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EU REMEDIES

ART 263: ACTION FOR ANNULMENTNecessary Elements(1) Bodies amenable to JR/time limit

• See art 263(1) for scope

★ The Council, Commission and ECB: including legislative acts, other than

recommendations/opinions

★ EP, European Council and EU bodies/offices/agencies: acts intended to produce legal effects

against third parties.

➡ Lisbon Treaty explicitly included EC and EU bodies/offices/agencies, though this is a

codification of prior ECJ jurisprudence which already brought them within scope of JR.

• Time limit: laid out in art 263(6) - within 2 months of publication/notification to A, or in absence of

this, within 2 months after it came to A’s knowledge.

★ After time limit expires, unchallenged decision becomes definitive.

★ Only exception is for measures which havesuch manifest and serious defects they are

regarded as non-existent (BASF v Commission (PVC Cartel), 1992) -HIGHLY exceptional!

★ Rationale = legal certainty!

←

(2) Acts subject to review - art 263(1)

• Must be LEGALLY BINDING: acts other than recommendations and opinions = regulations,

decisions and directives.

• Post-Lisbon, bothlegislative and non-legislative acts can be binding hence reviewable - look at

substance, not just title/form.

• JURISPRUDENCE:

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★ IBM, 1981:

early case

illustrating

this. “any

measure the

legal effectsof which are

binding on,

and capable

of affecting

the interests

of, the

applicant by bringing about a distinct change in his legal position” will be reviewable. The form is

immaterial! Here, it was statement of objections in investigation - court said must befinal

measures with intention to impact indiv’s legal position, notintermediatemeasures (latter has

no legal effect).

➡ On the facts, letter was merely initiation of the competition procedure (preparatory stage),

and did not alter A’s legal position in itself.

➡ Disputed measure must befinal (not preparatory, as is often the case in a multi-stage

procedure), though legal defects in the preparatory measures leading up to the final one

can be relied upon in an action directed against the latter.

★ France v Commission, 1997: ECJ held that this list isnot exhaustive, and other acts which are

sui generis can also be reviewed as long as they have binding force or produce legal effects.

★ Commission v Council, 1971: ECJ held that Council’s proceedings and Resolution had definite

legal effects, hence was subject to review.

• Must also beadopted by Union institution/body/agency. 

★ Includes legislative acts, acts of the Council/Commission/ECB.

★ Acts of the EP which have legal effects on third parties.

➡ Les Verts v EP, 1986: French political party challenged reimbursement decision by EP. EP

not usually one of the institutions against which you would use action for annulment.

Hence, court had to adopt constitutional approach - if we have institution like EP which

creates legal effects for applicants, then such acts will be challengeable before ECJ.

★ Also includes acts of European Council with legal effects on third parties.

★ Acts of bodies/offices/agencies of the Union intended to produce legal effects on third parties.

➡ Hence, when ECB became main supervisory bank over many MS banks, acting like

securities commission, decisions could still be challenged!

←(3) Applicant’s standing - art 263(2)-(3)

• Privileged applicants:

★ Art 263(2): action can be brought by MS, EP, Council or the Commission

★ Automatic, absoluteright to bring proceedings. No need to provide any political reasons.

(Comm v Council, 1987)

★ Can be brought even where decision is addressed to another.

★ NB: EU law does not oblige MS to bring action for benefit of citizens, but neither does it preclude

national law from containing such an obligation.

★ EP: prior to Maastricht Treaty, it did not have formal privileged status, and in theComitology

case, 1988, ECJ rejected EP’s argument that it should have unlimited standing.

➡ In theChernobylcase, 1990, however, ECJ then held that EP could have quasi-privileged

status to protect its own prerogatives.

2

Abbreviations:ECJ ➔ European Court of justice

MSs ➔ Member states (of the EU)

EP ➔ European Parliament

CFSP ➔ Common Foreign and Security Policy TEU ➔ Treaty on EU (Maastricht) TFEU ➔ Treaty on the Functioning of the EU (ome)

EEC Treaty ➔ Treaty establishing the Economic EuropeanCommunity

DE ➔ !irect effect

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➡ Chernobyl reflected in re-drafting of art 173(3) EEC.

➡ Nice Treaty then added EP to the list of privileged applicants.

➡

• Quasi-privileged applicants:

★ Art 263(3): ECB, Court of Auditors and Committee of the Regions only have standing todefend

their own prerogatives.★ This category was essentially codification of case law (ECJ developed it saying necessary for

constitutional reasons)

• European Council is a body amenable to review, but is not listed as a privileged/quasi-privileged

body under art 263. Even odder because EC has right to bring action for failure to act under art 265.

• Bodies/offices/agencies of the Union are also subject to possibility of being defendants, without

being recognised as applicants. But most agencies could be legal persons under art 263(4)!

• ***Non-privileged applicants - art 263(4)

← 3 possible scenarios where natural and legal person can bring direct action….

←

I. Addressee of decision

II. Act is of direct and individual concern to A

←

←  ➔ Rationale: if private company/individual is addressee of Comm decision, can challenge under I.

But how about his competitors, who are also affected directly and individually? This was original

intention. But subsequent development rather revolutionary.

←  “➔ act”: pre-Lisbon wording was “decisions”. Now encompasses all legislative acts and non-

legislative acts, as long as they produce legal effects. Codification of ECJ jurisprudence that

looked to substance not form.

←

← DIRECT CONCERN:

➡ General principle (Les Verts): where EU measure directly affects A’s legal situation, and

leaves no discretion to the (intermediate) addressees of the measures as to

implementation.Direct causal relationship

➡ International Fruit case, 1971: Reg provided for system of import licences. ECJ held that

national authorities did not enjoy any discretion as to the licences/conditions of granting

licences. The Commission’s decision and measure affected and impacted A directly - no

possibility of intervention by national authority.

➡ Piraiki-Patraiki, 1985: national authorities’ use of discretion is entirely theoretical.➡ CfMunicipality of Differdange v Commission, 1984: Comm authorised Luxembourg to

grant aid to steel firms on condition of reduction of capacity. ECJ held there was no direct

concern - Comm’s decision did not identify the affected establishments (steel firms), nor

the factories which would have to be shut down cos of reduction of production.

➡ Left margin of discretion as to implementation and choice of factories to be closed

to national authorities and the businesses!

← INDIVIDUAL CONCERN:

➡ The predecessor of art 263(4) was art 230(4) EC: focus on substance rather than form,

so that measure in the form of a Reg could be found to be of direct and indiv concern!➡ The new article does not encourage this, cos of the formalistic test for legislative

acts. By contending that Court should look to substance of a measureacross the

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categories of legal acts, it would render what was a legislative act invalid, should it

be re-classified as a delegated act, because of the lack of adherence to formal

procedures.

➡ BASIC TEST: **Plaumann v Comm, 1963: ECJ held that treaty provisions on standing

must be interpretedbroadly. Usually, wouldn’t say that Comm decision addressed to

German govt can be challenged by individual. Still, need to preventactio popularis.➡ There isindividual concern: if

➡ decision affects them by reason of certain attributes which are peculiar to

them, or

➡ by reason of circumstances in which they are differentiated fromall others,

➡ hence distinguished them individually just as in the case of the person

addressed.

➡ However, A was importer of clementines, this was commercial activity which

anyone could take up. Hence no indiv concern!

➡ Criticism:

➡ Pragmatically speaking, the test is economically unrealistic - limited number

of firms in industry is determined by supply and demand. Further, it takes

time and resources for potential traders to enter the market (ignores practical

realities that determine number of traders in an open category).

➡ Conceptually speaking, the test imposes too high a threshold, making it

literally impossible for A to succeed. Further, ECJ has held that test for

standing should be judged when application for review is lodged, yet ECJ

also saying that activity could be carried out by anyoneat any time - focus

shifts to ill-defined future.

➡ Hence, basically impossible unless challenged decision had retrospective

impact!

➡ Because of element of retroactivity (looking to closed class of applicants), we

exclude potential applicants who could be affected much more in the future.

➡ JURISPRUDENCE: higher degree of individualisation than present inPlaumann is

required:

➡ Toepfer, 1965: applied for import licence before measure enters into force

➡ Piraiki-Patraiki, 1985: pending contracts entered into before measure was adopted.

➡ Comm v Infront, 2008: where measure has specific object of altering rights

acquired by indiv prior to adoption of the measure.

➡ Measures in the form of Regulations/Directives?

➡ True Regs are not open to review (too general - no indiv concern!)

➡ Abstract terminology test (stricter!)➡ Exemplified inCalpak SpA v Comm, 1980: ECJ has to look beyondform, to

determine if the measure is really a Reg in substance. A Reg will be a true

Reg if it applied to ‘objectively determined situationsand produces legal

effects with regard to categories of persons described in a generalised and

abstract manner’, hence not be open to review.

➡ Criticism: always possible to draft norms in this way, especially since ECJ

held that knowledge of number/identity of those affected would not preclude

norm from being held to be a true Reg, immune from attack.

➡ Closed category test

➡ According to the above, true Regs are not open to review.

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➡ BUT inCodorniu v Council, 1994,ECJ held that a measure might be a

‘true’ Reg according to the abstract terminology test, yet nonetheless be of

indiv concern!

➡ Despite this attempt at liberalisation, the post-Codorniu approach has largely

been purePlaumann.

➡ Hence,Buralux v Council, 1994: ECJ held mere fact that it was possible todetermine number/identity of those affected did not mean that Reg was of

indiv concern,as long as the measure was abstractly formulated.Indiv

concern to be determined by thePlaumann test.

➡ Delegated acts? Probably quite hard for A to show standing, since delegated acts are

defined as non-legislative acts ofgeneralapplication.

➡ Instances where ECJ has been more liberal in finding standing:

i. Specific right being infringed:Codorniu, 1994: first opening up of thePlaumann

test. Court held if you have a specific right that the rule invalidates (here, trademark

invalidated by regulation), then A might have standing.

➡Impact not that great...seen more as a once-off decision. Extreme facts -Reg completely took away the right. Never successfully argued thereafter,

though quote often.

➡ CfCassa Nazionale v EU Council, 1996: court rejected A’s attempt to

demonstrate such a “specific right”. High threshold. Requirements unclear.

ii. In the interests of democracy -Les Verts v EP, 1986.

iii. A involved in procedure where procedural regulations laid down private

parties’ rights of participation, in recognition of their legitimate interest in

outcome.Usually happens in the following 3 subject areas...

a. Anti-dumping

➡ Anti-dumping regs meant to prevent non-MSs from selling goods toocheaply within the EU

➡ Anti-dumping duties had to be imposed by Reg (not decisions), hence

if Court held that Reg was not actually a Reg, then arguably Comm

didn’t have power to impose the measure.

➡ Plausible applicants:

➡ 1) firm initiating complaint about dumping, who felt the duty was too

low;

➡ 2) producer subject to anti-dumping duty ( Allied Corporationcase,

1984 - can have indiv concern insofar as A was identified in the

measure or involved in the preliminary investigation);➡ 3) importer of product against which anti-dumping duty was imposed

(Extramet v Council, 1991: importer had standing, but only cos it was

largest importer, was also end-user, and business activities were

highly dependent on and affected by these imports).

b. Competition

➡ Regulated by art 101 and 102 TFEU.

➡ Old regime allowed A to make application to Comm, showing evidence

of breach of these articles (under art 3(2) Reg 17)

➡ Metro GmbH v Comm, 1977: decision of Comm was addressed to

another, but adopted cos of complaint submitted by M. ECJ held that

those entitled (under art 3(2)) to make application to Comm should be

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able to institute proceedings to protect their legit interests, if their

request is not fully complied with.

c. State aid

➡ Provision of state aid is regulated by art 107 to 109 TFEU (prevent

distortion of free mkt competition due to govt assistance)

➡ While there is no directly comparable procedural rights as in (ii) above,ECJ inCOFAZ v Comm, 1986, reasoned by analogy to theMetro and

Timex cases, holding that As played a comparable role, especially cos

art 108(2) permitted undertakings concerned to submit comments to

Comm. Hence undertakings were granted standing, but only if their

market position was significantly affected by the disputed aid!

i. Extent of damage suffered: only one case so far (Extramet) - exceptional!

➡ Extramet: importer of potash suffered from reg that favoured the only union

producer - entire business in danger! Some would say this is anti-dumping

above, but most agree that court showed willingness cos of extreme

manifest impact. More generous in allowing challenge.

➡ Vs restrictive interpretation ofPlaumann?Closed class + specific duty imposed by Treaty

on EU institution to take A’s case into account

➡ Earlier case law seemed to imply either characteristic would suffice...BUT later law

indicates requirements arecumulative

➡ Piraiki-Patraiki, 1985: cotton producers distinguished based on whether they

already had contracts for export of cotton prior to before import ban was imposed -

closed class in itself sufficient

➡ CfSofrimport, 1990; traders with goods already in transit allowed to

challenge import ban on apples, but only if disputed rules required Comm to

take account of special position of goods in transit - closed class in itself not

sufficient

➡  Antillean Rice Mills, 2001:appliedPiraiki-Patraiki and held that there was specific

duty here to concerns of litigant into account. But here, if you look closely, there

wasn’t exactly a closed class.

➡ Do associations have standing?FEDEROLIO guidelines  trade association will have➔

standing in 3 situations (only):

a. Where legal provision expressly grants TA series of procedural rights -CCE deVital and Others v Comm, 1995

b. Where trade association represents interests of undertakings entitled to bring

proceedings in their own right, individually ➔ Confederation Espanola de

Transporte de Mercancias v Comm, 2000

c. Where trade association is differentiated because its own interests as an

association are affected, especially its position as negotiator - itself has indiv

standing underPlaumann -Van der Kooy v Comm, 1988

 If not, no standing, since non-members could still enter economic activity, even if at➔

present, all those possibly concerned are your members -Greenpeace v Comm, 1998.

← **Reform of test of individual concern?

➡ ECJ’s approach often criticised as being too restrictive, but ECJ defends it on grounds of

Treaty givingcomprehensive mechanism for legal protection, cos of availability of indirect

route under art 267 TFEU.

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➡ Much struggle by private companies to overcome this strict standard - still prefer direct

action rather than prelim ref route, since no need to convince national court; faster and

cheaper.

➡ Most notable criticism is[AG Jacobs’] scrutiny inUPA v Council, 2002:

➡ Current shortfalls← ± indirect route (preliminary ruling) is not sufficient, since A can’t control whether ref is made, what

measures are referred, nor what grounds of invalidity of raised = no true right of access.

Hence, there might be denial of justice.

← ± legal certainty militates in favour of a general measure being subject to review ASAP, not only after

implementing measures have been adopted

← ± indirect challenges are subject to procedural disadvantages (eg. Delay, costs)

➡ Critique of proposed solutions

← ± these deficiencies cannot be overcome just by allowingexceptional standing to A who has no way

of triggering reference for prelim ruling under national law - no basis in the Treaty and

would lead to inequality across MSs. Would require EC courts to interpret and apply

national rules!

← ± also insufficient to oblige MSs’ legal systems to ensure that prelim refs are generally available -

doesn’t address procedural issues, difficulties of monitoring/enforcement, interference

with national procedural autonomy

➡ Proposed solution

← ± hence, only way is to reform the test for indiv concern itself, so that A is deemed individual

concerned where the Community measure has, or is liable to have, asubstantial

adverse effect on his interests.

← -resolves all the above problems

← -removes current anomaly that the more the number of persons affected, the less likely that effective

JR will be available

← -replaces increasingly complex and unpredictable rules on standing.

➡ BUTECJ inUPA then declined to follow AG Jacobs’ approach. Instead:

➡ Reiterated that Treaty established complete system of legal remedies and

procedures

➡ ***it is for MSs to establish system of legal remedies and procedures which ensure

respect for right to effective judicial protection

➡National courts should interpret and apply national procedural rules onexercise of rights of action compatibly with allowing challenges to validity of

Community acts

➡ ECJ cannot examine and interpret national law - beyond its jurisdiction

➡ While condition of direct and individual concern must be interpreted in light of

principle of effective judicial protection, can’t be too liberal and effectively set aside

the condition which is expressly stated in the Treaties, since this would go beyond

 jurisdiction conferred by Treaties.

➡ So today,Plaumann is still good law!

➡ Criticism of ECJ’s reasoning

➡ ECJ mostly ignored AG Jacobs’ analysis of the difficulties indivs face in using art

267 (indirect route) - procedural, and its nature as a reference system. Also

substantive - indiv might not be able to challenge illegality of the measure in

national courts without first acting in contravention of it.

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➡ ECJ’s strategy of getting national courts to interpret national procedural rules

compatibly to allow applicants to challenge EU norms of general application does

not resolve procedural difficulties, nor problems cos of discretionary nature of the

indirect route! Doesn’t address issue that A might first have to contravene the rule!

➡ Preliminary rulings will go to ECJ, yet same issues could have been heard by

General Court if admissible as a direct challenge.➡ ECJ’s argument based on boundaries of legitimate Treaty interpretation is

unconvincing - Treaty always required indiv concern, but it is ECJ’s overly-

restrictive interpretation of this that is being criticised. ECJ has filled gaps for other

parts of art 263 where it felt it was warranted - not evident why AG Jacobs’

interpretation would transgress bounds of interpretation.

➡ In normative terms, those who have suffered substantial impact should have

access to JR! This aligns with national legal orders.

➡ No reason why there would be increase in number of cases: fact that art 263 is

restrictive forces As to use art 267, over which ECJ has less control. EU Courts

can also influence number of cases brought through the standards of review it

applies.

III. Regulatory act which does not entail implementing measures, & is of direct concern to A

➡ Introduced by the Lisbon Treaty, to amend the rules on standing following above criticism!

➡ Proponents thought ECJ would give “regulatory act” wide interpretation, so we could do

away with the problematic “individual concern”. But ECJ didn’t follow expectations -

instead, looked at textual meaning - said since “legislative acts” is terminology used

elsewhere, then “regulatory act’ must mean something different!

➡ Hence, definition of this term is super important - determines barriers A must

surpass!

➡ Inuit case, 2011: Gen Court confirmed that “regulatory act” covers all acts of general

applicationapart fromlegislative acts.Legislative acts can only be challenged under first

or second channel!

➡ “regulatory act” = secondary norms, not primary legislative acts.

➡ Doesn’t sit well with Lisbon classification of legal acts: does it meanany legally

binding act (legislative/delegated/implementing), or does it have to take form of

regulation/decision which does not entail implementing measures?

➡ It has been proposed that the narrowest interpretation aligns with the drafters’

intent: only delegated acts in the form of regulations/decisions that are of direct

concern and do not entail implementing measures.

←  ➔but if this is so, it doesn’t really address the above problems on standing.➡ Hence, to alleviate the difficulties, should be interpreted as covering any legislative,

delegated or implementing act which does not entail implementing measures

(hence excluding directives)

←  ➔remains to be seen if ECJ will adopt this approach

➡ “implementing measure”

➡ Natural meaning: Regulations and (most) decisions do not require any measure to

be implemented into the national legal order - directly applicable.

➡ But directives do!

➡ True that for Regs, MSs might need to modify laws to comply with/fulfil demands,

but this should not preclude recourse to the liberalised standing rules - would also

cause inconsistency across MSs. Further, this factor depends on national law, not

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the EU regulatory act itself, hence not really accurate to say that the EU act

‘entailed’ implementing measures.

➡ **Microban case, 2011: general court found that an act that does not entail

implementing measure must leave no discretion to its addressee - implementation,

if any, must bepurely automatic and result only from Community rules (not any

other rules). If there’s only one valid legal option, then there is no true discretion.←  ➔see new case of Arcelor.

➡ **must be aware of the above discussion when answering problem question!

ART 277: PLEA OF ILLEGALITY• Used where A wishes to challenge, in the course of proceedings initiated for a different reason, the

legality of some other measure. Latter measure being challenged indirectly must be a general act.

• Eg. When challenging a decision of direct and indiv concern, A wishes to raise legality of the Reg on

which the decision is based.

★ SeeSimmenthal for typical case

• Same grounds of annulment as for annulment.

• Hence NOT an independent course of action.

★ Time limit for principal action still applies!

★ Must have real connection between principal decision being challenged, and the general

measure of which legality is being contested.

• Cannot be used in proceedings before national court - only in proceedings brought before ECJ under

some other Treaty provision (incidental + limited effect)

• Can only be used to challenge acts ofgeneral application (usually Regs/directives made pursuant

to arts 289 or 290 TFEU).

• This is a test of substance!Simmenthal case, 1979:★ A wanted to use plea of illegality to challenge certain Regs and notices, which formed legal

basis of the contested decision.

★ ECJ held that art 277 expresses a general principle conferring upon a party to proceedings the

right to challenge validity of previous acts which form the legal basis of the decision which is

being attacked, if party was NOT entitled to bring direction action against those acts.

★ Hence, has to include acts which, though not being in form of Reg, still produce similar effects

and hence cannot be challenged via direct action (too general) - need a wide interpretation of

the plea of illegality!

• Who can use the provision?

★Available to private parties, UNLESS it is clear that act could have been challenged directlyunder art 263 (where there was indiv + direct concern).

★ Greater controversy overprivileged applicants:

➡ [Bebr]: NO, since privileged applicants can challengeany binding EU act under art 263,

subject to time limit.

➡ [Barav]: YES. Irregularities in general act might appear only after relevant

implementation measures are adopted, hence after the time limit.

➡ ECJ decided that MS can invoke use art 277 even if it did not contest measure within art

263’s time limit (hence agreeing withBarav)

➡ Textual analysis: art 277 refers to “any party”

➡ There may be good reasons why MSs did not challenge act directly within time

limit!

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ART 258-260: ENFORCEMENT ACTIONS AGAINST MEMBER STATES

Overview

• Basically, whereMS has breached Union law. Proceedings can be brought by Comm or other MS,but NOT individual - indiv claim limited to state liability. Aim is to obtain declaration by ECJ that MS

failed to fulfil Treaty obligations (declaratory judgment!)

• Elements:

1. MS in breach of EU law

2. Decide if it’s Comm v MS or MS v MS

3. If it’s Comm v MS: i) procedure administrative phase, judicial phase, ii) declaratory judgment, iii)

penalties under art 260 TFEU.

4. NB: MSs usually reluctant to bring case themselves - try to get Comm to take on issue instead,

to avoid political ramifications.

• Key provisions:

★ Art 17(1) TEU: gives Comm task of ensuring and overseeing application of EU law - monitor MS

compliance.

★ Art 258 TFEU: general enforcement procedure

➡ Elite diplomatic channel for amicable dispute resolution

➡ Allow indivs to complaint to Comm about breaches of EU law

➡ ‘objective’ law enforcement tool for Comm

★ Art 260 TFEU: Comm can requestpenalty payment if MS fails to comply with previous

 judgment under art 258 (increasingly used!)

• 4 stages to the infringement procedure (administrative, then judicial):

i. Pre-contentious stage: MS has chance to explain position, and reach agreement with Comm.Comm will start off negotiations with the MS’ Permanent Representative

ii. Formal notification: MS gets letter of formal notice from Comm, detailing specific infringement.

Allows MS reasonable period to reply/submit observations.

←  ➔possible further round of discussions

iii. Reasoned opinion: issued by Comm, to which MS must comply within reasonable time.

iv. Referral: Comm refers matter to ECJ (has discretion whether to do so - no automatic transfer of

 jurisdiction to ECJ)

←  ➔ ECJ will give adeclaratory judgment (whether MS breached law) - might prescribe interim relief

under art 279.

• NB:under art 259:MSs can initiate action against another - has to bring matter before Comm first

(but doesn’t have to contact the other MS), and Comm will deliver reasoned opinion after both MSs

have chance to make oral and written submission.

←  ➔ but seems like complainant MS can bring case to ECJ even where Comm thinks there has not

been a breach of EU law!

←  ➔rarely used - political reasons. MSs can also intervene in cases brought by Comm.

★ InSpain v UK, 2000: Spain brought action against UK on UK’s extension of voting rights in EP

elections to Gibraltar residents.

★ Hungary v Slovak Republic, 2012:Hungary’s president wanted to travel to village in Slovak,

where statue of founding saint of Catholic Church of Hungary was to be unveiled. But visit

planned to be on anniversary of Hungary taking over Czech Republic in 1968. Hence Slovakrefused permission to enter. Hungary complained to Comm - Comm issued letter of formal

notice to Slovak, but Comm didn’t really want to get involved in political issue.

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➡ Comm in reasoned opinion said it didn’t perceive potential violation of EU law. In any

case, said it was justified.

➡ Hungary brought case to ECJ. Slovak argued it was matter for public international law,

cos talking about foreign head of state wanting to gain access for official reasonsas head

of state.

➡ ECJ rejected this: scope of EU law is for EU to decide! Hungary does not have to passany further admissibility hurdles.Buteventually held Heads of States have to request

official permission under public international law - host MS has to be aware and give

consent cos of all the immunities etc.

• Over the years, main criticisms such as 1) lack of effectiveness; 2) absence of role for indiv Cs; 3)

elite, unresponsive attitude of the Comm have gradually been addressed!

• Relationship to prelim ref procedure

★ Van Gend en Loos, 1963: said that arts 258 and 267 are complementary. Indiv enforcement is

inaddition to enforcement by MS/Commission. Held that the 2 are not mutually exclusive! All

have common aim of ensuringgreater adherence to EU law. Comm does not have monopoly

in enforcing EU law - rather, it is a complete system of judicial protection.

★ CfMolkerei-Zentrale, 1968: ECJ emphasised the distinction between proceedings brought by

indiv (intended to protect indiv rights in the specific case), and Commission enforcement

proceedings (intended to ensure general and uniform observance of EC law) - different objects,

aims and effects!

★ Hence, inComm v UK, 2006: ECJ rejected UK’s argument that Comm infringement proceedings

ought to be inadmissible on basis that national judicial proceedings were pending.

★ Also, inComm v Germany, 1985: ECJ held that direct effect of Comm provision (indivs’ ability to

enforce it before national courts) was NO defence to Comm action for failure to implement!

Function and Operation of the Infringement Procedure• Art 258 TFEU: where Comm thinks MS failed to fulfil Treaty obligation, it will deliver reasoned

opinion. If further non-compliance, it will bring matter before ECJ!

★ Lisbon’s change: ‘the Treaties’: infringement proceedings can now be brought for violations of

obligations under both TEU and TFEU, except CFSP which is still beyond ECJ’s jurisdiction

(reflects abolition of the ‘pillar’ structure).

Nature of the procedure:Comm initiates either on its own, or in response to complaint.

• Comm has acknowledged that citizens’ complaints is a significant source, suggesting procedure

contributes to a more participatory Community.

★ Developed standard complaint form in 1999 to facilitate indiv use• But also emphasised that enforcement procedure NOT primarily meant as means of redress for

indivs, rather it is objective mechanism for ensuring MS compliance - Comm’sdiscretion in deciding

whether to initiate proceedings, andbilateral (not trilateral) nature.

★ Even where there are clear violations, this does notcompel Comm to bring enforcement

proceedings! Comm still has a discretion, though in a Communication of 2002, Comm itself said

if there’s clear evidence it will start proceedings.

• Hence, the indiv’s role is imprecise and varies.

• But since establishment ofOmbudsman’s office, indivs have complained about Comm’s procedures,

and Ombudsman held investigation of own initiative in 1996.

★Comm stopped practice of failing to inform indiv Cs where case was terminated.★ In 2002, Comm published consolidated version of internal procedural rules in a Communication,

allowing Ombudsman to assess Comm’s performance. Also aided transparency/good admin.

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←  ➔includes standard form for complaints to be submitted to Comm

• Access to documents: complainants/interested parties often complain of difficulty in accessing docs

related to infringement, while Comm uses exception in Reg on access to docs (see previous sup’s

notes) on ‘inspections, investigations and audits’. ECJ generally supports Comm.

★ Petrie v Comm, 2001: CFI underscored bilateral nature of infringement proceedings

★ CfBavarian Lager II, 2007: CFI held disclosure of docs relating to proceedings closed 6 yearsago would not jeopardise Comm’s investigations, hence not within exception.

★ Sweden/API v Comm, 2010: ECJ held there is general presumption that disclosure of pleadings

would undermine protection of those proceedings, butrebuttable! Also, after ECJ has delivered

 judgment for art 258 proceedings, docs relating to Comm’s investigations in context of these

proceedings are NOT within exception, even if art 260 proceedings are still pending (no

presumption of undermining art 260 case)!

Comm’s discretion?Concerns that the Comm uses discretion to bring proceedings in arbitrary manner, or

unfairly/oppressively. Comm might have political motivations.

★ Art 258(2): indicates that after it issues reasoned opinion indicating breach, Comm has discretion

whether to refer to ECJ or not [between stages (3) and (4)].

➡ ECJ carries out objective analysis: will only examine if infringement alleged by Comm exists -

willnot look at Comm’s motives for bringing the action (Comm v UK, 1988). Comm also acts in

‘general interest’, hence does not have to have specific interest!

➡ Here, UK tried to argue that Comm was acting for political reasons. But ECJ affirmed Comm has

full discretion as to why it will pursue a certain breach.

★ Also generally agreed that Comm has discretion whether/when to issue reasoned opinion.

★ Discretion as totiming?

➡ Comm v Netherlands, 1991: there are limits to Comm’s discretion, in respect of length of time

taken to bring proceedings. Excessive delay might be prejudicial (though not on the facts, where

Netherlands argued period of >5 years from time of first letter, to bringing infringement

proceedings, was excessive) - more difficult for MS to refute Comm’s arguments, hence

infringing the rights of the defence.

➡ CfComm v Austria, 2002: ECJ rejected argument that given length of time since events which

were subject of infringement proceedings, proceedings would violate principle of legal certainty

and indivs’ acquired rights.

➡ As for discretion on timing after issuing of reasoned opinion (above cases are on

commencement of infringement proceedingsin the first place):

➡ Comm v Ireland, 1984: though it allowed the Comm action to be admissible, ECJ

reprimanded Comm for the short length of time it allowed Denmark for compliance with

the reasoned opinion.➡ Comm v Belgium, 1988: proceedings against Belgium deemed inadmissible cos of short

time allowed for responding to letter of formal notice and reasoned opinion. Reasonable

period must be allowed, unless in circumstances ofurgency /where MS was fullyaware

of Comm’s views long before procedure started.

★ Non-privileged parties sometimes try bringing ‘failure to act’ actions (art 265 TFEU) against Comm,

for Comm’s failure to initiate infringement proceedings under art 258.

➡ Rejected by ECJ inStar Fruit case, 1987: clear that art 258 does not bind Comm to commence

proceedings - Comm has discretion!

★ Justification for discretion (and lack of role for indivs)?[Snyder] highlights that the main form of

dispute settlement used by the Comm isnegotiation, of which the ability to initiate infringement

proceedings is but one part. Comm also uses litigation as part of long-term strategy, with focus on

establishingbasic principles/playing for rules, not just winning each case.

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★ Self-imposed admin constraints (by the Comm):

➡ 1989: decided to bring immediate infringement proceedings against any defaulting MS as soon

as time limit for implementation of directive has passed

➡ 1990: routinely issued letters of formal notice whenever MS fail to notify national measures

implementing directives due for implementation

➡ Also codified its own internal procedural rules, in response to pressure from Ombudsman

The reasoned opinion:

★ FUNCTION: provides procedural protection for MS (natural justice); official means of communication

to MS about substance of complaint, and specifies time limit for compliance.

★ FORM: no formalism, and is not subject to review (action for annulment) because it does NOT have

binding effect

←  ➔but MS can contest lack of adequate reasoning by raising matter before ECJ if proceedings reach

the referral stage.

★ **CONTENT:

➡ Art 296 TFEU: general rule that legal acts must state reasons on which they are based

➡ Art 258: specific requirement of reasoning in relation to opinions issued by Comm

➡ Comm v Italy, 1961: must havecoherent statement of the reasons which led the Comm to

believe that MS failed to fulfil an obligation under the Treaty.

➡ But no need to address every argument made by MS at pre-litigation stage, nor indicate

steps to be taken by MS to remedy the breach.

➡ But Comm must respond to MS’ reply to letter of formal notice

➡ Scope/subject matter of proceedings is delimited by letter of formal notice _ reasoned

opinion.Essence of complaint must be the same throughout!

➡ Comm cannot later amend substantive content of submission, even if both parties want

ECJ to consider other aspects of MS’ conduct - must start art 258 procedure afresh! But

note that MS is not bound to raise defence during pre-litigation stage - can raise new

matters as defence before ECJ!

➡ But if Comm’s application to ECJ found inadmissible on grounds that it is based on

objection different from that in reasoned opinion, it will just have to lodge fresh app before

ECJ based on same objections as the reasoned opinion (no need to redo pre-liti!)

➡ ***BUT note that if Comm’s application to ECJ differs from reasoned opinion in a manner

favouring MS - limits what is in the reasoned opinion, it will be accepted! Can also allow

extension of subject matter to eventsafter the reasoned opinion, as long as they are of

the same kind/constitute same conduct, or is used to show general and persistent

pattern/practice (not specific violation)

★ Confidentiality: can indiv complainants disappointed by Comm’s failure to bring proceedings againstMS seek access to the reasoned opinion/other relevant docs?

➡ WWF case, 1995: CFI held that MSs entitled to expect confidentiality of Comm, hence court

was not prepared to order disclosure, even if investigation closed some time ago.

➡ Petrie case, 1999:CFI held that need for confidentiality remains even after matter is brought

before ECJ, up until ECJ delivers judgment. Objective of obtaining amicable resolution applies

all the way before judgment is given!

➡ Note that since 2002, Comm has maintained electronically accessible list of decisions on

infringement proceedings. Also occasionally publishes reasoned opinions.

★ Can MS argue before ECJ that breach has already remedied?

➡ NOT a defence if procedural conditions for bringing art 258 proceedings have been fulfilled, and

period for compliance (laid down by Comm) has expired w/o adequate response. ECJ only looks

to see if MS was in breach at time of expiry of period laid down in RO, not at time of hearing.

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➡ Different from ECJ’s approach in actions against Union institution for failure to act (art 265)!

Reasons:

1. Comm has continued interest in bringing action (prevent MSs from undermining

infringement proceedings, and MSs might re-commence same conduct later)

2. ECJ should be able to rule on legality of short breaches - might not be less serious than

longer breaches (though not if effects of infringement ended before expiry of period)

3. Judgment can establish MS’ liability (eg. For indiv’s action for redress before nat courts)

Necessary Elements

Must havefailure ofmember state to fulfil aTreaty obligation 

1) Positive act vs omission = both can constitute failure by MS to fulfil Treaty obligation!

Examples of positive acts: 

➡ Comm v UK, 1994: enactment of legislation expressly contravening EU law. UK had enacted

legislation that if you want to fly UK flag on ship, ship must be British-owned - direct

contravention of free movement of services/freedom of establishment provisions.

➡ Comm v Greece, 2009: includes administrative acts/practices. Rejected MS’ argument that govt

didn’t have direct influence on admin practices - insufficient justification for continued breach of

Eu law

Examples of omissions:

➡ Failure of MS to implement Directives correctly (partial or complete).

➡ Comm v France (Strawberries), 1997:where nat authorities stood by without doing anything to

prevent sustained illegal action by private parties. Failure to stop destructive protests against

imports was was so glaring that France had overstepped limits of discretion (even though MSsusually have wide discretion as to organisation of police systems).

2) What is a member state?(usually not the govtitself which is acting in breach of EU law)

• Comm v Belgium, 1970: just cos institution responsible is constitutionally independent is NOT a

 justification. MS responsible regardless of which agency of the State is responsible.

★ Also liable for acts/omissions of constitutionally independent public authorities (Comm v Ireland,

1982). Here entity received govt funding.

★ And for constituent state within federation (Comm v Greece, 1988)

★ And even private companies if govt exercises considerable influence over them (Comm v

Germany, 2002)

• Although it is nat govt who will appear before ECJ, the defendant is the State - legislature/judiciary

are organs of the state, and their acts may trigger enforcement proceedings.

• But can enforcement action be brought againstnational courts? Huge discussion inKobler, 2003: 

★ Contro cos in democratic society, govt not meant to have influence over judiciary (and

legislative). Rather, Parlt should be controlling govt, with judiciary being entirely independent.

★ Here, focus on question of representation, not liability.

★ ECJ in this case said that if MS sup ct made mistake in application of EU law, it did soas a rep

of the State, hence can bring enforcement action against judiciary’s action!

Types of Breaches of EU Law Art 258 only contains a very general description of MS violation: can includeactions/omissions, and failure to

implement any rule/standard which is an effective part of EU law.

A. Breach of the obligation of sincere cooperation under art 4(3) TEU

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• Comm v Netherlands, 1982: Comm alleged that MS failed to supply info on its compliance, as

required by the Directive, and due to this failure, it was entitled to presume that MS failed to implement

the necessary national measures. But in application to ECJ, breach identified was failure to implement.

★ ECJ rejected Comm’s argument - it is Comm’s responsibility to prove that MS did not fulfil

obligation, and Comm cannot rely on presumption in doing so.

★ Held that all MSs have obligation under art 4(3) TEU to facilitate achievement of Comm’s tasks(including Comm’s duty to monitor compliance with the Treaty).

★ Though inComm v Greece, 1988: ECJ held that once Comm has produced sufficient evidence,

MS cannot simply deny allegations, but has to contest it in asubstantive way. Also, inComm v

Ireland, 1999: established that Comm doesn’t have to show harmful effects of the nat legislation

• Where MS fails to respond at pre-litigation stage, it will be hard for Comm to ascertain if there is

breach. Hence, Comm will usually initiateseparate enforcement proceedings on basis of breach of the

obligation of cooperation.

• CONTENT: not just positive obligation on MS not to violate EU law, but also to prevent others (eg.

Citizens) from frustrating provisions of the treaty.

★ Comm v France, 1997 -strawberries case

★ Comm v Greece, 1989: obligation will be breached if MS fails to penalise those who infringe EU

law in same way as those who infringe nat law - effectively, proportionately and dissuasively.

B. Inadequate implementation of EU law

• Comm v France, 1974: French legislature failed to repeal nat provision on racial make-up of ship

crew, claiming verbal directions given to naval authorities sufficed to comply with EC law. ECJ rejected!

• For directives: not directly applicable = always incumbent on MS to implement them fully.

★ Fact that they might have vertical/indirect DE does not reduce obligation on MS.

★ Mere admin practices will not suffice because they 1) can be altered at will by administration; 2)

lack sufficient publicity.

➡ Comm v Germany, 1985: German govt argued that general objection to admin practices

were inapplicable here, as the admin practice couldn’t be changed arbitrarily, on the facts,

and had been given sufficient publicity. ECJ agreed!

➡ Held that implementation of directive does not necessarily require legislative action, as

long as the 2 criterion are fulfilled.

★ Also possible that ECJ might hold ‘indirect effect’ of directive would require national court to

construe relevant national law in light of wording and purpose of the Directive, so as to give

effect to its aim - (proceedings by Comm against UK, relating to Product Liability Directive)

• If national legislation has been subject to differing judicial interpretation, this is not clear enough for

compliance with EU law!

C. Breaches which interfere with EU external relations

• Where MS’ conduct allegedly

1. Violates international agreement binding on EU, or

2. Otherwise violates obligation of sincere cooperation by jeopardising EU objectives in external

relations field.

➡ Open Skies case, 2002: Comm brought proceedings against MSs for having entered

bilateral negotiations with US on air transport agreements

➡ Comm v Sweden, 2010:ECJ held Sweden was in breach, by unilaterally proposing to list

particular substance under Stockholm Convention before EU had time to propose its

position, in area of shared competence.

D. Systemic and persistent breaches or general practices

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• Where each breach itself is relatively minor, but is part of apattern of inadequate implementation

and compliance in practice.

• Possible for disputed act to be anadministrative act, but higher threshold to find breach here.

★ Practice has to be consistent and general

★ MS’ breach must be shown by ‘sufficiently documented and detailed proof of the alleged

practice’ - different kind of proof compared to alleged breach by national legislation.★ Comm v Ireland, 2005: ECJ held that general admin practice can be deduced from selected

number of indiv infringements, allowing finding of ‘general and persistent breach’ against MS.

Once Comm has shown sufficient evidence of indiv complaints/act, to show persistent and

repeated practice of breach, it is for MS to challenge the evidence in detail.

E. Action by the courts of a MS

• Failure by MS’ judiciary to comply with EU law has NEVER been basis of art 258 judgment -

politically sensitive! But ECJ holds that MSs are responsible for (in)action by constitutionally

independent organs of the state, and might incur liable in damages.

• NB: in 2004, Comm issued reasoned opinion against Sweden on basis of its Sup Ct’s failure to make

prelim ref to ECJ, and absence of any national law/reg for prelim ref procedure. But resolved prior to

 judgment by ECJ!

Defences by MSs

A. Force majeure

• Usually rejected by ECJ! MS is responsible for breach, regardless of which agency of the State

caused the failure to fulfil obligations

★ Even fact that institution is constitutionally independent is not a defence (Comm v Belgium,

1970)

★ Comm v Belgium, 1970: ECJ rejected dissolution of Parlt as a defence - normally have

significant amount of time for implementation anyway, longer than it’ll take to dissolve Parlt.

• MS cannot argue that national provisions/circumstances/practices justify failure -Comm v Italy, 1984

• In a rare case ofComm v Italy, 1970,ECJ agreedforce majeure could be pleaded where a bomb

attack presented ‘insurmountable difficulties’ (but not on the facts!)

B. Lack of intentional wrongdoing by MS

• ECJ has rejected such arguments, holding that admissibility of art 258 action is based on objective

test, whether MS failed to fulfil obligation. No need to look for subjective intent/deliberateness.

C. EU measure on which infringement proceedings are based is illegal

• Comm v Greece, 1988: MS contested lawfulness of Comm’s initial decision, after action brought

against it for failing to amend national legislation.

★ **ECJ held that system of remedies under the Treaty distinguishes between (i) remedies under

art 258/259 (declaration that MS failed to fulfil obligations), and (ii) art 263/265 (JR of measures

adopted by EC institutions). Hence, in absence of express provision of Treaty, MS can’t plead

unlawfulness of decision under (ii) as defence to action under (i).

★ Once time limit for art 263 expired, MS cannot call into question validity of EU measure! Only

possible defence will be absolute impossibility of implementation.

• If MS had objected to decision, it had opportunity to bring direct action for annulment under art 263.

• But plea of illegalitymight be defence where Union measure was so gravely flawed it was legally

‘non-existent’, or if it was aregulation(as opposed to decision addressed to MS) andillegality was

not apparent to MS until Comm brought enforcement proceedings.

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D. Other MSs also in breach

• NO! Not a defence. Community law differs from traditional forms and principles of international law -

less of a role for reciprocity to play.

• Commission v Luxembourg and Belgium, 1964: Treaty establishes new legal order - not limited to

creating reciprocal obligations. Hence, MSs not to take law into their own hands - no need to resort toself-enforcement/counter-measures, since we have Union courts to ensure compliance.

E. Internal difficulties/economic problems

• Lack of funds to implement certain legislation is NEVER accepted as justification!

←  ➔govt should have anticipated cost and voiced concerns during drafting stage.

• Comm v UK, 1979: no matter how great the practical difficulties of implementation are, MS still

bound by obligations!

F. MS does not apply conflicting national law in practice

•Comm v France (French Merchant Seamen), 1974: NOT good enough! Must actively change law/dosomething to ensure that all parties within territory are aware the conflicting law no longer applies.

Consequences of Art 258 Rulings; Pecuniary Penalty Under Art 260

Art 258 consequences

• Prior to introduction of art 260, one weakness of the infringement proceedings was that ECJ could

only make a finding of violation against defaulting MS.

★ Cannot order adoption of any specific measures, or otherwise dictate consequences of its

 judgment in the enforcement proceedings.

★ But note that ECJ might exceptionally, limit temporal effects of measures, for legal certainty, as

allowed inComm v Finland, 2009 (but not on the facts in this case)

Art 260: the pecuniary penalty

• Amended by theLisbon treaty

★ Before Lisbon, Comm would have to go through procedure (informal latter, letter of formal

notice, reasoned opinion etc) again to get ECJ to impose fine.

★ But now, where there is non-compliance, Comm will just issue formal letter of notice - no need to

submit another reasoned opinion again (art 260(2)).

★ Further, if it concerns non-implementation of directive, there is no need even for the formal

notice! (Art 260(3))

• Aim: give teeth to infringement procedure, incentivising MS’ compliance with ECJ rulings.

• Nature: more formally legal, and less diplomatic than art 258! Further sharpened by Lisbon’s

changes.

• The old version of art 260, prior to the Lisbon amendment, only provided for Comm to bring MS

before ECJ again forseconddeclaratory ruling. Changes

i) Comm no longer obliged to issue reasoned opinion first - faster, more efficient!

ii) Comm can directly seek pecuniary penalty where MS failed to notify measures transposing EU

directive (penalty not just limited to non-compliance with art 258 ECJ ruling!)

• Amount - Comm will specify recommended amount; ECJ has discretion but cannot exceed this

amount specified! Comm will propose amount, based onseriousness of infringement, duration,

and MS’ ability to pay.

←  ➔ current debate: MSs think Comm has to chooseeither lump sum or daily amount, but ECJ says

can have adoption of both - had both inComm v France, 2005.

←  ➔daily amount would seem more appropriate for a continuous breach.

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★ Comm v Italy, 2011: Italy wrongly made subsidies to many businesses - Italy said would take too

long to get back the illegal subsidies. ECJ agreed to reduce lump sum, but still imposed daily

amount as well to incentives Italy to do so asap.

★ Note that if MS doesn’t pay fine, will again be art 260 breach - might lead to further fine.

• No formal method for collection, but usually assumed that Comm can withhold payments due to MS

from other EU law funds.• Limits: Comm can’t seek injunction/order of specific action from ECJ. ECJ has no jurisdiction either

to require MS to comply with judgment for pecuniary penalty within specified time period!

• What if MS then complied with Comm’s reasoned opinionbefore judgment, but NOTbeforeexpiry of

period laid down in reasoned opinion?

★ Initially, seemed like ECJ would not impose penalty.

★ BUT with introduction of lump sum payments (in addition to periodic payments), ECJ has

clarified that it will beappropriate to impose alump sum payment (but not periodic penalty).

• Comm’s vs ECJ’s interpretation of the penalty:

★ Before ECJ developed jurisprudence,Comm published guidelines + memorandum proposing

calculation method in mid-1990s: amount reflects aim of sanction (effective compliance with EU

law ASAP), hence most appropriate means is a periodic penalty - penalties should bedeterrent

not symbolic (basically opposing lump sum).

★ Proposed daily penalty based on: 1) seriousness of infringement; 2) duration; 3) need to ensure

deterrence purpose is fulfilled.

★ But ECJ, since its first ruling on the pecuniary penalty inComm v Greece, 2000, has

emphasised that it isnot bound by Comm’s advice (but agrees in substance with much of it)

★ It was in 2004 that ECJ clearly diverged from Comm’s approach: inComm v France,it imposed

lump sum penalty for longstanding violation, alongside the periodic penalty, though Comm had

not recommended this.

➡ ECJ held that penalty provision’s objective was to induce defaulting MS to comply, hence

ensuring that EC law is applied.

➡ Purpose of periodic penalty: induces MS to terminate breach ASAP; purpose of lump

sum: based on assessment of effects of MS’ failure on public and private interests.

Different purposes! Hence possible to have both penalties imposed at the same time,

especially where breach has continued for a long time and is inclined to persist.

←  ➔fact that Comm hadn’t proposed lump sum penalty is not an obstacle!

➡ Rejected argument that MS’ rights of defence affected by it being unable to argue against

lump sum, since art 260 procedure is enforcingearlierart 258 judgment.

★ Following this seminal case, Comm amended its guidelines - acknowledged desirability of lump

sum payment where MS has delayed compliance reasonably. Adopted ECJ approach.

★ ECJ has rejected Comm’s suggestion of automatic imposition of lump sum if MS hasn’t yetcomplied by date set in reasoned opinion - whether to impose lump sum is atECJ’s discretion,

considering all relevant circumstances (case-by-case)

Interim measures (art 278/279)

• Can be sought inany case before the ECJ.

• Useful for Comm to seek simultaneously, when proceedings under art 258 are ongoing.

★ If breach found under art 258 proceedings, ECJ’s ruling does not have effect on impugned

national rule.

★ Art 278 TFEU: actions before ECJ generally do not have suspensory effect.

★ Art 279 TFEU: permits ECj to prescribe any necessary interim measures.

• Requirements (in ECJ’s Rules of Procedure):

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i. Circumstances giving rise to urgency: measures must be so as to prevent alleged injury, where

serious and irreparable harm to C’s interests are threatened.

ii. Factual + legal grounds establishing prima facie justification for measures sought

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← ART 267: PRELIMINARY RULINGS

Basics of the Preliminary Reference System

• Historical introduction:rare for international org to enter into direct correspondence with MSs. At

that time, EC law was thought to bespecialised area - hence need to refer questions of interpretation

to specialised courts. So started off with horizontal relationship - but now, moving to be one of vertical

hierarchy

★ Simmental, 1976: emphasis that r/s is one ofcooperation (horizontal) not hierarchy - ECJ not

empowered to investigate facts/look at grounds and purpose for request. However, in this case,

ECJ said where question of EU law is decided, it is automatically applicable to all MSs - not just

to the MS which requested for it.

• Significance:

★ Became vehicle through which important Union law concepts were developed (eg. Supremacy

inCosta v ENEL, direct effect inVan Gend en Loos).

★ Also means of indirect review of acts of EU institutions (Comm v Jego Quere, 2004).

★ Necessary to ensure uniform application of EU law (International Chemical Corporation v

 Amminstrazione delle Finanze, 1981). ECJ enjoys advantages over nat courts in ensuring

uniform application:

➡ Panoramic view of Union/institutions

➡ Detailed knowledge of Treaties/subordinate legislation

➡ Familiarity with the functioning of the Common market

➡ Can receive submissions from other Union institutions/MSs can intervene

➡ Can better address comparisons between language versions of text, being multi-nat

court.

• What questions can be referred? Two types

1. Questions on the interpretation of the Treaty (art 267(1)(a))

➡ Wider. ECJ has given many seminal judgments on DE and supremacy under this

2. Questions relating to validity and interpretation of EU actions (art 267(1)(b)) - eg. Where C

argues that EU Reg gives rise to rights directly enforceable in nat courts.

➡ For interpretation, ref can be made to clarify even non-legally-binding provisions (even for

non-binding acts) -Grimaldi case, 1989. Hence, open approach

➡ But for validity, only includes all EU acts having binding effect, excluding Treaties (Les

Verts: treaties are constitutional charter of Union, and ECJ does not have jurisdiction over

Treaty validity). Also excluding ECJ’s case law (Wunsche, 1986: must use proper review

procedure to challenge previous ECJ judgements, cannot use prelim ref procedure)

➡ Also includes issues of invalidity of EU law. This is issue for ECJ, not nat court, to decide.

Courts (distinction between 2 types)

• “court/tribunal”? 

★ Corbiau v Administration des Contributions, 1993: whether body is court/tribunal is question of

EU law! Here, ECJ held that tax administration is not court within sense of art 267.

★  Almelo, 1994: to be court/tribunal, body must:

➡ Be established by law

➡ Have permanent existence

➡ Exercise binding jurisdiction

➡ Be bound by rules of adversary procedure:Cartesio case, 2008:though art 267 does not

require proceedings to beinter partes, ref can only be made if there is case pending

before nat court, leading to decision of a judicial nature.

←  ➔ can’t make prelim ref for what is essentially anadministrative decision that doesn’t resolve legal

dispute!

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➡ Apply rule of law

➡ Be independent.

★ Further requirements in other cases:

➡ Broekmeulen v Huisarts Registration Commissie, 1981: must exercise official authority

(general medical council was final appeal body, despite being private association. So

yes!). If under MS’ legal system, task of implementing EU provisions is left toprofessional body acting under degree of govt supervision, and that body, in

conjunction with the public authorities, creates appeal procedures potentially

affecting EC rights, then it is essential that ECJ can rule on issues of

interpretation/validity arising out of such proceedings.

➡ Borker, 1980: must have judicial role

➡ Norse, 1982: must be closely linked to organisation of legal remedies through nat courts -

private arbitration tribunal usually isn’t, unless it is endorsed by public authority (eg. Under

Swedish labour law). But note in Almelo, 1994: body hearing appeals against arbitration

award = court/tribunal)

➡ Perfumes Christian Dior, 1997: can be court common to >1 MS - Benelux court on trade

marks. But must be from a MS.

★ Arbitration context? Depends on the nature of the arbitration; not sufficient just that body gives

 judgment according to law, and award is binding between parties. Must havecloser link

between arbitration procedure and the ordinary court system!

• Which courts or tribunalscan refer? (art 267(2)) - discretion!

★ Discretion to refer where Union law qn is raised in case pending before any national court

( Zabala Erasun v INEM, 1995)

★ Rheinmuhlen, 1974: “national courts have the widest discretion” - not restricted by EU law , in

the spirt of cooperation

←  ➔ recall AG Jacobs’ criticism - said prelim ref not real alternative to direct challenges cos of natcourts’ wide discretion.

★ Pigs Marketing Board v Redmond, 1978: nat court has discretion to refer “if it considers that a

decision on the question is necessary to enable it to give judgement”

←  ➔butLeclerc, 1995; it is nat court, having knowledge of the facts, which is in best position to decide

on necessity of prelim ruling to give judgment. Hence, if nat court refers, Court will in principle

be bound to give judgment.

★ But note nat court’s discretion only extends towhether or not to make prelim ref, not to

composition of question - ECJ can request more info to decide which questions to answer

•Which courts or tribunalsmust refer? (art 267(3)) - obligation!★ Rationale for imposing this duty is to prevent body of national case law that is not in accordance

with EU law from being established!

★ 2 interpretations:

1. The abstract theory: only bodies whose decisions arenever subject to review

←  ➔MSs would want this - don’t want to be subject to too many mandatory prelim refs

 2. The concrete theory: depends on whether the body’s decision is subject to appealin thetype of case in question.

★ ECJ’s jurisprudence seems to support the concrete theory.

➡ Costa v Enel, 1964: although magistrate’s decisions were capable of being appealed in

some instances, there was no right of appeal in theparticular case - allowed prelim ref!➡ Lyckeskog case, 2000: just cos appellate court decision was subject to prior declaration of

admissibility before it could be appealed to the Sup Ct did NOT mean that the appellate

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court’s decisions came within art 267(3) - procedural impediment to appeal did NOT

make it a final court. It is Sup Ct is the final court under obligation.

←  ➔ hence, question is whether there is any possible legal remedy, regardless of

practicability/subjection to restrictions.

• What iflower national court makes prelim ref, which isreversed on appeal by higher court?

★ Cartesio case, 2008:ECJ supported ability of lower courts to refer to ECJ, even in face ofopposition from higher court. It is up to the referring court alone (and not the appeal court) to

assess relevance and necessity of prelim ref. For clarity and legal certainty, ECJ will abide by

decision to make prelim ref, which will have full effect as long as it hasn’t been

revoked/amended by the referring court.

←  ➔ Facts: about registration of company under Hungarian law (before lowest courts) - ECJ held that

review of what was essentially administrative act is still inter-party procedure, between company

which wanted the registration, and lower court seeking to deny it.

• Can national courts be limited by national procedural rules as to whether they may raise

matter of EU lawof their own volition? (where not raised by indiv complainant) Note that some MSs’

courts are reluctant to make prelim refs - Germany, Poland, Czech. Especially for constitutional courts,

they seem themselves as outside ordinary judiciary structure. No such prob in UK where HOL has

been willing to make prelim refs.

★ Peterbroeck case, 1995: ECJ held such Belgian procedural rule was contrary to EU law!

Couldn’t be justified by legal certainty/proper conduct of procedure

★ Cf Van Schijndel, 1995: ECJ held there is no obligation on nat courts to abandon passive role

they have under domestic procedural rules.

★ But Asturcom, 2009: clarified that ECJ can impose duty to raise point of EU law, if court has

discretion to raise such point in analogous domestic situations (different from Van Schijndel,

where nat court was not allowed to step beyond passivity at all)

←

Existence of a Question

1. Where Union courts have already resolved the issue ( Acte eclaire)

National law in breach of EU law/prior ECJ rulings

• Where ECJ has already ruled on the matter!

• Da Costa case, 1973: facts and questions asked werematerially identical to those inVan Gend en

Loos

★ ECJ held that while art 267(3) imposes obligation on national courts/tribunals of last instance,

an interpretationalready given by ECJ (in a prior prelim ruling) may ‘deprive the obligation of its

purpose, and thus empty it of its substance’.

←  ➔especially so if question raised is materially identical to one already raised previously.

★ Still, art 267 always allows nat court to make prelim ref if it considers it desirable (formal terms),but if A does not raise some new factor/argument, ECJ will be strongly inclined to just restate

substance of the earlier case.

• Costa initiated what is, in effect, asystem of precedent. Developed in subsequent cases!

←  ➔applies even if ECJ answered question in different procedure (eg. Art 263)

• CILFIT case, 1982: Court of Cassation (Italy) made prelim ref on whether obligation to refer under art

267(3) was unconditional, or whether it was premised on existence of reasonable interpretative doubt.

★ ECJ highlighted that the prelim ref system wasnot a means of appeal/redress for parties.

★ National courts/tribunals, even under art 267(3), still have same discretion to decide whether

prelim ref is necessary for them to give judgment - hence will not have to make ref if the

interpretation of EC law is not relevant.

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★ Similarly, where previous ECJ decisions have already dealt with the point of law in question,

irrespective of the nature of proceedings and fact that qns at issue are not strictly identical, then

the obligation will be emptied of its substance too! (quotingCosta)

• Hence, ECJ rulings became precedent for national courts, subject to qualification that national court

can still make prelim ref if it wishes to!

Validity of EU legislation/act and prior ECJ rulings

• Above cases are where MS action allegedly violates the Treaty - issues ofinterpretation, but ECJ is

even more forceful where it is the impact of its previous decisions onvalidity of EU legislation which is

in issue!

• International Chemical Corporation case, 1981: Council Reg designed to reduce skimmed-milk

stocks, and P received aid but failed to buy skimmed-milk, hence P’s security forfeited by national

agency. Earlier ECJ case decided that the Reg was invalid cos of disproportionately high price, hence

P argued that security could not be forfeited - would be ensuring compliance with an invalid obligation.

★ ECJ held that main purpose of art 267 is to ensureuniform application of EC law.

★ Legal certainty requires that the ECJ having declared an EC act void, national court cannot

continue to apply the act !

★ Erga omnes effect: while ECJ’s declaration of validity of the EC act is addressed only to the

national court which brought the matter before the ECJ, it is sufficient reason for other national

courts to regard the EC act as void!Multilateral effect, so that initial ECJ judgment has

precedential impact on all national courts.

←  ➔but this doesn’t deprive nat courts of power to refer under art 267 still.

• Firma Foto-Frost case, 1987: nat courts cannot find that EU norm is invalid! Main purpose of art 267

is to ensureuniform application of EC law, and this will be jeopardised by divergences between MS

courts as to validity of EC act (affects legal certainty and the very unity of the Community legal order).

★ Art 267 gives ECJ exclusive jurisdiction to declare EC act void, hence power to declare invalidity

is also reserved to ECJ!

★ Further, ECJ is in best position to decide on validity of Community acts

➡ Allows participation of EC institutions whose acts are challenged

➡ Can require MS/institutions who are not participating in proceedings to supply all info

necessary

★ But nat courtcan reject arguments against validity, concluding that Community measure is valid!

←

ECJ rulings and legal certainty

• It remains for national courts to determine the validity of national law. Also for national courts to applyECJ’s interpretation of compatibility of national law with EU law, within domestic system.

• General principle is that ECJ ruling will be applied to legal relationshipseven before the ruling was

given, but after the EC measure came into force.

★ Kuhne case, 2004: in a separate decision, subsequent to C’s first action, ECJ made clear that

Dutch authorities’ reclassification of product was erroneous. Hence C then sought

reimbursement of refunds they ought to have received.

➡ ECJ held that EC law does not require admin bodies to be obliged to reopen admin

decisions that have become final.

➡ But on the facts, where

1. National (Dutch) law conferred on admin body competence to reopen thefinaldecision, subject to certain conditions

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2. Decision became final only cos of judgment of nat court against whose decision

there is no judicial remedy

3. Decision was based on interpretation of EC law, which in light of subsequent ECJ

decision, was incorrect, and where interpretation adopted without prelim ref

4. C complained to admin bodyimmediately after becoming aware of the judgment in

(3)

5. The admin body will be under an obligation to review the decision.

←

2. Where there is no doubt as to the validity of an EU measure (‘acte clair’)

• Where nat court feels that answer to the issue is so clear that prelim ref not required!

• Different from the above cases, as theacte clair doctrine may apply even where there is no prior

ECJ decisionon the point!

• CILFIT case, 1982: ECJ held that correct application of EC law may be so obvious as to leave no

scope for any reasonable doubt as to how to answer the question.

• Qualifications:

★ Nat court must be convinced that answer isequally obvious to other MS’ courts, and the ECJ.

★ Must bear in mind the characteristics of EC law:

1) Interpreting EC provision involves comparison of the different language versions

2) EC law uses autonomous terminology

3) Provisions of EC law must be placed in context and interpreted in light of provisions of EC

law as a whole!

4) Hence emphasising thatacte clair is an exceptional situation.

★ [Mancini & Keeling]: approved of[Rasmussen]’s analysis that the judgment was based on

strategy of ‘give and take’ - ECJ recognised it couldn’t force nat courts to accept its jurisdiction,

hence granted them power to do lawfully what they could do unlawfully anyway, but subjecting itto stringent conditions. Hence hoped to induce willing participation in the Treaty’s ‘mechanism

for judicial cooperation’. Seeing case as dialogue between MS courts and ECJ.

★ [Arnull] thought that only the requirement of comparing diff language versions had teeth, and

even so, was less onerous than it seemed. Hence also saw it as legitimising failure to refer.

★ ButAG Jacobs argued that national courts shouldn’t have to consider all language versions.

• Note threshold might be quite high - also, risk of coming to such a conclusion rests on the MS courts

- if MS assumes it’s anacte clair but interpretation wasn’t actually that clear, might have state liability.

Approach/Attitude of the ECJ(i)…in deciding whether to accept the referenceInitial liberal approach

• ECJ read reference so as to preserve ability to pass judgment, wherever possible. Didn’t want to

discourage litigants from having recourse to EC law, and sought to develop doctrines like direct

effect/supremacy. Also wanted to encourage national judges to employ this novel machinery.

• Hence, prepared to correct incorrectly framed references.

★ Costa v ENEL, 1964: held that it had power to extract questions really pertaining to Treaty

interpretation, from a question imperfectly formulated by the national court.

★ Schwarze case, 1965: France argued that qns asked were concerned with validity of Community

acts, not interpretation of the Treaty, hence should be challenged under art 263!

➡ ECJ held that regardless, art 267 expressly gives ECJ power to rule on validity of EU act.

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➡ Form is not crucial, and focusing too much on it will prolong art 267 procedure, in a

manner incompatible with its true nature. Also inappropriate for this system of judicial

cooperation, where nat court and ECJ must work together for uniform application.

• Also often rejected objections to reference based on reasons for making it, or facts on which it was

based - held that these matters are within nat court’s domain, emphasising theseparation of

functionsunder art 267 (Costa).←  ➔ Simmenthal, 1976: stressed the distinct separation of functions, such that ECJ did not have

 jurisdiction to consider facts of case/criticise reasons for reference

ECJ starts asserting authority over cases being referred

• **Foglia v Novello, 1980: ECJ held that parties had appeared to “collaborate” artificially, to seek

annulment of the relevant national tax provisions, by inserting contractual clause to induce Italian court

to make preliminary reference.

★ ECJ’s duty under art 267 is to supply national courts with info on interpretation of EC law,

necessary to allow latter to settle genuine disputes

★ To allow such an artificial case to come under art 267 would jeopardise the whole system of

legal remedies available to individuals: should use action for annulment instead!

★ But Italian judge undaunted by ECJ’s refusal, and made prelim ref again, asking if ECJ’s first

decision was consistent with principle that it is for nat court to determine facts and need for a

reference. InFoglia (No. 2), 1981…

➡ ECJ held that art 267 is based on cooperation, entailing division of duties.

➡ For ECJ to carry out its task, nat court must explain, where it is unclear, why it considers

reply necessary to enable it to give judgment.

➡ Art 267 does NOT require ECJ to give advisory opinions on general/hypothetical

questions. Hence, ECJdoes not have jurisdiction to give views on problems of EC

law which do not answer to an objective requirement in the resolution of a dispute. 

←  ➔ ECJ must be able to check whether it has jurisdiction, like all other courts. Hence can examine,

where necessary, the conditions in which the case was referred.

➡ Hence subtly held that ECJ will be ultimate decider of own jurisdiction! Vertical hierarchy!

★ [Bebr]argued against the ruling! ECJ had always viewed art 267 as establishing co-operative

★ r/s, rather than hierarchical superiority. French govt here didn’t even contest ECJ’s jurisdiction,

but ECJ did so of its own motion. Assumption that P did not entertain action seriously is

questionable too!

★ But[Wyatt] was in favour of it - if prelim refs are not subject to preliminary objections as to

admissibility, then it will be the nat courts acting as guardians of ECJ’s judicial functions, when it

should really be the ECJ instead. Thought that ECJ’s reasoning was convincing, in

distinguishing judicial function from delivery of advisory opinions, since only the formercharacterises the organ as a court.

• AfterFoglia, principle was left dormant for awhile. But from 1990s, ECJ started to employ it in…

i. Hypothetical cases

➡ Rationale: avoid wastage of judicial resources. Also, might be unclear who the

appropriate parties are, and relevant arguments may not be raised.

➡ But fine line between hypothetical cases and test cases.

←  ➔ test cases aid in legal certainty, allowing people to plan lives with knowledge of legal implications

of choices they make! SeeFoglia itself!

➡ Wienand Meilicke case, 1992:M wanted ECJ to answer many questions on contributions

in kind, having written articles on issue. ECJ reiterated not for court to give advisoryopinion in hypothetical case, much less for court to prove academic opinion right/wrong

where there’s no real underlying case.

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➡ CfLeclerc-Siplec, 1995,andBosman, 1995: even though these cases on free movement

of goods/workers seemed hypothetical (no real dispute), court was still generous in

answering prelim refs.

ii. Where qn raised is not relevant to resolution of the dispute

➡ Meilicke, 1992: ECJ declined to give ruling, holding that it had not been shown that issue

posed in prelim ref was actually at stake in main action➡ Corsica Ferries, 1994: ECJ reiterated it has no jurisdiction to rule on qns that have no

relation to the facts/subject matter of the main action

➡ Salonia case, 1981: prelim ref can be rejected“only if it is quite obvious” that

interpretation/validity bears no relation to actual nature of case/subject matter of

main action - high threshold?

➡ But more demanding in...Dias case, 1992: ECJ accepted that nat courts are prima facie in

best position to decide on need for reference, hence in principle, ECJ bound to give ruling

when asked. But this is subject to qualifications!

➡ Nat court must have regard to the ECJ’s function of assisting in administration of

 justice in MS (not delivering advisory opinions on general/hypothetical qns)➡ Hence, nat court should first establish facts of case and settle questions relating

purely to national law. Also explain reasons why it considers prelim ref necessary.

➡ Only with the above info, can ECJ be in position to ascertain if interpretation

of EC law sought is related to nature/subject-matter of proceedings.

➡ Ifmanifestly irrelevant, ECJ will not proceed to judgment!

➡ Also said “enabling MS to give judgement” should be interpreted broadly - whole

procedure leading up to judgement of MS court. Otherwise, procedural qns would

be deemed inadmissible.

iii. Where qn is not articulated clearly enough

➡ECJ will tease out real qn if reference was imperfectly formulated, but will NOT altersubstance of the qn!

iv. Where facts are insufficiently clear

➡ Similar to (iii) - facts too unclear for ECJ to apply relevant legal rules (ECJ does not

respond in a merelyabstract manner).

➡ Wienand Meilicke case, 1992:nat courts’ obligation to provide info is particularly impt for

areas where there are complex legal and factual situations (eg. Competition).

➡ Sliding scale idea - whether sufficient info provided will depend on circumstances.

➡ Must be enough for ECJ to assess situation and admissibility, and relevance of qn.

➡ Portugal Telecom, 2012: it is for ECJ, not intervening MS, to decide whether information is

adequate/relevant.

➡ Information provided serves not just to enable ECJ to give useful answers, but also to

enable MS govts/other interested parties to submit observations!

➡ Some critics think this strictness goes against notion of ahorizontal r/s between ECJ and

nat courts - should be left to letter to determine if qn is relevant. Otherwise, hierarchical!

←  ➔this ground has been most often employed by ECJ to reject prelim refs.

➡ NB: ECJ can decide on admissibility of each qn posed.

v. Where reference is not about matter of union law over which ECJ has jurisdiction

➡ Tombesi, 1997: if question referred i