Case C-206/06, Essent

>> Court of Justice reiterates electricy is product, recaps criteria Art. 87(1) EC

The process of liberalising the Dutch electricity sector in implementation of Directive 96/92 was initiated by a 1998 Law on electricity.

A Transitional Law on Electricity provided that “Every customer, not being a protected customer, shall, in addition to what he contractually owes to the net operator for the area in which he is established, pay to that net operator an amount of NLG 0.0117 per kWh, calculated on the basis of the total amount of the electricity which the net operator distributed to the customer’s connection over the period from 1 August 2000 to 31 December 2000.”

A second paragraph of this provision provided that “every protected customer shall, in addition to what he contractually owes to the licence holder for the area in which he is established, pay to that licence holder an amount of NLG 0.0117 per kWh, calculated on the basis of the total amount of electricity which that licence holder supplied to the customer over the period from 1 August 2000 to 31 December 2000.” The present case concerned the question whether this provision was compatible with Articles 25, 87 and 90 EC.

The Court of Justice first of all reiterated that Articles 25 and 90 EC complemented each other in pursuing the objective of prohibiting any national fiscal measure that was liable to discriminate against products coming from or destined for other Member States by constituting a restriction on their free movement within the Community in normal conditions of competition (see also Joined Cases C-393/04 and C-41/05 Air Liquide Industries Belgium [2006] and Case C‑221/06 Stadtgemeinde Frohnleiten and Gemeindebetriebe Frohnleiten [2007]).

The Court reiterated that any pecuniary charge, however small and whatever its designation and mode of application, which was imposed unilaterally on goods by reason of the fact that they crossed a frontier, and which was not a customs duty in the strict sense, constituted a charge having equivalent effect.

By contrast, pecuniary charges resulting from a general system of internal taxation applied systematically, in accordance with the same objective criteria, to categories of products irrespective of their origin or destination fell within Art. 90 EC.

A charge which was imposed on domestic and imported products according to the same criteria might nevertheless be prohibited by the Treaty if the revenue from such a charge was intended to support activities which specifically benefitted the taxed domestic products. If the advantages which those products enjoyed wholly offset the burden imposed on them, the effects of that charge were apparent only with regard to imported products and that charge constituted a charge having equivalent effect.

If, on the other hand, those advantages only partly offset the burden borne by domestic products, the charge in question constituted discriminatory taxation for the purposes of Art. 90, the collection of which was prohibited as regards the proportion used to offset the burden borne by the domestic products. (see: Joined Cases C-78/90 to C-83/90 Compagnie commerciale de l’Ouest and Others [1992]).

The Court reiterated that electricity constituted a product for the purposes of the provisions of the Treaty. (Case C-393/92 Almelo [1994] and Case C-158/94 Commission v Italy [1997]).

A charge which was imposed not on a product as such, but on a necessary activity in connection with the product might fall within the scope of Articles 25 and 90 EC. The Court held that for the purposes of the application of Articles 25 and 90 EC, it was of little account that the financial charge was not levied by the State.

The Court held that the classification as “aid” within the meaning of Art. 87(1) of the Treaty required that all the conditions set out in that provision were fulfilled. First, there must be intervention by the State or through State resources. Second, the intervention must be liable to affect trade between Member States. Third, it must conferred an advantage on the recipient. Fourth, it must distort or threaten to distort competition.

Where a State measure must be regarded as compensation for the services provided by the recipient undertakings in order to discharge public service obligations, so that those undertakings did not enjoy a real financial advantage and the measure thus did not have the effect of putting them in a more favourable competitive position than the undertakings competing with them, such a measure was not caught by Art. 87(1) EC

However, for such compensation to escape classification as State aid in a particular case a number of conditions must be satisfied.

First, the recipient undertaking must actually have public service obligations to discharge, and the obligations must be clearly defined.

Second, the parameters on the basis of which the compensation was calculated must be established in advance in an objective and transparent manner, to avoid it conferring an economic advantage which might favour the recipient undertaking over competing undertakings.

Third, the compensation could not exceed what was necessary to cover all or part of the costs incurred in the discharge of public service obligations, taking into account the relevant receipts and a reasonable profit for discharging those obligations.

Fourth, the compensation must be determined on the basis of an analysis of the costs which a typical undertaking, well run and adequately provided with the requisite means so as to be able to meet the necessary public service requirements, would have incurred in discharging those obligations, taking into account the relevant receipts and a reasonable profit for discharging the obligations.

As regards the charge on the electricity transmitted, that taxes did not fall within the scope of the provisions of the EC Treaty concerning State aid unless they constituted the method of financing an aid measure, so that they formed an integral part of that measure.

The Court held that for a tax to be regarded as forming an integral part of an aid measure, it must be hypothecated to the aid measure under the relevant national rules, in the sense that the revenue from the tax was necessarily allocated for the financing of the aid and had a direct impact on the amount of that aid.

That appeared to be true of the case in the main proceedings, subject to the verification by the national court. Where a tax was hypothecated to an aid measure, the notification of the aid must also cover the method of financing.

Text of Judgment

Further cases of importance:

Case 132/82 Commission v Belgium [1983]
Case C‑280/00 Altmark Trans and Regierungspräsidium Magdeburg [2003]
Joined Cases C-34/01 to C-38/01 Enirisorse [2003]
Case C‑451/03 Servizi Ausiliari Dottori Commercialisti [2006]

Case C-49/07, MOTOE

>> Court of Justice holds that public body can infringe competition law

MOTOE, a non‑profit‑making association governed by private law whose object was the organisation of motorcycling competitions in Greece, submitted to the competent minister an application for authorisation to organise such competitions.

That request was “forwarded” to the Greek Automobile and Touring Club, a legal person and a non‑profit‑making association which represented the International Motorcycling Federation in Greece, for it to consent for the purposes of granting the authorisation applied for as was required under Art. 49 of the Greek Road Traffic Code.

When the application was refused, MOTOE appealed, arguing that this provision was contrary, first, to the constitutional principle that administrative organs must be impartial and, second, to Articles 82 EC and 86(1) EC, on the ground that the national provision at issue enabled the Greek Automobile and Touring Club, which itself organised motorcycling competitions, to impose a monopoly in that field and to abuse that position.

The referring Court asked whether a legal person such as the Greek Automobile and Touring Club fell within the scope of Articles 82 and 86 EC, given that its activities consisted not only in taking part in administrative decisions authorising the organisation of motorcycling events, but also in organising such events itself and in entering, in that connection, into sponsorship, advertising and insurance contracts and, second, whether those Treaty provisions precluded a rule, such as that laid down in Art. 49 of the Greek Road Traffic Code, in so far as it conferred on such an association the power to give its consent to applications for authorisation to organise those events, without that power being made subject to restrictions, obligations or review.

The Court of Justice first of all held that Greek Automobile and Touring Club was an undertaking despite not making profit.The fact that, for the exercise of part of its activities, an entity was vested with public powers did not, in itself, prevent it from being classified as an undertaking for the purposes of Community competition law in respect of the remainder of its economic activities. The classification as an activity falling within the exercise of public powers or as an economic activity must be carried out separately for each activity exercised by a given entity.

The power of a legal person such as the Greek Automobile and Touring Club to give its consent to applications for authorisation to organise those events did not prevent its being considered an undertaking for the purposes of Community competition law so far as concerned its economic activities referred to above.

For the purposes of applying Art. 82 EC, the relevant product or service market included products or services which were substitutable or sufficiently interchangeable with the product or service in question, not only in terms of their objective characteristics, by virtue of which they were particularly suitable for satisfying the constant needs of consumers, but also in terms of the conditions of competition and the structure of supply and demand on the market in question.

The activities in which the Greek Automobile and Touring Club was engaged consisted, first, in the organisation of motorcycling events and, second, in their commercial exploitation by means of sponsorship, advertising and insurance contracts. Those two types of activities were not interchangeable but were rather functionally complementary.

The Court of Justice admitted that the activities in which the Greek Automobile and Touring Club engaged were confined to the territory of Greece. It held, however, that the territory of one Member State might still constitute a substantial part of the common market. (see also Case C‑260/89 ERT [1991]).

The Court of Justice furthermore reiterated that Article 82 EC could not be infringed by a rule such as that laid down in Art. 49 of the Greek Road Traffic Code unless trade between Member States was affected by it.

Such an effect on trade between Member States could be assumed only if it was possible to foresee with a sufficient degree of probability, on the basis of a set of objective legal and factual elements, that the behaviour in question might have an influence, direct or indirect, actual or potential, on trade between Member States in such a way as might hinder the attainment of a single market between Member States. Purely hypothetical or speculative effects that the conduct of an undertaking in a dominant position might have did not satisfy that criterion. Similarly, the impact on intra-community trade must not be insignificant. (see Case C‑475/99 Ambulanz Glöckner [2001] and Joined Cases C‑215/96 and C‑216/96 Bagnasco and Others [1999]).

According to the Court of Justice, the power to give consent to applications for authorisation to organise motorcycling events stemmed from an act of public authority, namely Art. 49 of the Greek Road Traffic Code, but it could not be classified as an economic activity. A legal person such as the Greek Automobile and Touring Club could not therefore be considered an undertaking entrusted with a service of general economic interest within the meaning of Art. 86(2) EC.

Nevertheless, the Court found that to entrust a legal person such as the Greek Automobile and Touring Club, which itself organised and commercially exploited motorcycling events, the task of giving the competent administration its consent to applications for authorisation to organise such events, was tantamount de facto to conferring upon it the power to designate the persons authorised to organise those events and to set the conditions in which those events were organised, thereby placing that entity at an obvious advantage over its competitors. Such a right might therefore lead the undertaking which possessed it to deny other operators access to the relevant market.

According to the Court, that situation of unequal conditions of competition was also highlighted by the fact that, when the Greek Automobile and Touring Club itself organised or participated in the organisation of motorcycling events, it was not required to obtain any consent in order that the competent administration granted it the required authorisation.

Furthermore, such a rule, which gave a legal person such as the Greek Automobile and Touring Club the power to give consent to applications for authorisation to organise motorcycling events without that power being made subject by that rule to restrictions, obligations and review, could lead the legal person entrusted with giving that consent to distort competition by favouring events which it organised or those in whose organisation it participated.

Text of Judgment

Case C-66/08, Kozłowski

>> Court of Justice defines scope of Article 4(6) of Framework Decision European arrest warrant

In 2002, Mr Kozłowski was sentenced in Poland to five months’ imprisonment. The sentence imposed by that judgment had become final, but had not yet been executed. Since May 10, 2006, Kozłowski had been imprisoned in Stuttgart (Germany).

The Polish judicial authority issued a European arrest warrant issued on April 18, 2007, asking the surrender of Mr Kozłowski for the purposes of execution of the sentence of imprisonment of five months imposed on him.

The German executing judicial authority requested the referring court to authorise the execution of this European arrest warrant in question on the ground there was no ground for non-execution and, in particular, Mr Kozłowski did not have his habitual residence in Germany.

The referring court asked the European Court of Justice two preliminary questions regarding the scope of the terms “resident” and “staying” contained in Article 4(6) of Framework Decision 2002/584 on the European arrest warrant and the surrender procedures between Member States.
The Court of Justice first of all reiterated its statement in the famous Advocaten voor de Wereld case that the objective of the Framework Decision was to replace the multilateral system of extradition between Member States by a system of surrender, as between judicial authorities, of convicted persons or suspects for the purpose of enforcing judgments or of criminal proceedings, that system of surrender being based on the principle of mutual recognition.

The Court stressed the importance of giving an uniform interpretation of these terms. It held that they concerned autonomous concepts of Union law and that, therefore, in their national law transposing Art. 4(6), the Member States were not entitled to give those terms a broader meaning than that which derived from such a uniform interpretation. Mr Kozłowski was not “resident” in Germany within the meaning of Art. 4(6) of the Framework Decision, therefore, the Court of Justice only discussed the scope of the term “staying” contained in that provision.

The Court of Justice held that, in order to determine whether, in a specific situation, there were connections between the requested person and the executing Member State which led to the conclusion that that person was covered by the term “staying” within the meaning of Art. 4(6) of the Framework Decision, it was necessary to make an overall assessment of various objective factors characterising the situation of that person, which included, in particular, the length, nature and conditions of his presence and the family and economic connections which he had with the executing Member State.

Since it was for the executing judicial authority to make an overall assessment in order to determine, initially, whether the person concerned fell within Art. 4(6) of the Framework Decision, a single factor characterising the person concerned could not, in principle, had a conclusive effect of itself.
The Court of Justice subsequently articulated some of the factors which could be taken into account when making such assessment.

It stated that the fact that the requested person’s stay in the executing Member State was not uninterrupted and the fact that his stay in that State did not comply with the national legislation on residence of foreign nationals, while not constituting factors which led by themselves to the conclusion that he was not “staying” in that Member State within the meaning of Art. 4(6) of the Framework Decision, could be of relevance to the executing judicial authority when it was called upon to assess whether the person concerned was covered by that provision.

The fact that that person systematically committed crimes in the executing Member State and the fact that he was in detention there serving a custodial sentence were not relevant factors for the executing judicial authority when it initially had to ascertain whether the person concerned was “staying” within the meaning of Art. 4(6) of the Framework Decision. By contrast, such factors might, supposing that the person concerned was “staying” in the executing Member State, be of some relevance for the assessment which the executing judicial authority was then called upon to carry out in order to decide whether there were grounds for not implementing a European arrest warrant.

In the light of various factors referred to by the national court as characterising the situation of a person such as Mr Kozłowski, in particular the length, nature and conditions of his stay, the absence of family ties and his very weak economic connections with the executing Member State, Mr Kozłowski not be regarded as covered by the term “staying” within the meaning of Art. 4(6) of the Framework Decision.

Text of Judgment

C‑413/06 P, Bertelsmann and Sony

>> Judgment CFI set aside because it had required detailed description of each of the factors underpinning Commission decision declaring concentration compatible with common market

Bertelsmann and Sony were two international media companies which had notified to the Commission their intent to integrate their global recorded music businesses into three or more newly-created companies.

Commission Decision 2005/188 declared that concentration to be compatible with the common market and the functioning of the EEA Agreement.

By the present appeal, Bertelsmann and Sony requested the Court to set aside the judgment of the Court of First Instance in Case T-464/04 Impala v Commission [2006], in which the CFI annulled this Commission Decision.

The grounds of appeal relied on concerned (1) the manner in which the Court of First Instance carried out its review, particularly with respect to questions of proof, (2) the concept of a collective dominant position, and (3) the findings of the Court of First Instance with respect to the failure of the contested decision to state adequate reasons.

The Court of Justice first of all held that it could not be inferred from Regulation 4064/89 that there was a general presumption that a notified concentration was compatible with, or incompatible with, the common market.

The decisions of the Commission as to the compatibility of concentrations with the common market must be supported by a sufficiently cogent and consistent body of evidence.

However, it could not be deduced from that that the Commission must, particularly where it pursued a theory of collective dominance, comply with a higher standard of proof in relation to decisions prohibiting concentrations than in relation to decisions approving them.

Therefore, where it had been notified of a proposed concentration pursuant to Regulation 4064/89, the Commission was, in principle, required to adopt a position, either in the sense of approving or of prohibiting the concentration, in accordance with its assessment of the economic outcome attributable to the concentration which was most likely to ensue.

The Court held that the Commission had a margin of assessment with regard to economic matters for the purposes of the application of the substantive rules of Regulation 4064/89, in particular Art. 2.

Review by the Community judicature of a Commission decision relating to concentrations was confined to ascertaining that the facts had been accurately stated and that there had been no manifest error of assessment.

The Court of First Instance must not substitute its own economic assessment for that of the Commission for the purposes of applying the substantive rules of Regulation 4064/89.

However, the Community judicature must establish whether the evidence relied on was factually accurate, reliable and consistent but also whether that evidence contained all the information which must be taken into account in order to assess a complex situation and whether it was capable of substantiating the conclusions drew from it.

The Court of Justice inter alia held that the CFI could not, without committing an error of law, find that the Commission had failed to comply with the duty to provide an adequate statement of reasons for the contested decision.

It would be unreasonable to require, as did the Court of First Instance in the judgment under appeal, a detailed description of each of the factors underpinning the contested decision, such as the nature of campaign discounts, the circumstances in which they might be applied, their degree of opacity, their size or their specific impact on price transparency. (see, by analogy: Joined Cases 275/80 and 24/81 Krupp Stahl v Commission [1981]; and Joined Cases 296/82 and 318/82 Netherlands and Leeuwarder Papierwarenfabriek v Commission [1985]).

The Court of Justice reiterated that the duty to state adequate reasons in decisions was an essential procedural requirement which must be distinguished from the question whether the reasoning was well founded, which was concerned with the substantive legality of the measure at issue.

The reasoning of a decision consisted in a formal statement of the grounds on which that decision was based. If those grounds were vitiated by errors, the latter would vitiate the substantive legality of the decision, but not the statement of reasons in it, which might be adequate even though it set out reasons which were incorrect.

The Court of First Instance furthermore committed an error of law in relying, as a basis for the annulment of the contested decision, on documents submitted on a confidential basis, since the Commission itself could not have used them for the purposes of adopting that decision by reason of their confidential nature. That error of law was not, in any event, capable of invalidating the finding of the Court of First Instance in the judgment under appeal that, in substance, the contested decision should be annulled on the ground of its inadequate reasoning.

The Court held that, under Art. 61(1) of the Statute of the Court of Justice, if the appeal was well founded, the Court of Justice was to quash the decision of the Court of First Instance. It might itself give final judgment in the matter, where the state of the proceedings so permitted , or refer the case back to the Court of First Instance for judgment. The present case was not in a state where judgment might be given. The case must therefore be referred back to the Court of First Instance.

Text of Judgment ECJ

Text of Judgment CFI

Case C-173/07, Schenkel

>> Journey out and back not a single flight

Mr Schenkel booked in Germany, with Emirates, an outward and return journey from Düsseldorf to Manila via Dubai . His return flight from Manila was cancelled because of technical problems. Mr Schenkel eventually departed from two days later and arrived at Düsseldorf on the same day. He brought an action against Emirates, claiming compensation of EUR 600 in reliance on Arts 5(1)(c) and 7(1)(c) of Regulation 261/2004. Emirates submitted that the outward and return flights were to be regarded as two separate flights. The referring court asked whether Art. 3(1)(a) of Regulation 261/2004 was to be interpreted as applying to the case of an outward and return journey in which passengers who had originally departed from an airport located in the territory of a Member State to which the Treaty applied travelled back to that airport on a flight departing from an airport located in a non-member country.

The Court of Justice held that the term “flight” was not among those defined in Regulation 261/2004. The term must therefore be interpreted in the light of the provisions of Regulation 261/2004 as a whole and the objectives of that regulation.

To interpret Art. 3(1)(a) of Regulation 261/2004 in such a way that a flight included an outward and return journey would amount to depriving passengers of their rights in a situation in which the flight departing from an airport located in the territory of a Member State was not operated by a Community carrier. The principle of equal treatment or non-discrimination required that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment was objectively justified.

However, the Court found that a journey out and back could not be regarded as a single flight.
The Court found that to regard a “flight” within the meaning of Art. 3(1)(a) of Regulation 261/2004 as an outward and return journey would in fact have the effect of reducing the protection to be given to passengers under the regulation, which would be contrary to its objective of ensuring a high level of protection for passengers. The Court held that the concept of “flight” within the meaning of Regulation 261/2004 must be interpreted as consisting essentially in an air transport operation, being as it were a “unit” of such transport, performed by an air carrier which fixed its itinerary.

The fact that the outward and return flights were the subject of a single booking had no effect on that conclusion. Consequently, Art. 3(1)(a) of Regulation 261/2004 could not apply to the case of an outward and return journey such as that at issue in the main proceedings.

Text of Judgement

Case C-33/07, Jipa

>> Repatriation restricting EU citizen’s right of free movement only when genuine, present and sufficiently serious threat to fundamental interest of society.

Mr Jipa left Romania to travel to Belgium. On account of his “illegal residence” in Belgium, he was repatriated to Romania under the terms of an Agreement between Belgium, Luxembourg and the Netherlands, on the one hand, and Romania, on the other, on the readmission of persons who were in an illegal situation. The Romanian Minister for Administration and Home Affairs
applied to the referring court for a measure prohibiting Mr Jipa from travelling to Belgium for a period of up to three years, in accordance with a Romanian Law on the conditions for the free movement of Romanian citizens abroad. The referring court asked whether Art. 18 EC and Art. 27 of Directive 2004/38 precluded national legislation that allowed the right of a national of a Member State to travel to another Member State to be restricted, in particular on the ground that he had previously been repatriated from the latter Member State on account of his “illegal residence” there.

The Court of Justice held that, as a Romanian national, Mr Jipa enjoyed the status of a citizen of the Union under Art. 17(1) EC and might therefore rely on the rights pertaining to that status, including against his Member State of origin, and in particular the right conferred by Art. 18 EC to move and reside freely within the territory of the Member States. The Court held that the right of freedom of movement included both the right for citizens of the European Union to enter a Member State other than the one of origin and the right to leave the State of origin.

However, the right of free movement of Union citizens was not unconditional but might be subject to the limitations and conditions imposed by the Treaty and by the measures adopted to give it effect. As far as the main proceedings were concerned, those limitations and conditions derived in particular from Art. 27(1) of Directive 2004/38, which provided that Member States might restrict the freedom of movement of Union citizens and their family members on grounds inter alia of public policy or public security.

The Court held that while Member States essentially retained the freedom to determine the requirements of public policy and public security in accordance with their national needs, in the Community context and particularly as justification for a derogation from the fundamental principle of free movement of persons, those requirements must be interpreted strictly. Their scope could not be determined unilaterally by each Member State without any control by the Community institutions.

The Court stated that a measure limiting the exercise of the right of free movement could not be based exclusively on reasons advanced by another Member State to justify a decision to remove a Community national from the territory of the latter State, as in the main proceedings.

The fact that a citizen of the Union had been subject to a measure repatriating him from the territory of another Member State, where he was residing illegally, might be taken into account by his Member State of origin for the purpose of restricting that citizen’s right of free movement only to the extent that his personal conduct constituted a genuine, present and sufficiently serious threat to one of the fundamental interests of society. According to the Court, the situation in the present case did not however seem to meet these requirements.

The Court held that it was nevertheless for the national court to make the necessary findings in this respect, on the basis of the matters of fact and of law justifying, in the main proceedings, the request of the Minister for a restriction on Mr Jipa’s right to leave Romania.

Text of Judgement

Joined Cases C-39 and 52/05 P, Sweden and Turco

>> Regulation 1049/2001 imposing obligation to disclose opinions of the Council’s legal service relating to a legislative process.

In this case, Mr Turco had submitted a request to the Council for access to the documents appearing on the agenda of a JHA Council meeting, including an opinion of the Council’s legal service on a proposal for a Council Directive laying down minimum standards for the reception of applicants for asylum in Member States. The Council refused access to that opinion on the basis of Art. 4(2) of Regulation 1049/200. Mr Turco made a confirmatory application to the Council asking it to reconsider its position. In the contested decision, the Council agreed to disclose the introductory paragraph of that opinion, but it refused to reconsider its position as to the remainder. In essence, it justified its confirmation of refusal of access on the ground, first, that the advice of its legal service deserved particular protection, because it was an important instrument which enabled the Council to be sure of the compatibility of its acts with Community law and to move forward the discussion of the legal aspects at issue. Secondly, disclosure of the legal service’s opinions could create uncertainty regarding the legality of legislative acts adopted further to those opinions and, therefore, jeopardise the legal certainty and stability of the Community legal order.

The Court of Justice reiterated that when the Council was asked to disclose a document, it must assess, in each individual case, whether that document fell within the exceptions to the right of public access to documents of the institutions set out in Art. 4 of Regulation 1049/2001. In view of the objectives pursued by Regulation 1049/2001, those exceptions must be interpreted and applied strictly. (Case C-64/05 P Sweden v Commission and Others [2007])

The Court of Justice held that examination to be undertaken by the Council when it was asked to disclose a document must necessarily be carried out in three stages, corresponding to the three criteria in 4(2) of Regulation 1049/2001. The exception relating to legal advice laid down in the second indent of Art. 4(2) of Regulation 1049/2001 must be construed as aiming to protect an institution’s interest in seeking legal advice and receiving frank, objective and comprehensive advice. The risk of that interest being undermined must, in order to be capable of being relied on, be reasonably foreseeable and not purely hypothetical.

However, it was for the Council to balance the particular interest to be protected by non-disclosure of the document concerned against, inter alia, the public interest in the document being made accessible in the light of the advantages stemming, from increased openness, in that this enabled citizens to participate more closely in the decision-making process and guaranteed that the administration enjoyed greater legitimacy and was more effective and more accountable to the citizen in a democratic system. It was incumbent on the Council to establish in each case whether the general considerations normally applicable to a particular type of document were in fact applicable to a specific document which it had been asked to disclose. These considerations were of particular relevance where the Council was acting in its legislative capacity. The Court of Justice stated that openness in that respect contributed to strengthening democracy by allowing citizens to scrutinize all the information which had formed the basis of a legislative act. The possibility for citizens to find out the considerations underpinning legislative action was a precondition for the effective exercise of their democratic rights.

The Court of Justice held that to submit, in a general and abstract way, that there was a risk that disclosure of legal advice relating to legislative processes might give rise to doubts regarding the lawfulness of legislative acts did not suffice to establish that the protection of legal advice would be undermined for the purposes of the second indent of Art. 4(2) of Regulation 1049/2001 and could not, accordingly, provide a basis for a refusal to disclose such advice. Furthermore, the Court of Justice found that there appeared to be no real risk that was reasonably foreseeable and not purely hypothetical that disclosure of opinions of the Council’s legal service issued in the course of legislative procedures might undermine the protection of legal advice within the meaning of the second indent of Art. 4(2) of Regulation 1049/2001. It followed that Regulation 1049/2001 imposed, in principle, an obligation to disclose the opinions of the Council’s legal service relating to a legislative process.

Text of Judgement

C-195/08 PPU, Rinau

Today was the hearing of the first case using the new urgent preliminary ruling procedure in the area of FSJ. The case was lodged only five weeks ago.

Today, the first case (C-195/08 PPU) was heard in which the new urgent preliminary ruling procedure in the area of freedom, security and justice is being used (hence the suffix). This procedure was introduced by Council Decision 2008/79 (pdf) of December 20, 2007, which, as is well known, ended a long discussion on whether such procedure should be introduced.

The Brussels European Council of 4-5 November 2004 decided that “thought should be given to creating a solution for the speedy and appropriate handling of requests for preliminary rulings concerning the area of freedom, security and justice, where appropriate, by amending the Statutes of the Court”. This finally resulted in amendments to the Rules of Procedure (pdf) of the Court of Justice, inter alia introducing a new Article 104b (see this link (pdf) for the text of the amendments). The new urgent procedure is applicable as from March 1, 2008 (see this press release of the Court of Justice (pdf)).

Of course, as is well known, Article 104a already provides for an urgent preliminary ruling procedure, but as Lenaerts has pointed out last December in the Common Market Law Review: “ this accelerated procedure has been considered inadequate for the present purposes because, among other things, it has not been found to cut down sufficiently the duration of the proceedings and its acceleration is achieved at the expense of all the other cases pending before the Court, thereby explaining why it has been used by the Court only on a very exceptional basis” (link, pp 1654-1656 (access kluwerlawonline required, pdf)).

The lenght of the preliminary ruling procedure is of course a returning point of criticism and concern. The Lisbon Treaty will add to Article 234 EC that when a preliminary 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". (new Art. 267(4) TFEU)

Update July 12: judgment was delivered yesterday: link

Case C-458/06, Gourmet Classic

>> Court has jurisdiction in Art. 234 cases even if all parties agree on interpretation of Community law provision.

The Gourmet Classic case, which was delivered this morning, prima facie seemed just an ordinary Art. 234 EC case. The Regeringsrätten (The Swedish Supreme Administrative Court) asked the Court whether the alcohol in cooking wine must be regarded as ethyl alcohol within the meaning of Art. 20 of Directive 92/83. However, as AG Bot pointed out in his Opinion to this case: “a particular feature of this case is that in the main proceedings all parties agree that the alcohol contained in cooking wine must be regarded as ethyl alcohol within the meaning of that provision.”

The Court of Justice therefore was faced with the question whether a dispute actually existed and hence had jurisdiction to give a ruling on the question referred.

The AG found that the Court lacked jurisdiction to give a ruling in this case, arguing that “to accept that the Court has jurisdiction in a case such as that before me is to distort the objective pursued by Art. 234 EC and disregard the conditions for bringing an action before the Court under that Article to the effect that there must be of a dispute and that the question referred for a preliminary ruling must be justified by the need to resolve a genuine controversy.”

Nevertheless, the Court found that it did have jurisdiction. It held that Article 234 EC aimed to avoid divergences in the interpretation of Community law which the national courts had to apply and aimed to ensure that, in all circumstances, that law had the same effect in all Member States (see Case 166/73 Rheinmühlen-Düsseldorf [1974]
). The Court reiterated that the procedure provided for in Art. 234 EC was an instrument of cooperation between the Court of Justice and the national courts. In the context of that cooperation, it was for the national court or tribunal, which alone had direct knowledge of the facts of the main proceedings and which must assume responsibility for the subsequent judicial decision, to assess, in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submitted to the Court. Where questions submitted by national courts concerned the interpretation of a provision of Community law, the Court of Justice was, in principle, obliged to give a ruling (see inter alia Joined cases C-297/88 and C-197/89 Dzodzi [1990], Case C-83/91 Meilicke [1992] and Case C-412/93 Leclerc-Siplec [1995]).

The Court admitted that while “the spirit of cooperation” which must prevail in the exercise of the functions assigned by Art. 234 EC to the national courts, on the one hand, and the Community judicature, on the other, required the Court of Justice to have regard to the particular responsibilities of the national court, it implied at the same time that the national court, in the use which it made of the possibilities offered by that Article, must have regard to the particular function entrusted to the Court of Justice in this field, which was to assist in the administration of justice in the Member States and not to deliver advisory opinions on general or hypothetical questions.



The Court pointed out that the purpose of the procedure before the Regeringsrätten was to review the legality of an opinion which, once it became definitive, bound the tax authorities and served as the basis for the assessment to tax if and to the extent to which the person who applied for the opinion continued with the action envisaged in his application. In those circumstances, the Regeringsrätten must be held to be carrying out a judicial function. The fact that all parties confirmed the preliminary opinion of the Skatterättsnämnden did not affect the judicial nature of the main proceedings.

The Court of Justice argued that Regeringsrätten asked the Court of Justice a question concerning the interpretation of a provision of Community law, namely the first indent of Art. 20 of Directive 92/83, and it considered that a preliminary ruling on that point was necessary in order to review the legality of the preliminary opinion of the Skatterättsnämnden. The Court was therefore not being asked to deliver an advisory opinion on a hypothetical question.

Moreover, since there was no judicial remedy under national law against the decisions of the Regeringsrätten, that court was obliged, under Art. 234(3) EC, to bring the matter before the Court of Justice. Consequently, it was only by referring a question to the Court for a preliminary ruling that the objective pursued by that provision could be attained, that was to ensure the proper application and uniform interpretation of Community law in all the Member States and to prevent a body of national case-law that was not in accordance with the rules of Community law from coming into existence in the Member State concerned.

The Court thus found that it had jurisdiction to reply to the question posed by the Regeringsrätten. In short, it concluded that the alcohol contained in cooking wine was, if it had an alcoholic strength exceeding 1.2% by volume, to be classified as ethyl alcohol as referred to in the first indent of Art. 20 of Council Directive 92/83.

Text of Judgment

Preliminary references

Already some time ago, Rene Barents, who has been Head of Research and Documentation for the ECJ since 2000, sent me this document (table of contents, both pdf)) on preliminary references under Art. 234 EC. An interesting read, highly recommended. Apologies to all ECJBlog readers for not posting it any sooner.