Course Pack
Judiciary of the European Union
Prepared by Tamara Ćapeta ©
Professor of EU Law
Faculty of Law
University of Zagreb
E-mail: tcapeta@pravo.hr
2012
Content
Unit 1 – Organization of the Court of Justice of the EU
2
Unit 2 – Jurisdiction of the Court of Justice of the EU
4
Unit 3 – Enforcement Actions against Member States
5
Unit 4 – Judicial Review of EU Law
14
Unit 5 – Preliminary Ruling procedure in Interpretation
25
Unit 6 – National Courts in EU Legal Order: Direct Effect
35
Unit 7 – National Courts in EU Legal Order: Constitutional Issues of Supremacy
44
Unit 8 – National Courts in EU Legal Order: Interpretative Effect
50
Unit 9 – Liability for Damages in the EU
52
1
Unit 1
Organization
of the Court of Justice of the European Union
The Court of Justice of the European Union (CJEU) was established by the Treaty, at the
beginning of European integration. Its internal organisation and jurisdiction is also provided
for in the Treaty. The Court, as one of the EU institutions, consists today of three Courts: the
Court of Justice (further the European Court (of Justice)), the General Court (called the Court
of First Instance until Lisbon Treaty) and the Civil Service tribunal.
The General Court and Civil Service tribunal, as the first of possibly more specialized courts
were established because the workload of the original Court grew beyond what the Court
was able to cope with. Thus, the EU Court joined the common desitiny of judiciary in
modern democracies – cases overload. The jurisdiction of the CJEU as an institution, though,
did not change with the establishment of new courts. Only, some jurisdictional headings
were devolved in the first instance to the newly established courts.
Article 19/1 of the TEU (Lisbon) relates to the Court, and it reads:
“The Court of Justice of the European Union shall include the Court of Justice, the
General Court and specialised courts. It shall ensure that in the interpretation and
application of the Treaties the law is observed.”
Other Articles relating to the Court are to be found in TFEU, in the Protocol on the Statute of
the Court, and in its Rules of Procedure. All these procedural documents may be
downloaded from the web site of the CJEU: curia.europa.eu
In this introductory class, you will be acquainted with the internal organisation of CJEU and
will get the general overview of the Court's jurisdiction. The same as the EU, and as every EU
institution, the European Court's powers are also governed by the principle of enumerated
powers (or the principle of conferral). Thus, this is the court of limited jurisdiction, the
headings of its jurisdiction expressly enumerated in the Treaties.
Any textbook on EU law usually has a chapter dealing with the organisation and basic
jurisdiction of the Court and you can use any that is available to you. Take, however, into
consideration that the Treaties do change over time and with them also the organisation,
and more rarely, the jurisdiction of the Court. At present the Court is governed by the Lisbon
2
Treaty, in force since December 2009. The textbooks predating Lisbon Treaty might,
therefore, have outdated information, which you must update by looking into the relevant
Treaty articles. Likewise, other instruments governing the Court change. Just before the
beginning of this year’s class, the new Statute of the Court entered into force, introducing
certain, possibly important changes, in the internal functioning of the Court, which we will
discuss in the class. Also, the new, significantly changed and simplified, Rules of procedure
were adopted and will enter into force in November 2012.
When reading about the Court organization, think about the following: how are the judges
appointed?; who appoints them and for how long?; how does the Court work internally – in
chambers or as plenary? how do the judges communicate?; how do judges deliberate?.
When reading about the Court’s jurisdiction, try to compare the European Court’s
jurisdiction with the jurisdiction of different branches of national courts in your country.
We will discuss all these issues in the class.
Apart from CJEU as an institution consisting at present of 3 courts established at the
European level, the European judicial architecture comprises also every national court of
every Member State. In fact, national courts are European courts of general jurisdiction.
They are the courts that decide in all disputes involving application of EU/EC law, except
those for which CJEU has exclusive jurisdiction. In most cases in which an individual (i.e.
legal or physical person) invokes EU law to her/his benefit, CJEU will either lack entirely or
not enjoy exclusive jurisdiction. Therefore, the appropriate forum to solve the issue will be
national court. National courts are, therefore, an important part of the EU judiciary, which is
why part of this course is devoted to their role in the EU legal system.
When I say: “National courts are also European courts“, how do you understand such a
statement? What made this possible? Why was this necessary? Can you name some of the
important cases that turned national courts into European courts? Why was this important
for the European integration process? Try and compare European role of national courts
with the role of national courts in the International legal order?
3
Unit 2
Jurisdiction
of the Court of Justice of the European Union
Before we talk about the jurisdiction of the European Court, in this class I want to discuss some
general questions about the role of courts in a legal system and in society. These issues are not
specific for the EU, and most of them do not have an answer. However, I still find it very
important that we discuss them and that you keep thinking about them as we proceed with the
class on EU judiciary.
Bellow is the number of issues I want you to think about:
Why do we have judges? Or, in other words, what do the judges do?
When judges apply law, what kind of exercise is that: mechanical one (as claimed by
Montesquieu and wanted by Kelsen) or creative one?
Do judges participate in the creation of law?
Should judges create law? If not, why not?
If they should, or if they simply do, are there limits to judicial law creation?
Should there be limits to judicial law-creation?
Where are the limits?
All these questions are relevant in the European legal order. European Court of Justice is the
court that was very often attacked for its ‘activism’. Whether such accusations are in order,
depends largely upon your answer to the questions placed above.
In your class materials, you will find few articles. The excerpt from the book by Mauro
Cappelletti discusses the reasons why judges acquired the power of judicial review. Other
articles concern the role of the European Court as policy maker in the EU. Article by Professor
Dehousse describes some important decisions that made the Court an interesting forum for
politicians and article by (then) Advocate General Fennelly talks about the methods that the ECJ
uses. You will also find the article of Karen Alter, who analyses the political influence of the ECJ
in the critical times for the functioning of the internal market in the 1980’s, through the analysis
of the events surrounding the Cassis de Dijon decision.
4
Unit 3
Enforcement Actions against Member States
This procedure allows to the European Court of Justice to review Member States
performance under EU law. It is the only procedure that empowers the CJEU to directly
review validity of Member State law. In all other situations, judicial review of domestic law is
performed by domestic courts, not by the European Court. The procedure is often referred
to as ‘infringement procedure’ or ‘infraction procedure’.
Lisbon Treaty introduced some changes into the procedure as compared to the previous
situation, under the Nice Treaty. Also, the numbering of Articles was changed. Below, you
may find both the articles of the old TEC (Nice) and of TFEU (Lisbon), governing infraction
procedure. Compare them and find out what is new.
5
Nice Treaty version
Lisbon Treaty version
Article 226 (ex 169)
Article 258
If the Commission considers that a Member
State has failed to fulfil an obligation under
this Treaty, it shall deliver a reasoned
opinion on the matter after giving the State
concerned the opportunity to submit its
observations.
If the Commission considers that a Member
State has failed to fulfil an obligation under
the Treaties, 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 by
the Commission, the latter may bring the
matter before the Court of Justice.
If the State concerned does not comply with
the opinion within the period laid down by
the Commission, the latter may bring the
matter before the Court of Justice of the
European Union
Nice Treaty Article 227(ex 170)
Lisbon Treaty Article 259
A Member State which considers that
another Member State has failed to fulfil an
obligation under this Treaty may bring the
matter before the Court of Justice.
A Member State which considers that
another Member State has failed to fulfil an
obligation under the Treaties may bring the
matter before the Court of Justice of the
European Union.
Before a Member State brings an action
against another Member State for an
alleged infringement of an obligation under
this Treaty, it shall bring the matter before
the Commission.
The Commission shall deliver a reasoned
opinion after each of the States concerned
has been given the opportunity to submit
its own case and its observations on the
other party's case both orally and in writing.
If the Commission has not delivered an
opinion within three months of the date on
which the matter was brought before it, the
absence of such opinion shall not prevent
the matter from being brought before the
Court of Justice.
Before a Member State brings an action
against another Member State for an
alleged infringement of an obligation under
the Treaties, it shall bring the matter before
the Commission.
The Commission shall deliver a reasoned
opinion after each of the States concerned
has been given the opportunity to submit
its own case and its observations on the
other party's case both orally and in writing.
If the Commission has not delivered an
opinion within three months of the date on
which the matter was brought before it, the
absence of such opinion shall not prevent
the matter from being brought before the
Court.
6
Nice Treaty Article 228 (ex 171)
Lisbon Treaty Article 260
1. If the Court of Justice finds that a
Member State has failed to fulfil an
obligation under this Treaty, the State shall
be required to take the necessary measures
to comply with the judgment of the Court of
Justice.
1. If the Court of Justice of the European
Union finds that a Member State has failed
to fulfil an obligation under the Treaties, the
State shall be required to take the
necessary measures to comply with the
judgment of the Court.
2. If the Commission considers that the
Member State concerned has not taken
such measures it shall, after giving that
State the opportunity to submit its
observations, issue a reasoned opinion
specifying the points on which the Member
State concerned has not complied with the
judgment of the Court of Justice.
2. If the Commission considers that the
Member State concerned has not taken the
necessary measures to comply with the
judgment of the Court, it may bring the case
before the Court after giving that State the
opportunity to submit its observations. It
shall specify the amount of the lump sum or
penalty payment to be paid by the Member
State concerned which it considers
appropriate in the circumstances.
If the Member State concerned fails to take
the necessary measures to comply with the
Court's judgment within the time limit laid
down by the Commission, the latter may
bring the case before the Court of Justice. In
so doing it shall specify the amount of the
lump sum or penalty payment to be paid by
the Member State concerned which it
considers appropriate in the circumstances.
If the Court of Justice finds that the
Member State concerned has not complied
with its judgment it may impose a lump sum
or penalty payment on it.
This procedure shall be without prejudice to
Article 227.
If the Court finds that the Member State
concerned has not complied with its
judgment it may impose a lump sum or
penalty payment on it.
This procedure shall be without prejudice to
Article 259.
3. When the Commission brings a case
before the Court pursuant to Article 258 on
the grounds that the Member State
concerned has failed to fulfil its obligation
to notify measures transposing a directive
adopted under a legislative procedure, it
may, when it deems appropriate, specify
the amount of the lump sum or penalty
payment to be paid by the Member State
concerned which it considers appropriate in
the circumstances.
If the Court finds that there is an
infringement it may impose a lump sum or
penalty payment on the Member State
concerned not exceeding the amount
specified by the Commission. The payment
obligation shall take effect on the date set
by the Court in its judgment.
7
Who sues whom and why?
Infringement proceedings can be brought to the European Court either by the Commission
or by a Member State, and the defendant is always Member State. The number of
proceedings initiated by Member States, however, is low, so we shall not deal with this
aspect of procedure in the class. Also, in the class, we shall discuss only some aspects of the
procedure initiated by the Commission. Please, do read the chapter in a textbook describing
infringement procedure before attending the class.
The reason for suing the State is its 'failure to fulfil an obligation under the Treaties’; While
TEC (Nice) was referring to the Treaty in singular, Lisbon talks about the Treaties. What is
the reason for this?
Violation of Treaties does not mean that only violations of Treaties proper can be alleged,
but rather of the entire law that is based on the Treaties.
Can you think of the examples of 'failure to fulfil an obligation under the Treaties'? What
kind of violation has France committed in the case C-265/95 Commission v France (Spanish
strawberries)?
Once sued, the defendant Member State is represented in the Court by its Government.
However, the expression Member State that may commit the violation is broader. Who in
the Member State can commit the violation?
Pre-judicial phase of the procedure
The action for failure to act against Member State can be initiated exclusively in front of the
European Court of Justice. Thus, this is one of few procedures in which the General Court
did not acquire jurisdiction.
However, before bringing the Member State to the Court, Commission has to try to solve
the issue in a more diplomatic way, in bilateral dialogue with the State at issue.
Infringement procedure, thus, has its pre-judicial and judicial part. Going through the steps
of the pre-judicial phase represents a procedural condition for initiating the procedure
before the Court.
Pre-judicial phase can be divided into the formal one and the informal one. In the informal
stage, the Commission makes its view about the possible violation known to the Member
State, and the Member State may either comply with what the Commission requires or
persuade Commission that there is no violation.
Today, all complaints and enquiries by citizens or companies are processed via new
database, called CHAP, introduced in 2009. It helps in management of possible
8
infringements and makes the procedure more efficient. All complaints/enquiries which are
not dismissed as falling outside of Comission’s jurisdiction are either transferred to the EU
Pilot, if further communication with Member State is necessary, or, if the case is clear, the
file goes to the, so-called, NIF data base.
EU Pilot Project was introduced in 2008, and its aim is to solve as many cases as possible
without the need to open formal infringement procedure. Cases from the CHAP database as
well as cases created on the basis of the Commission’s own initiative are transferred to the
EU Pilot. It provides for the communication between responsible department in the
Commission and the responsible authorities in the Member States, prior to the launching of
the formal pre-judicial phase of the procedure. It gives to the Member States an opportunity
to either explain or correct the violation of EU law. Data til February 2011 show that 80% of
cases were solved through the EU Pilot, without the need to initiate infringment procedure.
Those cases that remain unsolved are transferred to the NIF database.
NIF database thus contains cases that were not solved via EU Pilot and which, therefore, will
go into formal infringement procedure.
The formal stage is initiated by issuing the formal notice of the alleged infringement, to
which a State is given certain deadline to reply (usually 2 months). If by then the matter is
still not settled, Commission may decide to issue reasoned opinion which clearly states
grounds of alleged infringement and gives the deadline to the State to eliminate the
violation. After the expiry of the deadline, the Commission may bring the matter before the
Court.
In the Court, Commission may plead only those grounds of alleged violation which were
already stated in the reasoned opinion. Therefore, reasoned opinion is procedurally
important for the initiation of the judicial phase and it determines the scope of judicial
investigation. Still, being just the opinion – the non-binding act, it may not be the object of
the annulment proceedings.
Read carefully case C-265/95 Commission v France (Spanish strawberries) and find
paragraphs which refer to pre-judicial phase of procedure.
Commission’s Discretion
In the infringement procedure, Commission enjoys wide discretion to decide whether to
enforce EU law against the violating state. This discretion exists in all stages of the
procedure.
First of all, even if it considers that the violation exists, Commission may decide not to
initiate procedure. This is why an action for failure to act cannot be brought against
Commission for not initiating the infringement procedure.
9
Commission can also decide, at any point during the procedure, to discontinue it. And, as
this is an entirely discretionary decision, an action for annulment cannot be brought against
the Commission's decision not to pursue the procedure further.
Think about the reasons for and against leaving such a wide discretion to the Commission.
Individuals and the Infringement Procedure
Half of the infringement procedures are initiated on the basis of the citizens’ complaints to
the Commission about the violations (see the last Report on monitoring of application of EU
law:
http://ec.europa.eu/community_law/infringements/infringements_annual_report_en.htm;
see also the complaint form).
Individuals can address their complaints to the Commission on the pre-designed form (see,
the Complaint form, in your materials). However, complaints may also be addressed to the
Commission in any other way.
After submitting complaints, however, an individual does not have any control over
subsequent procedure. As already mentioned, she/he cannot bring an action against
Commission’s decision not to initiate procedure. This excerpt from the Petrie decision by the
then Court of First Instance (CFI), demonstrates that individuals can even difficultly find out
what is happening after they have submitted the complaint. In this case, an individual
required the disclosure of certain documents issued during the infringement procedure, and
Commission denied the access to the documents. The CFI considered the following:
«In the present case, the documents requested are letters of formal notice and reasoned opinions
drawn up in connection with investigations and inspections carried out by the Commission. As the
Court pointed out in paragraph 63 of its judgment in WWF (cited above in paragraph 59), the
Member States are entitled to expect the Commission to guarantee confidentiality during
investigations which might lead to an infringement procedure. This requirement of confidentiality
remains even after the matter has been brought before the Court of Justice, on the ground that it
cannot be ruled out that the discussions between the Commission and the Member State in
question regarding the latter's voluntary compliance with the Treaty requirements may continue
during the court proceedings and up to the delivery of the judgment of the Court of Justice. The
preservation of that objective, namely an amicable resolution of the dispute between the
Commission and the Member State concerned before the Court of Justice has delivered judgment,
justifies refusal of access to the letters of formal notice and reasoned opinions drawn up in
connection with the Article 226 EC proceedings on the ground of protection of the public interest
relating to inspections, investigations and court proceedings, which comes within the first
category of exceptions in Decision 94/90.» (Case T-191/99, para 68).
10
Think about how efficient is the infringement procedure from the point of view of citizens?
What do individuals get if the violation is established?
Individuals cannot efficiently vindicate their rights by waiting for the Commission to initiate
procedure against the Member State. However, they do have on their disposal another
judicial way, opened by the judgement in the Van Gend en Loos case. What is the other way
that citizens can use?
Judicial phase of the procedure
Judicial phase of the infringement procedure may be initiated, if the Commission so decides,
upon the expiry of the deadline left to the Member State by the Reasoned Opinion to fulfil
its EU law obligation. Reasoned Opinion is relevant for the judicial stage, as it is firstly, a
procedural condition for the introduction of action, and, therefore, for the establishment of
the Court’s jurisdiction. It is also relevant as it determines the scope of action in the Court.
Commission is limited in its strategy in the Court by the allegations of violations, which it
had already mentioned in the Reasoned Opinion. It cannot, therefore, introduce new
allegations about violations of EU law in the judicial phase.
Burden of proof that the Member State ‘failed to fulfil its obligation(s)’ is on the
Commission. However, Member States are under obligation to provide the Commission with
all information and documents it requests as necessary for proving its position to the Court.
If the State does not co-operate, this may be considered as failure to fulfil the obligation of
loyal cooperation.
After you read cases in your materials, think about what type of judgement does the Court
come to if it finds that Member State has violated EU law,? Does the Court have a power to
order state what to do to put an end to a violation?
During the procedure in the Court, there is a possibility to ask for interim measures to be
determined by the Court until the final decision is reached. Cases C-195/90 and C-195/90 R
Commission v Germany (Road tax) demonstrate that the Court has more powers when
affording interim protection, then once it finds that the violation by the State existed.
Namely, as interim measure, the Court suspended the operation of German law, which
allegedly violated EU law. On the contrary, the declaratory judgement in the infringement
procedure merely stated that the law at issue was in violation to EU law, and left further
decision on how to react to this finding entirely in the hands of Germany.
11
Admissible State defences
In order for the ‘failure’ to be found by the Court, violation by the State need not be
conscious or intentional. Further, it is not necessary that any damage was caused by the
violation. Therefore, lack of knowledge or intention to commit violation is not a defence, as
it is not the fact that no one was damaged by the violation of EU law.
State cannot rely on its internal difficulties (C-265/95 Commission v France – Spanish
Strawberries), or specificities of its constitutional organization, as a defence. Thus, argument
that parliamentary procedure is slow, so that the State has not yet adjusted its laws to the
requirements of EU law, or that there was other types of problems in the parliamentary
procedure, cannot help the State (e.g. 48/71 Commission v Italy). State cannot even rely on
the fact that its Parliament was dissolved, so that it could not have legislated (77/69
Commission v Belgium).
The Court will not accept as a defence the allegation that other state(s) also failed to fulfil
certain EU obligation. Thus, for example, a State cannot use in the Court the fact that other
state(s) did not implement a directive, for non-implementation of which the first state is
brought to the Court.
In one case, Belgium tried to justify its failure to transpose a directive into internal law by
claim that the directive at issue had direct effect. The Court did not accept such argument.
States do not have many defences on their disposal in judicial proceedings. One defence the
Court does accept is force majeur. However, in deciding whether certain situation can be
characterized in such a way, the Court is very restrictive.
The best strategy for the State is, therefore, to claim that there is no ‘failure’. This can be
done either by showing that what the state has done is not contrary to the obligation
stemming from the EU law. This may depend on how the EU law provision imposing the
obligation is interpreted. Thus, a state might want to persuade the Court in the correctness
of it’s, rather than the Commission’s, interpretation of relevant EU law.
Different strategy can also be used: a state might claim that the EU provision which
establishes the obligation for the state is invalid. If it is invalid, there is no obligation, and
therefore, no failure in the fulfilment of the obligation. Procedural means which the state
has to use for this type of defence is plea of illegality (exceptio illegalitatis), envisaged by
Article 277 TFEU. However, this plea may be introduced only against EU measure of general
application. If it is alleged that the Member State has violated a decision addressed to that
State, the State cannot introduce plea of illegality, if it did not challenge the measure
directly in the period of two months. This is procedurally done by introducing the action for
annulment regulated in Article 263 TFEU (we will discuss this type of procedurein separate
Unit). In this respect, see case 226/87 Commission v Greece.
12
What if the State does not put an end to a violation established by the Court?
If Member State does not put an end to violation even after the judgment of the Court,
Commission may initiate new infringement proceedings on the basis of Article 260 TFEU.
Since the entry into force of the Maastricht Treaty, the Court is empowered to punish the
State financially for not respecting its judgment. It took 7 years (until the year 2000) for the
first penalty to be imposed (against Greece in case C-387/97).
Read the case C-304/02 Commission v France.
What is, according to the Court, the purpose of this procedure?
Is the Court bound by the Commission's proposal of penalty?
What was Germany's argument against the power of the Court to alter Commission's
proposal on penalty? What do you think about the Court's reply? (see paragraphs 88 and 90
of the judgment)
After the Decision in C-304/02 Commission v France, Commission has published new
Communication (SEC(2005) 1658), announcing that, in the future, it will ask for parallel
imposition of both penalty payment and the lump sum. New reading of the relevant Treaty
provision will increase the effectiveness of the infringement procedure. Namely, the new
reading created the reason for the Commission to continue with the procedure, even if the
state eliminates the violation before the end of the second procedure. It means, at the same
time, that the states have lost one possible strategy in this procedure, which they did use.
They cannot prolong the violation until almost the end of procedure, and leave the Court
unpunished. The Court may now continue with the procedure, as it is still possible to fine
the state with lump sum for past violation, even though the violation itself has ceased in the
meantime.
The Lisbon Treaty introduced two novelties in this procedure.
Read the new provision – Article 260 TFEU and compare it to the Nice Treaty version. What
is new?
What happens after the second Judgment that imposes penalty payment?
The State is under obligation to pay penalty paymet so long as it did not comply with the
Judgment, ie so long as it did not fulfil the obligation under the EU law for which the
Judgment was passed. Who and how, however, is entitled to judge whether the State has
complied with the Judgment?
Until recently, there was not any case law relating to this issue, nor was, indeed, this
question explored in the literature. However, some answers were provided by the two
13
recent cases, decided by the General Court – T-33/09 Portugal v Commission and T-139/06
France v Commission. Read the cases. What was the main complaint of Portugal and France?
Why did they bring the action in the General Court and what did they ask for? What was the
main legal issue that General Court was faced with? There is an appeal introduced by the
European Commission against the General Court’s decision in case T-33/09 Portugal v
Commission. This will give the opportunity to the European Court to clarify the issue. If the
decision will be brought during the course of classes, we shall discuss it.
14
Unit 4
Judicial Review of EU Law
The power of the CJEU to review validity of EU law was envisaged by the Founding Treaty since
the beginnings of European integration. There are two principal ways how such question
reaches the Court: direct and indirect.
Principal tool for direct review of EU law are actions for annulment (263-264 TFEU). EU acts can
in this way come under the scrutiny of the Court on the initiative of multiple actors: EU
institutions, Member States and individuals.
Principal indirect way of judicial review of EU law is reference for preliminary ruling on validity
(Article 267 TFEU). The other indirect way of challenge is the plea of illegality (Article 277 TFEU).
The question of validity of an EU act can come to the Court also within the procedure initiated
by the action for damages (Article 268 TFEU)
Lisbon Treaty has introduced certain changes in the organisation of these procedures, especially
in relation to the direct action for annulment. Bellow, you may find both the articles of the TEC
(Nice) and of TFEU (Lisbon). Compare them and find out what is new.
Nice Treaty version
Lisbon Treaty version
Article 230 (ex 173) TEC
Article 263 TFEU
The Court of Justice shall review the legality
of acts adopted jointly by the European
Parliament and the Council, of acts of the
Council, of the Commission and of the ECB,
other than recommendations and opinions,
and of acts of the European Parliament
intended to produce legal effects vis-à-vis
third parties.
The Court of Justice of the European Union
shall review the legality of legislative acts,
of acts of the Council, of the Commission
and of the European Central Bank, other
than recommendations and opinions, and
of acts of the European Parliament and of
the European Council intended to produce
legal effects vis-ŕ-vis third parties. It shall
also review the legality of acts of bodies,
offices or agencies of the Union intended to
produce legal effects vis-à-vis third parties.
15
Nice Treaty – 230 TEC (cont.)
Lisbon Treaty – 263 TFEU (cont.)
It shall for this purpose have jurisdiction in
actions brought by a Member State, the
European Parliament, the Council or the
Commission on grounds of lack of
competence, infringement of an essential
procedural requirement, infringement of
this Treaty or of any rule of law relating to
its application, or misuse of powers.
It shall for this purpose have jurisdiction in
actions brought by a Member State, the
European Parliament, the Council or the
Commission on grounds of lack of
competence, infringement of an essential
procedural requirement, infringement of
the Treaties or of any rule of law relating to
their application, or misuse of powers.
The Court of Justice shall have jurisdiction
under the same conditions in actions
brought by the Court of Auditors and by the
ECB for the purpose of protecting their
prerogatives.
The Court shall have jurisdiction under the
same conditions in actions brought by the
Court of Auditors, by the European Central
Bank and by the Committee of the Regions
for the purpose of protecting their
prerogatives.
Any natural or legal person may, under the
same conditions, institute proceedings
against a decision addressed to that person
or against a decision which, although in the
form of a regulation or a decision addressed
to another person, is of direct and
individual concern to the former.
Any natural or legal person may, under the
conditions laid down in the first and second
paragraphs, institute proceedings against an
act addressed to that person or which is of
direct and individual concern to them, and
against a regulatory act which is of direct
concern to them and does not entail
implementing measures.
The proceedings provided for in this Article
shall be instituted within two months of the
publication of the measure, or of its
notification to the plaintiff, or, in the
absence thereof, of the day on which it
came to the knowledge of the latter, as the
case may be.
Acts setting up bodies, offices and agencies
of the Union may lay down specific
conditions and arrangements concerning
actions brought by natural or legal persons
against acts of these bodies, offices or
agencies intended to produce legal effects
in relation to them.
The proceedings provided for in this Article
shall be instituted within two months of the
publication of the measure, or of its
notification to the plaintiff, or, in the
absence thereof, of the day on which it
came to the knowledge of the latter, as the
case may be.
16
Nice Treaty - Article 231
Lisbon treaty – Article 264
If the action is well founded, the Court of
Justice shall declare the act concerned to be
void.
If the action is well founded, the Court of
Justice of the European Union shall declare
the act concerned to be void.
In the case of a regulation, however, the
Court of Justice shall, if it considers this
necessary, state which of the effects of the
regulation which it has declared void shall
be considered as definitive.
However, the Court shall, if it considers this
necessary, state which of the effects of the
act which it has declared void shall be
considered as definitive.
Nice Treaty - Article 234 TEC (ex 177)
Lisbon Treaty - Article 267 TFEU
The Court of Justice shall have jurisdiction
to give preliminary rulings concerning:
The Court of Justice of the European Union
shall have jurisdiction to give preliminary
rulings concerning:
(a) the interpretation of this Treaty;
(b) the validity and interpretation of acts of
the institutions of the Community and of
the ECB;
(c) the interpretation of the statutes of
bodies established by an act of the Council,
where those statutes so provide.
Where such a question is raised before any
court or tribunal of a Member State, that
court or tribunal may, if it considers that a
decision on the question is necessary to
enable it to give judgment, request the
Court of Justice to give a ruling thereon.
Where any such question is raised in a case
pending before a court or tribunal of a
Member State against whose decisions
there is no judicial remedy under national
law, that court or tribunal shall bring the
matter before the Court of Justice.
(a) the interpretation of the Treaties;
(b) the validity and interpretation of acts of
the institutions, bodies, offices or agencies
of the Union;
Where such a question is raised before any
court or tribunal of a Member State, that
court or tribunal may, if it considers that a
decision on the question is necessary to
enable it to give judgment, request the
Court to give a ruling thereon.
Where any such question is raised in a case
pending before a court or tribunal of a
Member State against whose decisions
there is no judicial remedy under national
law, that court or tribunal shall bring the
matter before the Court.
If such a question is raised in a case pending
before a court or tribunal of a Member
State with regard to a person in custody,
the Court of Justice of the European Union
shall act with the minimum of delay.
17
Nice treaty - Article 241 (ex 184) TEC
Lisbon Treaty – Article 277 TFEU
Notwithstanding the expiry of the period
laid down in the fifth paragraph of Article
230, any party may, in proceedings in which
a regulation adopted jointly by the
European Parliament and the Council, or a
regulation of the Council, of the
Commission, or of the ECB is at issue, plead
the grounds specified in the second
paragraph of Article 230 in order to invoke
before the Court of Justice the
inapplicability of that regulation.
Notwithstanding the expiry of the period
laid down in Article 263, sixth paragraph,
any party may, in proceedings in which an
act of general application adopted by an
institution, body, office or agency of the
Union is at issue, plead the grounds
specified in Article 263, second paragraph,
in order to invoke before the Court of
Justice of the European Union the
inapplicability of that act.
For this class, read the chapter(s) on judicial review of EU law in your chosen textbook. I am not
going to explain everything about these procedures in the class. Rather, we shall deal with some
of the problematic issues that are related to these procedures, such as standing of individuals in
direct actions for annulment, judicial changes in the system of indirect review, and the
relationship between direct and indirect challenge. We shall also discuss changes introduced by
the Lisbon Treaty, their reasons and possible effects.
The procedures at issue are regulated by only a few Articles of the Treaty. Therefore, many
issues related to their application were solved in the case-law. Below, I will shortly describe
main questions addressed by the case law.
Which legal norms can be judicially reviewed?
One of the issues solved in judicial practice considered the range of reviewable acts. The issue
arose in relation to direct action. However, the same acts can be object of review of their
validity in the preliminary ruling procedure as well. On the contrary, as we will explain infra, the
plea of illegality may be introduced against narrower group of acts.
Describing reviewable acts, Article 263/1 uses the expression ‘acts of the institutions other than
recommendations and opinions’. The issue to be solved was whether the acts in question are
only those enumerated in Article 288 TFEU (that is: Regulations, Directives and Decisions), or the
term ‘acts’ used in the Article has wider meaning. The ECJ answered this in case 22/70 ERTA.
What has the Court concluded in that case?
18
The Court’s approach in answering whether the act is reviewable or not, is substantive, not
formal, as is clear from the following excerpt from the case 60/81 IBM:
“9 In order to ascertain whether the measures in question are acts within the meaning of Article
173 it is necessary , therefore , to look to their substance . According to the consistent case-law of
the Court any measure the legal effects of which are binding on, and capable of affecting the
interests of, the applicant by bringing about a distinct change in his legal position is an act or
decision which may be the subject of an action under Article 173 for a declaration that it is void.
However, the form in which such acts or decisions are cast is, in principle, immaterial as regards
the question whether they are open to challenge under that article.”
Act, in the sense of Article 263 TFEU, is, therefore, any legal norm capable of affecting
somebody’s legal position, that is, a norm which changes somebody’s rights or obligations.
Act, however, has to be the act of an EU institution or body. The Lisbon Treaty expanded
significantly the list of potential defendants. Which institutions has the Lisbon Treaty added?
Why do you think this was done? Were their acts reviewable already under the Nice Treaty?
As the Lisbon Treaty merged first and third pillar of the previous EU structure, the Court
acquired full jurisdiction to review acts in the policies which were previously a matter of the
third pillar (sucj as judicial and police co-operation), in which the Court’s jurisdiction was
limited. However, some transitional arrangements still apply to the acts enacted before the
Lisbon Teaty entered into force.
The Court, on the contrary, still does not have any powers of judicial review in relation to
the CFSP acts (ex-second pillar acts). However, the Court can check whether the measure
adopted under the second pillar was properly adopted under that pillar, or should it, rather,
not have been adopted under the first pillar legal base. The Court based this jurisdiction on
Article 47 TEU (Nice) in the case C-170/96 Commission v Council (Airport transit visas), and in
some later cases. The following is the excerpt from the case C-91/05 Commission v Council
(small weapons), containing Court’s reasoning about its jurisdiction. In that case the
Commission asked for the annulment of a Council decision adopted under the CFSP
competence and for the declaration of illegality of a Council Joint Action:
“32. Under Article 47 EU, none of the provisions of the EC Treaty is to be affected by a
provision of the Treaty on European Union (Case C-176/03 Commission v Council [2005] ECR
I-7879, paragraph 38, and Case C-440/05 Commission v Council [2007] ECR I-0000,
paragraph 52).
33. It is therefore the task of the Court to ensure that acts which, according to the Council,
fall within the scope of Title V of the Treaty on European Union and which, by their nature,
are capable of having legal effects, do not encroach upon the powers conferred by the EC
Treaty on the Community (see, to that effect, Case C-170/96 Commission v Council [1998]
ECR I-2763, paragraph 16; Case C-176/03 Commission v Council , paragraph 39; and Case
C-440/05 Commission v Council , paragraph 53).
34. It follows that the Court has jurisdiction to consider the action for annulment brought by
the Commission under Article 230 EC and, in that context, to consider the pleas invoked in
accordance with Article 241 EC in so far as they allege an infringement of Article 47 EU.”
19
On the basis of Article 47 TEU (Nice), the Court found certain priority in the first pillar over
the second pillar. Thus, the conclusion was that if there existed a first pillar legal basis, the
measure had to be adopted under the first pillar, and not under the second pillar, and the
Court had power to check this.
The Lisbon Treaty did not change considerably the Court’s jurisdiction in the area of
Common Foreign and Security Policy (CFSP). Or, in other words, this jurisdiction is still
excluded, on the basis of Article 275 TFEU. However, there are two important changes. First
one might be caused by the amendments to Article 47 TEU (Nice), on which provision the
Court based its jurisdiction to review the choice of the legal basis in the second pillar.
Compare Article 47 TEU (Nice) with Article 40 TEU (Lisbon) and think about how could this
affect previously quoted case-law.
Article 47 TEU (Nice)
Article 40 TEU (Lisbon)
Subject to the provisions amending
the Treaty establishing the
European Economic Community
with a view to establishing the
European Community, the Treaty
establishing the European Coal and
Steel Community and the Treaty
establishing the European Atomic
Energy Community, and to these
final provisions, nothing in this
Treaty shall affect the Treaties
establishing
the
European
Communities or the subsequent
Treaties and Acts modifying or
supplementing them.
The implementation of the
common foreign and security
policy shall not affect the
application of the procedures and
the extent of the powers of the
institutions laid down by the
Treaties for the exercise of the
Union competences referred to in
Articles 3 to 6 of the Treaty on the
Functioning of the European
Union.
Similarly, the implementation of
the policies listed in those Articles
shall not affect the application of
the procedures and the extent of
the powers of the institutions laid
down by the Treaties for the
exercise of the Union competences
under this Chapter.
20
Second important difference introduced by the Lisbon Treaty is Article 275 TFEU.
Article 275 TFEU
The Court of Justice of the European Union shall not have jurisdiction with respect to the
provisions relating to the common foreign and security policy nor with respect to acts
adopted on the basis of those provisions.
However, the Court shall have jurisdiction to monitor compliance with Article 40 of the
Treaty on European Union and to rule on proceedings, brought in accordance with the
conditions laid down in the fourth paragraph of Article 263 of this Treaty, reviewing the
legality of decisions providing for restrictive measures against natural or legal persons
adopted by the Council on the basis of Chapter 2 of Title V of the Treaty on European Union.
The new Treaty, thus, grants the possibility to individuals to bring actions against measures
adopted under CFSP for alleged violations of their rights under the Treaty, including fundamental
rights. This development is in line with the recent case-law, especially the Joined Cases C-402/05P
and C-415/05P Kadi, which strongly require that individuals have access to the Court for the
alleged fundamental rights violations by EU acts.
Who can bring the direct action for annulment to the Court?
The other important issue with which the Court has dealt is the question of standing, or the right
to bring the action for annulment. Article 263 TFEU distinguishes between 3 different groups of
potential applicants. First group, usually called privileged applicants, because they do not have to
show any legal interest to bring the action, comprises Member States, and three EU institutions:
EP, the Council and the Commission. EP enjoys such wide standing only since the Treaty of Nice
entered into force. Its capacity to sue was for the first time established by the ECJ in times when
Article 263 (then 173 TEC) did not mention EP at all as potential applicant. This happened in the
end of the 1980s in case C-70/88 EP v Council (Chernobyl case), when the EP was admitted
standing for the purposes of ‘protecting its own prerogatives’. Without any textual background in
the Treaty, the Court has effectively amended the Treaty. This was necessary in order to maintain
the new institutional balance, required by the fact that EP was elected at the direct elections and
by the fact that it was granted more powers in the decision-making processes. This judicial
amendment of the Treaty was subsequently codified and made part of the Treaty provisions
governing action for annulment. However, it is only since the Nice Treaty, that the EP was
granted unlimited power to ask for annulment.
The second category of potential applicants consists of the so-called quasi-privileged applicants –
bodies which have the power to ask for annulment of an EU act in order to protect their own
prerogatives. Nice Treaty granted such right to the Court of Auditors and the ECB. The Lisbon
Treaty expanded the list with the Committee of the Regions.
Also, even if they are not mentioned in the text of Article 263 TFEU, one might place national
parliaments in the group of unprivileged applicants. Namely, new procedure for the supervision
of subsidiarity, envisaged a self-standing right of national parliaments (different from the right of
a Member State as privileged applicant, in which case it is represented by its Government) to
initiate annulment proceedings on the basis of the claim that certain EU act breaches principle of
subsidiarity (see Article 8 of the Protocol No 2 to the Lisbon treaty on the application of principles
of subsidiarity and proportionality). How exactly will this right be translated into practice is yet to
be seen.
21
However, the most controversial case law was developed in relation to a third group of potential
applicants, the non-privileged applicants – individuals (physical and legal persons). Lisbon Treaty
introduced potentially important changes into paragraph 4 of the relevant Article (263/4). The
change was inspired by the case law which revealed the problems in the system of judicial
protection of individuals against EU measures. We will come back to these cases, and discuss
wether the new modifications addressed properly the problems rised by that case law. Before,
however, it is necessary to clarify some other issues related to the procedures at issue.
Shortly, the standing of individuals in direct actions (or their capacity to aks the Court to decide
about the validity of an EU act) was limited not only by the text of the Treaty, but also with
restrictive interpretation that the Court gave to the relevant provisions. The clear and
unproblematic situation is the one in which an individual challenges a decision that is addressed
to him/her. However, if an individual wants to challenge an act addressed to someone else, or an
act of general application, she/he has to prove that the act concerns her/him directly and
individually.
The most important hurdle for an individual to bring an action for annulment is thus the
requirement for direct and individual concern, especially because the notion of individual
concern is understood by the Court very restrictively.
The act will be of direct concern if that act is the one that changes the legal position of a person
challenging it. If, however, another institution (either European or domestic) interferes in the
chain of causality that affected rights of an individual, the requirement of direct concern shall not
be fulfilled. It does not mean that whenever an implementing measure is required, such act
cannot be of direct concern. If, when enacting such implementing measures, the body at issue
has no discretion whether and how to implement the act, the act will be of direct concern for the
individual. On the contrary, if the institution which implements the act can decide whether and
how to implement the act, then it will be the decision of that institution, and not the first act,
that is of direct concern to him/her. For example, if certain Regulation requires Member State
authorities to pay agricultural subsidies to producers of certain product, limiting the ceiling of
such subsidy, it is the Regulation which possibly violates the right of a producer who claims to be
entitled to higher amount, even though, it will be the State Ministry for Agriculture or Finances
that will effectuate the payment. If, on the contrary, such Regulation grants the right to subsidy,
and leaves to the Member States to decide about the concrete amount, the right of a producer
claiming to be entitled to more than what he/she received from the relevant Ministry, will not be
potentially breached by the Regulation, but by the decision of the Ministry. In such situation, the
producer would lack direct concern to challenge the Regulation.
Direct concern, thus, does not represent the problem. The problem lays in the Court’s restrictive
interpretation of the meaning of ‘individual concern’. The formula was established in case 25/62
Plaumann. Read the case and find the formula for individual concern. What do you think about
it? What do you think about how the Court applied the formula in relation to Plaumann? Is that
how you would understand the formula? By the formula and the way in which it is applying it,
the Court has interpreted individuals’ right to bring an action for annulment very restrictively.
What may be the policy reasons for such a decision of the ECJ?
Due to such restrictive interpretation, several opinions were expressed about the need to change
it. Some of them were coming from the Court itself (by AG Jacobs, and the Court of First
Instance). Before addressing these proposals and their argumentation, as well as the way in
which the Lisbon Treaty has dealt with this issue, it is necessary to explain indirect ways of
initiating judicial review of EU law, and their relationship to direct actions.
22
Plea of Illegality
The action for annulment must be brought to the court within the time limit of 2 months from
the date of its publication, notification or from the moment the applicant found out about it. The
consequence of failure to challenge a decision within the time-limit is that it becomes definitive
against the addressee of such decision. If this deadline has elapsed, or if an individual did not
have standing to ask directly for the annulment, the EU act in question may be challenged
indirectly.
The first indirect way of challenge is plea of illegality (Article 277 TFEU). Plea can be raised only in
the proceedings in front of the CJEU (be it the ECJ, General Court or specialised EU courts) and
not in national court. Even though the article talks only about regulation, the ECJ’s approach is
substantive – thus, any act of general application may be challenged by plea of illegality. Plea can
be put even after the expiry of the time-limit for direct challenge. The unanswered question is
still whether privileged applicants can raise plea of illegality even if they did not challenge the act
in question directly? Can you think of reasons for and against this?
Preliminary ruling on validity
Second, much more important way of indirect challenge is preliminary ruling on validity (Article
267 TFEU). It enables individuals to challenge EU acts which they could not challenge directly
because they lacked standing in direct action for annulment in the CJEU. The challenge is initiated
in the course of proceedings in the domestic court, which then sends a reference to the ECJ on
the question of validity of applicable EU act. Can you think of a type of situation in which this may
occur?
The range of acts whose validity may be put in question this way is wider than in the case of plea
of illegality – all EU acts, not only those of general application, may, in principle, be thus
challenged.
Since the case Foto-Frost was decided by the ECJ, the judicial review of EU acts was centralised,
making only the CJEU competent to decide on invalidity of EU acts. Read the case, and pay
attention to the reasons offered by the ECJ to justify its exclusive right to proclaim an EU act
invalid. Read also the text of Article 267 TFEU. Has the ECJ interpreted the Treaty contrary to its
wording? What do you think about the justifications offered by the ECJ?
The consequence of the case Foto-Frost is that the national court confronted with the possibly
invalid EU act cannot decide on its invalidity and leave it disapplied on its own, but has to initiate
preliminary ruling proceedings on invalidity in front of the ECJ. This applies to courts of last
instance, but also to the courts of lower instances in the domestic procedure.
Even though in preliminary ruling the power of the Court is confined to a declaration of invalidity
of an EU act (whereas in direct action it annuls the act), practical consequences are the same.
Namely, the declaration of invalidity also has erga omnes effect. This was explained by the Court
in the case 66/80 ICC in following terms:
“13 IT FOLLOWS THEREFROM THAT ALTHOUGH A JUDGMENT OF THE COURT GIVEN UNDER
ARTICLE 177 OF THE TREATY DECLARING AN ACT OF AN INSTITUTION, IN PARTICULAR A COUNCIL
OR COMMISSION REGULATION , TO BE VOID IS DIRECTLY ADDRESSED ONLY TO THE NATIONAL
COURT WHICH BROUGHT THE MATTER BEFORE THE COURT , IT IS SUFFICIENT REASON FOR ANY
OTHER NATIONAL COURT TO REGARD THAT ACT AS VOID FOR THE PURPOSES OF A JUDGMENT
WHICH IT HAS TO GIVE .”
23
Relationship between direct and indirect challenge
The question that is not yet completely clarified is whether an individual can challenge the act
indirectly if he/she could have challenged it directly in General Court within the time limit of 2
months. The partial answer to this question was offered by the ECJ in case TWD. Read it. How
was this case distinguished by the ECJ from the previous cases Rau and Universität Hamburg?
Which issues remained unsolved after TWD? How would you solve them? Which value did the
ECJ invoked in TWD to justify its decision? If it decided differently – that notwithstanding the
expiry of time limit in Article 263 the challenge may be brought – what value would it then be
protecting?
Changes in standing of individuals in direct actions
Problems in relationship between direct and indirect challenge are partly the result of restrictive
and confusing case law about the standing of individuals in direct actions for annulment. PreLisbon, there were many calls for the change in that case-law. Read the Opinion of AG Jacobs in
case UPA, and the judgement of the CFI in case Jégo Quéré. What reasons were given for
widening the standing of individuals in annulment actions? AG Jacobs claims that indirect
challenge is not an effective remedy. The right to effective remedy was confirmed by the ECJ on
many occasions in relation to the powers on national courts (we will deal with that case law later
in this course). Why does AG Jacobs think that indirect challenge via preliminary ruling is not an
effective remedy? What test for individual concern does he propose? In Jégo Quéré, what did the
CFI say about effective judicial protection? What test did it propose for individual concern?
Has the ECJ accepted the proposed changes? Read the judgement of the ECJ in the appellate
proceedings in case Jégo Quéré. Has the Court accepted the CFI reasoning? What reasons has the
Court given? Do you agree with the ECJ?
Lisbon Treaty has amended the text of Article 263/4 for the first time since its inception in 1958. Do
the proposed changes follow AG Jacobs proposal? CFI proposal? Could they solve the problem of
standing of individuals in action for annulment?
New provision opened the possibility for individuals to challenge regulatory acts which do not
require implementing measures without proving individual concern (direct concern is still a
condition). How much this helps individuals in challenging EU acts depends on the interpretation of
the term ‘regulatory act’ and of the expression ‘which does not entail implementing measures’.
Recent case-law started to provide answers to these questions. In case T-18/10 Inuit, the general
Court offered its vision of the proper interpretation of the term ‘regulatory act’. Read the case. Is this
restrictive or wide interepretation? Could you think of different interpretation? How does this
interpretation addresses concerns raised by AG Jacobs? The matter was thus far interpreted only by
the General Court. Until the ECJ confirms the General Court’s interpretation, we can still not be
certain about the meaning of ‘regulatory act’. Inuits introduced the new action, challenging this time
the implementing act directly, and the Regulation indirectly (case T-526/10). Should this case be
decided during the course, we will discuss it.
24
Grounds of invalidity
There are 4 grounds of annulment envisaged by 263/2 TFEU. The grounds are expressed in generous
way and were given extensive interpretation by the Court.
First of them, lack of competence, was up to today often used in order to challenge the proper legal
basis in order to solve the issue of horizontal distribution of competences between the institutions.
Lately, this ground also became relevant in the battles about vertical division of competences – to
answer the question does the EU have power to enact certain act at all, or is this power reserved to
the Member States? Thus, the question of federal separation of powers becomes an important issue
in the EU legal order. In the case C-376/98 Tobacco Advertising, the ECJ has annulled an EU Directive
for the lack of powers on the EU level for the first time in that Court’s history (and so far, also the
last). The case came to the Court on the basis of direct action introduced by Germany for the
annulment of the Directive on advertising of tobacco products. In the case C-491/01 BAT and case C210/03 Swedish Match, the allegation that an EU act was invalid for the lack of an EU competence
was put in front of national courts, and then reached the ECJ indirectly, via preliminary rulings on
invalidity.
Level of scrutiny
Important issue in every system of judicial review is not only what may be challenged, but the
intensity of review with which the Court is assessing the validity of different types of decisions of
political bodies. To discuss the issues of level of scrutiny chosen by the Court it is necessary to enter
into substance of judgements in particular policy areas. There is no time to enter into such issues
within this course. Do, however, read, Craig and De Burca's short overview of this problem (at. pp.
569 - 571), and try to think about this issue when you read cases for the classes on the internal
market. One interesting, and still under-researched topic is whether the Court controls EU political
institutions with the same intensity as the institutions in the Member States.
25
Unit 5
Preliminary Ruling Procedure in Interpretation
Preliminary ruling procedure, regulated today by Article 267 TFEU, is usually described as the most
important mechanism of constitutionalisation of European law. And, indeed, it gave the ECJ the
opportunity to develop the most important constitutional doctrines (remember that, for example,
both direct effect in Van Gend en Loos, and supremacy in Costa v ENEL emerged from the preliminary
ruling). It also enabled the ECJ to create European judicial system that comprises all national courts,
making them, if not always it’s allays, then at least its most important interlocutors.
We have already mentioned preliminary ruling procedure when we talked about judicial review of EU
law. Article 267 TFEU empowers the ECJ to judge on two types of issues – to assess validity of EU law
and to interpret it. Of course, interpretation is the necessary first step in any legal decision, so it is
also in the assessment of validity. Thus, preliminary ruling is important not because it empowers the
ECJ to interpret EU law – this is what the courts do – but because it gives its interpretations the force
of the final word.
Today, the procedure is regulated by the single Article in the Treaty, Article 267 TFEU. And the
procedure regulated by that Article is applicable for the interpretation of the entire Treaty based law,
for which the ECJ has jurisdiction – that is, for all issues pertaining to former first and third pillars. In
the Nice Treaty, relevant provision was Article 234 TEC. Before Lisbon Treaty entered into force,
procedure in the field of asylum, immigration, and judicial cooperation in civil matters (then Chapter
IV of the TEC) was regulated by Article 68 TEC. Procedure in the third pillar was regulated by Article
35 TEU. Both procedures differed in some important details from the main procedure. Euratom
Treaty has the same procedure as the one provided for in the Lisbon Treaty Article 267 TFEU. It is
regulated by Article 150 Euratom.
Lisbon Treaty did not introduce considerable changes in the main procedure. However, big change
was created by merging first and third pillar, and submitting all issues relating to area of freedom,
security and justice under the jurisdiction of the ECJ according to the rules of the main procedure.
Below, you find both the provision of Nice and of Lisbon Treaty in parallel.
26
Nice Treaty - Article 234 TEC (ex 177)
Lisbon Treaty - Article 267 TFEU
The Court of Justice shall have jurisdiction to
give preliminary rulings concerning:
The Court of Justice of the European Union
shall have jurisdiction to give preliminary
rulings concerning:
(a) the interpretation of this Treaty;
(b) the validity and interpretation of acts of
the institutions of the Community and of the
ECB;
(c) the interpretation of the statutes of bodies
established by an act of the Council, where
those statutes so provide.
Where such a question is raised before any
court or tribunal of a Member State, that
court or tribunal may, if it considers that a
decision on the question is necessary to
enable it to give judgment, request the Court
of Justice to give a ruling thereon.
Where any such question is raised in a case
pending before a court or tribunal of a
Member State against whose decisions there
is no judicial remedy under national law, that
court or tribunal shall bring the matter before
the Court of Justice.
(a) the interpretation of the Treaties;
(b) the validity and interpretation of acts of
the institutions, bodies, offices or agencies of
the Union;
Where such a question is raised before any
court or tribunal of a Member State, that
court or tribunal may, if it considers that a
decision on the question is necessary to
enable it to give judgment, request the Court
to give a ruling thereon.
Where any such question is raised in a case
pending before a court or tribunal of a
Member State against whose decisions there
is no judicial remedy under national law, that
court or tribunal shall bring the matter before
the Court.
If such a question is raised in a case pending
before a court or tribunal of a Member State
with regard to a person in custody, the Court
of Justice of the European Union shall act with
the minimum of delay.
27
As preparation for the class, read the chapter on preliminary ruling from a textbook of your choice.
We shall not deal with every aspect of procedure in the class. Preliminary ruling procedure is based
on the cooperation between the ECJ and national courts. What I shall try to show is how has the
procedure changed, and how this has affected the relationship between two most important actors –
ECJ and national courts. We shall try to figure out possible reasons for this, including the question of
whether this was justified or should be criticized.
Jurisdiction to answer preliminary requests (either on interpretation or on validity) is exclusively in
the hands of the ECJ. However, since the Nice Treaty (and taken over into the Lisbon Treaty – Article
256/3 TFEU), it is provided that this jurisdiction may in some areas also be devolved to the General
Court. This is to be provided for in the Statute, which may be amended in accordance with the
ordinary legislative procedure (EP and Council acting together). The proposal may come either from
the ECJ or from the Commission, the other institution being consulted. For now, the ECJ is not
prepared to give up part of its preliminary ruling jurisdiction, as this might prove damaging for the
uniformity of EU law.
Purpose of Preliminary Ruling on Interpretation
The main purpose of the preliminary ruling procedure is to ensure the uniform application of EU law.
Think about how is the uniform application of law guaranteed within the domestic judicial systems?
Because judicial construction of law is not only the task of the Court but is a discursive exercise, the
Treaty (in Statute of the ECJ, Art. 23) allowed for large number of participants in the preliminary
ruling. Thus, parties to the domestic dispute, all Member States, as well as Commission are invited to
give their opinions to the Court as to the proper construction of the EU rule in question. Additionally,
if the act originates from the Council, European Parliament, the ECB or an agency or body of the EU,
they may as well intervene in the case. The possibility of participation of many different interests in
constructing the meaning of EU law legitimizes the ‘final word’ status of the preliminary rulings given
by the Court.
Very often the reason why Member States’ courts seek preliminary ruling from the Court is to enable
them to decide about non-application of a rule of national law. Thus, preliminary ruling plays an
important role in facilitating judicial review of national law for its conformity with EU law.
Initiator of Preliminary Ruling Procedure
The preliminary ruling procedure is put in motion exclusively by national courts. It is, therefore,
important to know what is meant by that expression (the Treaty expression in English version is
'court or tribunal of a Member State'). The ECJ explained that the concept of ‘court or tribunal’ is an
EU law concept. It, therefore, falls on the ECJ to explain its meaning. The ECJ has never given
complete definition of that expression, but rather stated some elements which an institution has to
fulfil in order to be deemed a ‘court or tribunal’. Thus, the institution has to be established by law,
apply rules of law in deciding, end up proceedings with binding decisions of definitive character, be
established as lasting, conduct procedure inter partes, be independent, its jurisdiction must be
28
compulsory (that is does not depend on the acceptance of the parties)... ‘Court or tribunal’ can also
be an institution common to more Member States, as is, e.g. Benelux Court. An institution can
sometimes lack some of the enumerated elements, especially inter partes procedure requirement,
and still be considered a ‘court or tribunal’. In any case, as the concept of the court is not national,
but rather European, some institutions that are not considered courts under national law might still
be in position to require preliminary ruling from the ECJ, and vice-versa, some institutions
understood as courts under national legal system, might not be courts for the purpose of preliminary
ruling.
In your materials you will find the Opinion of Advocate General Colomer in case C-17/00 De Coster, in
which he gives the overview and critique of the ECJ's case law on this issue. It is offered as optional
reading as you are not required to read it as part of preparation for class. Do, however, read it when
preparing for the exam. Think about which bodies in your country could be deemed to be 'court or
tribunal' in the sense of Article 267 TFEU. Why is it important what is 'court or tribunal' from the
ECJ's point of view? Why is it important from the point of view of domestic institutions?
The national 'courts or tribunals' have either discretion or obligation to refer to the ECJ for the
interpretation of EU law. Compare in this respect paragraphs 2 and 3 of the Article 267 TFEU (this
part of the provision was not changed by the Lisbon treaty). Many issues relating to both discretion
and the duty were clarified in the case law. Therefore, in order to help national courts, the ECJ has
prepared the Note addressed to them. Read the Note.
Discretion to refer and jurisdiction of the ECJ
Discretion to refer comprises the decision on whether to refer and when in the course of domestic
proceedings to refer. This does not mean that every reference from the national court automatically
establishes jurisdiction of the ECJ. There are occasions in which the ECJ would not consider itself to
have jurisdiction to answer the question posed by national court. Read again Article 267 TFEU and
find in its text reasons for the ECJ to decline jurisdiction to decide on question posed by national
court.

Question has to concern interpretation of the 'Treaties' or 'acts of the institutions, bodies, offices
or agencies of the Union’
‘Treaties’ to which provision refers are Treaty on the European Union and TFEU. The ECJ has
jurisdiction to interpret all provisions of the Treaties except those relating to the CFSP (Article 275
TFEU). Nice Treaty version of the preliminary ruling provision mentioned only EU institutions and the
ECB as bodies whose acts could be object of the ruling on interpretation. Lisbon Treaty enlarged
jurisdiction of the Court also to the acts of any other body, office or agency that is established under
EU law. Decisions adopted under the CFSP powers cannot, however, be interpreted by the ECJ. The
Court’s jurisdiction in that respect is expressly excluded by already mentioned Article 275 TFEU.
29
Even though the Treaty does not expressly mention international agreements signed by the EU, the
ECJ has found to have jurisdiction for their interpretation, treating them as the acts of the institutions
(case 181/73 Haegeman). It has likewise found itself competent to interpret acts adopted on the
basis of such international agreements (case 129/89 Sevince), as well as agreements to which EU
succeeded in the place or parallel to Member States, such as GATT (joined cases 267-268 SPI). Even if
the argumentation offered by the ECJ was criticized (see Hartley), the ECJ’s jurisdiction to interpret
international agreements to which EU is a party is not today disputed.
The case law has also made it clear that an act of the institutions need not have direct effect (case
111/75 Mazalai) nor be legally binding (case C-322/88 Grimaldi) in order to trigger ECJ’s
interpretative jurisdiction.
There is one disputed situation in which the ECJ has considered itself to have jurisdiction, but this
was opposed by several of its Advocate Generals and some scholars. There are situations in which
internal laws of Member States adopt EU law solutions even for purely internal situations. When
internal law was explicitly or implicitly relying on EU rule, the ECJ considered itself competent under
Article 234 TEC (today 267 TFEU) to give interpretation of such EU rule. Read the case Dzodzi and the
Opinion of AG Darmon. Who, according to you is right? Why?
Except for the peculiar situation in Dzodzi line of cases, the question cannot concern interpretation of
domestic law. The national courts often need preliminary ruling in order to decide whether the
provision of domestic law is conform or contrary to EU rule. Therefore, they often formulate
questions to the ECJ in those terms: Is the provision of the Italian law X contrary to Article C of
Directive Y? The ECJ will not necessarily decline jurisdiction in such cases. It may reformulate the
question, so as to extract the relevant issues of interpretation of EU law. The reformulated question
would be something like: What is the proper meaning of Article C of Directive Y when it has to be
applied to a situation as the one in the case in front of national court? Also, the ECJ can expand the
question of national court to issues of EU law that the national court has not mentioned (Case 35/85
Tissier).

Question has to concern 'interpretation', not the ‘application’ of EU law.
What is the dividing line between interpretation and application? Read the answer (operative part of
the judgment) given to national court in the case C-144/04 Mangold :
“On those grounds, the Court (Grand Chamber) hereby rules:
1. On a proper construction of Clause 8(3) of the Framework Agreement on fixed-term contracts
concluded on 18 March 1999, put into effect by Council Directive 1999/70/EC of 28 June 1999
concerning the framework agreement on fixed-term work concluded by ETUC, UNICE and CEEP,
domestic legislation such as that at issue in the main proceedings, which for reasons connected with
the need to encourage employment and irrespective of the implementation of that agreement, has
lowered the age above which fixed-term contracts of employment may be concluded without
restrictions, is not contrary to that provision.
30
2. Community law and, more particularly, Article 6(1) of Council Directive 2000/78/EC of 27
November 2000 establishing a general framework for equal treatment in employment and occupation
must be interpreted as precluding a provision of domestic law such as that at issue in the main
proceedings which authorises, without restriction, unless there is a close connection with an earlier
contract of employment of indefinite duration concluded with the same employer, the conclusion of
fixed-term contracts of employment once the worker has reached the age of 52.
It is the responsibility of the national court to guarantee the full effectiveness of the general principle
of non-discrimination in respect of age, setting aside any provision of national law which may conflict
with Community law, even where the period prescribed for transposition of that directive has not yet
expired.”
Has the ECJ interpreted or applied EU law in that case? Do you consider such practice of giving very
concrete answers to the national courts good or bad, and why?

'Where such a question is raised…'
Who has to raise the question: Parties; national Court?
Can national rules on the procedure and organisation of judicial system prevent national court from
raising the issue?
Read in this respect case 166/73 Rheinmühlen. Think about the consequences of the Court’s ruling on
the relations within the internal judicial hierarchy. Who wins? Think about the application of
Rheinmühlen in your country. Th Court has confirmed its Rheinmühlen position in case Elchinov,
despite the contrary proposal of its Advocate General. Read the Opinion and the Judgment in
Elchinov.
In two cases – joined cases C-430-431/93 Van Schijndel and case C-312/93 Peterbroeck, the ECJ has
confirmed that national procedural rules cannot stand in the way to efficiency of preliminary ruling
procedure, unless they may be justified by legitimate reasons acceptable to both national and
European legal order. The rule that seems to have emerged from these cases is that the national
court has to rise issues of EU law on its own motion, and then, if necessary pass them to the ECJ, if
national law obliges it to rise issues of domestic law ex officio, or if it only empowers the court to do
so. On the other hand, if rising legal issues of its own motion is prohibited by domestic law, the judge
need not raise the issue of EU law either, provided that the rule preventing judge from such
behaviour can be justified by reasons acceptable also from the point of view of European law. What
does described case law mean for the courts in the countries in which the principle iura novit curia is
literally understood?
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
'…that court or tribunal may…'
The preliminary ruling should help the judge who decides the case to solve the case. Therefore, the
judge can only ask for the interpretation in her own name, and not for the benefit of some other
proceedings or for general interest. That means that only the judge in front of who the case is still
pending can ask the question. If she has concluded the case, without the possibility of its reopening
in front of that same judge, even if an appeal is possible, but it lies in front of another judge, the ECJ
will decline jurisdiction to answer the question (case 338/85 Pardini).

'…if it considers that a decision on the question is necessary to enable it to give judgment…'
The important issue here is who decides whether the answer is necessary? Read the Treaty provision
again. What would you conclude?
Now read the case Foglia v Novello II. What was the ECJ's opinion on who decides on the necessity of
answer to the question? How has the Court described purpose of preliminary ruling procedure?
The Court’s control over the issue whether the answer to the question posed by national court is
necessary became in the eighties and especially in the nineties more tight. Except for the situations
when it declined jurisdiction because the question asked was not, according to the ECJ's opinion,
relevant for the resolution of the dispute (for example, C-343/90 Laurenco Dias) or was hypothetical
(for example, C-83/91 Meilicke), the ECJ started to decline jurisdiction because the national court did
not submit to it enough information on factual and internal legal context of the case (for example, C307/95 Max Mara). This, according to the ECJ, disables it to check whether the issue of EU law is at
all relevant for the dispute in front of the national court, and it does not allow it to give useful answer
to the court.
What are possible motives of the Court for tightening the control over the national courts’
questions? Are they justified? Do you see any problems with this? How could the Court's attitude
towards the issue who decides about the necessity of the question influenced the relationship
between ECJ and national courts?
In the newer case law, the Court still reserves for itself the power to control the relevance of the
question asked, but the retorics is more deferent to the national courts. The usual formula used
today by the Court is illustrated by this quote from the case Cartesio Octató:
“67. According to settled case-law, there is a presumption of relevance in favour of questions on the
interpretation of Community law referred by a national court, and it is a matter for the national court to
define, and not for the Court to verify, in which factual and legislative context they operate. The Court
declines to rule on a reference for a preliminary ruling from a national court only where it is quite
obvious that the interpretation of Community law that is sought is unrelated to the actual facts of the
main action or to its purpose, where the problem is hypothetical, or where the Court does not have
before it the factual or legal material necessary to give a useful answer to the questions submitted to it.”
32
Duty to refer
According to third paragraph of Article 267 TFEU, the courts of last instance cannot choose whether
to refer a question to the ECJ, if the answer to it is necessary to solve the dispute. They must refer.
Whether a court is the court of last instance is judged in every particular case. Thus, for example, in
Costa v ENEL, the ECJ considered the Giudice conciliatore to be the court of last instance in the sense
of paragraph 3. Giudice was judge against whose decisions an appeal usually lies. However, in the
case in question this was not so, as it involved a very small amount of money. Find the relevant
paragraph in the judgment.
However, even if there is a relevant issue of EU law, there are two situations which relieve the court
of last resort of the duty to refer. Read the case CILFIT and identify these two situations.
The acceptance of the so called acte claire doctrine in CILFIT was, according to commentators, a
reaction of the Court to the already existing practice of Member States’ highest courts to avoid
sending references to the ECJ. However, the opinions of scholars about the aims that the ECJ wanted
to accomplish in CILFIT and about its outcomes differ. Read the overview of different opinions in
Craig/De Burca, pp. 446-449, (or even better, read articles mentioned there), and be prepared to
discuss the issue in the class.
Note that acte claire doctrine applies only to preliminary ruling on interpretation, not on validity. If
there is a possibility that an EU act is invalid, the ECJ has, since the case 314/85 Foto-Frost, the
exclusive jurisdiction to declare such invalidity. Therefore, all national courts have the obligation to
refer, which does not disappear if it is obvious that EU act is invalid (see in that respect case C-461/03
Gaston Schul).
Effects of preliminary rulings on interpretation
In CILFIT (paragraph 13), the ECJ repeated a statement from an early decision in the case 28-30/62
Da Costa. Read that paragraph of the judgment. What can you conclude about the effects of the
preliminary rulings? Who do they bind? Only the national court which referred the question; other
national courts; someone else?
If Da Costa established a system in which the ECJ's interpretations bind all national courts, a system
thus similar to the systems based on precedent, how would you interpret the finding of the Court
that, notwithstanding the previous ruling, the national court can nevertheless repeat the question? If
the previous interpretation is binding, can the repeated question pass the hurdle that it has to be
'necessary'? If the previous ruling is binding, what could be the justified reason for the national court
to ask the ECJ same question again? Reading case Da Costa might help in finding an answer to that
question. It is on your optional reading list.
Having in mind that courts of lower instances enjoy discretion whether to refer the question and
therefore also the possibility to interpret EU rules themselves, can such courts interpret EU law
differently from the previous ruling of the ECJ?
33
Can you think of justifications for the erga omnes effects of Court's interpretation? What can be the
policy reasons justifying such a choice? The ECJ has offered some legal justifications in joined cases
Salumi that was relevant for the question of temporal effects of preliminary rulings. Read the case
and identify the justification offered by the ECJ. What about the effects in time? Do the
interpretations bind the courts pro futuro or do they have retroactive effect? How can you justify
this?
In the case 43/75 Defrenne II, the ECJ has for the first time limited the effects of its judgment only to
the pending and future cases. This was justified by financial concerns. What does such a choice tell us
about the previously discussed issue on who do the preliminary rulings bind?
Craig and De Burca said that making preliminary rulings generally binding changed the bilateral
relationship between the ECJ and national courts into multilateral one. Explain. Having in mind other
constitutional doctrines, especially direct effect, did the ECJ really have any other choice?
Urgent Preliminary Ruling Procedure - PPU
Even though the ECJ is performing better year after year, the preliminary ruling procedure lasts for
long time. According to statistics, in 2010, it lasted on average 16 months. This is only a fragment of
the procedure that is taking place in the national court. There are situations, in which it is
unacceptable for a person in front of the court to wait that long. Take, for example, someone
imprisoned, or a kid in the middle of a dispute on custodial rights.
With the introduction of the EU power in criminal judicial co-operation, this problem became even
more accentuated. For that reason, the ECJ proposed the introduction of the Urgent preliminary
ruling procedure (so called PPU – from French procédure préliminaire d’urgence). This procedure
applies only in cases on interpretation or assessment of validity of Title V of Part Three TFEU, relating
to the area of freedom, security and justice. It applies in matters of real urgency and allows for much
shorter decision-making by the Court. This is achieved through assigning the task of required
interpretation to a chamber designated only for urgent procedures, through omitting certain stages
in the procedure, shortening of time limits, and through omitting part of the translation that is
performed in the regular procedure. Procedure should not last for longer than 2 months, and up to
today fourteen decided cases respected that limit. The Court expanded the Note on Guidance to
national courts to cover also the PPU.
Lisbon Treaty (new, fourth paragraph of Article 267 TFEU) requires that urgency is afforded also to
any case that relates to a person in custody, notwithstanding which part of EU law requires
interpretation for the case to be solved. Thus far, existing rules on PPU satisfied this requirement.
Future of the Preliminary ruling procedure
As the EU legal system has today constitutionally matured, the question arises should something be
modified in the judicial structure in the EU. Among other proposals, there is one about creating the
appellate legal system, making the ECJ appellate court on questions of EU law. What do you think
34
about this proposal? Would it solve the big problem of today’s preliminary rulings that considerably
prolong the time till the solution of the dispute? Would it relieve the workload of the ECJ? How
would you transform the EU judiciary?
Others proposed that the ECJ is given power to control its own docket. Do you find this a good
solution for the preliminary ruling? Likewise, today, there are no dissenting opinions in the ECJ.
Should they be allowed? How would this influence the preliminary ruling procedure? Would it breach
its purpose of assuring uniform application of EU law?
The Lisbon Treaty has not introduced any substantive changes into the preliminary ruling procedure.
Thus, it should not be expected that the ECJ’s jurisdiction and its relationship with national courts will
change in the close future.
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Unit 6
National Courts in EU Legal Order: Direct Effect
Apart from the courts established at the European level (ECJ, General Court and specialized courts),
all national courts of the Member States are also European courts in the sense that they are obliged
to provide protection to the rights which individuals derive from EU law
Main concepts that involved national courts as EU judiciary were direct effect and supremacy. Direct
effect and supremacy are a result of Court’s federal vision of Europe. Namely, in certain areas
Member States transferred regulatory powers to the EU, which justifies that the legal norms created
on the basis of such powers directly penetrate each national legal order and have precedence over
rules of national law.
Supremacy, in short, means that EU law prevails over prior and posterior national law (6/64 Costa v.
ENEL; 106/77 Simmenthal).
Direct Effect means that clear and precise provisions of EU law are directly applicable by Member
States’ authorities, including their courts (procedural direct effect); it also means that such EU rules
create on their own rights which national courts must protect (substantive direct effect). Direct effect
was explained by the Court for the first time in the case 26/62 Van Gend en Loos, in relation to a
Treaty provision.
Consequence of combination of direct effect and supremacy of EU law for national courts is their
obligation to apply directly rule of EU law, leaving, if necessary, non-applied any contrary provision of
national law.
However, direct effect became a complex concept with its application to Directives. Directives are
most frequently used legislative instrument at the EU level. Their capacity to create rights for
individuals independently of the Member States transposition measures was developed through the
ECJ’s case law. So was the correspondent obligation of national courts to provide for the protection
of those rights.
As judicial practice had to justify direct effect of Directives, not at first acceptable to all national
courts, the entire concept of direct effect became unclear. In this short overview, I will first give short
outline of the judicial developments of direct effect of directives. This should remind you of the cases
you have already read in the basic course in EU law.
We will then deal with cases (CIA, Unilever) in which the Court seemed to depart from its case law on
Directives and the obligations they create for national courts. We will try to find the explanation for
these cases.
We will also explore one possible understanding of direct effect on the basis of the case C-287/98
Linster, especially the opinion of Advocate General Léger.
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Vertical/Horizontal Direct Effect of Directives (overview of case law)
Wording of Article 288 TFEU does not necessarily suggest that directives have direct effect:
“A directive shall be binding, as to the result to be achieved, upon each Member State
to which it is addressed, but shall leave to the national authorities the choice of form
and methods.“
However, the ECJ recognized direct effect of Directives (9/70 Grad; 41/74 Van Duyn), even if it had
not immediately called it so.
o Para. 12 of the judgment in Van Duyn:
“If, however, by virtue of the provisions of article 189 regulations are directly applicable
and, consequently, may by their very nature have direct effects, it does not follow from
this that other categories of acts mentioned in that article can never have similar effects.”
Main justification the Court offered for recognizing direct effect of Directives in Van Duyn was
effectiveness of Directives, as part of EU law:
o para. 12 of the judgment in Van Duyn:
“… the useful effect of such an act would be weakened if individuals were prevented from
relying on it before their national courts and if the latter were prevented from taking it
into consideration as an element of Community law.”
Several courts in Member States refused to accept direct effect of directives (most importantly,
French Conseil d’Etat in Cohn-Bendit /1978/; Bundesfinanzhof in Kloppenburg /1985/).
Thus, the ECJ needed to persuade national courts in its position. It, therefore, added new argument
in favour of direct effect of Directives, often named the estoppel argument (148/78 Ratti).
o Para 22 of the judgment in Ratti:
“Consequently a Member State which has not adopted the implementing measures
required by the directive in the prescribed period may not rely, as against individuals, on
its own failure to perform the obligations which the directive entails.”
Using Ratti type argument for justification of direct effect of Directives resulted in differentiation
between vertical and horizontal situations. Thus, the case law established that Directives can have
vertical, but not horizontal direct effect (152/84 Marshall; C-91/92 Faccini Dori). Reason given by the
ECJ is that directive cannot of itself impose obligations on an individual (thus, the individual who was
supposed to have a right cannot rely on another individual’s failure to fulfil the obligation, as there is
no obligation)
Effect of non recognition of horizontal direct effects of Directives was less effectiveness,
discrimination within the state and among the states.
37
To alleviate some of these negative consequences, the ECJ developed some new concepts, many of
which made the original idea of direct effect less understandable and defendable.
Thus, the Court interpreted widely the notion of ‘state’ (C-188/89 Foster, para. 18): organizations or
bodies which are subject to the authority or control of the State or have special powers beyond those
which result from the normal rules applicable between individuals.
The Court also developed doctrine of indirect effects, which is today a self-standing concept in EU
law, and not only a remedy for gaps in direct effect of Directives. We shall talk about indirect, or
interpretative effect under the following Unit.
Finally, the Court has also instituted the EU concept of state liability for damages for, among other,
non-transposition or improper transposition of a Directive (C-6 and 9/90 Francovich)
The Court has also sometimes, without clear explanation allowed for the invocation of Directives in
horizontal situations.
All this created confusion as to what does direct effect really mean (read Craig’s article in your list of
optional reading). There are scholars, including AGs, who therefore plead in favour of the recognition
of horizontal effects of directives, which would simplify the concept.
Below, you will find the excerpt from the case Faccini Dori. It is given for its clear expression of the
position of the Court in relation to possible effects of EU Directives.
C-91/92 Paola Faccini Dori v Recreb Srl.
Reference for a preliminary ruling: Giudice conciliatore di Firenze - Italy.
(1994) European Court reports I-3325
Relevant facts (in short): Company Recreb concluded a contract with Miss Faccini Dori at Milan
Central Railway Station for an English language correspondence course. Some days later, by
registered letter Miss Faccini Dori informed that company that she was cancelling her order,
indicating inter alia that she relied on the right of cancellation provided for by the Council Directive
85/577/EEC, concerning protection of the consumer in respect of contracts negotiated away from
business premises. Recreb did not accept the cancelation notice and asked the Giudice Conciliatore di
Firenze to order Miss Faccini Dori to pay it the agreed sum with interest and costs. The judge ordered
Miss Faccini Dori to pay the sums in question, to which order she lodged an objection with the same
judge. The judge stayed the proceedings to receive the answer from the ECJ in preliminary ruling on
whether it can apply the directive in question. At the material time Italy, had not taken any steps to
transpose the directive into national law, although the period set for transposition had expired
Judgment (relevant parts)
(…)
Whether the provisions of the directive concerning the right of cancellation may be invoked in
proceedings between a consumer and a trader
19 The second issue raised by the national court relates more particularly to the question whether, in
the absence of measures transposing the directive within the prescribed time-limit, consumers may
derive from the directive itself a right of cancellation against traders with whom they have concluded
contracts and enforce that right before a national court.
38
20 As the Court has consistently held since its judgment in Case 152/84 Marshall v Southampton and
South-West Hampshire Health Authority [1986] ECR 723, paragraph 48, a directive cannot of itself
impose obligations on an individual and cannot therefore be relied upon as such against an
individual.
21 The national court observes that if the effects of unconditional and sufficiently precise but
untransposed directives were to be limited to relations between State entities and individuals, this
would mean that a legislative measure would operate as such only as between certain legal subjects,
whereas, under Italian law as under the laws of all modern States founded on the rule of law, the
State is subject to the law like any other person. If the directive could be relied on only as against the
State, that would be tantamount to a penalty for failure to adopt legislative measures of
transposition as if the relationship were a purely private one.
22 It need merely be noted here that, as is clear from the judgment in Marshall, cited above
(paragraphs 48 and 49), the case-law on the possibility of relying on directives against State entities is
based on the fact that under Article 189 a directive is binding only in relation to "each Member State
to which it is addressed". That case-law seeks to prevent "the State from taking advantage of its own
failure to comply with Community law".
23 It would be unacceptable if a State, when required by the Community legislature to adopt certain
rules intended to govern the State' s relations ° or those of State entities ° with individuals and to
confer certain rights on individuals, were able to rely on its own failure to discharge its obligations so
as to deprive individuals of the benefits of those rights. Thus the Court has recognized that certain
provisions of directives on conclusion of public works contracts and of directives on harmonization of
turnover taxes may be relied on against the State (or State entities) (see the judgment in Case 103/88
Fratelli Costanzo v Comune di Milano [1989] ECR 1839 and the judgment in Case 8/81 Becker v
Finanzamt Muenster-Innenstadt [1982] ECR 53).
24 The effect of extending that case-law to the sphere of relations between individuals would be to
recognize a power in the Community to enact obligations for individuals with immediate effect,
whereas it has competence to do so only where it is empowered to adopt regulations.
25 It follows that, in the absence of measures transposing the directive within the prescribed timelimit, consumers cannot derive from the directive itself a right of cancellation as against traders with
whom they have concluded a contract or enforce such a right in a national court.
26 It must also be borne in mind that, as the Court has consistently held since its judgment in Case
14/83 Von Colson and Kamann v Land Nordrhein-Westfalen [1984] ECR 1891, paragraph 26, the
Member States' obligation arising from a directive to achieve the result envisaged by the directive
and their duty under Article 5 of the Treaty to take all appropriate measures, whether general or
particular, is binding on all the authorities of Member States, including, for matters within their
jurisdiction, the courts. The judgments of the Court in Case C-106/89 Marleasing v La Comercial
Internacional de Alimentación [1990] ECR I-4135, paragraph 8, and Case C-334/92 Wagner Miret v
Fondo de Garantía Salarial [1993] ECR I-6911, paragraph 20, make it clear that, when applying
national law, whether adopted before or after the directive, the national court that has to interpret
that law must do so, as far as possible, in the light of the wording and the purpose of the directive so
as to achieve the result it has in view and thereby comply with the third paragraph of Article 189 of
the Treaty.
27 If the result prescribed by the directive cannot be achieved by way of interpretation, it should also
be borne in mind that, in terms of the judgment in Joined Cases C-6/90 and C-9/90 Francovich and
Others v Italy [1991] ECR I-5357, paragraph 39, Community law requires the Member States to make
good damage caused to individuals through failure to transpose a directive, provided that three
conditions are fulfilled. First, the purpose of the directive must be to grant rights to individuals.
Second, it must be possible to identify the content of those rights on the basis of the provisions of the
directive. Finally, there must be a causal link between the breach of the State' s obligation and the
damage suffered.
28 The directive on contracts negotiated away from business premises is undeniably intended to
confer rights on individuals and it is equally certain that the minimum content of those rights can be
identified by reference to the provisions of the directive alone (see paragraph 17 above).
29 Where damage has been suffered and that damage is due to a breach by the State of its
obligation, it is for the national court to uphold the right of aggrieved consumers to obtain reparation
in accordance with national law on liability.
30 So, as regards the second issue raised by the national court, the answer must be that in the
39
absence of measures transposing the directive within the prescribed time-limit consumers cannot
derive from the directive itself a right of cancellation as against traders with whom they have
concluded a contract or enforce such a right in a national court. However, when applying provisions
of national law, whether adopted before or after the directive, the national court must interpret
them as far as possible in the light of the wording and purpose of the directive.
Incidental effect of Directives
Shortly after Faccini Dori, the ECJ decided the case CIA. Read the case, relevant parts of which are
reproduced below.
C-194/94 CIA Security International SA v Signalson SA and Securitel SPRL
Reference for a preliminary ruling: Tribunal de commerce de Liège - Belgium.
(1996) European Court reports I-2201
Relevant facts (in short): CIA Security, a firm selling alarm systems, brought proceedings in Belgian
commercial court against Signalson and Securitel, also security firms, asking for the order requiring
them to cease unfair trading practices. Signalson and Securitel were publically claiming that alarm
systems which CIA is selling were not approved as required by Belgian technical regulations. CIA
claimed that Belgian regulation was not notified to the Commission according to Directive 83/189 on
the provision of information in the field of technical standards and regulation, and was therefore not
applicable. Belgian court stayed the proceedings and requested from the ECJ answer to several
preliminary questions.
Judgment (relevant parts)
(…)
The fifth and sixth questions
32 By its fifth and sixth questions the national court asks in substance whether the provisions of
Directive 83/189, and particularly Articles 8 and 9 thereof, are unconditional and sufficiently precise
for individuals to be able to rely on them before a national court which must decline to apply a
national technical regulation which has not been notified in accordance with the directive.
(…)
40 The first point which must be made is that Directive 83/189 is designed to protect, by means of
preventive control, freedom of movement for goods, which is one of the foundations of the
Community. This control serves a useful purpose in that technical regulations covered by the
directive may constitute obstacles to trade in goods between Member States, such obstacles being
permissible only if they are necessary to satisfy compelling public interest requirements. The control
is also effective in that all draft technical regulations covered by the directive must be notified and,
except in the case of those regulations whose urgency justifies an exception, their adoption or entry
into force must be suspended during the periods laid down by Article 9.
41 The notification and the period of suspension therefore afford the Commission and the other
Member States an opportunity to examine whether the draft regulations in question create obstacles
to trade contrary to the EC Treaty or obstacles which are to be avoided through the adoption of
common or harmonized measures and also to propose amendments to the national measures
envisaged. This procedure also enables the Commission to propose or adopt Community rules
regulating the matter dealt with by the envisaged measure.
42 It is settled law that, wherever provisions of a directive appear to be, from the point of view of
their content, unconditional and sufficiently precise, they may be relied on against any national
provision which is not in accordance with the directive (see the judgment in Case 8/81 Becker [1982]
ECR 53 and the judgment in Joined Cases C-6/90 and C-9/90 Francovich and Others [1991] ECR I5357.
40
43 The United Kingdom considers that the provisions of Directive 83/189 do not satisfy those criteria
on the ground, in particular, that the notification procedure contains a number of elements that are
imprecise.
44 That view cannot be adopted. Articles 8 and 9 of Directive 83/189 lay down a precise obligation on
Member States to notify draft technical regulations to the Commission before they are adopted.
Being, accordingly, unconditional and sufficiently precise in terms of their content, those articles may
be relied on by individuals before national courts.
45 It remains to examine the legal consequences to be drawn from a breach by Member States of
their obligation to notify and, more precisely, whether Directive 83/189 is to be interpreted as
meaning that a breach of the obligation to notify, constituting a procedural defect in the adoption of
the technical regulations concerned, renders such technical regulations inapplicable so that they may
not be enforced against individuals.
(…)
54 In view of the foregoing considerations, it must be concluded that Directive 83/189 is to be
interpreted as meaning that breach of the obligation to notify renders the technical regulations
concerned inapplicable, so that they are unenforceable against individuals.
55 The answer to the fifth and sixth questions must therefore be that Articles 8 and 9 of Directive
83/189 are to be interpreted as meaning that individuals may rely on them before the national court
which must decline to apply a national technical regulation which has not been notified in accordance
with the directive.
After you have read the case, answer the following:
-
What is different in cases Faccini Dori and CIA?
Is the situation from which a dispute in CIA arose vertical or horizontal?
Has the ECJ taken this into consideration?
After CIA was decided, many commentators concluded that the ECJ has given up its position and has
admitted horizontal effect of Directives. However, and on the contrary, the Court continued to
repeat its previous position about Directives in subsequent cases. More accurately, it continued to
repeat the sentences from paragraphs 20-24 of Faccini Dori judgment (for example joined cases C397 and 403/91 Pfeiffer, para. 108; case C-350/03 Schulte, para. 70; case C-80/06 Ecorad, para. 20;).
Thus, we may conclude that the Court still holds a position according to which a Directive cannot on
itself impose obligation on an individual and cannot, therefore, be relied in the court against an
individual.
How, then, can CIA be explained?
An answer could be looked upon in the case Unilever, although the Court was all but clear in its
explanations.
C-443/98 Unilever Italia SpA v Central Food SpA
Reference for a preliminary ruling: Pretore di Milano - Italy
(2000) European Court reports I-07535
Relevant facts (in short): In response to an order from Central Food, Unilever supplied it with certain
quantity of extra virgin olive oil. Central Food informed Unilever that the olive oil supplied to it was
not labelled in accordance with the Italian Law, and it consequently, refused to pay the amount due
and called on Unilever to remove the goods from its warehouse. Unilever contested Central Food's
41
position, on the ground that Italian Law in question is contrary to Directive 83/189, and therefore,
inapplicable. It referred to the judgment in CIA. Asserting that the olive oil supplied was therefore
wholly in conformity with the Italian legislation in force, it called on Central Food to accept the
consignment and to pay for it. Central Food refused to do so and Unilever commenced proceedings
before the Pretore di Milano for an order requiring Central Food to pay a sum corresponding to the
price of the consignment.
Judgment (relevant parts)
(…)
31 The question from the national court seeks, in essence, to ascertain whether a national court is
required, in civil proceedings between individuals concerning contractual rights and obligations, to
refuse to apply a national technical regulation which was adopted during a period of postponement
of adoption prescribed by Article 9 of Directive 83/189.
(…)
35 The Italian Government, supported by the Danish Government, observes that, whilst the Court has
indeed attributed direct effect to certain provisions of directives in that individuals, in the absence of
proper transposition, may rely on such provisions as against the defaulting Member State, it has also
held that to extend such a precedent to relationships between individuals would be tantamount to
granting the Community power to impose, with immediate effect, obligations on individuals, even
though it has no such competence except where it is empowered to adopt regulations. Thus, it is
clear from settled case-law of the Court that a directive cannot of itself impose obligations on
individuals and cannot therefore be relied on as such against them. No derogation from that principle
can be based on the judgment in CIA Security. The operative part of that judgment discloses no
intention to reverse the principle according to which a directive cannot have direct effect in
horizontal relations between individuals.
(…)
45 It is therefore necessary to consider, secondly, whether the inapplicability of technical regulations
adopted in breach of Article 9 of Directive 83/189 can be invoked in civil proceedings between private
individuals concerning contractual rights and obligations.
46 First, in civil proceedings of that nature, application of technical regulations adopted in breach of
Article 9 of Directive 83/189 may have the effect of hindering the use or marketing of a product
which does not conform to those regulations.
47 That is the case in the main proceedings, since application of the Italian rules is liable to hinder
Unilever in marketing the extra virgin olive oil which it offers for sale.
48 Next, it must be borne in mind that, in CIA Security, the finding of inapplicability as a legal
consequence of breach of the obligation of notification was made in response to a request for a
preliminary ruling arising from proceedings between competing undertakings based on national
provisions prohibiting unfair trading.
49 Thus, it follows from the case-law of the Court that the inapplicability of a technical regulation
which has not been notified in accordance with Article 8 of Directive 83/189 can be invoked in
proceedings between individuals for the reasons set out in paragraphs 40 to 43 of this judgment. The
same applies to non-compliance with the obligations laid down by Article 9 of the same directive, and
there is no reason, in that connection, to treat disputes between individuals relating to unfair
competition, as in the CIA Security case, differently from disputes between individuals concerning
contractual rights and obligations, as in the main proceedings.
50 Whilst it is true, as observed by the Italian and Danish Governments, that a directive cannot of
itself impose obligations on an individual and cannot therefore be relied on as such against an
individual (see Case C-91/92 Faccini Dori [1994] ECR I-3325, paragraph 20), that case-law does not
apply where non-compliance with Article 8 or Article 9 of Directive 83/189, which constitutes a
substantial procedural defect, renders a technical regulation adopted in breach of either of those
articles inapplicable.
51 In such circumstances, and unlike the case of non-transposition of directives with which the caselaw cited by those two Governments is concerned, Directive 83/189 does not in any way define the
substantive scope of the legal rule on the basis of which the national court must decide the case
42
before it. It creates neither rights nor obligations for individuals.
52 In view of all the foregoing considerations, the answer to the question submitted must be that a
national court is required, in civil proceedings between individuals concerning contractual rights and
obligations, to refuse to apply a national technical regulation which was adopted during a period of
postponement of adoption prescribed in Article 9 of Directive 83/189.
One way how to explain CIA and Unilever is by making a distinction between procedural and
substantive direct effect. Procedural effect refers to invocability of Directives in front of the courts.
Substantive effect refers to capacity of a legal rule to create substantive legal relationship, i.e. to
bestow rights and obligations on subjects.
Directives can, in principle, be invoked in courts both in horizontal and vertical relations. However,
directives cannot have horizontal substantive direct effect, i.e. they may not govern horizontal legal
relations in which one individual has a right and another correlative obligation. Therefore, they may
not be relied in court for the purpose of claiming that an individual has a right in relation to other
individual. But, they may be relied in court in order to claim that a rule of national law is inapplicable,
if the right of the individual who claims it flows not from a directive, but from another legal rule.
In other words, directive may be relied in national court against another individual if the right of the
individual invoking the directive is not based in the directive. The subsequent case law clarified also
that legal interest for the directive to be applied must enter under the scope of application ratione
materiae of the directive (C-226/97 Lemmens, see opinion of AG Fennelly). In simpler terms, one
cannot rely on a directive in order to render rule of national law inapplicable, if the case has nothing
to do with the purpose of the directive at issue.
Another way of explanation, which follows the similar logic, is distinguishing between so called
invocability for substitution and invocability for exclusion. In order to understand this, read the
Opinion of Advocate General Léger in case C-287/98 Linster (in your materials). However, some
cases, such as case Pfeiffer, for instance, in which a directive could have been relied on if the
described expalanations are accepted, were not solved in that way. Rather, the Court simply
repeated that Directives lack direct effect horizontally, and pointed to the other technique –
interpretative effect. Therefore, the Court’s position on this issue is still far from being clear.
Case Kücükdeveci also puts under the question tjhe willingness of the Court to further develop and
use the incidental effect doctrine. Compare in that respect the Opinion of AG Bot in paras. 87-90 with
the Judgment in Kücükdeveci. Has the Court followed its AG proposal? Can you find any reason in the
Judgment for not following the AG suggestions?
Direct Effect - Policy Issues
Approaching the issue of direct effect from policy perspective, Monica Claes describes direct effect as
appropriateness of courts to decide on something rather than to leave it to politics. In those terms,
direct effect can be understood as a tool for guaranteeing horizontal separation of powers. Who in
the EU decides whether it is appropriate for the courts to decide? Legislator? ECJ? Domestic courts?
43
Direct effect, especially when directives are concerned (or other provisions of EU law which require
action by Member States) can also be observed from the angle of vertical division of powers –
between EU and Member States. Namely, if the ECJ treats a provision of a directive as sufficiently
clear to be applied by the courts, it denies the power of domestic legislator to choose the way how to
implement a directive. The policy issue behind direct effect can therefore be framed also as the
question of appropriateness of the ECJ to decide on vertical division of powers.
Thus, for example, in case Defrenne the ECJ found the then Article 119 EC to be directly effective (at
least in cases of direct discrimination). This provision required from Member States to ensure that
the principle of equal treatment of male and female workers is applied. By stating that this provision
is applicable by the courts, the ECJ did two things – it took away the possibility to domestic legislators
to define what is understood under term equal treatment. Making it matter of EC law, it reserved the
terrain for the EU legislator; and making it the 'clear' concept (because without that the courts could
not apply the provision) it reserved to itself the power to make policy decision as to what is the
appropriate meaning of that provision. By raising it to the status of constitutionally recognized
principle, it has also opened the possibility to reverse the interpretation of the EU legislator as to
what the concept of equal treatment means.
Finally, justified question is also why have national courts accepted direct effect? For this, think
about who is empowered by direct effect of EU law and who loses? Some thoughts about this
question are given by Monica Claes in “European Mandate of National Courts”, pp. 247-264.
44
Unit 7
National Courts in EU Legal Order: Constitutional
Issues of Supremacy
Ordinary supremacy
Direct effect coupled with supremacy turns domestic courts into review courts. These two doctrines,
when addressed to courts, oblige them to apply directly EU legal norm, leaving aside any contrary
provision of domestic law. I will borrow the expression used by Monica Claes and call this type of
obligations of domestic courts a Simmenthal mandate, as it was in that case that the ECJ explained it
for the first time. You have already talked about the Simmenthal case within the course on
constitutional law of the EU. Please reread the case. There are two different instances of conflict
between the EU and domestic law in Simmenthal. Identify them. What are the national courts
required to do with the norm of domestic law that is contrary to a norm of EU law? Think about how
decision of the ECJ in Simmenthal disturbed the balance of powers between domestic institutions in
Italy.
As is quite clear from the Simmenthal, when there is a directly effective provision of EU law, domestic
courts must apply it. If at the same time, there is a contrary provision of domestic law, the courts still
have to apply EU law provision. Thus, the consequence of the combined application of direct effect
and supremacy is the obligation of national courts to disapply rules of domestic law. The courts have
to decide about disapplication on their own. They are prohibited from consulting other institution
(Constitutional Court, Parliament …) asking for permission to do so.
Even if clearly stated in Simmenthal, it took some time for the national courts to accept the
Simmenthal mandate. Domestic constitutional obstacles to the acceptance of the Simmenthal
mandate were twofold: constitutional position on the relationship between domestic and
international law, and constitutional position of the judiciary within the government, or the
entrenched understanding of what is the proper role of the courts.
Obstacle 1: Constitutional position of international/EU law
The first type of obstacle was solved either by the reinterpretation of the Constitution or by the
changes in the text of the Constitution which allowed for the supremacy of international law, or
allowed only for supremacy of EU law in the domestic legal order. Most of the new Member States
opted for the second solution – formal adaptations of their constitutions before the entry into the EU
membership.
Find the text of Croatian Constitution
(http://www.usud.hr/default.aspx?Show=ustav_republike_hrvatske&m1=27&m2=50&Lang=en)
45
Does Croatian Constitution allow for the supremacy and direct effect of EU law?
Obstacle 2: Perception of proper role of courts
The second obstacle, the one resulting from the constitutional conception of the role of the courts, is
visible as the lack of judiciary power to review validity of the acts of Parliament either in relation to
domestic constitutions, or in relation to international treaties. Thus, even if it is accepted that EU law
is supreme, the courts are not deemed the appropriate institutions to enforce such supremacy. They
lack power, or jurisdiction to disapply acts of Parliament even if they are contrary to EU law (which
they should not be even under domestic constitution).
The ECJ's position on that issue is clear: the domestic court that lacks the power to review and
disapply domestic law because of its incompatibility with EU law 'simply' has to set aside rule of
domestic law that is the obstacle for such power, even if this is the rule of constitutional character,
(cases 106/77 Simmenthal and C-213/89 Factortame). Thus, EU law empowers Courts for such
judicial review, even if this contrary to dimestic Constitution.
That this was not that 'simple' was demonstrated in many Member States. In France, the Conseil
d'Etat, highest administrative court, did not accept review powers over parliamentary act until 1989,
in case Nicolo. To review the laws was deemed to modify the judiciary position under the
Constitution, which was subordinated to the legislator, allowing courts only to ‘apply’ laws. To review
parliamentary laws would, according to Conseil d'Etat and Commissaire du gouvernment in the case
Semoules (1968) mean changing the constitutional position of the courts which is possible only by
the constitutional amendment. On the other hand, French highest court in civil jurisdiction hierarchy,
Cour de cassation, did accept power to review French laws for its compatibility with EU law, already
in 1975, in case Jacques Vabre. It founded its jurisdiction on the Article 55 of the French Constitution
which stated:
“From their publication, duly ratified or approved treaties or agreements have a higher
authority than laws (lois), subject, for each treaty or agreement, to its implementation by the
other party.”
The same constitutional provision was, until the case Nicolo, at the same time read by the Conseil
d’Etat as granting treaties higher status than laws, but not as granting at the same time power to the
courts to decide on it. That provision of the Constitution was, in the eyes of the Conseil d’Etat,
addressed to the legislator, not to the courts. Development of French judicial doctrine is explained in
the Article by Philippe Manin: The Nicolo case of the Conseil d’Etat: French Constitutional Law and
the Supreme Administrative Court’s Acceptance of the Primacy of Community Law over Subsequent
National Staute Law, published in: (1991) 28 CMLRev. 499 – 519.
Simmenthal mandate was difficult to accept also for the courts in the UK, due to the theory of the
sovereignty of Parliament. It states that Parliament can pass any law it whishes, and that nobody, but
the Parliament itself, can set aside an act of the Parliament. In addition, the theory implied that one
Parliament cannot bind future Parliament. Being dualist state, the UK entered into the EU (then EEC)
by passing 1972 EEC Act. This Act was read as parliamentary acceptance of the doctrine of supremacy
of EU law, as it was clear at the time of the accession of the UK that supremacy was inherent in EU
46
law (Lord Denning in Macarthys v Smith (1980), and Lord Bridge in Factortame case (1991). It is still
not clear, however, what would happen if the UK Parliament acted explicitly and intentionally
contrary to EU law.
To accept Simmenthal mandate required reinterpretation of the entrenched theories of laws and
government in other states as well. Most States did, however, base their acceptance in the domestic,
rather than EU, legal order. One of the rare different examples is Belgian Cour de Cassation, which
based supremacy and the consequent power of courts to disapply contrary statutes on the very
nature of EU law, in its judgment in the case Le Ski of 1971. You may read about this topic in more
details in Monica Claes: The National Courts’ Mandate in the European Constitution, Hart Publishing,
2006 (pp. 224 – 245).
Think about the situation in Croatia. Croatian Constitution was amended in 2010 with a view to
enable Croatia's membership int he EU. The new provisions, which will enter into force only with
membership, should therefore be rea din favour of allowing direct effect and supremacy. However,
the question remains does Croatian Constitution empower courts for full application in practice of
the Simmenthal mandate? Are there some provisions which may represent the obstacle to the
application of Simmenthal mandate?
One such rule is potentially Article 37 of the Constitutional Act on Constituional Court which reads:
(1) If a court of justice in its proceedings determines that the law to be applied, or some of its
provisions, are not in accordance with the Constitution, it shall stop the proceedings and present a
request with the Constitutional Court to review the constitutionality of the law, or some of its
provisions.
(2) If the court of justice in its proceedings determines that another regulation to be applied, or some
of its provisions, are not in accordance with the Constitution and the law, it shall directly apply the
law to that specific case and shall present a request with the Constitutional Court to review the
constitutionality and legality of the disputed regulation or some of its provisions.
(3) The Constitutional Court shall inform the Supreme Court of the Republic of Croatia about the
requests lodged in paragraphs 1 and 2 of this Article.
Explaining acceptance
Easier or less easy, founding it on the domestic constitution or on the specific nature of EU law, all
legal systems did find the way to allow for the acceptance of the Simmenthal mandate. Domestic
courts started to apply EU law on regular basis, and to accord it precedence in relation to domestic
law. Without acceptance on the part of domestic courts Simmenthal would mean nothing. Why have
the courts accepted their new obligations even though they ran contrary to their 'classical' beliefs as
to their role in the society? Read chapter from Monica Claes' book (in your materials) describing
different explanation of acceptance of the Simmenthal mandate (pp. 246 – 265) and be ready to
discuss in the class. Try to think about the different explanations in the Croatian context.
47
Supremacy over Constitution and constitutional pluralism
The issue discussed thus far concerned the situation that occurs daily in the practice of the courts.
Namely, domestic laws (whether statutes or by-laws) of Member States come often into clash with
EU law provisions. In such cases, supremacy acts as a rule of conflict demanding that in the case of
conflict a court apply EU rather than the rule of domestic law.
Another clash that may occur is the one between EU legal rule and the rule of domestic Constitution
of a Member States. Already in case Costa v ENEL, the ECJ said that EU law prevails over any rule of
domestic law, out of which one may read the claim as to the supremacy over domestic Constitutions
as well.
In practice, this type of clash occurs as the question whether certain rule of EU law is in conformity to
a national Constitution. As long ago as in the beginning of 1970’s has the ECJ denied the possibility of
the control of EU rules in relation to domestic Constitutions. According to the ruling in the case 11/70
Internationale Handelsgesselschaft,
3 RECOURSE TO THE LEGAL RULES OR CONCEPTS OF NATIONAL LAW IN ORDER TO JUDGE THE
VALIDITY OF MEASURES ADOPTED BY THE INSTITUTIONS OF THE COMMUNITY WOULD HAVE AN
ADVERSE EFFECT ON THE UNIFORMITY AND EFFICACY OF COMMUNITY LAW. THE VALIDITY OF SUCH
MEASURES CAN ONLY BE JUDGED IN THE LIGHT OF COMMUNITY LAW. IN FACT, THE LAW STEMMING
FROM THE TREATY, AN INDEPENDENT SOURCE OF LAW, CANNOT BECAUSE OF ITS VERY NATURE BE
OVERRIDDEN BY RULES OF NATIONAL LAW, HOWEVER FRAMED, WITHOUT BEING DEPRIVED OF ITS
CHARACTER AS COMMUNITY LAW AND WITHOUT THE LEGAL BASIS OF THE COMMUNITY ITSELF
BEING CALLED IN QUESTION . THEREFORE THE VALIDITY OF A COMMUNITY MEASURE OR ITS EFFECT
WITHIN A MEMBER STATE CANNOT BE AFFECTED BY ALLEGATIONS THAT IT RUNS COUNTER TO EITHER
FUNDAMENTAL RIGHTS AS FORMULATED BY THE CONSTITUTION OF THAT STATE OR THE PRINCIPLES
OF A NATIONAL CONSTITUTIONAL STRUCTURE.
However, such position of the ECJ is not accepted by the highest and/or Constitutional courts of most
Member States. National Constitutional courts do see their own Constitution as final authority on
validity of any legal rule to be applied in the territory of a country of the respective Constitution.
Thus, there exist two opposing positions about the final authority in questions of validity of EU law –
ECJ, claiming that the authority is in the EU legal order, with the ECJ as final interpreter; national
courts of constitutional jurisdiction claiming that it is domestic constitutional order, with them as
final interpreters.
In practice, this conflict became visible in relation to two separate types of issues.
First is the question of compatibility of EU law with fundamental rights. This issue was settled (even if
it can be reopened) by the Solange II decision of the German Federal Constitutional Court. This was
preceded by the development and application by the ECJ of the doctrine of fundamental rights as
general principles of the EU legal order. Thus, the German court accepted the ECJ’s jurisdiction to
control compatibility of EU rules with fundamental rights protected at the EU level, as long as the EU
standard of fundamental rights protection corresponds to the standard demanded by the German
Basic Law. German Constitutional Court proclaimed that, as long as this is true, it will not control
conformity of EU rules with German Constitution. Constitutional jurisdictions in other Member States
48
accepted similar positions, either explicitly or tacitly. As you talked about this in the constitutional
law class, I shall not elaborate about this topic further.
Second is the issue of Kompetenz-Kompetenz. It concerns the question of who has the last decision
about whether the rule of EU law exceeds the limits of EU competences. ECJ sees this as an issue of
Treaty interpretation, for what it has the last word. National constitutional jurisdictions, headed
again by the German Constitutional Court, see it as an issue of interpretation of domestic
Constitutions. Namely, as EU was created on the basis of the transfer of competences from domestic
to EU level, each domestic Constitution contains the answer as to which competences were
transferred. The consequence of the finding that an EU norm is exceeding the powers which were
transferred by the Constitution, results in its unconstitutionality, and therefore, inapplicabitly in the
domestic legal order of that Constitution.
Two conflicting claims about where does the final measure for the value of legal rules lie cannot
solve the practical issue, that is – which norm is applicable in the case at hand, if the clash occurs.
Hierarchical view about the legal order demands that the conflict is solved. It, therefore, demands
that the conflict between the ECJ’s claim to authority and domestic Constitutional courts claims to
authority is also solved.
However, lately, there is a new concept emerging under the name ‘constitutional pluralism’, which
tries to explain legal order from new perspective. It accepts co-existence of conflicting claims to final
authority and even sees it as fundamental characteristic of EU legal order, rather than as an anomaly.
Existence of conflicting claims results in different dynamics of the legal order, demanding from all the
actors, tolerance for the claims of the other actors. Thus, conflicts are accommodated through
interpretation, and thus avoided, rather than solved through the application of the rule of conflict.
This is relatively new school of thought, and different scholars offer different approaches. To those
interested, I would recommend reading M. Kumm, The Jurisprudence of Constitutional Conflict:
Constitutional Supremacy in Europe before and after the Constitutional Treaty, [2005] 11 European
Law Journal, 262 – 307. Even if not explicit, this position is embraced today by many Constitutional
Courts of Member States, as well as by the ECJ. For one example, read the Decision of the Polish
Constitutional Court about the constitutionality of the Treaty by which Poland acceded into the EU
(in your materials).
Fortunately, the conflicts between Member States’ Constitutions and EU legal norms do not happen
often in practice. Thus, in everyday work of the courts and in their day-to-day application of
supremacy of EU law, they do not pose a problem.
49
Unit 8
National Courts in EU Legal Order: Interpretative
Effect
Direct effect is not the only method of giving effect to EU law. The other, possibly even more
important doctrine developed by the ECJ is the doctrine of indirect or interpretative effects. In short,
it imposes on national courts the obligation to interpret domestic legal provisions in the light of the
purpose and wording of EU law.
This doctrine served to fill the gap which was created by the shortcomings of the direct effect of
Directives. This, however, does not mean that this method of giving effect to EU law is in any way
subordinated to direct effect. Rather, it figures in parallel with direct effect, and applies to all EU law,
and not exclusively to Directives.
Indirect effect is quality of all EU legal norms, of primary and secondary law, notwithstanding the
area of EU competences in which the norm exists. As the ECJ has no jurisdiction in the area of
common foreign and security policy, decision whether to treat this part of EU as producing
interpretative effect is for national courts alone to decide. The rest of EU law, including the
provisions of the late third pillar, does have indirect effect. That this is so, the Court explained
already pre-Lisbon, in the case Pupino. Namely, in the previous version of the TEU, Member States
excluded direct effect of acts adopted in the third pillar by express wording in the text of the TEU.
This, however, did not mean that framework decisions do not produce indirect effect, as the ECJ has
recognized in case Pupino.
For the class, read the cases Von Colson and Kamman, Kolpinghuis Nimegen and Pupino, which are
among your materials for the class preparation and think about the quastions asked below.
Questions to think about when reading the cases
Von Colson and Kamman





Is the situation in the case vertical or horizontal situation?
Did relevant provisions of Directive have direct effect? Why?
How does the indirect effect (obligation of conform interpretation) differ from direct effect
of a Directive?
How has the Court justified the existence in EU law of obligation of conform interpretation?
German government, which intervened in the case, suggested to the Court that German law
could be differently interpreted. Why do you think they did that?
50
Kolpinghuis Nijmegen




Is the situation in this case vertical or horizontal?
Could Directive at issue been relied on directly?
Go back to Von Colson and Kamman case, and find what has the Court said about the limits
of the obligation of conform interpretation in that case
Which limits it recognized in this case?
Pupino
Pupino case is important for two reasons. Firstly, because it decreased the difference between the
legal acts adopted in the first and in the third pillar. Secondly, because it tried to develop further the
boundaries of the obligation of conforming interpretation.




Why could the Italian court not apply framework decision relevant for the case directly?
Why are the French and Italian Governments challenging the jurisdiction of the Court (in
paras. 24 and 25)? How do their arguments differ?
How has the Court justified the existence of the obligation of conform interpretation in the
third pillar?
In Pupino, the Court said that the limit to obligation of conform interpretation is reached if
that would require the court to interpret contra legem. What, according to your opinion, this
means?
Pfeiffer



How has the Court justified the obligation of conforming interpretation (see esp. para. 114)?
Are there and which are the boundaries of conforming interpretation?
What does the Court require from the national courts in paras. 115 and 118?
Dominguez



What was the Court’s poition in this case about the appropriate order of application of direct
and indirect effect? Should the national court try as first to apply Directive directly, and only
if this is not possible, try to interpret domestic law in conforming way, or vice versa?
Which are the limits to conforming interpretation?
Which national court has refered the question? Which message has the ECJ sent to that
Court in para. 29 of the Judgment?
51
Unit 9
Liability for Damages in the EU
Liability of EU institutions is governed by Article 340 TFEU:
“The contractual liability of the Union shall be governed by the law applicable to the contract
in question.
In the case of non-contractual liability, the Union shall, 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 servants in the performance of their duties.
Notwithstanding the second paragraph, the European Central Bank shall, in accordance with
the general principles common to the laws of the Member States, make good any damage
caused by it or by its servants in the performance of their duties.
The personal liability of its servants towards the Union shall be governed by the provisions
laid down in their Staff Regulations or in the Conditions of Employment applicable to them.”
The European Court of Justice has jurisdiction to hear disputes relating to non-contractual liability of
the EU, under Article 268 TFEU:
“The Court of Justice of the European Union shall have jurisdiction in disputes relating to
compensation for damage provided for in the second and third paragraphs of Article 340.”
The action is introduced today in first instance to the General Court, and may reach the ECJ only on
appeal.
According to the case law, the conditions of liability differ depending on whether the institution
enjoyed or not discretion when arriving at certain decision that caused damage to an individual.
If the institution whose action (or inaction) caused the damage had no discretionary choice, or only
limited choice how to act, damaged individual has to prove illegality, existence of damage and causal
link. Illegality will exist if the institution acted contrary to a rule of EU law.
If the institution was acting within certain measure of discretion, the mere breach of EU law does not
suffice for the establishment of liability. The formula that was used in such cases until recently was
developed in case Schöppenstedt, and named accordingly.
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Schöppenstedt formula:
(case 5/71 Aktien-Zukerfabrik Schöppenstedt v Council, [1971] ECR 975)
11 IN THE PRESENT CASE THE NON-CONTRACTUAL LIABILITY OF THE COMMUNITY
PRESUPPOSES AT THE VERY LEAST THE UNLAWFUL NATURE OF THE ACT ALLEGED TO BE THE
CAUSE OF THE DAMAGE . WHERE LEGISLATIVE ACTION INVOLVING MEASURES OF ECONOMIC
POLICY IS CONCERNED, THE COMMUNITY DOES NOT INCUR NONCONTRACTUAL LIABILITY FOR
DAMAGE SUFFERED BY INDIVIDUALS AS A CONSEQUENCE OF THAT ACTION, BY VIRTUE OF
THE PROVISIONS CONTAINED IN ARTICLE 215, SECOND PARAGRAPH, OF THE TREATY, UNLESS
A SUFFICIENTLY FLAGRANT VIOLATION OF A SUPERIOR RULE OF LAW FOR THE PROTECTION
OF THE INDIVIDUAL HAS OCCURRED .
Thus, in cases that involved discretionary decision-making (‘where legislative action involving
measures of economic policy is concerned’), except for the damage and causation, damaged
individual has to prove also that an institution committed “sufficiently flagrant violation of a superior
rule of law for the protection of individuals”.
The requirement for sufficiently flagrant violation is today assessed in the same way as the condition
for sufficiently serious breach imposed by the Court for the state liability of damages. Thus, the
institution must “gravely and manifestly disregard limits of its discretion” in order for the liability to
arise.
Liability of the EU and that of Member States started to converge recently, starting with the case
Bergaderm (case C-352/98 P Laboratoires Pharmaceutiques Bergaderm SA and Goupil v Commission,
[2000] ECR I-5291). Here is the excerpt from this Judgment:
39 The second paragraph of Article 215 of the Treaty provides that, in the case of non-contractual
liability, the Community is, in accordance with the general principles common to the laws of the
Member States, to make good any damage caused by its institutions or by its servants in the
performance of their duties.
40 The system of rules which the Court has worked out with regard to that provision takes into
account, inter alia, the complexity of the situations to be regulated, difficulties in the application
or interpretation of the texts and, more particularly, the margin of discretion available to the
author of the act in question (Joined Cases C-46/93 and C-48/93 Brasserie du Pêcheur and
Factortame [1996] ECR I-1029, paragraph 43).
41 The Court has stated that the conditions under which the State may incur liability for damage
caused to individuals by a breach of Community law cannot, in the absence of particular
justification, differ from those governing the liability of the Community in like circumstances. The
protection of the rights which individuals derive from Community law cannot vary depending on
whether a national authority or a Community authority is responsible for the damage (Brasserie
du Pêcheur and Factortame, paragraph 42).
42 As regards Member State liability for damage caused to individuals, the Court has held that
Community law confers a right to reparation where three conditions are met: the rule of law
infringed must be intended to confer rights on individuals; the breach must be sufficiently serious;
and there must be a direct causal link between the breach of the obligation resting on the State
and the damage sustained by the injured parties (Brasserie du Pêcheur and Factortame,
paragraph 51).
43 As to the second condition, as regards both Community liability under Article 215 of the Treaty
and Member State liability for breaches of Community law, the decisive test for finding that a
breach of Community law is sufficiently serious is whether the Member State or the Community
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institution concerned manifestly and gravely disregarded the limits on its discretion (Brasserie du
Pêcheur and Factortame, paragraph 55; and Joined Cases C-178/94, C-179/94, C-188/94, C189/94 and C-190/94 Dillenkofer and Others v Germany [1996] ECR I-4845, paragraph 25).
44 Where the Member State or the institution in question has only considerably reduced, or even
no, discretion, the mere infringement of Community law may be sufficient to establish the
existence of a sufficiently serious breach (see, to that effect, Case C-5/94 Hedley Lomas [1996]
ECR I-2553, paragraph 28).
Short Outline of the judicial development of the State Liability in Damages in EU law
Remedy in damages against the state is not first EU remedy imposed by the ECJ (restitution, interim
protection, right to judicial review …)
Principle of state liability for breach of EC law was established in C-6 and 9/90 Francovich; in the
conditions of an imprecise directive (and thus, without direct effect).
State liability exists also when the state is in breach of directly effective EU rule (C-46 and 48/93
Brasserie du Pêcheurs/Factortame III).
All branches of government may incur liability (including the courts, case Kobler).
All levels of government may incur liability (C-302/97 Konle; C-424/97 Haim)
Conditions for liability:
o
legal norm which is breached should entail the grant of rights to individuals;
o
it should be possible to identify the content of those rights on the basis of the
provisions of the norm in question;
o
the breach must be sufficiently serious;
o
there must be a direct causal link between the breach of the obligation resting on
the State and the damage sustained by the injured parties.
Second condition – mentioned only in Francovich
o
it is, in fact, requirement for procedural direct effect in the legal relation between
the individual and the state; without which the court cannot apply legal norm
Sufficiently serious breach
o
condition imposed also for the liability of EC institution
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o
need for the uniformity in the system of liability, notwithstanding whether the state
or EC organs violate EC law – interactive development of liability law – in C-352/98P
Bergaderm, the ECJ applied conditions from Brasserie to the question of the liability
of European Commission
o
seriousness of breach depends on the level of discretion left to national authorities
o
if there is no discretion, or it is minimal – breach is always serious
o
breach is always sufficiently serious in Francovich situation – i.e. when the state does
nothing to implement EC law
o
when there is a discretion, breach is serious if the body in question manifestly and
gravely disregarded the limits of its powers; circumstances to be taken into
consideration: clearness of the norm in question, existence of additional
interpretation by EC institutions, previous case-law and similar
o
it is for the national courts to assess seriousness of the breach – but, see C-392/93
British Telecommunications or C-283, 291 and 292/94 Denkavit
Direct causal link
o
breach of causality by national enforcement authorities, may relieve the state as
legislator from the liability even in Francovich type of case, when the legislator did
nothing to transpose a directive – C-319/96 Brinkmann
o
only two situations in which liability of state as legislator may be established

when there is no interference of executive in the causation chain (C-140/97
Rechberger)

when EC norm does not have direct effect and national law cannot be
interpreted in conformity with that norm
All other issues related to state liability (e.g. time limits for bringing the action, competent courts,
burden of proof etc.) are solved by national law, but within the framework of principles of
equivalence and effectiveness.
Your tasks for this Unit:



Reread cases in which the Court established state liability in damages (Francovich, Brasserie
de Pecheurs)
Which conditions has the Court imposed for the state liability to arise?
Do they differ from Schöppenstedt formula?
55


Why does the Court make distinction between discretionary and non-discretionary acts of
the institutions/states?
Why does the Court think that two types of liability – that of EU institutions and that of
states - have to be governed by the same conditions?
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