CFI. He then appealed to the ECJ which upheld the decision of the CFI. The ECJ reaffirmed its support for fundamental rights including freedom of expression under the ECHR, but held that the protection of the rights of the institutions, responsible for carrying out tasks in the public interest, justifies the restriction. The ECJ was required to strike a fair balance between the individual’s fundamental right to freedom of expression and the legitimate concern of the institutions to ensure that their officials and employees fulfil their duties.

 

 

Legal certainty Non-retroactivity

 

Key Principle: Penal provisions may not take effect retroactively.

 

R. v Kirk (Case 63/83) 1984

Captain Kirk, a Danish fisherman, was charged with fishing in the United Kingdom’s 12 mile coastal fishing zone, contrary to United Kingdom law. Although the United Kingdom was entitled under the Act of Accession to exclude non-United Kingdom fishing vessels from the 12 mile zone until December 31, 1982, Captain Kirk had been fishing on January 6, 1983. The EC subsequently adopted a regulation permitting the United Kingdom to maintain the exclusion for a further 10 years, backdated to January 1, 1983. The United Kingdom court made an Art.234 (ex 177) reference. [1984] E.C.R. 2689.

 

Held: (ECJ) Non-retroactivity of penal provisions is common to all the Member States and enshrined in Art.7 of the ECHR. It is one of the general principles of EC law.

 

Commentary

(1) The duty to interpret national law in accordance with EC law reaches its limits in the context of the general principles of law, particularly the principle of non-retroactivity. In X (Case C-60/02), the Austrian court sought clarification of the legality of imposing penalties for breach of EC law. This action arose out of a request by Rolex for a judicial investigation into persons unknown, following the discovery of a consignment of counterfeit watches in transit between Italy and Poland. Austrian law only permitted a judicial – review where the conduct involved a criminal offence. The *         importation and exportation of counterfeit goods was an offence. Mere transit was not an offence under Austrian law, although it was an offence under an EC Regulation. The ECJ held that, if the national court considered that mere transit was not an office, the principle of non-retroactivity of penalties would prohibit the imposition of criminal penalties for such conduct, even though the national law was contrary to EC law.

(2)   The ECJ has upheld a number of individual provisions of the ECHR as general principles of EC law: see e.g. National Panasonic (UK) Ltd v Commission (Case 136/79): Art. 8 (right to privacy); VBVB v Commission (Cases 43 & 63/82): Art. 10 (right to expression).

(3)   While the EC is not a party to the ECHR it has recognised the importance of fundamental rights in Art.6(l) (ex F(l) TEU), stating that the Union is founded on the principles of liberty, democracy, respect for human rights and fundamental freedoms and the rule of law, principles which are common to the Member States. Article 6(2) (ex F(2) of the TEU) provides that the Union shall respect fundamental rights, as guaranteed by the ECHR and as they result from the constitutional traditions common to the Member States, as general principles of EC law. Article 7 (ex F(l) of the TEU) is a new provision introduced by the ToA. It empowers the Council to determine that a Member State has committed a persistent and serious breach of human rights, in which case it may decide to suspend the voting rights of the offending state.

(4) The EC itself has fallen foul of the ECHR. In Matthews (ECHR), the applicant, a resident of Gibraltar, brought a claim before the European Court of Human Rights following her exclusion from voting in the EP. The Court of Human rights ruled in 1999 that the limited status for Gibraltar residents provided by the Direct Elections Act 1976 infringed Art.3 of Protocol 1 of the ECHR (right to free elections). As the Act was in fact a Treaty, the ECJ did not have the capacity to review it, thus depriving the applicant of a remedy if she had not pursued her claim before the Court of Human rights.

 

 

Legitimate expectations

 

Key Principle: EC measures must not infringe the legitimate expectations of those concerned in the absence of overriding public interest.

 

Mulder v Minister van Landbouw en Visserig (Case 120/86) 1988

Mulder and other milk producers decided not to deliver milk for five years under an EC scheme to reduce an excess supply of milk. After that time they were unable to resume deliveries because provision under an EC regulation was based on a reference year during the five years of non-delivery.

 

Held: (ECJ) Where a producer has been encouraged by an EC provision to suspend marketing in the general interest and against the payment of a premium he may legitimately expect not to be subjected to restrictions because he has acted on the provision. [1988] E.C.R. 2321.

 

Commentary

An expectation is only legitimate where it is reasonable rather than speculative. Challenges to EC legislation based on a breach of legitimate expectations rarely succeed.

 

 

 

Proportionality

 

Key Principle: Measures should not exceed what is appropriate and necessary to achieve the objectives in question.

 

R. v Intervention Board for Agricultural Produce, Ex p. Man(Sugar) (Case 181/84) 1986

As a result of applying for an export licence four hours late the Commission ruled that the entire deposit was forfeit under the terms of a regulation. The Divisional Court in the United Kingdom made an Art.234 reference.

 

Held: (ECJ) The forfeiture of the entire deposit was a disproportionate penalty for a minor breach. The regulation was annulled to the extent that it required the forfeiture. [1985] E.C.R. 2889.

 

Commentary

(1)   Proportionality, like a number of other general principles, derives from German law, although there are some similarities with reasonableness in English law. Proportionality operates by weighing the objectives of legislation against the means by which they are achieved. The principle operates to restrain public authorities from imposing unnecessarily restrictive measures.

(2)   Proportionality is frequently invoked in the context of single market measures. Under the Cassis de Dijon principle (see Ch.8, p.79) restrictions on imports may be permissible if necessary to justify a mandatory requirement provided they are not disproportionate. (In Cassis (Case-120/78) it was disproportionate to ban the sale of drinks below a certain alcohol level. Labelling would have provided the customer with sufficient information.) Proportionality is incorporated in the principle of subsidiarity under Art.5 (ex 3b) (see p.39 below).

 

 

Equality

 

Key Principle: Persons in similar situations should be treated alike unless differential treatment is objectively justified.

 

Sabbatini v EP (Case 20/71) 1972

Mrs Sabbatini sought the annulment of decisions whereby the expatriation allowance she had previously received from the EP was withdrawn following her marriage. The allowance was payable to the “head of the family”, normally considered to be the husband except in cases of serious illness or invalidity.

 

Held: (ECJ) Determination of the status of expatriate must be dependent on uniform criteria, irrespective of sex. The decisions taken with regard to the applicant were annulled. [1972] E.C.R.

 

Commentary

(1) The EC Treaty recognises the principle of equality (or nondiscrimination) on grounds of nationality (Art. 12 (ex 6) EC, sex (Art.141 (ex 119): equal pay for equal work) and against producers or consumers under the CAP (Art.34(3) (ex 40(3)). Equality of treatment has been extended by secondary legislation into such areas as access to employment and housing (Directive 76/207). Equality of treatment is essential to secure the free movement of goods, persons, services and capital (e.g. Art.30 (ex 36): exception to the free movement of goods, provided there is no discrimination on grounds of nationality. See Ch.8.). The ECJ has applied the principle imaginatively to meet the demands of the single market. See e.g. Cowan v Tresor Public (Case 186/87): Ch.ll, p.135.

(2) For two recent examples of a breach of the principle of equality by the Italian government, see Commission v Italy (Case C-224/00) and Commission v Italy (Case C-388/01). In Case C-224/00 Italy was found to have infringed Art. 12 (ex 6) of the Treaty by maintaining in force a provision of the Italian Highway Code for different and disproportionate treatment of offenders according to the place of registration of their vehicle, effectively discriminating against nationals of other Member States not resident in Italy. In Case C-388/01 Italy was found to have infringed both Arts 12 and 49 (see Ch.ll) by applying differential rates for admission charges to museums, monuments, art galleries etc. The rates favoured Italian nationals and persons resident in Italy aged 60, 65 or above, but excluded tourists and nonresidents.

 

 

Key Principle: The Equal Treatment Directive should be interpreted liberally and should not be limited in scope to discrimination on grounds of gender.

 

P v S (Case C-13/94) 1996

P was employed as a manager by Cornwall County Council. He was taken on to work as a male employee, but informed his employers that he intended to undergo treatment for gender reassignment. After taking sick leave, P was not permitted to return to work in a female gender role. The final surgical operation took place after the expiry of notice of dismissal. P claimed for unfair dismissal before an industrial tribunal, claiming discrimination on grounds of sex. The tribunal made a request for an Art.234 ruling to the ECJ to clarify the meaning of the Equal Treatment Directive in relation to transsexuals.

 

Held: (ECJ) Art.5(l) of the Equal Treatment Directive 76/207 precludes the dismissal of a transsexual for a reason arising from the gender reassignment of the person concerned [1996] ECR 1-2143.

 

Commentary

(1)   Art.5(l) of Directive 76/207 provided that application of the principle with regard to working conditions including the conditions governing dismissal means that men and women shall be guaranteed the same conditions without discrimination on grounds of sex. Article 5 was deleted by Directive 2002/73, amending Directive 76/207.

(2)   The ECJ in P v S followed the submissions of Advocate-General Tesauro that transsexuals do not constitute a third sex and were therefore protected by the Directive against discrimination on the grounds of sex, he submitted that respect for fundamental rights is one of the general principles of EC law, and that the elimination of discrimination on grounds of sex forms part of those fundamental rights. The ECJ stated that dismissal of a person due to an intention to carry out treatment for gender reassignment is contrary to Directive 76/207.

(3)   For an example of the application in the UK by the Employment Appeals Tribunal of the approach adopted in P v S, see Chessington World of Adventures Ltd v Reed (1997) (dismissal following gender reassignment surgery from male to female).

(4)   For a more conservative approach after P v S, see Grant v South West Trains (Case C-249/96), in which the ECJ held that Directive 76/207 does not cover issues of sexual orientation. (The facts of this case concerned a claim in the UK for the special travel concessions to cover same sex partners.) A different result may be achieved in such circumstances in the future, following amendment to the Treaty by the ToA.

 

Article 13 (ex 6a) EC empowers the Council to take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation. Two directives based on Art. 13 were adopted in 2000, Directive 2000/43 on equal treatment between persons irrespective of racial or ethnic origin, and Directive 2000/78 providing a general framework for equal treatment in employment and occupation. See Ch.14, pp. 193-194

 

 

Procedural rights Right to a hearing

 

Key Principle: A person whose interests are affected by a decision must be given the opportunity to be heard.

 

Transocean Marine Paints Association v Commission (Case 17/74) 1974

The Commission reached a competition decision concerning exemption under Art.85(3) of an agreement between the undertakings making up the Association without hearing the Association’s observations. The Association challenged the decision under Art.230 (ex 173).

Held: (ECJ) Interested parties have a right to be heard. The offending part of the decision was annulled (see Ch.5, p.53). [1974] E.C.R. 1063.

 

Commentary

The principle of the right to a hearing was confirmed in the case of Ismeri Europa Sri v Court of Auditors (Case C-315/99P) in which the ECJ dismissed an appeal against a decision of the CFI arising from an application for damages allegedly suffered by the applicant as a result of criticisms made by the Court of Auditors in its report in 1996. The ECJ held that there was no breach of the principle by the Court of Auditors as it was not bound to submit drafts of its reports to third parties such as the applicant.

 

 

 

Right to effective judicial control

 

Key Principle: The individual is entitled to effective judicial control.

 

Johnston v Chief Constable of the Royal Ulster Constabulary

(Case 222/84) 1986

Mrs Johnston, a member of the full-time Reserve of the Royal Ulster Constabulary (RUC), brought an action before an industrial tribunal challenging the decision of the Chief Constable of the RUC not to renew her contract and to refuse her training in firearms. The Chief Constable had decided, in the light of the large number of police officers killed in Northern Ireland, that male police officers would carry firearms in future. Women would not be equipped with firearms and would not receive firearms training. In the industrial tribunal the Chief Constable produced a certificate issued by the Secretary of State for Northern Ireland, stating that Mrs Johnston’s contract had not been renewed in order to safeguard national security and to protect public safety and public order. Under Art.53 of the Northern Ireland Order the certificate was considered to be “conclusive evidence of purpose”. Mrs Johnston claimed that the action contravened Art.6 of Directive 76/207 (obligation on Member States to introduce measures to enable applicants to pursue equal treatment claims before the courts). (See Ch.14, p.190).

 

Held: (ECJ) The principle of judicial control in Art.6 of Directive 76/207 reflects Arts 6 and 13 of the ECHR. It entitles all persons to an effective remedy in a competent court against measures which they consider contrary to the principle of equal treatment for men and women. The national courts must interpret a provision such as Art.53 of the Northern Ireland Order in the light of Directive 76/207.

 

Commentary

Other procedural rights that have been recognised by the ECJ include the duty to give reasons: UNECTEF v Heylens (Case 222/86); and the right to protection against self-incrimination: Orkem v Commission (Case 374/87) and Solvay v Commission (Case 27/88) (in the context of criminal proceedings only, and therefore not applicable to the competition investigations in question).

 

 

 

Subsidiarity

 

Key Principle: The EC must act within the limits of the powers conferred on it by the Treaty. In areas outside the EC’s exclusive competence, the EC must act in accordance with the principle of subsidiarity only if the proposed action cannot be sufficiently achieved by the Member States.

 

UK v Council (The Working Time Directive) (Case C-84/94) 1996

The Council adopted Directive 93/104 based on Art.ll8a of the EC Treaty (harmonisation of health and safety in the working environment), providing, inter alia, that average weekly working time should not exceed 48 hours, that there should be specified minimum rest periods and that workers should be entitled to four weeks’ annual paid leave. The United Kingdom challenged the measure under Art.230 (ex 173), claiming that it should have been adopted under Art.100 (now Art.94), requiring a unanimous vote, rather than Art. 118a (now, after amendment, Art.138), requiring a qualified majority vote, and that it contravened the principle of subsidiarity.

 

Held: (ECJ) The measure was properly adopted under Art.ll8a (except for the second sentence of Art.5, specifying Sunday for a rest day: annulled).

(2) The adoption of the directive was not inconsistent with the principle of subsidiarity. [1996] 3 C.M.L.R. 671.

 

Commentary

(1)   Subsidiarity was introduced into the EC Treaty by the Maastricht Treaty. It represents a check on the powers of the EC institutions by creating a presumption in favour of action by the Member States in areas where the EC does not possess exclusive powers (e.g. competition policy, environmental protection, education, transport). Article 5 (ex 3b) EC incorporates the principle of proportionality by stating that action by the EC shall not exceed what is necessary to achieve the objectives of the Treaty. For further clarification of the principle, see the Protocol on Subsidiarity annexed to the EC Treaty by the ToA.

(2)   In UK v Council the need to improve the existing level of health and safety of workers through the imposition of minimum requirements presupposed EC-wide action. There was no breach of the principle of proportionality in the Council’s view that improvements in the health and safety of workers could not be achieved by less restrictive measures.

(3)   The principle of subsidiarity is increasingly invoked as a ground where annulment is sought. (See Craig & De Burca pp.100-101) UK v Council (Case C-84/94); Germany v EP and Council (Case C-233/94) (the Deposit Guarantee Directive case); Germany v EP and Council (Case C-376/98) (the Tobacco Advertising case); and Netherlands v EP and Council (Case C-377/98) (the Biotechnology Patents Directive case). In only one of these cases was the directive annulled (Tobacco Advertising), due to adoption on the wrong legal base. Thus breach of the principle of subsidiarity is yet to be successfully cited as a ground for annulment.

 

 

 

 

4. ENFORCEMENT OF EC LAW

 

 

Member States obligations under Article 10

(ex 5)

 

Key Principle: Member States must take all appropriate measures to ensure fulfilment of the obligations arising from the Treaty or from secondary legislation. They must facilitate the EC’s tasks and abstain from measures which could jeopardise the objectives of the Treaty: Art.10 (ex 5).

 

Commission v Greece (Case 272/86) 1988 The Commission requested information from the Greek Government relating to cereal imports during enforcement proceedings under Art.226 (ex 169). Greece failed to supply information at both the informal and formal stages.

Held: (ECJ) Failure to supply the information amounted to a failure to facilitate the achievement of the EC’s tasks under Art.10 (ex 5). [1988] E.C.R. 4875.

 

Commentary

Art.10 lies at the heart of the Member States’ obligations to implement and apply EC law. It is directly effective and is frequently cited by the ECJ. See e.g. Von Colson (Case 14/83) (see p. 10) and Francovich (Joined Cases C-6 & 9/90). As the EC lacks the mechanisms necessary to enforce EC law (with the exception of the power to fine under Art.228 (ex 171): see p.46 below) this obligation is transferred to the Member States under Art.10.

 

 

 

Actions under Article 226 (ex 169)

 

Key Principle: If the Commission considers that a Member State has failed to fulfil an obligation under the Treaty, it shall deliver a reasoned opinion on the matter after giving the state concerned the opportunity to submit its observations. If the state concerned does not comply with the opinion within the period laid down, the Commission may bring the matter before the ECJ: Art.226 (ex 169).

 

Key Principle: As the reasoned opinion sets out the scope of the judicial proceedings under Art.226 (ex 169), both sets of documents must be founded on the same grounds and submissions.

 

Commission v Italy (Case 31/69) 1970

The Commission informed the Italian Government by a letter dated July 12, 1986 that it had failed to comply with various regulations over refunds under the Common Agricultural Policy (CAP)- In me reasoned opinion delivered in November 1968, the Commission found that Italy was in breach of the obligations under the Regulations. When proceedings were issued in the ECJ they included references to infringement of two regulations of June 1968 which had not been set out in the reasoned opinion.

 

Held: (ECJ) Even if the Member State concerned does not consider it necessary to avail itself of the opportunity to submit its observations, such an opportunity constitutes an essential guarantee under the Treaty and amounts to an essential procedural requirement in proceedings under Art.226 (ex 169). The alleged failure deriving from the regulations of June 1968 must be excluded from the proceedings. [1970] E.C.R. 25.

 

Commentary

(1)   Art.226 (ex 169) provides a two-stage mechanism (the administrative and judicial stages) for the Commission to bring proceedings against a Member State which has infringed an obligation under EC law. During the administrative stage the Commission sends a letter setting out the breach and negotiates with the state in question. If the matter is unresolved the Commission may issue a reasoned opinion.

(2)   The reasoned opinion must contain “a coherent statement of reasons which led the Commission to believe that the state in question has failed to fulfil an obligation under the Treaty”: Commission v Italy (Pigmeat) (Case 7/61). It must also specify the action required to remedy the breach and any period for implementation.

(3)   Non-compliance with the opinion entitles the Commission to start formal proceedings in the ECJ (the judicial stage). The decision to proceed is a matter for the discretion of the Commission: Star Fruit v Commission (Case 247/87).

(4) While there has been a significant increase in the number offormal letters of notice of infringements (1,209 letters in 1993 compared with 960 in 1990), more than half the cases are settled before the reasoned opinion is issued. About 70 cases a year reach the ECJ for decision under the formal procedure.

 

 

 

Key Principle: In deciding to issue a reasoned opinion, the Commission acts as a college.

 

Commission v Germany (Case C-191/95)

The Commission brought enforcement proceedings against Germany under Art.226 (ex 169) for a declaration that, by failing to impose penalties on companies which do not disclose their annual accounts (as required by various EC directives), Germany was in breach of EC law. At the time that the Commission decided to pursue proceedings in the ECJ, it had the facts of the case but not the text of the reasoned opinion before it.

 

Held: (ECJ) The Commission’s decision to issue a reasoned opinion and to bring an action for failure to fulfil obligations was the subject of collective deliberation by the college of commissioners. The college must be able to decide on the basis of the relevant information, though it need not decide on the final wording of the Act (normally an administrative step). The action was found to be admissible. [1998] E.C.R. 1-000.

 

Key Principle: Force majeure is no defence to an action under Art.226 (ex 169).

 

Commission v Italy (Case 101/84) 1986

Italy failed to submit statistical returns to the Commission from 1979 in relation to the carriage of goods contrary to Directive 78/546. The Italian Government put forward a defence of force majeure, claiming that it had been unable to comply following the destruction in a bomb blast of the vehicle register at the Data Processing Centre of the Ministry of Transport.

Held: (ECJ) While the bomb attack may originally have amounted to force majeure, the ensuing difficulties had only lasted for a certain time. The administration had failed to exercise due diligence to replace the equipment and collect the data. The Italian Government could not, therefore, rely on the event to justify its continuing failure to comply [1985] E.C.R. 1077.

 

Commentary

Unless there has been a procedural flaw in the Commission’s action, defences to actions in the ECJ under Art.226 have rarely succeeded. This is due to the strength of the Commission’s case when proceedings reach the judicial stage, as complaints that are not well founded are normally resolved at the administrative stage.

 

Key Principle: Practical difficulty in implementation is not a defence to enforcement proceedings.

 

Commission v UK (Case 128/78) 1979

Regulation 1463/70 provided for the installation of tachographs (to record rest periods and duration of driving) in vehicles used to carry passengers and goods on roads. It was due for implementation by January 1, 1976. The United Kingdom introduced a voluntary scheme to record the information and stated that it did not intend to implement the Regulation fully for economic, industrial and practical considerations.

 

Held: (ECJ) Difficulties of implementation cannot be accepted as a justification. In permitting Member States to profit from membership of the EC, the Treaty places on them the obligation to observe its rules. For a state to break the rules unilaterally is a breach of the principle of solidarity under Art.10 (ex 5). [1979] E.C.R. 419.

 

Commentary

(1)   Italy unsuccessfully argued that it should have a defence to proceedings arising out of non-implementation of a directive due to its frequent changes of government which prevented the adoption of national legislation: Commission v Italy (Case 28/81). Italy has been the most persistent offender in terms of Art.226 (ex 169) actions. It has sought to remedy the problem by passing a statute that annually transposes all EC directives (verbatim) into national law.

(2)   Ireland stated in response to enforcement proceedings arising from its failure to transpose a directive on the interoperability of the trans-European high-speed rail system, that no high speed train was in operation at the time or would be in the foreseeable future. The ECJ considered the lack of a highspeed train to be irrelevant, pointing out the fact that if an activity referred to in a directive does not exist in a particular Member State, this cannot release the state from its obligation to ensure that the directive is properly transposed. (3) If the ECJ finds that the state is in breach it will require the defaulting state to take the necessary steps to comply with the judgment: Art.228 (ex 171). After amendment of Art.228 by the Maastricht Treaty, if the state concerned does not comply, the Commission may issue a reasoned opinion after following a repetition of the procedure under Art.226 (ex 169) specifying the points of non-compliance. Non-compliance with the reasoned opinion entitles the Commission to bring the case before the ECJ, which may impose a lump sum or penalty payment.

 

Key Principle: If a Member State fails to comply with a judgment of the ECJ following enforcement proceedings it may impose a lump sum or periodical payment on it: under Art.228 (ex 171).

 

Commission v Greece (Case C-387/97) 2000 The Commission applied to the ECJ for a declaration under Art.228 and for imposition of a daily periodical penalty, following Greece’s failure to comply with a judgment against it of April 7, 1992 in Case C-45/91. The judgment required Greece to draw up and implement plans to dispose of toxic and dangerous waste under several environmental directives.

 

Held: (1) By failing to take the necessary measures to dispose of waste, Greece had not implemented the judgment in Case C-45/91 and had failed to fulfil its obligations under Art.171 of the Treaty.

(2) The basic criteria which must be taken into account in order to ensure that penalty payments have coercive force and EC law is applied uniformly and effectively are: the duration of the infringement, its degree of seriousness and the ability of the Member States to pay. In applying

Enforcement of EC Law

these criteria, regard should be made in particular to the effects which failure to comply has on public and private interests and to the urgency of getting the Member State to fulfil its obligations.

 

Commentary

(1) The ECJ considered that a periodical payment was best suited to the  circumstances of the  case  and imposed a payment of €20,000 for each day of delay in implementing the necessary measures to comply with the judgment in Case C-45/91, from the date of the present judgment until full compliance. (2) In Commission v Trance (Case C-304/02) the ECJ imposed both a lump sum and penalty payment at the same time. The case arose out of an earlier judgment in 1991 against France (Case C-64/88) for infringement of fisheries conservation measures. The Court found that Art.228 did not preclude the imposition of both types of penalties, in particular where the breach had continued for a long time and was inclined to persist. As a result. France was ordered to pay a lump sum of €20,000,000 and a penalty payment of €57,651,250 for each period of six months from delivery of the present judgment until full compliance with the judgment in Case C-64/88.

 

 

 

Key Principle: The ECJ may prescribe the necessary interim measures in any cases before it: Art.241 (ex 184).

 

Commission v UK (Case 221/89R) 1989

Held: (ECJ) The United Kingdom must suspend the offending provisions of the Merchant Shipping Act 1988, pending the determination of the proceedings under Art.226 (ex 169).

 

Commentary

Applications for interim relief are normally heard before the President of the ECJ, who has the discretion to refer cases to the full court, if necessary.

 

 

 

Actions between Member States under Art.227 (ex 170)

 

Key Principle: Where a Member State considers that another Member State is in breach of EC law it may bring the matter before the ECJ if it has put the case before the Commission which has not acted within three months of the reasoned opinion: Art.227 (ex 170).

 

France v UK (Re Fishing Net Mesh Sizes) (Case 141/78) France complained to the Commission about United Kingdom measures on fishing net mesh sizes. When the Commission did not proceed in the ECJ under Art.226 (ex 169) France brought the matter before the ECJ under Art.227 (ex 170).

 

Held: (ECJ) The United Kingdom was in breach of EC law on fishing net mesh sizes. [1979] E.C.R. 2923.

 

Commentary

Member States prefer to leave the resolution of their disputes with other states in the hands of the Commission, thus avoiding direct confrontation. Article 227 (ex 170) provides a mechanism for an aggrieved state to pursue its action directly against another state when the Commission has not acted on a reasoned opinion.

Although proceedings have been commenced in a few other cases under Art.227, France v UK is the only one resulting in an order against another state. The ECJ rejected an application by Belgium against Spain over a Spanish requirement that wine labelled “Rioja” must be bottled in the region of production: Belgium v Spain (Case C-388/95).

 

 

 

Specific enforcement proceedings

Actions under Article 88 (ex 93(2)) on illegal state

Aids

 

 

Key Principle: The Commission may issue a decision requiring a state to change or abolish illegal state aid within a specified time. Failure to comply entitles the Commission or any interested state to bring the matter before the ECJ: Art.88 (ex 93(2)).

 

British Aerospace and Rover Group Holdings Pic v Commission (Case C-292/90) 1992

The Commission had issued a decision requiring the United Kingdom Government to recover payments considered to be Uegal state aid made to the Rover Group before its take-over by British Aerospace. While the aid to Rover to absorb debts had been approved by the Commission, provided no further aid was granted, additional unauthorised financial concessions (“sweeteners” of £44.4 million) were made by the United Kingdom Government to British Aerospace. British Aerospace and Rover sought annulment of part of the decision in the ECJ.

 

Held: (ECJ) If the Commission considered that the United Kingdom had not complied with conditions in the decision and had paid further aid, it should have instituted proceedings directly against the United Kingdom under Art.88 (ex 93(2)), and given notice to the parties  concerned  to  submit their comments. The decision was annulled in relation to the requirement to recover the additional payment of £44.4 million. [1992] E.C.R. 1-493.

 

Commentary

After the judgment the Commission reopened proceedings on a proper basis under Art.88 (ex 93(2)), treating the payment as aid. An out-of-court settlement was reached with the United Kingdom Government, as a result of which the sum was agreed to be repaid with interest.

 

 

 

 

Challenge under Article 298 (ex 225) to the use of expedited procedures

 

 

Key Principle: Where it considers that a state is acting improperly, the Commission may challenge the action of a state which has brought expedited proceedings under Art.296 (ex 223) or 297 (ex 224): Art.298 (ex 225).

 

Commission v Greece (Case C-120/94R) 1994

The Commission sought interim relief in relation to the closure by Greece of its border with the former Yugoslavian Republic of Macedonia,  pending  the hearing  of the  main  action  (Case C-120/94).

 

 

Held: (ECJ) Interim relief was refused. The ECJ considered that the interpretation of Arts 296-298 (ex 223-225) was uncertain and did not accept that there was an urgent prima facie case for relief. [1994] E.C.R. 1-3037.

 

Commentary

Member States may derogate from the Treaty under Arts 296 (ex 223) and 297 (ex 224): (a) to protect essential interests of their security connected with production and trade in arms, munitions and war material; (b) where there is serious internal disturbance affecting the maintenance of law and order; and (c) in the event of a serious balance of payments crisis. Member States must cooperate closely with the Commission to avoid improper use of these powers.

 

 

 

 

 

 

JUDICIAL REVIEW OF THE ACTS OF THE EC INSTITUTIONS

 

 

Action for annulment under Article 230 (ex 173)

 

Reviewable acts

 

Key Principle: The ECJ may review the legality of acts adopted jointly by the EP and the Council, of acts of the Council, of the Commission and of the European Central Bank (ECB), and of acts of the EP intended to produce legal effects vis-a-vis third parties: Art.230 (ex 173).

 

Parti Ecologise (“Les Verts”) v EP (Case 294/83) 1986 Prior to amendment by the Maastricht Treaty, Art.173 (now 230) did not expressly provide that acts of the EP may be challenged. Les Verts (the Green Party) sought under Art.173 to challenge the allocation of funds by the Bureau of the EP to fight the 1984 European elections.

 

Held: (ECJ) An action for annulment may lie against measures adopted by the EP where they are intended to produce legal effects vis-a-vis third parties. The allocation was annulled. [1986] E.C.R. 1339.

 

Commentary

The decision in “Les Verts” has been incorporated verbatim in the amended version of Art.230(l) (ex 173(1)), reflecting the increased involvement of the EP in the decision-making process. See the pre-TEU decision in Luxembourg v EP (Case 230/81), [1983] E.C.R. 255, in which the ECJ annulled a resolution of the EP to move its seat from Luxembourg to Brussels, based on an action under the ECSC Treaty which recognised the power to review acts of the EP.

 

Key Principle: The EC, will look at the «^S23^ the form of a measure to determine whether it is inten have legal effect.

 

Cimenteries v Commission (Noordwijk’s Cement Accord) (Cases 8(11/66) 1967

Various undertakings enjoyed exemption from fines under a regulation in relation to competition. They were exposed to penalties when the Commission changed its practice in a notice sent out in a registered letter.

 

Held: (ECJ) (1) The measure affected the undertakings’ interests by changing their legal position.

(2) It was not a mere opinion but a decision intended to produce legal effects and must be considered a reviewable act. [1967] E.C.R. 75.

 

Commentary

(1)   In Cimenteries and “Les Verts” the ECJ has recognised a category of reviewable acts known as “acts sui generis”, not appearing in Art.249 (ex 189) (which refers specifically to         regulations, directives and decisions).

(2)   Other examples of reviewable acts include:

(a)   discussions of guidelines before the signing of the European Road Transport Agreement: Commission v Council (Re Erta) (Case 22/70);

(b)   a code of conduct issued by the Commission concerning the administration of the Structural Fund: France v Commission (Case C-303/90).

(3)   Applicants, both privileged and non-privileged, must bring a claim for annulment within two months of publication of the measure, or of notification to the applicant, or of the day on which the applicant had knowledge of the measure (if not notified): Art.230(3) (ex 173(3)). Outside the time limit it may be easier to bring a challenge under Art.241 (ex 184) (see p.63).

 

 

 

Key Principle: Certain “acts” may be so seriously affected by defects of form or procedure that they are non-existent and incapable of annulment.

 

Commission v BASF A.G. (Case C-137/92 P) 1992

The  original  text  of a  decision  imposing  fines  on various chemical companies had been altered after its adoption. Also, it had only been adopted in three of the official languages, leaving it to the Commissioner to adopt versions in the other languages. The CFI considered the decision to be so defective in form as to be nonexistent. The Commission appealed to the ECJ.

 

Held: (ECJ) The decision was defective but not sufficiently tainted by irregularity as to be non-existent. The original measure was annulled. A measure would be non-existent where it was “tainted by an irregularity whose gravity is so obvious that it cannot be tolerated by the Community legal order”. [1994] E.C.R. 1-2555.

 

Commentary

(1)   Acts of the EC institutions are presumed to be lawful. Only in exceptional circumstances will an act be found to be nonexistent.

(2)   Other, less exceptional, examples of non-reviewable acts include:

(a)   a reasoned opinion under Art.226 (ex 169): Commission v Italy (Pigmeat) (Case 7/61);

(b)   “comfort” letters issued by the Commission in competition cases, stating that an undertaking is not in breach of Art.85(l) or is exempt: Lancome v Etos B.V. (Perfumes) (Case 99/79).

 

 

 

 

Locus standi: the right to challenge

 

Key Principle: Member States, the Council and the Commission may bring actions for annulment before the ECJ on specified grounds. The EP and the ECB (after amendment by the TEU) may bring actions on the same grounds for the purpose of protecting their prerogatives: Art.230(2) and (3) (ex 170(2) and (3)).

 

EP v Council (“Chernobyl”) (Case C-70/88) 1990

The EP challenged the legal basis of a Council regulation on the permitted level of radioactive contamination in foodstuffs following the Chernobyl explosion.

 

Held: (ECJ) The ECJ shall have jurisdiction in actions brought by the EP or the ECB for the purpose of protecting their prerogatives. [1990] E.C.R. 1-2041.

 

Commentary

(1)   Prior to amendment by the Maastricht Treaty, Art. 173 (now 230) did not explicitly recognise any entitlement by the EP to seek annulment. The “Chernobyl” decision partly overruled an earlier decision in EP v Council (“Comitology”) (Case 302/87) in which the ECJ had ruled that the EP could not challenge under (old) Art. 173 but only under Art. 175 (now 232). The Maastricht Treaty amended Art.230(3) in line with the decision in Chernobyl. As a result, the EP, ECB and Court of Auditors were permitted to bring a challenge in order to protect their prerogative (normally arising in relation to a claim that a measure had been adopted on an incorrect legal base). The Treaty of Nice further amended Art.230(3) to place the EP on a par with the Council and Commission. As a result, only the ECB and Court of Auditors are limited to challenges where there is a threat to their prerogative.

(2)   The Member States and EC institutions are known as “privileged” applicants as they do not have to show that a measure is addressed to them or otherwise concerns them directly.

(3)   It is more difficult for non-privileged applicants (natural or legal persons) to establish locus standi. An individual may only challenge:

(a)   a decision addressed to himself (e.g. a competition decision by the Commission);

(b)   a decision in the form of regulation (i.e. a measure equivalent to a decision);

(c)   a regulation or decision addressed to another person which is of direct and individual concern to himself: Art.230(4).

 

 

 

Key Principle: Only decisions or measures equivalent to decisions may be challenged.

 

 

International Fruit N.V. (No.l) v Commission (Cases 41-44/70)

The applicant sought to challenge a regulation that prescribed the number of import licences for a particular period on the basis of previous applications (FCT) As the regulation applied to a finite number of

£ pdie Suffable fronf their P^^Mtc^ character of a decision and could be challenged. [1971] h.C.K.

411-

?XS applies generally to categories of persons whereas a i sion (or melure with the character of a decision) binds those t whom it is addressed, i.e. named or identifiable individual. Some regulations are hybrid in that they apply generally but operate as decisions for certain individuals.

 

 

Key Principle: If the measure is not addressed to the applicant, it must be of direct and individual concern to him. Toepfer K.G. v Commission (Cases 106 & 107/63) 1965

The applicant, an importer of maize, sought an import licence from   the   German   Government.   The   German   Government refused, seeking authorisation from the Commission for the safeguard  measures  it  had  taken.  A  Commission  decision addressed to Germany approved the safeguard measures and the Government’s refusal to  grant all existing applicants a licence.

 

Held: As the decision affected only existing applicants it was of  individual  concern  to  the  applicant.  The   decision  was annulled. [1965] E.C.R. 405.

 

 

Plaumann & Co v Commission (Case 25/62)

P, a major importer of Clementines,  sought to challenge  a Commission decision addressed to the German Government refusing  to  allow  the  Government  to  reduce  the  duty  on Clementines imported from outside the EC.

 

Held: To establish individual concern the applicant must show that he  is  affected by the  decision  as  a  result  of  factors particularly relevant to him, not because he is a member of a class affected by the measure. The application was inadmissible. [1963] E.C.R. 95.

 

Commentary

(1) The difference between the locus standi of the applicants in Toepfer and Plaumann is that T could be identified as a member of a closed class of persons affected by the decision whereas P could not. (Anyone could import Clementines.)

(2)   See also Spijker Kwasten N.V. v Commission (Case 231/82); A Commission decision to allow a Dutch import ban on Chinese brushes could not be challenged by a previous import licence holder. Note in addition UP A (Case C-50/00P).

(3)   This restrictive approach was recently followed by the ECJ in Greenpeace Council v Commission (Case C-321/95P), upholding the decision of the CFI to refuse to recognise locus standi. The applicants were local residents and an environmental group opposed to the building of a power station. The basis of the ECJ’s decision was that the applicants had only an indirect interest in the decision to provide financial assistance in the building of the power station.

(4) In a few cases the ECJ has demonstrated a liberal approach to locus standi. In Piraiki-Patraiki (Case 11/82) Greek producers of cotton were found to be individually concerned in a Commission decision, due mainly to the obligation in the Greek Act of Accession to take such interests into account. See also Sofrimport v Commission (Case C-152/88): Importers with goods in transit could challenge a regulation that had to take account of their interests.

 

 

 

Key Principle: The fact that a general legislative measure applies to traders in a general way does not necessarily prevent individual traders from being individually concerned.

 

Codorniu v Council (Case C-309/89) 1993

C sought to challenge a Regulation reserving the word “cremant” for high-quality sparkling wines from specific regions in France and Luxembourg. C was a major producer of similar sparkling wines in Spain where it held a trade mark, and the largest producer of wines labelled “cremant” in the EU.

 

Held: (ECJ) The applicant was individually concerned because the reservation to producers in France and Luxembourg interfered with C’s intellectual property rights. [1994] E.C.R. 1-1853.

 

Commentary

(1) This decision departs from the previous case law of the ECJ in that there was no suggestion that the Regulation had been adopted with the applicant in mind.

(2) Jurisdiction to hear Art.230 (ex 173) applications brought by non-privileged applicants passed to the CFI in August 1993. So far the CFI has followed the pre-Codorniu, more restrictive approach of the ECJ in refusing to accept that a claim to locus standi could be based on a disadvantageous competitive position. See Campo Edro Industrial v Council (Case T-472/93) in which a regulation gave aid in sugar pricing to producers of sugar from cane and beet but not to isoglucose producers. Despite being the sole Spanish producers of isoglucose, the applicants were denied locus standi to challenge the regulation. A similarly restrictive approach was taken in CSR Pampryl v Commission (Case T-l 14/99). Here a long-standing cider producer who had sold cider under various names including the indication “Pays d’Auge” sought to challenge a regulation which registered “Pays d’Auge” as a protected designation. The applicant failed to establish that the use of the geographical name over which it claimed a right stemmed from a specific right granted at national or EC law before the regulation and which had been adversely affected by that regulation.

(3)The CFI in February 2002 dismissed as inadmissible an application by 70 MEPs to annul a decision by the EP on amendments to its Rules of Procedure following the Inte-rinstitutional Agreement of May 1999 between the EP, the Council and the Commission on internal investigations by the European Anti-Fraud Office. The CFI considered that there were no factors enabling individual MEPs to be distinguished individually. As the measure affected the applicants in the same way as all other MEPs, the inadmissibility of the action did not create inequality between the applicants and other MEPs.

(4) For a brief two-month period it looked as if a new and moreliberal approach to standing was developing. In May 2002 the CFI departed from the ECJ’s approach in a surprise decision. In Jego-Quere (Case T-l77/01) a French fishing company, Jego-Quere et Cie (‘JQ’) had fished for some time off Ireland using nets with a mesh size which was prohibited as a result of Commission Regulation 1162/2001. JQ sought to challenge the Regulation, clearly a measure of general application, under Art.230 in the CFI. The CFI upheld the action as admissible, referring to the need to avoid depriving JQ of the right to an effective remedy under Arts 6 and  13  of the ECHR.  The CFI considered that neither indirect review under Art.234 nor an action for r damages based on the non-contractual liability of the EC „ institutions was a satisfactory route. The best solution was to reconsider the established caselaw of the Court on standing. It proposed that a non-privileged individual applicant should be regarded as individually concerned by a measure of general application if it “affects his legal position in a manner which is both definite and immediate, by restricting his rights or by imposing obligations on him”.

(5) The ECJ in July 2002 reverted to a more traditional, restrictive view on standing in Union de Pequenos Agri-cultores (UPA) (Case C-50/00P), refusing to depart from previous caselaw, despite support for liberalisation expressed by Advocate General Jacobs. The applicant, UPA, a trade association in Spain, had sought to challenge part of Regulation 1638/98 on the common organisation of the market in olive oil. The ECJ held that standing continued to be determined according to the rules in the Plaumann decision and upheld the decision of the CFI that UPA was not individually concerned and so could not challenge the Regulation. Individuals who lack standing may, the ECJ pointed out, plead invalidity before the ECJ under Art.241. Alternatively, an action may be brought before the national courts who may be asked to make a reference to the ECJ under Art.234.

Responsibility for ensuring effective judicial protection rests with the Member States. The ECJ refused to intervene if such protection were absent. Any change to the rules on standing may only come through amendment to the wording of Art.230.

(6) The hard line on standing was maintained by the CFI in January 2003 against tobacco companies from the Philip Morris and Reynolds Groups: Philip Morris International (Joined Cases T-377/00, T-379/00, etc.). The cases involved decisions to bring proceedings before the US courts in connection with allegations that the cigarette companies were involved in smuggling cigarettes into the EC for distribution. The applicants sought to challenge the decisions to proceed. The CFI ruled that the applications were inadmissible, repeating the formula in UPA that it was not, the function of the Court to usurp the authority of the Community deriving from the Treaty.

(7) Under the Constitutional Treaty (Article III-270) any natural or legal person will be empowered to challenge a regulatory act which is of direct and individual concern to him or her and which does not entail implementing measures. This amendment would, on the face of it, improve the standing of non-privileged applicants (in the event of full ratification of the Treaty). However, its potential remains subject to interpretation by the European Courts, which may adhere to the conservative line on standing in UPA.

 

 

Key principle: An individual is only directly concerned in a measure where its implementation leaves no discretion to the addressees.

 

Regione Siciliana v Commission (Case T-341/02) 2004

The Commission provided financil assistance to Italy from the Regional Development Fund for the construction of a motorway in Sicily between Messina and Palermo. It issued a decision addressed to the Republic of Italy ending the assistance. The authority responsible for implementing the project, the Region of Sicily, sought to challenge the decision under Art.230.

 

Held: (CFI) As the national authorities had discretion in implementing the contested measure, the Region of Sicily lacked direct interest in the proceedings and so lacked standing to bring a challenge.

 

Commentary

An applicant will only be able to establish that a measure is of direct and individual concern where it affects his legal position and where its implementation flows automatically from the EC measure without the need for the adoption of further rules. This decision is currently under appeal to the ECJ (Case C-417/04P).

 

 

 

Grounds for challenge

 

Key Principle: A measure may be challenged under Art.230 if an essential procedural requirement is infringed.

 

Roquette Freres S.A. v Council (Case 138/79) 1980

The Council sent the EP a draft regulation fixing a quota for isoglucose producers for consultation in March 1979, asking for its views during April, so that the measure could be adopted by j July. This would only have been possible if the EP had convened a special session but no such request was made by the Council or Commission. The measure was adopted by the Council in June 1979, with reference in the Preamble to the fact that the EP had been “consulted”. R, a member of a closed group of isoglucose producers, sought to challenge the regulation.

 

Held: (ECJ)  Failure to  consult  the  EP,  as  required  under Art.43(2) of the Treaty, was a breach of an essential procedural requirement. The regulation was annulled. [1980] E.C.R. 3393.

 

Commentary

(1) Wrongly identifying the legal basis of a measure may lead to failure to consult the EP (See Ch.2).

(2) Failure to specify the legal basis of a measure may also be regarded as breach of an essential procedural requirement: Commission v Council (Case 45/86), as may failure to state the reasons for a decision: Germany v Commission (Re Tariff Quotas on Wine) (Case 24/62).

(3) A measure may also be challenged under Art.230 on groundsof lack of competence (similar to ultra vires in English law) (See, for example, Germany v EP and Council,(Case C-367/98), the Tobacco Advertising case, in which the ECJ annulled a decision of the CFI due to the Commission’s lack of competence to impose a general ban on tobacco advertising under Art.95 (ex 100a), 47(2) (ex 57(2)) and 55 (ex 66), infringement of the EC Treaty or any rule relating to its application, or misuse of power. (4) There is a time limit of two months from the date of the decision within which to bring a challenge under Art. 120. In Pitsiorlas v Council and ECB (Case T-3/00) (under appeal Case C-193/01P) the CFI stated that, in exceptional circumstances, an excusable error may have the effect of making the applicant not out of time. There were no such circumstances in this case and the application was held to be inadmissible.

 

 

Key Principle: A measure may be annulled where it is in breach of a general principle of EC law.

 

Transocean Marine Paint Association v EC Commission (Case 17/74) 1974

The Commission issued a measure in relation to the renewal of an exemption from the competition rules policy without providing an opportunity for the members of the Association to be heard. The Association argued that the measure should be annulled because it had been denied a hearing.

Held: (ECJ) A person whose interests are affected by a decision by a public authority such as the Commission considering an exemption must be given an opportunity to submit his observations. The offending part of the measure was annulled. [1974] E.C.R. 1063.

 

Commentary

(1) This case provides an example of the ECJ’s adoption of a general principle from the domestic law of the Member States: in this case, the United Kingdom (audi alterem partem). Infringement of a rule to the Treaty’s application is interpreted liberally by the ECJ to cover any general principle of law, whether in international law, in the domestic legal systems of the Member States or in the general principles recognised by the ECJ (see Ch.3).

(2) Before and after the terrorist attacks of September 11, 2001, the UN Security Council adopted a number of resolution calling on all UN Member States to freeze the funds or other financial resources controlled by the Taliban, Usama bin Laden and the Al-Qaeda network. The resolutions were put into effect within the EU by various Council regulations, with the persons concerned listed in an annex. Derogation may be granted by the Member States on humanitarian grounds. Several persons and entities sought annulment of the regulations in the CFI which has recently given judgment in the first two cases. The Court held that the EC is competent to order the freezing of individual assets as part of the fight against international terrorism. Although the EC is not a member of the UN, it must consider itself bound by the UN Charter. The Court found that, in so far as they are required by the UN Security Council, the measures fall mostly outside the scope of judicial review and do not infringe universally recognized human rights including the right to property, the right of defence and the right of effective judicial review, Kadi v Council and Commission (Case T-315/01); Yusuf, etc. v Council and Commission (Case T-306/01).

 

 

 

 

Action for inactivity under Article 232 (ex 175)

 

Key Principle: If the EP, Council or Commission fails to act on an infringement of the Treaty, the Member States and other institutions of the EC may bring an action before the ECJ to have the failure established: Art.232 (ex 175).

 

 

EP v Council (Case 13/83) 1985

The EP sought to challenge the failure of the Council to imple- | ment a common transport policy under Art.74 (now 70) and to \ reach a decision on 16 Commission proposals on transport.

 

Held: (ECJ) While there was no enforceable obligation to implement a common transport policy under Art.231 (ex 174), the Council was required to act to implement the freedoms expressed in Arts 71 (ex 75), 49 (ex 59), 41 (ex 50) and 51 (ex 61) within the transitional periods (end of 1961). To be enforceable, obligations must be sufficiently defined to allow the ECJ to establish whether failure to adopt them is lawful.

 

Commentary

This obligation mirrors that in Art.230 (ex 173). Rules on locus standi are similar, with the EC institutions in a privileged position, ji relative to individuals. Article 232 (ex 175) was amended by the» Maastricht Treaty to include the EP and the ECB, as in Art.230.

 

 

Key Principle: An individual may bring proceedings under Art.232 (ex 175) where an institution has failed to address to him or her an act other than a recommendation or opinion.

 

Bethell v Commission (Case 246/81) 1982 Lord Bethell sought to force the Commission to apply the competition rules against various European airlines. As this sector was outside Reg. 17, Lord Bethell had no entitlement to insist that the Commission carry out an investigation.

 

Held: The applicant was not directly and individually concerned  and could not challenge the Commission’s inaction under Art.232 (ex 175), nor its refusal to act under Art.230 (ex 173). [1982] E.C.R. 2277.

 

Commentary

tfo action may be brought under Art.232 (ex 175) unless the institution has first been called upon to act. It has two months in which to act or define its position, after which the applicant has a further two months in which to bring an action. A successful action under either Art.232 or 230 requires the institution to take the necessary steps to implement the judgment: Art.233 (ex 176). There are no sanctions for non-compliance.

 

 

Indirect challenge under Article 241 (ex 184)

 

 

Key Principle: Despite the expiry of the time limit under Art.230(5) (ex 173(5)) (that is, two months from the date of adoption) any party may plead that a regulation is inapplicable on the grounds set out in Art.230(2) (ex 173(2))

 

Italy v Council and Commission (Case 32/65) 1966 Italy brought proceedings under Art.230 (ex 173) to annul a regulation and indirectly challenged two further regulations under Art.241 (ex 184). The Commission raised the issue of whether a Member State may make an indirect challenge.

Held: (ECJ) As the regulations were not relevant to the issue in question the challenge under Art.241 (ex 184) was dismissed. [1966] E.C.R. 389.

 

Commentary

(1)   The ECJ did not rule on the entitlement of a Member State to make an indirect challenge under Art.241 (ex 184).

(2)   Art.241 (ex 184) applies only to regulations. However, it is substance not form that indicates the true character of a measure. (See Simmenthal v Commission (Case 92/78) in which the ECJ held that a general notice of invitation to tender was normative in character and thus capable of indirect challenge under Art.241.

(3)   The effect of a successful challenge under Art.241 will lead to the regulation in question being declared inapplicable and any subsequent measure void.

 

 

 

 

 

 

6. LIABILITY OF THE EC INSTITUTIONS

 

Non-contractual Liability

 

 

Key Principle: The EC must, in accordance with the general principles common to the laws of the Member States, make good any damage caused by its institutions or by its in performance of their duties (Art.288(2) (ex 215(2)).

 

Liitticke v Commission (Case 4/69) 1966

L  sued  the  Commission for damages  under Art.288(2)  (ex    j 215(2)),  claiming  that it had  failed  to  require  the  German Government to change a disputed provision of national law.     ‘ Under the German measure in question, L was obliged to pay taxes, which he alleged contravened EC law.

 

Held: (ECJ) There was no wrongful act or omission. The Commission had done all that it could in negotiating with the German Government. Non-contractual (tortious) liability is established under Art.288 where there is:

(a)   a wrongful act or omission by an EC institution or its servants;

(b)   damage to the applicant;

(c)   a causal connection between the wrongful act or omission and the damage. [1971] E.C.R. 325.

 

Commentary

(1)   Liitticke establishes that a claim for damages under Art.288(2) (ex 215(2)) is an independent action. It departs from the previous approach of the ECJ in Plaumann (see Ch.5) that annulment proceedings must be brought (under Art.173, 175 or 184) before a claim may be pursued under Art.215(2).

(2)   Under Art.235 (ex 178) the ECJ has jurisdiction in compensation claims under Art.288(2) (ex 215(2)). Jurisdiction was transferred to the CFI in September 1993.

(3)   In New Europe Consulting and Brown v Commission (Case T-231/97) the claim arose out of the sending of a fax by the Commission to a number of co-ordinators under the EC PHARE programme alleging irregularities by the applicants. The applicants, a consultancy chosen to implement a programme, claimed that the Commission should compensate them for the harm suffered as a result of sending the fax. The CFI considered that the Commission should have held an enquiry into the alleged irregularities. It held that the three requirements of Liitticke were established: a wrongful act by the Commission, damage (in the form of harm to the image of the applicants) and a causal link between the breach and the damage. The Commission was ordered to pay compensation of €125,000.

(4)   In Cantina sociale di Dolianova v Commission (Case T-166/98) the loss arose as a result of the Commission’s failure to provide a scheme to pay compensation to the applicants for the preventive distillation for the wine. The CFI decided that the principle of non-discrimination and prohibition of unjustified enrichment had been infringed. Such breaches were seen as sufficiently serious and led to a rare finding against the Commission.

(5)   Unlike non-contractual liability, there is no specific set of rules governing breach of contract under EC law. Under Art.288(l) (ex 215(1)) the contractual liability of the EC institutions is governed by the law applicable to the contract in question.

 

 

 

Key Principle: Unusual and special damage must be established before the EC may incur for a lawful act.

 

Dorsch Consult Ingenieurgesellschaft mbH (Case C-239/99 P)2000

The applicant entered into a contract in 1975 with the government of Iraq to organise and supervise the construction of a highway in Iraq. In August 1990, following the invasion of Kuwait by Iraq, the Security Council of the UN adopted a series of resolutions, including Resolution 661 (1990) which ordered an embargo to be placed on trade with Iraq. The Council of the EU responded immediately by adopting Regulation 2340/90 to that effect. The Iraqi government froze all assets and rights of companies trading with Iraq where those companies were based in countries covered by the embargo. The applicant, not having received payment from the Iraqi authorities for sums previously acknowledged, sought damages from the Council of the EU in the CFI in Case T-184/95. The claim was based on the submission that the loss was caused by the adoption of Regulation 2340/90 by the EC which in turn had led to the Iraqi action against companies such as the applicant. The application was dismissed. The applicant appealed to the ECJ.

 

Held: (ECJ) (upholding the decision of the CFI):

(1)   It is necessary, where damages are claimed for a lawful or unlawful act by the EC institutions, to prove that the alleged damage is real and that a causal link exists between that act and the alleged damage. The damage could not be attributed to Regulation 2340/90, but to UN Resolution 661 (1990) imposing sanctions on Iraq.

(2)   Where damages are claimed for a lawful act of the EC institutions, it is a precondition of liability that there is unusual and special damage. Iraq had to be regarded as a “high risk” country even before the invasion of Kuwait. As a result the damage suffered by the applicant did not exceed the economic risks inherent in the sector concerned.

 

Commentary

The ECJ noted that an applicant must produce evidence to show that it has exhausted all avenues and legal remedies open to it in order to recover its claim before the Court.

 

Key Principle: Failure of administration (“faute de service”) is a wrongful act or omission for which the EC is vicariously liable under Art.288(2).

 

Richez-Parise v Commission (Case 19/69, etc.) 1969

Some members of staff of the Commission were given wrong information about pensions, as a result of which they decided to take early retirement. Although the Commission discovered the mistake it did not seek to correct the information. The officials sued the Commission under Art.288(2) (ex 215(2)).

 

 

Held: (ECJ) Even though the giving of the advice originally was not wrongful, failure to correct the information was a “faute Ae service”. The Commission was liable to compensate members 0f staff who had relied on its advice. [1970] E.C.R. 325.

 

 

Key Principle: A negligent act by a servant is a wrongful act for which the EC will be vicariously liable provided it is performed in the course of his duties (“faute de personne”).

 

 

Sayag v Leduc (Case 5/68) 1968

Sayag was an engineer employed by Euratom. While driving to visit an atomic plant in Belgium he injured someone in a road accident. The Belgian court made an Art.234 reference to theECJ.

 

Held: (ECJ) Driving a motor vehicle is not an act performed in the course of duty unless it is necessary in an emergency or other exceptional circumstances. Euratom was not vicariously liable. [1969] E.C.R. 329.

 

Commentary

The distinction between faute de service, a fault in the operation of the system, and faute personnelle, a personal fault by an individual reflects French administrative law. Thus in EC law vicarious liability attaches to faute de service and to faute personnelle where the wrongful act is closely connected to the individual’s duties (i.e. not a “frolic of one’s own”). As in French law, the EC institutions may be vicariously liable for matters that would be considered maladministration in English law.

 

 

 

Liability for legislation: the “Schoppenstedt Formula”

 

 

Key Principle: The EC is not liable in relation to a legislative measure involving choices of economic policy unless a sufficiently serious breach of a superior rule of law for the protection of the individual has occurred.

 

 

Zuckerfabrik Schoppenstedt v Council (Case 5/71) 1971 The  applicant,   a  sugar  trader,  sought  compensation  under Art.288(2)  (ex 215(2)) for damage suffered as a result of a regulation, claiming that the measure infringed another regulation and Art.34(3) (ex 40(3)) (the principle of nondiscrimination under the CAP). The Council objected, claiming that the action would undermine the system of judicial review under Art.230 (ex 173).

 

Held: (ECJ) The ruling of the ECJ in Lutticke (see above) was,, approved    and   the    application   was    declared    admissible However, the breach was not found to be “sufficiently flagrant” As a result the application failed. [1971] E.C.R. 975.

 

Commentary

(1)   Most EC law involves choices of economic policy. It is the ECJ’s responsibility to examine the acts of the institutions to determine when those acts should give rise to compensation to individuals. It is not intended that individuals should be protected from variations in the market.

(2)   Although known as the “Schoppenstedt Formula”, the principle stated above represents a reformulation by the ECJ in Bayeriscbe HNL v Council and Commission (Joined Cases 83/76, etc.), approving the decision in Schoppenstedt. (See below.)

(3)   The ECJ confirmed its adherence to the Schoppenstedt formula in Bergaderm (below). It restated the formula using slightly different wording.

 

 

Key Principle: “Sufficiently serious breach” must be interpreted in the same way for the EC institutions as for the Member States.

 

Laboratoires Pharmaceutiques Bergaderm and Goupil v Commission (Case C-352/98P) 2000

The applicant, in an appeal against a decision of the CFI, sought damages against the Commission for losses suffered as a result of a Commission directive on cosmetics. The directive prohibited the use of various substances thought to be possibly carcinogenic, one of which was used by the applicant (the only company to do so) in its sun-tan lotions. As a result, the applicant went into liquidation. The CFI dismissed the action and rejected the applicant’s claim that the directive was an administrative   rather   than   legislative   act.   The   applicants appealed to the ECJ which upheld the decision of the CFI.

 

Held: (ECJ): EC law confers a right to damages where three conditions are met :

(1)   the rule of law infringed must be intended to confer rights on individuals;

(2)   the breach must be sufficiently serious;

(3)   there must be a direct causal link between the breach of the obligation resting on the state and the damages sustained by the injured parties.

 

Commentary

(1)   It is clear from the judgment of the ECJ in Bergaderm that it is not the nature of the measure which is significant but the degree of discretion enjoyed by the EC institution. Thus it makes no difference to an action in damages whether the act in question is legislative or administrative. See Hartley, The Foundations of European Community Law (5th ed.), p.467, “The test for determining whether there is discretion is whether the adoption of the act involves policy choices. It can hardly matter, however, whether these are economic, social or political.”

(2)   The test under Bergaderm to establish a sufficiently ser-iousbreach involving wide discretion is whether the EC institution manifestly and gravely disregarded the limits on its discretion.

 

 

Key Principle: There must be a breach of a superior principle of law.

CNTA v Commission (Case 74/74)

This case concerns the system for monetary compensation amounts (MCAs) payable to exporters under the CAP to compensate for fluctuations in exchange rates. CNTA entered into various export contracts before the system was abolished in France by the Commission, claiming to have based the contractual prices on the MCAs. CNTA claimed damages for the losses arising from the ending of the scheme from the Commission.

 

 

Held: (ECJ) regulation infringed the principle of legal certainty, in particular the principle of legitimate expectation; In the absence of overriding public interest the Commission had violated  a  superior  rule  of law  by  not  taking  transitional measures to protect the trader. However, as no actual loss has been suffered, no damages were awarded. [1975] E.C.R. 533

 

Commentary

The wrongful act was the failure to give reasonable notice, not th J adoption of the regulation (which was not declared invalid). Othei general principles which have been invoked in damages claim! include proportionality and equality. (See Ch.3).

 

 

 

Key Principle: The breach must be sufficiently serious.

 

Bayerische HNL v Council and Commission (Cases 83/76, etc.) 1978

In order to use up the skimmed milk powder “mountain” the Council adopted a regulation requiring animal feed producers to buy skimmed milk powder from EC intervention agencies. This was more expensive than soya, which had previously been used as feed. Some farmers brought actions in the national courts, leading to Art.234 references to the ECJ. Others claimed damages in the ECJ.

 

Held: (ECJ) (1) (Under Art.234 (ex 177)) The regulation was invalid because it infringed the principles of non-discrimination and proportionality. (2) (Under Art.215) There was a breach of a superior breach of law which was intended to protect the individual. However, the breach was not sufficiently serious; in a legislative field involving wide discretion, the EC is not liable unless  there has  been  a  manifest and  grave breach.  Thus damages were not available to the farmers. [1978] E.C.R. 1209.

 

Commentary

Despite the invalidity ruling under Art.234 (ex 177) it did not follow that the breach was serious enough to satisfy the Schop-penstedt Formula under Art.288 (ex 215).

 

 

Key Principle: The rule of law must be intended for the protection of the individual.

 

Kampffmeyer v Commission (Joined Cases 5/66, etc.) 1967

The applicants, German grain importers, applied to the German authorities for a licence to import grain from France. The German authorities refused, suspending imports. The Commission confirmed the decision. Under Regulation 19 such applications could only be refused if a serious disturbance of the market was threatened. The applicants challenged the Commission decision under Art. 173 in the ECJ and also sued the German Government in the national courts.

Held: (ECJ) Although the rules of law in question were not of direct and individual concern to the applicant (under Art.230 (ex 173)), the protection of individual interests such as the applicant’s was intended. The application was admissible. As there was no serious threat to the market, the Commission decision was unjustified (faute de service) and was annulled. [1967] E.C.R. 245.

Commentary

(1)   A rule intended to benefit a class of persons may be found to benefit an individual.

(2)   The ECJ deferred a decision on damages until the concurrent proceedings before the German courts were completed.

(3)   The EC may not be liable where there is an overriding public interest. In Mulder v Commission (Joined Cases C-104/89 and 37/90) milk producers who had no quota due to lack of production in the year preceding their application were given a quota based on 60 per cent of production in the year before that.

Held: (ECJ) Although the quota decision was illegal because it infringed the principle of legitimate expectations, the Council had taken account of a higher public interest in fixing the rate, without gravely and manifestly disregarding the limits of its discretionary power. [1992] E.C.R. 1-3061.

 

Concurrent Liability

Key Principle: Where the national authority is primarily at fault the action should be brought in the national courts.

Kampffmeyer v Commission (Cases 5/66, etc.) 1967

See p.71.

Held: (ECJ) The amount of damages awarded against the Commission could not be finalised until K had completed proceedings before the German courts.

Commentary

(1)   The requirement to pursue a remedy in the national courts has been upheld in Haegeman v Commission (Case 96/71). There are problems arising from this approach as the scope or availability of a remedy may vary between Member States.

(2)   The ECJ has not been consistent on the need to exhaustna-tional remedies before proceeding in the ECJ (now in the CFI).

In Krohn v Commission (Case 175/84) it was held to be appropriate to bring an action in the ECJ rather than the national courts where the national authorities, on Commission instructions, had refused an import licence.

 

 

7. PRELIMINARY RULINGS

 

Preliminary rulings under Article 234 (ex 177)

Key Principle: Art.234 is essential for the Community character of the law established by the Treaty and has the object of ensuring that in all circumstances, EC law is given the same interpretation in all states of the Community.

 

Rheinmuhlen-Dusseldorf v Einfuhr-und Vorratsstelle Get-reide (Joined Cases 146 & 166/73) 1974

R, a German cereal exporter, unsuccessfully sought to rely on EC law in the Hessian Tax Court to obtain an export rebate. He appealed to the Federal Tax Court (Bundesfinanzhof) which quashed the decision of the lower court, holding that R was entitled to a rebate. The case was sent back to the Hessian Tax Court to decide certain points of fact. The Hessian Tax Court, although bound under German law by the decisions of the Federal Tax Court, refused to follow the decision of the higher court and referred several questions to the ECJ under Art.234 (ex 177). R appealed to the Federal Tax Court against the lower court’s decision to make a reference. The Federal Tax Court then referred further questions to the ECJ to determine the extent of a lower court’s powers to make a reference in such circumstances.

 

Held: (ECJ) The power of a lower court to make a reference cannot be abrogated by national law; the lower court must be free to refer if it considers that the higher court’s ruling could lead to it giving a judgment contrary to EC law. [1974] E.C.R. 33.

 

Commentary

(1) Art.234 provides a mechanism which enables the ECJ to givepreliminary rulings on:

(a)   the interpretation of the EC Treaty;

(b)   the validity and interpretation of acts of the institutions of the EC Treaty and of the European Central Bank; and

(c)   the interpretation of the statutes of bodies established by an act of the Council.

Preliminary Rulings

(2)   The procedure has been of great importance in the development of EC Law. As the EC Treaty is a framework (or “traite cadre”) with little detail or definition, the ECJ has used the procedure to explain and clarify its provisions. The task of interpreting EC law has been described by Bingham J. in the High Court as involving the “creative process of supplying flesh to a spare and loosely constructed skeleton”, Customs and Excise v Samex, 1983.

(3)   The interpretations apply equally to all Member States, irrespective of the origin of any individual reference, thus ensuring uniformity of interpretation throughout the EC. Article 234 rulings are interlocutory rulings provided by the ECJ. After the question has been formulated by the national court, proceedings should be suspended pending the ruling. (This may take up to two years.) The national court should then apply the ruling to the issues in question.

(4)   The ToA amended the EC Treaty to give the ECJ power to consider preliminary references in two new areas. Under Art.68, EC national courts, against whose decisions there is no judicial remedy, must refer to the ECJ questions concerning measures under Title IV (relating to visas, asylum, immigration, etc.). The wording of Art.68 precludes references from the lower courts: Dem Yanenko (Case C-45/03). The Council, Commission and Member States have discretion to refer in such circumstances. Under Title VI, where the Member States accept the jurisdiction of the ECJ (Art.3 5 TEU), the ECJ may make preliminary rulings in relation to framework decisions (harmonisation measures under the third pillar). (See Chapter One) For a ruling on a framework decision, see Maria Pupina (Case C-105/03)

 

 

Discretionary References Court or tribunal

 

Key Principle: Any court or tribunal of a Member State has the power to make a reference under Art.234 to the ECJ.

 

Broekmeulen v Huisarts Registratie Commissie (Case 246/80) 1981

A Dutch Appeals Committee for General Medicine (not regarded as a court or tribunal under Dutch law) refused B’s application to practice as a doctor in the Netherlands. During the course of a reference the ECJ considered whether the Committee was a court or tribunal for the purpose of Art.234 (ex 177).

 

Held: (ECJ) Where there is no right of appeal to the ordinary courts, the Appeals Committee, which operates with the consent of the public authorities and with their co-operation and which delivers decisions which are final after an adversarial procedure, must be regarded as a court or tribunal for the purpose of Art.234 (ex 177). [1981] E.C.R. 2311.

 

Commentary

(1) For a body to be considered a court or tribunal under Art.234 it is essential that the body in question exercises a judicial function (by making legally binding decisions), is competent to make a reference and is subject to control by public authorities. These elements were found by the ECJ to be lacking in Nordsee Deutsch Hochseefischerei GmbH (Case 102/81) where an arbitrator was appointed without participation of public authorities, under a contract in which recourse to arbitration was voluntary.

(2)   A body exercising a purely administrative function is not covered by Art.234. See, for example, Victoria Film (Case C-134/97) (body acting in administrative capacity making binding decisions on matters of individual tax planning).

 

 

Necessity

Key Principle: Where a question of interpretation or validity of EC law is raised before a court or tribunal of a Member State, that court or tribunal may, if it considers that a question is necessary to enable it to give judgment, request the ECJ to give a ruling on it (Art.234(2)).

 

CILFIT Sri. and Lanificio di Gavardo Spa. v Ministry of Health (Case 283/81) 1982

Wool importers disputed a health inspection levy imposed by the Italian Government on wool imported from outside the EC, arguing that wool is an animal product (for which charges could not be imposed by regulation) and therefore not subject to such a charge. The Italian Government claimed that the interpretation of “animal product” was obvious under the acte clair principle, in which case no reference under Art.234 (ex 177) was necessary. The Italian Supreme Court referred the question to the ECJ.

 

Held: (ECJ) A reference to the ECJ is not necessary where:

European Union Law

(1)   the question of EC law is irrelevant;

(2)   the question has already been decided by the ECJ; and

(3)   the correct interpretation is so obvious as to leave no scope for doubt. [1982] E.C.R. 3415.

 

Commentary

(1)  While the ruling in CILFIT was formulated in response to a question concerning mandatory references under Art.234 (ex   177(3))  (see below),  it applies also to discretionary references. The “acte clair” doctrine derives from French administrative   law:   international   treaties   need   not   be referred to the government for interpretation if the meaning is clear. The ECJ in 1996 issued Notes for Guidance to National   Courts  for  Preliminary  Rulings,   to  provide  a summary  of advice  from  the  caselaw of the  Court  on making a reference, reaffirming its position on decisions such as CILFIT.

(2) In Bulmer v Bollinger (CA, 1974) [1974] 2 All E.R. 1226, Lord Denning drew up guidelines for the United Kingdom courts   in   making   Art. 177   (now   234)   references.   The guidelines, though not binding, were treated as influential. Factors to be taken into account were stated to include the existence of a previous ECJ ruling, the conclusiveness of the reference to the judgment, the need to establish the facts, delay, the wishes of the parties and costs. Lord Denning’s guidelines have been criticised as unduly restrictive. They should not be followed where they conflict with CILFIT. (3) The  Court of Appeal ruled that three factors must be present if a reference is to be made: the facts must be clear, the provision of EC law must be conclusive to the determination of the case and the judge must consider whether he himself can resolve the question of EC law with complete confidence (R. v International Stock Exchange of the UK and the Republic of Ireland, Exp. Else [1993] 1 All E.R. 420.

 

Mandatory references

 

Key Principle: Where a question of interpretation or validity of EC Law is raised before any court or tribunal of a Member State against whose decisions there is no judicial remedy, that

Court or tribunal shall bring the matter before the ECJ (Art.234(3)).

 

Costa v ENEL (Case 6/64) 1964

Several questions were referred to the ECJ by the Italian small claims court (see Ch.l, p.4). As the sum claimed was very low there was no right of appeal to a higher national court.

Held: (ECJ) National courts against whose decisions there is no judicial remedy must refer the matter to the ECJ. [1964] E.C.R 585.

 

Commentary

(1)   Identification of the courts that are covered by the obligation to refer under Art.234(3) has been controversial. United Kingdom courts have been reluctant to accept that courts other than the House of Lords are obliged to refer. The position of the Court of Appeal and other lower courts has been difficult to determine. It may be impossible to know until a case is concluded whether the Court of Appeal is the court of last resort or not (i.e. whether leave to appeal against a decision of the CA will be granted by the CA itself or by the HL). The ECJ has not ruled on this point. The present uncertainties are illustrated by S.A. Magnavision N.V. v General Optical Council. The High Court had refused leave to appeal to the House of Lords against conviction on a point of EC law (Magnavision No.l (QBD, 1987)). The Divisional Court in Magnavision No.2 (QBD, 1987) refused leave to appeal on a point of public importance (whether the Divisional Court became a court of final resort when leave to appeal to the HL was refused), ruling that the matter was closed. The applicant was left without a remedy. While no clear precedent exists in English law the United Kingdom courts appear to be moving towards acceptance of the wide view as expressed in Costa v ENEL rather than the narrow view in Magnavision.

 

 

Key Principle: References under Art.234 are not precluded by the existence of a prior ruling of the ECJ on a similar point.

 

Da Costa en Schake N.V. v Nederlandse Belastagingenad-ministratie (Cases 28-30/62) 1963

A Dutch court of last resort referred questions identical to those in Van Gend en Loos on which judgment had recently been given by the ECJ. The Commission argued that the reference should be dismissed for lack of cause, as no questions remained for interpretation.

Held: (ECJ) Where an authoritative ruling has been made on an identical point, a national court need not refer. However, no national court may be deprived of the opportunity to refer a provision that has already been interpreted. [1963] E.C.R. 31.

 

Misuse of the Article 234 Procedure

 

Key Principle: Questions referred by national courts must involve genuine issues of EC law or they will not be considered by the ECJ.

 

Foglia v Novella (No.l) (Case 104/79) (1980)

F and N, wine dealers in France and Italy, inserted a clause in their contract of sale not to pay any tax that contravened EC law. F sought to recover from N the tax incurred by a carrier of the goods in France. It appeared that the parties might have artificially concocted the contractual terms and the litigation in order to obtain a ruling on the validity of the French law.

Held: (ECJ) It is the duty of the ECJ to supply rulings in genuine disputes. To rule in circumstances such as the present case would jeopardise the system by which individuals can protect themselves against tax provisions contrary to the Treaty. [1980] E.C.R. 745.

 

Rulings on validity

 

Key Principle: While national courts may declare that a provision of EC law is valid, only the ECJ may declare a provision of EC law invalid.

 

Foto-Frost v Hauptzollamt Lubeck-Ost (Case 314/85) 1987 A German court referred to the ECJ the question of whether a national court could declare invalid a provision of EC law (in this   case,   a   decision   which   appeared   to   conflict   with   a regulation).

 

Held: (ECJ) National courts have no jurisdiction to declare that acts of EC institutions are invalid. [1987] E.C.R. 4199.

 

Commentary

In Foto-Frost the ECJ stated that an exception to the rule might arise in the event of an applicant seeking an interim injunction (although no question had been referred on this point). The issue

was taken up in Zuckerfabrik .

 

Key Principle: The national courts are not precluded by Art.249 (ex 189) of the Treaty from suspending enforcement of a national administrative measure adopted on the basis of an EC regulation.

 

Zuckerfabrik Suderdithmarschen A.G. v Hauptzollamt Itzehoe (Case C-143/88) 1991

Z, a sugar producer, complained that a German decision imposing a levy based on an EC regulation was invalid. The German court referred a number of questions to the ECJ, including the possible basis for the suspension of a national measure based on a regulation that may be invalid.

 

Held: (ECJ) A national court may suspend a national measure adopted to implement an EC regulation if:

(1)   the national court entertains serious doubts as to the validity of the EC measure and itself refers the question of validity to the ECJ (if this has not already been done);

(2)   there is urgency and a threat of serious and irreparable damage to the applicant;

(3)   the national court takes due account of the EC’s interests. [1991] E.C.R. 1-415.

 

Commentary

(1)   Due to the time needed to obtain an Art.234 (ex 177) reference from the ECJ (up to two years) the need for an interim remedy pending final resolution of the issues has become great in a number of cases. In R. v Secretary of State for Transport, Ex p. Factortame the House of Lords applied the ruling of the ECJ in Case 213/89 and suspended the offending parts of the Merchant Shipping Act 1988. The House of Lords held that interim relief was necessary to protect the rights of individuals under EC law.

(2)   The ECJ introduced a simplified procedure in 2000. This may be involved in three circumstances:

•   Where the question referred is identical to one referred earlier:

•   Where the answer to  the  question may clearly be deduced from existing caselaw: or

•   Where the answer to the question admits of no reasonable doubt.

Using the procedure enables the ECJ to provide a response within five months rather than the usual 24.

 

FREE MOVEMENT OF GOODS

 

The Customs Union

 

Key Principle: Member States are required under Art.23 (e 9) EC to form a customs union. They must not introduce any new customs duties between Member States, nor must they increase existing duties (Art.25 (ex 12)).

 

Van    Gend   en   Loos   v   Nederlandse   Administratie   der Belastingen (Case 26/62) 1963

 

Held: (ECJ) Art.12 (now 25) is directly effective. [1963] E.C.R. 1.

 

Commentary

The customs union involves the prohibition between Member States of customs duties on imports and exports and of charges having equivalent effect, and the adoption of a customs tariff in relation to third countries (non-Member States) (Art.25 (ex 12)).

Van Gend en Loos illustrates the importance attached by the ECJ to the customs union by recognising that individuals may enforce their rights under Art.25 (ex 12) before the national courts.

 

Key Principle: A charge having equivalent effect which is disguised as a tax or levy is illegal under Art.25 (ex 12).

 

Sociaal Fonds voor de Diamantarbeiders v S.A.C. Brachfeld (Cases 2 & 3/69) 1969

The Belgian Government imposed a levy on imported diamonds in order to provide social security benefits for diamond workers. An Art.234 (ex 177) reference was made to the ECJ.

 

Held: (ECJ) The imposition of a charge on goods crossing a frontier is an obstacle to the free movement of goods. Such a levy is prohibited under Art.12 independently of its destination or purpose. [1969] E.C.R. 211.

 

Commentary

If the diamond workers’ welfare scheme had been funded through non-discriminatory  system  of taxation without  reference  to sports it would have been permissible under Art.90 (ex 95)

 

 

Discriminatory Taxation

 

Key Principle: No Member State may impose a tax directly or indirectly on products from another Member State greater than that applied to similar domestic products. Indirect protection through taxation of domestic products is also illegal: Art.90 (ex 95).

 

Commission v UK (Re Excise Duties on Wine) (No.l) (Case 170/78) 1980

The Commission sought a declaration under Art.226 (ex 169) that the United Kingdom had infringed Art.90 (ex 95) by imposing a higher excise duty on light wines than on beers.

 

Held: (ECJ) Allowing for changing drinking habits and the increasing popularity of wine in the United Kingdom it is possible to regard wine and beer as similar products in competition with each other and to compare the taxation of each. No ruling was made pending further investigation. [1980] E.C.R. 417.

 

Held: (No.2) (Case 170/78A) 1983: (ECJ) (Following the investigation by the Commission) The United Kingdom tax system discriminated against imported wine so as to afford a protection to domestically produced beer, contrary to Art.95. [1983] E.C.R. 2265.

 

Commentary

(1) Art.86 (ex 90) allows Member States freedom to create their own internal systems of taxation provided there is no discrimination between Member States. Similar products may be taxed differently only where the distinction is objectively justified. In Commission v France (Case 196/85) there was no breach when traditional sweet wines were taxed at a lower rate than ordinary wines to provide economic assistance to rural areas dependent on wine production.

(2) In Humblot v Directeur des Services Fiscaux (Case 112/84) road tax was payable to the French Government at a higher rate on cars of more than 16 c-v, the highest engine capacity for cars made in France. A French taxpayer sought to recover the additional tax paid on a 36 c-v car imported from Germany. The ECJ held the system to be a breach of Art.90 (ex 95). An amended tax system was later found still to breach Art.90 (ex 95).

 

Quantitative Restrictions and Measures having Equivalent Effect

 

Key Principle: Quantitative restrictions and all measures having equivalent effect are prohibited under Art.28 (ex 30).

 

R. v Henn and Darby (Case 34/79) 1980

The United Kingdom seized pornographic goods imported from the Netherlands. The importers were prosecuted and an Art.234 (ex 177) reference was made by the House of Lords.

Held: (ECJ) A total ban is a quantitative restriction under Art.28 (ex 30). (The measure was in fact found to be justified under Art.30 (ex 36): see p.84.) [1979] E.C.R. 3795.

 

Commentary

(1)   Anything which restricts importation by reference to quantity (e.g. a quota system) is a quantitative restriction.

(2)   The Treaty renumbering resulting from the ToA has had aparticularly unfortunate effect in relation to the provisions on the free movement of goods as old Art.30 has become Art.28 and old Art.36, new Art.30 (with old Arts 31—33 repealed). It is thus essential to be sure, in relation to any citation of “Art.30”, whether this relates to new or old numbering.

(3)   Inactions as well as actions may be a breach of Art.28. In Commission v France (Case C-265/95) the Commission brought enforcement proceedings against France under Art.226 (ex 169) for failing to act to prevent disruption to the free movement of agricultural goods such as Spanish strawberries. The problems arose from protest action by French farmers and others, intercepting lorries, destroying their loads and threatening their drivers. The ECJ held that the French Government’s failure to adopt necessary and proportionate measures was a breach of Art.10 (ex 5) EC.

 

 

Key Principle: All trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-EC trade are to be considered as measures having an effect equivalent to quantitative restrictions.

 

Procureur du Roi v Dassonville (Case 8/74) 1974 Dassonville, a trader, imported Scotch whisky into Belgium from France without a certificate of origin, contrary to Belgian law. He was charged with a criminal offence but pleaded that the Belgian requirement contravened Art.28 (ex 30). An Art.234 (ex 177) reference was made.

 

Held: (ECJ) In the absence of harmonisation, a Member State may take measures to prevent unfair practices provided they are reasonable and do not hinder inter-member trade. It was more difficult for a trader importing goods in circulation in another Member State to obtain a certificate than for an importer to do so when importing the goods directly from the state of production. Thus the requirement to obtain a certificate was a measure having equivalent effect and was illegal under Art.28 (ex 30). [1974] E.C.R. 837.

 

Commentary

(1)   Dassonville is important in that it defines what is meant by a “measure having equivalent effect” (MEQR). Further examples of MEQRs include inspection fees at frontiers and charges for storage pending inspections. Following the decision in Keck and Mithouard (see p.91) a more restrictive approach has been taken by the ECJ to measures regarded as MEQRs.

(2)   Directive 70/50 divides measures into distinctly effec-tivemeasures (which do not apply equally to domestic and imported goods) and indistinctly effective measures (which apply alike to both domestic and imported goods).

 

 

Key Principle: Member States may not promote national products where this involves discrimination against imports.

 

Commission v Ireland (Case 249/81) 1982

A scheme was operated (“Buy Irish”) to promote the sales of Irish goods to shoppers in Ireland. A symbol indicating Irish origin was attached to goods and an information service was available. According to the Irish Government the scheme was not particularly successful as the sale of imported products actually rose during the promotion period. The Commission brought an action against the Irish Government under Art.226 (ex 169).

 

Held: (ECJ) If a measure is capable of restricting imports it is illegal under Art.28 (ex 30). [1982] E.C.R. 4005.

 

Commentary

Contrast the “Buy Irish” case with Apple and Pear Council v Lewis (Case 222/82) in which a Council funded by a levy on apple and pear growers in England and Wales was created to promote the consumption of English and Welsh varieties. Some growers refused to pay, claiming that the scheme infringed Art.28 (ex 30). The ECJ (under Art.234 (ex 177)) held that it was permissible to promote a product by reference to its qualities, even where those qualities are typical of national production.

 

Key Principle: There is no valid reason why goods which have been lawfully produced and marketed in one Member State should not be introduced into any other Member State (the principle of mutual recognition).

 

Rewe-Zentral A.G. v Bundesmonopolverwaltung fur Brannt-wein (“Cassis de Dijon”) (Case 120/78 1979) Cassis de Dijon is a blackcurrant liqueur originating in France where it contains 15 to 20 per cent alcohol by volume. German law required fruit liqueurs to have a minimum alcohol content of 25 per cent. While the measure was not discriminatory it clearly excluded French cassis from the German market. German importers challenged the measure in the national court which made an Art.234 (ex 177) reference.

 

Held: In the absence of EC rules, the Member States may regulate the production and marketing of alcoholic drinks. Obstacles to movement within the EC arising from disparities between national laws relating to the marketing of the products must be accepted in so far as they may be necessary to satisfy mandatory requirements relating in particular to the effectiveness of fiscal supervision, the protection of public health, fairness of commercial transactions and the defence of the consumer. [1979] E.C.R. 649.

 

Commentary

(1)   The ECJ rejected German Government claims that a requirement for a higher alcohol content discouraged alcoholism and that it protected consumers against unfair commercial practices. The requirement infringed the principle of proportionality and, while mandatory, was not necessary. Consumers could be protected by being given information about the alcoholic content on the label.

(2)   The mandatory requirements in Cassis have provided a basis for departing from Art.28 (ex 30) in cases involving indistinctly applicable measures. They were not satisfied in Commission v Germany (Case 178/84) in which a longstanding ban on additives in beer was found to be unjustifiable on health grounds. Other unjustifiable measures have included a restriction on the shape of bottles containing traditional alcoholic drinks and a requirement to sell margarine in cubes.

(3)   Note that distinctly applicable measures may only be justified under Art.30 (ex 36) (see p.94).

(4)   The principle of mutual recognition represents a widening of the Cassis principle to cover all goods, not merely alcoholic beverages. It has provided the basis for the single market (1992) programme of directives to harmonise standards.

 

 

Key Principle: National strategies to protect the environmen may infringe Art.28 (ex 30).

Commission v Denmark (Case 302/86) 1988

Danish law required that beer and soft drinks could be sold only in reusable containers, as part of a deposit-and-return scheme on grounds of environmental protection. The scheme was later modified to allow producers to market a limited quantity of drinks in non-approved containers. The Commission brought an action under Art.226 (ex 169) in the ECJ, claiming that the measure infringed Art.28 (ex 30).

 

Held: (ECJ) Although protection of the environment is an important objective, the quantitative restriction on beverages that could be sold in non-approved containers had a disproportionate effect on importers from other EC states. Denmark was in breach of Art.28 (ex 30). [1988] E.C.R. 4607.

 

Commentary

(1) This case illustrates the difficult position of a Member State introducing  a  measure   that  can  affect  imports,   in   the absence of common EC rules. Contrast the decision with Oebel (Case  155/80) in which a Belgian law forbidding night working in bakeries was held not to infringe Art.28 (ex 30) because it did not affect imports. In another case concerned with the environmental problems associated with drinks packaging, this time where common EC rules have been adopted, the court found that problems can still occur where harmonisation is not complete. Commission v Germany (Case C-463/01) concerned enforcement proceedings brought against Germany which required the producers and distributors of drinks in non-reusable packaging to charge a deposit and take back the packaging. As Directive 94/62 on packaging and packaging waste (requiring producers of mineral water to bottle at source) did not fully harmonise the law, the German legislation had to be assessed for compatibility Art.28. While the German rules could be justified as necessary to protect the environment, they infringed the principle of proportionality as the transition period for producers and distributors to adopt was only six months.

 

Key Principle: The regulation of Sunday trading falls within tne discretion of Member States to make political and economic choices to accord with national or regional socio-cultural characteristics.

 

Torfaen Borough Council v B&Q Pic (Case 145/88) 1989 The defendant was charged with trading on a Sunday contrary to the Shops Act 1950. The magistrates court referred to the ECJ the question of whether such a measure breached Art.28 (ex 30).

 

Held: (ECJ) It is a legitimate part of socio-economic policy for Member States to regulate opening hours. Such rules do not infringe Art.28 (ex 30) provided they are not disproportionate and do not affect inter-member trade. [1989] E.C.R. 3851.

 

Commentary

(1) Torfaen left many shops and local authorities in confusion over Sunday trading. Later decisions clarified the position. The ECJ stated unequivocally in Stoke on Trent and Norwich City Council v B&Q (Cases C-169/91) that the prohibition in Art.28 (ex 30) does not apply to national legislation prohibiting retailers from opening their premises on Sundays. The Sunday trading laws did not discriminate against imports. Their legitimacy turned on proportionality (weighing national interests in achieving the objective against EC interests in the free movement of goods).

(2)   A ban on the employment of labour in France and Belgium on Sundays was also outside Art.28 (ex 30): Marchandise (Case C-332/89) and Conforama (Case C-312/89).

(3)   The Sunday Trading Act 1994 now permits shops in England and Wales below a certain floor area to trade freely on Sundays. Larger shops may trade for six hours between 10am and 6pm.

 

Key Principle: Art.28   (ex   30)   does   not   apply   to   selling arrangements by Member States which do not affect inter member trade.

 

Keck and Mithouard (Joined Cases C-267 & 268/91U993

K and M had resold goods at a loss contrary to French law

They claimed that the prohibition restricted the volume of sales of imported goods and so infringed Art.28 (ex 30). An Art.234 (ex 177) reference was made.

 

Held: (ECJ) Contrary to what had previously been decided, the application to products from other Member States of national provisions restricting or partitioning certain selling arrangements does not hinder directly or indirectly, actually or potentially, trade between Member States within the meaning of the Dassonville judgment. [1993] E.C.R. 1-6097.

 

Commentary

(1) Keck and Mithouard signals a departure from the previous line of case law developed by the ECJ since Cassis. Traders had relied too heavily on Art.28 (ex 30) to challenge national measures restricting commercial freedom where there was no effect on imports. Member States should be free to adopt measures that do not affect inter-member trade, provided these conform to the principle of proportionality.

(2) Later cases have confirmed this approach. In Tankstation’t Heukste vof and Boermans (Case C-401/92) Dutch rules on opening hours of shops in petrol stations were held to be outside Art.28   (ex 30).  A similar finding was made in Hunermund        v Landesapothekerkammer        Baden-Wurttemberg (Case C-292/92) (prohibition on promotion of para-pharmaceutical products outside pharmacies). See also  Belgapom   v  Itm  Belgium  and  Vocarex  S.A. (Case C-63/94). (Potatoes were sold at a loss contrary to Belgian law. Held: (ECJ) Art.28 (ex 30) does not apply to national legislation prohibiting sales at a very low profit margin.) For other instances of selling arrangements being left to the discretion of national authorities, see Societe d’Importation Edouard Leclerc-Siplec v TFI Publicite S.A. and M6 Publicite S.A. (Case C-412/93) (a French ban on televised advertising of the distribution sector) and Konsumentombudsmannen (KO) v Gourmet International Products AB (GIP) (Case C-405/98) (Swedish legislation prohibiting the advertising of alcoholic drinks justified in the interests of public health). (3) In   some   cases,   by   contrast,   the   ECJ   has   found   that nationalselling arrangements place a dual burden of regulation, with control exercised both at the state of production and the state of sale. In such circumstances the measure is in breach of Art.28. See Verband SozialerWettbewerb eV v Clinique Labaratoires SNCF (Case C-315/92). The effect of a German law banning the use of the name “Clinique” for cosmetics was to require the repackaging of imported cosmetics to be sold in Germany. As the ECJ did not accept that the ban was justified to avoid confusing customers, the measure infringed Art.28. Similar reasoning was employed in another case of German origin, this time involving national restrictions on unfair competition: Verein gegen Unwesen in Handel und Gewerbe Koln v Mars GmbH (Case C-470/93) (Requirement to repackage Mars bars with the words “plus ten percent” on the wrapping for sale in Germany infringed Art.29 (ex 30)). In Georg Schwarz v Burgermeister der Landeshaupstadt Salzburg (Case C-366/04) the ECJ found that a ban by Austria on the sale of unwrapped chewing gum from automatic vending machines imposed an additional burden on importers, the ban was justified on grounds of public health.

 

Key Principle: Each case should be assessed on its merits to determine the actual or potential effect of national legislation in relation to Art.28 (ex 30).

 

Neeltje v Houtwipper (Case C-293/93) 1994

Dutch law required all precious metals to be hallmarked according to certain specifications before being offered for sale. Thus imported goods would require re-hallmarking on entering the Netherlands. An Art.234 (ex 177) reference was made.

 

Held: (ECJ) While the hallmarking requirement was a mandatory measure to protect consumers and promote fair-trading, it infringed Art.28 (ex 30) by requiring the fixing of a fresh hallmark where an equivalent hallmark had already been affixed in another Member State. [1994] E.C.R. 1-4249.

 

Commentary

Unlike Keck and Mithouard the measure in Neeltje discriminated against imports.

 

Quantitative restrictions on exports and measures having equivalent effect

Key Principle: Restrictions on exports will only breach Art.29 (ex 34) if they have as their object or effect the restriction of patterns of exports, providing an advantage to the home product or market.

 

Groenveld v Produktschap voor Vee en Vlees (Case 15/79) 1979

Dutch law prohibited all meat processors from stocking or processing horsemeat, in order to prevent the export of horse-meat to countries prohibiting its sale. Groenveld decided to make horsemeat sausages, contrary to Dutch law, claiming that the law infringed Art.29 (ex 34) by prohibiting the processing and exporting of horsemeat.

Held: (ECJ) Art.29 (ex 34) did not apply to a rule which did not discriminate between goods for the home market and for export.

 

Commentary

(1) The Cassis justifications for restrictions on imports do not apply to exports. Whereas importers face a “dual burden”, namely the requirements of the home state and of the importing state, exporters need only satisfy the requirements of the home state. Thus export restrictions may only be justified under Art.30 (ex 36).

(2) “Quantitative restrictions” and “measures having equivalent effect” have the same meanings for Art.29 (ex 34) as for Art.28 (ex 30).

 

 

Derogations from Articles 30 to 34 (ex 28 and 29)

 

Key Principle: Arts 30 to 34 (ex 28 and 29) do not preclude prohibitions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of life or health of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial

commercial property. Such prohibitions must not constitute means of arbitrary discrimination or a disguised restriction a trade between Member States: Art.30 (ex 36).

 

Key Principle: Restrictions on imports or exports may be justified on grounds of public morality.

 

r. v Henn and Darby (Case 34/79) 1979

See p.86. The United Kingdom seized films and publications being imported from the Netherlands into the United Kingdom. The importers were prosecuted under customs and excise legislation with importing indecent and obscene arts. In their defence the importers claimed that the prohibition contravened Art.28 (ex 30) in that a stricter standard was being applied to imported than to domestic goods. An Art.234 (ex 177) reference was made.

 

Held: (ECJ) A Member State may lawfully prohibit on grounds of public morality the importation from another Member State of indecent or obscene materials as understood by its domestic laws. A prohibition on imports that is stricter than the domestic prohibition is not a measure designed to give indirect protection to a national product or aimed at creating arbitrary discrimination depending on where the goods are produced. [1979] E.C.R. 3795.

 

Commentary

Henn and Darby illustrates the general requirement of Art.30 (ex 36) that a measure must be necessary, but must not involve arbitrary discrimination or a disguised restriction on inter-member trade. Contrast Conegate Ltd v HM Customs and Excise (Case 121/85) in which there was a lawful domestic trade in the goods in question (inflatable dolls). Seizure of dolls being imported from Germany into the United Kingdom on grounds that they were indecent and obscene was a breach of Art.28 (ex 30), being discriminatory on grounds of nationality.

 

 

 

Key Principle: Restrictions  on imports or exports may be justified on grounds of public policy.

 

R. v Thompson (Case 7/78) 1978

United Kingdom law in force at the time prohibited the importation of gold coins and export of silver-alloy coins minted before 1947. The case turned on the distinction between whether the coins were “goods” or “means of payment”. Under United Kingdom law it was illegal to melt down or destroy coins, even if they were no longer legal tender.

 

Held: (ECJ) As the coins were not legal tender they were goods under Art.28 (ex 30). A ban on destroying such coins with a view to preventing their being melted down or destroyed in another Member State was justified on grounds of public policy under Art.30 (ex 36), because it stemmed from the need to protect the right to mint coinage which is traditionally regarded as involving the fundamental interests of the state. [1978] E.C.R. 2247.

 

Commentary

(1)   “Public policy” is a translation of the French term “ordrepublic”. R. v Thompson is a rare example of a successful invocation of the exception. Public policy does not cover consumer protection (Kohl v Ringelhan (Case 177/83)) or economic considerations (Cullet v Centre Leclerc (Case 213/83)).

(2)   For a House of Lords ruling on public policy under Art.30 (ex 36) in the context of a restriction on exports, see R. v Chief Constable of Sussex, Ex p. Trader’s Ferry [1998] 2 W.L.R. 1260. This case concerned a decision by the Chief Constable of Sussex to reduce the level of policing at the port of Shoreham where there had been a prolonged campaign of protest against the export of live animals to the continent. (The Chief Constable had justified his decision on the basis that policing the prolonged campaign reduced his capacity to carry out other policing responsibilities.) International Trader’s Ferry, the exporter, sought judicial review of the Chief Constable’s decision. The HL held that the Chief Constable had not acted unreasonably in English law. Without making a reference to the ECJ, the HL held that, assuming the decision to be a measure equivalent to a quantitative restriction on exports under Art.29 (ex 34), it was justified on grounds of public policy. Such grounds could arise where the broader requirements of public policy justified steps being taken. The Chief Constable’s actions were proportionate and reasonable in the light of available resources.

 

Key Principle: Restrictions on imports or exports may be justified by public security.

 

Campus Oil v Minister for Industry and Energy (Case 72/83)1984

Irish law required importers of petroleum products to buy up to 35 per cent of their needs from the Irish National Petroleum Company (INPC) at fixed prices. Ireland sought to justify this requirement on both public policy and public security grounds, claiming that this was the only method by which the national refining capacity could be maintained and the products sold. Held: (ECJ) The measure was justified on grounds of public security rather than public policy. Maintaining a refinery enabled Ireland to enter into long-term contracts with oil producers who would ensure greater continuity of oil supplies during a crisis. [1983] E.C.R. 2727.

 

Commentary

The ECJ accepted that a measure justified on grounds of public security might also achieve economic objectives without taking it outside Art.30 (ex 36).

Key Principle: Restrictions on imports and exports may be justified on grounds of protection of life and health of humans, animals or plants.

 

Officier van Justitie v Kaasfabrik Eyssen B.V. (Case 53/80) 1981 A cheese producer was prosecuted in the Netherlands for using nisin, a preservative prohibited under Dutch law, in processed cheese. Nisin was a permitted ingredient in other Member States. Scientific research was divided as to the harmfulness of the additive. The cheese producer argued that the ban infringed Art.28 (ex 30) as it impeded imports.

 

Held: (ECJ) In the absence of harmonisation, a state may protect the public by banning additives where there is genuine scientific doubt about their safety. [1981] E.C.R. 409.

 

Commentary

(1)   This decision forms part of a series of cases on the use of additives (cf. Commission v Germany, see p.89). In Ministre Public v Claude Muller (Case 304/84) it was held that the requirement for authorisation for specific additives is subject to the principle of proportionality; thus the process of application must be rapid and straightforward. Prior national authorisation may also be required for medical products (Lucien Ortscbeit GmbH v Eurim-Pharm GmbH (Case C-3 20/93).

(2)   Note that the protection of public health is a consideration!! that outweighs all others, especially economic considera-a tions: Boehringer v Council (Joined Cases T-125 &126/96).

 

 

Key Principle: The risk to health must be real and form part of a seriously considered health policy.

 

Commission v UK (Case 40/82) 1982

The United Kingdom unilaterally and hastily introduced a ban on the importation of poultry meat and eggs after extensive lobbying by United Kingdom poultry producers just before Christmas 1981. The United Kingdom Government claimed that the measure was necessary under Art.30 (ex 36) to prevent British flocks catching a form of poultry disease known as Newcastle Disease. Enforcement proceedings were brought against the UK.

 

Held: (ECJ) The ban was not part of a health policy but was a disguised restriction on trade. Less restrictive methods would have been sufficient. The measure could not be justified on grounds of animal health under Art.30 (ex 36). [1982] E.C.R. 2793.

 

Commentary

The measure appeared to be an attempt to protect United Kingdom producers from French competition. French turkey farmers later sought to recover their losses from the United Kingdom Government in Burgoin v MAFF (CA). Although the claim was struck out they won an out of court settlement of £3.5 million.

 

Key Principle: Where there is uncertainty as to the existence or extent of risks to human health, the institutions may take protective measures without having to wait until the illegality and seriousness of those risks becomes fully apparent.

 

National Farmers’ Union and Others (Case C-157/96); United Kingdom v Commission (Case C-180796)

 

The Commission adopted emergency measures in 1996 to counteract the threat to health posed by B.S.E. (“mad cow disease”) prohibiting the UK from exporting beef worldwide. The UK contested the decision under Art.230 (ex 173). The ECJ considered that the Commission was entitled to react to the publication of new information about the disease, and that the confinement of animals and products within a particular territory was an appropriate measure, even in relation to exports to third countries.

 

Held: (ECJ) (1) The measures were not disproportionate: there was no need to wait until the full extent of the risks became apparent.

(2) The measures were not illegal, and were properly based on Art.37 (ex 43) on the Common Agricultural Policy. [1998] E.C.R. 1-2211; [1998] E.C.R. 1-2265.

 

Commentary

(1)   In Commission v France (Case C-1/00) the Commission brought enforcement proceedings against France for unilaterally maintaining the export ban on British beef after the ban was lifted in August 1999 for certain meats and meat products. While declaring that France had acted unlawfully in refusing to adopt the necessary measure to implement the lifting of the ban, the ECJ found that its failure was not as extensive as the Commission had claimed, in view (partly) of the difficulty in interpreting and implementing the relevant Commission decision.

(2)   The precautionary principle has been followed in a number of later cases. In Pfizer Animal Health S.A. v Council and Alpharma Inc v Council (Cases T-13/99 and T-70/99) the CFI upheld the Council’s decision to ban certain antibiotics as additives in animal feed, confirming that preventive measures may be taken before the reality and seriousness of the risk is fully apparent. There must, however, be a real risk. The CFI acknowledged that the degree of risk cannot be set at zero. Before taking any preventive measure, public authorities must carry out a risk assessment involving both a scientific component (as thorough a scientific assessment as possible taking account of the degree of urgency) and a political component (“risk management” involving a decision by the authorities on the measures deemed appropriate according to the degree of risk). In Artegodan GmbH v Commission (Cases T-74/00 etc.) the CFI annulled Commission decisions ordering the withdrawal of marketing authorisation for anti-obesity drugs. After finding that the Commission was not competent to adopt the decisions as competence remained with the Member States, it went on to consider validity. The CFI held that the conditions for withdrawal of marketing authorisation must be interpreted in accordance with the general principle of protection of public health. Applying the precautionary principle where there is scientific uncertainty, the Court found that mere changes in scientific criterion for assessing the efficacy of a medical product justify withdrawal of a marketing authorisation only if those changes are supported by new data.

 

Key Principle: Restrictions on imports and exports may be justified on grounds of the protection of national treasures possessing artistic, historic or archaeological value.

 

Commission v Italy (Re Export Tax on Art Treasures) (Case7/68)

The Italian Government imposed a tax on the export of art treasures from Italy, claiming that such a tax would be less restrictive than an export ban. The Commission brought an action in the ECJ under Art.226 (ex 169).

 

Held: (ECJ) The measure was illegal under Art.25 (ex 12) (prohibition on customs duties and measures equivalent to customs duties). It could not therefore be justified under Art.30 (ex 36). [1968] E.C.R. 423.

 

 

Key Principle: Restrictions on imports and exports may be justified on grounds of the protection of industrial and commercial property.

 

EMI Electrola v Patricia (Case 341/87) 1989 Patricia and other record companies sought to take advantage of the fact that the copyright to the records of Cliff Richard had expired in Denmark but not in Germany by buying recordings in Denmark and importing them for resale in Germany.

Held: (ECJ) The recordings had not been marketed by the holder of the copyright (EMI) or with his consent, even though they had been lawfully placed on the market. EMI could rely on the copyright to keep out the recordings. [1989] E.C.R. 79.

 

Key Principle: The consent of a trade mark proprietor to marketing within the EEA goods placed on the market outside the EEA must be expressed unequivocally.

 

Zino Davidoff S.A. v A&G Imports; Levi Strauss & Co, Levis Strauss UK Ltd v Tesco Stores; Tesco Pic v Costco Wholesale UK Ltd (Joined Cases C-414, 415&416/99) 2001

Zino Davidoff was the proprietor of two trade marks registered in the UK and used for toiletries and cosmetic products. The goods were sold by Davidoff within and outside the EEA. A&G cquired stocks originally placed on the market in Singapore by Davidoff or with the company’s consent and imported the goods into the UK for resale.

Levi Strauss, the proprietor of the trade marks “Levi’s” and “Levi 501” registered in the UK, always refused to sell their jeans to Tesco or Costco. When Tesco and Costco sold in the UK genuine Levi products obtained outside the EEA, Levi Strauss began proceedings in the UK courts for trade mark infringement. Davidoff brought a similar claim. The High Court referred questions from the various proceedings under Art.234, to elicit clarification of the exhaustion principle in the context of the trade mark directive, where goods have been placed on the market within the EEA by the proprietor or with his consent.

 

Held:

(1)   Consent constitutes the decisive factor in the extinction of the proprietor’s exclusive right to prevent third parties from importing goods bearing his trade mark.

(2)   Intention to renounce the proprietor’s rights must be unequivocally demonstrated. Consent must be expressed positively.

Implied consent cannot be inferred from mere silence.

 

Commentary

Davidoff and Silhouette demonstrate the continuing power of the trade mark holder to exert rights which make it difficult for the consumer to obtain cheaply priced imports from parallel traders.

 

 

 

9. FREE MOVEMENT OF CAPITAL

 

Key Principle: All restrictions on the free movement of capital between Member States are prohibited: Art.56(l) (Ex.73b) EC.

 

Ministerio Fiscal v Aldo Bordessa (Cases C-358 & 416/93) 1995

Various Spanish and Italian nationals were charged with attempting to take out of Spain more money than was permitted under exchange control laws without prior authorisation. The Spanish court made an Art.234 (ex 177) reference to the ECJ.

 

Held: (ECJ) Art.l of Directive 88/361 prohibiting all restrictions on the free movement of capital is directly effective from July 1, 1990. Member States may require persons crossing borders to declare their assets but may not require a prior administrative authorisation, such a requirement being disproportionate. [1995] E.C.R. 1-361.

 

Key Principle: The free movement of capital is subject to the right of Member States to take measures which are justified on grounds of public policy or public security: Art.58(l)(b) (ex 73d).

 

FREE MOVEMENT OF WORKERS

 

Workers

 

Key Principle: Freedom of movement for workers shall be secured within the Community: Art.39 (ex 48).

 

Key Principle: A worker is someone who performs services for and under the direction of another in return for remuneration during a certain period of time.

 

Lawrie-Blum v Land Baden Wurttemberg (Case 66/85) 1986 Lawrie-Blum, a United Kingdom national, passed the first examination to qualify as a teacher in Germany. However, she was refused admission to the period of probationary service which must be undertaken before the second examination because she was not a German national. While Lawrie-Blum claimed that the refusal on nationality grounds infringed Art.39(2) (ex 48(2)), the Land argued that a probationary teacher was not a “worker” under Art.39 (ex 48).

 

Held: (ECJ) A trainee teacher who, under the direction and supervision of the school authorities, is undergoing a period of service in preparation for the teaching profession, during which he provides services by giving lessons and receives remuneration must be regarded as a worker under Art.39(l) (ex 48(1)), irrespective of the legal nature of the employment relationship. [1986] E.C.R. 2121.

 

Commentary

(1)   The meaning of “worker” must be defined in EC, not national terms.

(2)   Art.39 does not give rights to EC nationals working in their own countries. Thus a Surinamese mother was not entitled to join her son, a Dutch national, in the Netherlands where he was working: Morson v The Netherlands (Cases 35 & 36/82) 1982.

 

Work and economic activity

 

pursue or wish to pursue an economic activity.

Levin v Staatssecretaris van Justitie (Case 53/81) 1982 Mrs Levin, a United Kingdom national married to a non-EC national, sought a permit to reside in the Netherlands. She was refused on the ground that, as she was not gainfully employed, she could not be considered as a “favoured EEC citizen”. She appealed against the decision through the Dutch courts, meanwhile working part-time as a waitress. An Art.234 (ex 177) reference was made.

 

Held: (ECJ) The expression “worker” covers those who undertake part-time work, even where they are paid at a lower rate than the national guaranteed minimum, provided the work is genuine and not marginal or ancillary. [1982] E.C.R. 1035.

 

Commentary

Part-time  employment  supplemented  by  public  assistance  was considered to be “work” in Kempf v Staatssecretaris van Justitie (Case 139/85)  1986. In Steymann v Staatssecretaris van Justitie (Case 196/87)  1988, a member of a religious community who received pocket money and keep was a worker because commercial activity was a genuine and inherent part of membership. Contrast with Bettray v Staatssecretaris van Justitie (Case 344/87)  1989 where subsidised work carried out by a former drug addict at a rehabilitation  centre  was  not work  as  it was  not  a  genuine economic activity.

 

Workers Families

 

Key Principle: Member States shall facilitate the admission of workers’ families: Art.l0(2), Regulation 1612/68, provided the worker has accommodation available at a standard considered normal for national workers in the area concerned: Art.l0(3).

 

Commission v Germany (Case 249/86) 1989

Germany had adopted legislation which made the renewal of residence permits for family members conditional on their living and housing considered normal, not only at the time of arrival but throughout the duration of their stay. The Commission brought action against Germany under Art.226 (ex 169).

 

Held: (ECJ) Germany was in breach of Art. 10(3) of Regulation 1612/68. The obligation applies to the time of arrival of each family member, after which the migrant worker must be treated on the same basis as a worker of the state concerned. [1989] E.C.R. 1263.

 

Commentary

(1)   Free movement of workers would be meaningless if work-erscould not install their families with them. Regulation 1612/68 recognised the right of installation for workers’ families (defined as the worker’s spouse, descendants under 21 and dependent relatives in the ascendant line of the worker or his spouse): Art.10(1) repealed by Directive 2004/38. See R. v Immigration Appeal Tribunal, Ex p. Surinder Singh (Case C-370/90) (Art.lO(l) applies to family members of a worker returning to his home state).

(2)   Directive 2004/38 is due for implementation by April 30, 2006. It gives Union citizens and their family members the right to move freely and to reside throughout the territories of the Member States. It amends Regulation 1612/68, repeals most previous relevant secondary legislation (Directives 68/360, 90/364 and 365, 93/96) and replaces Directive 64/221.

(3)   Workers and their families may remain permanently in thestate of residence, even after the death of the worker, under Regulation 1251/70. See new Art. 12 of Regulation 2004/38.

 

Spouses

 

Key Principle: The spouse of the worker is entitled to install himself or herself with the worker in the territory of the state where the EC national is working.

 

Netherlands v Reed (Case 59/85) 1986

Ms Reed lived with her partner in the Netherlands. Both were United Kingdom nationals but only Ms Reed’s partner was employed. After living in the Netherlands for a year, Ms Reed sought a residence permit. She claimed that social developments in the Netherlands had reached the stage where an unmarried couple living together in a stable relationship should be treated as husband and wife for EC immigration purposes. The Dutch court made an Art.234 (ex 177) reference to the ECJ.

 

Held: (ECJ) Social developments in a single Member State cannot affect the development of EC law; thus relationships outside marriage cannot entitle the individual concerned to be treated as a spouse. However, under Dutch law an alien who had a stable relationship with a Dutch national was permitted to reside in the country under certain conditions. Applying the principle of non-discrimination, an alien should be granted the same rights of residence whether cohabiting with a Dutch national or an EC national. [1986] E.C.R. 1283.

 

Commentary

(1)   Ms Reed gained the right to reside in the Netherlands because there was a Dutch law giving residence rights to aliens in specific circumstances which, under Art. 7 EEC (now Art. 12 EC) was extended to her.

(2)   The position of cohabitees will change in some Member States when Directive 2004/38 comes into effect in May 2006. The Directive redefines ‘spouse’ to include the partner with whom the Union citizen has a registered partnership where the legislation of the Member States treats registered partnerships as equivalent to marriage. Under Art.3(2), Member States are required to facilitate entry and residence of family members where serious health grounds strictly require the personal care of the family member by the Union citizen and of partners with whom the Union citizen has a duly attested durable relationship.

 

Key Principle: Separation does not dissolve the marital relationship for the purpose of EC residence rights.

 

Diatta v Land Berlin (Case 267/83) 1985

A woman of Senegalese nationality married a French national.

The   couple   lived   in   Germany   where   the   husband   was employed. After a year they separated with the intention of ueCorning divorced. After Mrs Diatta’s temporary residence permit expired she applied for an extension. The application was refused on the ground that, as she no longer lived with her husband, she was not a family member of an EC national.

 

Held: (ECJ) Art.l0(3) of Regulation 1612/68 does not imply that the family must live under the same roof permanently. The marital relationship cannot be regarded as dissolved so long as it has not been terminated by the competent authority. [1985] E.C.R. 567.

 

Commentary

In a decision which has been much criticised, the House of Lords attempted to apply Diatta in R. v Secretary of State for the Home Department, Ex p. Sandhu (1985) (HL). Sandhu, an Indian national, married a German woman. The couple moved to the United Kingdom where a son was born. The marriage broke down, after which Mrs Sandhu and the child moved to Germany. Sandhu visited his family in Germany, but was denied re-entry to the United Kingdom on the ground that his residence rights had ended when his wife left the United Kingdom. The House of Lords considered that the position was covered by Diatta, refused to make an Art.234 (ex 177) reference and upheld the decision of the immigration authorities to deny entry. Article 13(2) of the Directive provides that divorce, annulment or termination of the registered partnership does not necessarily lead to loss of residence rights for family members, etc.

 

Rights of entry

 

Key Principle: Workers who are EC nationals and their families are entitled, on production of a passport or valid identity card, to enter the territory of other Member States in order to work.

 

Procureur du Roi v Royer (Case 48/75)

R, a French national with a conviction for procuring, was prosecuted with (and later convicted of) illegal entry into Belgium. R had not complied with administrative formalities on entry into Belgium where his wife ran a dance hall. He was expelled on the grounds that his personal conduct showed that he was a danger to public policy and that he had not observed the conditions for aliens. An Art.234 (ex 177) reference was made.

 

Held: (ECJ) The right for EC nationals to enter the territory of another Member State covers the right to enter in search of work or to rejoin a spouse or family. Failure by a national of a Member State to complete the legal formalities on access, movement and residence, does not justify expulsion. [1976] E.C.R. 497.

 

Commentary

(1)   In R. v Immigration Appeal Tribunal, Ex p. Antonissen (Case C-292/89) 1991 the ECJ found that deportation of a convicted drug dealer after six months’ residence in the United Kingdom without finding work did not contravene EC law, unless the individual concerned could provide evidence that he was continuing to seek employment and had a genuine chance of finding work.

(2)   Involuntary unemployment is not a ground for deportation.

(3)   In MRAXv Belgium (Case C-459/99) the ECJ held that third country nationals who are married to EC nationals should possess a visa when crossing the border into other Member States. However, in view of the principle of proportionality, a Member State may not send back such an individual who has not got a passport, visa or identity card, provided he can prove his identity and married status, and that he does not represent a threat to public policy, public security or public health under Directive 64/221.

(4)   See now Art.5 of Directive 2004/38.

 

 

Eligibility for employment

 

Key Principle: EC nationals are entitled to take up and pursue employment in the territory of another Member State under the same conditions as the nationals of the host state: Art.l, Regulation 1612/68.

 

Commission v France (Case 167/73) 1974

The French Code du Travail Maritime specified that a proportion of the crew of merchant ships must be French nationals. While this proportion had been set at three French crew members to one non-French crew member, the French Government claimed that it had not in practice been applied against EC nationals. The Commission brought enforcement proceedings against France under Art. 169 for breach of Art.48 of the Treaty and Art.4 of Regulation 1612/68 (prohibition on restriction by number of percentage of EC nationals in a particular activity or area).

 

Held: (ECJ) In failing to amend the Code in relation to EC nationals from other Member States, France was in breach of Art.39 (ex 48) of the Treaty and Art.4 of the Regulation. [1974] E.C.R. 359.

 

Commentary

While a state may not prescribe special recruitment procedures, limit advertising or otherwise hinder the recruitment of non-nationals, it may impose conditions relating to linguistic competence: Groener v Minister for Education (Case 397/87) (requirement for teachers in vocational schools in Ireland to be proficient in the Irish language permissible in the light of national policy on promotion of the Irish language).

 

Key Principle: The regulation of professional sporting activities is subject to the principle of equality.

 

Union des Associations Europeenes de Football v Jean-Marc Bosnian (Case C-415/93) 1995

UEFA, which regulates national football associations, had adopted two rules for implementation nationally. The first rule, incorporated into players’ contracts, allowed national football clubs to impose a transfer fee when a player moved to a new club. Without a fee players could not change clubs. The second rule restricted the number of non-national players in a national club to three. Bosman, a Belgian footballer, was unable to move from a Belgian to a French club because the transfer fee was rejected. He sued the Belgian club, the Belgian national football association and UEFA, claiming that the rules infringed Art.39(2) (ex 48(2)).

 

Held: (ECJ) Transfer rules such as those adopted by UEFA directly affect players’ access to the employment markets in other Member States and constitute an obstacle to the free movement of workers under Art.39 (ex 48). Rules restricting the rights of EC nationals to take part in professional football matches also amount to an obstacle to free movement. Such rules are covered by Art.48(2) and by Art.4 of Regulation 1612/68 (prohibition of quotas based on nationality: see pp.100-101 above) implementing Art.39(2) (ex 48(2)). [1996] All E.R. (EC) 97.

 

Commentary

(1)   Discrimination on grounds of nationality in professional and semi-professional sport contravenes both Art.39 and Art.6 of the EC Treaty (now Art.12 EC), the principle of nondiscrimination: Dona v Mantero (Case 13/76) 1976. See also UNECTEF v Hey lens (Case 222/86) 1987.

(2)   It is, however, legitimate to restrict membership of a teamon grounds of nationality for non-economic reasons (e.g. to represent a particular country in an international match). See also Deliege (Cases C-51/96 & C-191/97).

 

Equality in employment

 

Key Principle: Non-national EC workers may not be treated differently from national workers on account of nationality in relation to conditions of employment, dismissal, reinstatement or re-employment.

 

Sotgiu v Deutsche Bundespost (Case 152/73) 1974

Sotgiu was an Italian national living in Germany where he was

employed by the Federal Post Office. His family remained in Italy- Under a collective wages agreement he was entitled to a separation allowance. However, the allowance was payable at a lower rate for workers whose normal residence was abroad than for those whose home was in Germany. He challenged the rate in the German courts, which made an Art.177 reference.

 

Held: (ECJ) A separation allowance falls within the concept of “conditions of employment and work” under Art.7(l) of Regulation 1612/68. [1974] E.C.R. 153.

 

Commentary

(1)   Equal treatment is now governed by Art.24 of Regulation 2004/38.

(2)   The ECJ considered in Sotgiu that it made no difference whether the payment was voluntary or compulsory. Once the state had decided to pay the allowance to its own nationals, it must extend the same benefit to EC nationals from other Member States.

 

Authors, Latif Aran
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