CELEX: 62018CJ0722
Reference for a preliminary ruling
Combating late payment in commercial transactions
Directive 2000/35/EC
Article 1 and Article 6(3)
Scope
National legislation
Commercial transactions financed by the EU Structural Funds and by the EU Cohesion Fund
Exclusion

This request for a preliminary ruling concerns the interpretation of recitals 13, 20 and 22 of Directive 2000/35/EC of the European Parliament and of the Council of 29 June 2000 on combating late payment in commercial transactions (OJ 2000 L 200, p. 35), and of Article 18 TFEU.
The request has been made in proceedings between KROL — Zakład Robót Wodno-Kanalizacyjnych sp. z o.o.,  sp.k. (‘KROL’) and Porr Polska Construction S.A. (‘Porr’) concerning payment by Porr to KROL of statutory interest for late payment in connection with remuneration for works carried out by KROL under a contract concluded between those two companies.

Legal context

EU law
Recitals 9, 10, 13, 16, 20 and 22 of Directive 2000/35 state:
‘(9)      The differences between payment rules and practices in the Member States constitute an obstacle to the proper functioning of the internal market.
(10)      This has the effect of considerably limiting commercial transactions between Member States. This is in contradiction with Article [18] of the [FEU]  Treaty as entrepreneurs should be able to trade throughout the internal market under conditions which ensure that transborder operations do not entail greater risks than domestic sales. Distortions of competition would ensue if substantially different rules applied to domestic and transborder operations.
…
(13)      This Directive should be limited to payments made as remuneration for commercial transactions and does not regulate transactions with consumers, interest in connection with other payments, e.g. payments under the laws on cheques and bills of exchange, payments made as compensation for damages including payments from insurance companies.
…
(16)      Late payment constitutes a breach of contract which has been made financially attractive to debtors in most Member States by low interest rates on late payments and/or slow procedures for redress. A decisive shift, including compensation of creditors for the costs incurred, is necessary to reverse this trend and to ensure that the consequences of late payments are such as to discourage late payment.
…
(20)      The consequences of late payment can be dissuasive only if they are accompanied by procedures for redress which are rapid and effective for the creditor. In conformity with the principle of non-discrimination contained in Article [18] of the [FEU] Treaty, those procedures should be available to all creditors who are established in the Community.
…
(22)      This Directive should regulate all commercial transactions irrespective of whether they are carried out between private or public undertakings or between undertakings and public authorities, having regard to the fact that the latter handle a considerable volume of payments to business. It should therefore also regulate all commercial transactions between main contractors and their suppliers and subcontractors.’
As set out in  Article 1 of Directive 2000/35, headed ‘Scope’:
‘This Directive shall apply to all payments made as remuneration for commercial transactions.’
The first subparagraph of Article 2(1) of that directive defines ‘commercial transactions’ as ‘transactions between undertakings or between undertakings and public authorities which lead to the delivery of goods or the provision of services for remuneration’.
Article 6(3) of that directive is worded as follows:
‘In transposing this Directive, Member States may exclude:
(a)      debts that are subject to insolvency proceedings instituted against the debtor;
(b)      contracts that have been concluded prior to 8 August 2002; and
(c)      claims for interest of less than EUR 5.’
Directive 2000/35 was repealed by Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions (OJ 2011 L 48, p. 1) with effect from 16 March 2013, pursuant to the first paragraph of Article 13 of the latter directive.
Article 12(4) of Directive 2011/7 provides:
‘In transposing the Directive, Member States shall decide whether to exclude contracts concluded before 16 March 2013.’
As set out in the second sentence of the first paragraph of Article 13 of that directive, Directive 2000/35 remains applicable to contracts concluded before 16 March 2013 to which Directive 2011/7 does not apply pursuant to Article 12(4).

Polish law
Directive 2000/35 was transposed into Polish law by the ustawa o terminach zapłaty w transakcjach handlowych (Law on Payment Periods in Commercial Transactions) of 12 June 2003 (Dz. U. of 2003, No 139, item 1323) (‘the Law of 12 June 2003’), which entered into force on 1 January 2004.
As set out in  Article 4(3)(c) of that law, it does not apply to:
‘contracts which concern the supply of goods or provision of services for consideration, financed in whole or in part by resources from:
…
(c) the EU Structural Funds and the EU Cohesion Fund.’
The Law of 8 March 2013 (Dz. U. of 2013, item 403) transposing Directive 2011/7 repealed the Law of 12 June 2003 with effect from 28 April 2013. It contains no provisions which exclude from its scope commercial transactions financed by the EU Structural Funds or the EU Cohesion Fund.
Pursuant to Article 15 of that law, commercial transactions concluded before 28 April 2013 are governed by the Law of 12 June 2003.

The dispute in the main proceedings and the question referred for a preliminary ruling
By a contract concluded on 10 August 2009, Teerag-Asdag Polska, which subsequently merged with Porr, was tasked by the Polish Treasury, as developer, with carrying out  highway construction works. Performance of that contract was financed in part by resources from the EU Cohesion Fund on the basis of a project co-financing agreement.
By a contract concluded on  9 September 2009, KROL was commissioned by Porr to carry out part of those construction works.
The remuneration was to be paid by Porr on the basis of invoices issued by KROL as the works progressed.
After having sent Porr the invoices for the amount of remuneration due for the works carried out,  KROL sent Porr on 3 September 2014  a statement of interest to be paid and, two days later, a letter of formal notice to pay statutory interest for late payment within seven days of receipt of that notice.
That request was not complied with and KROL therefore brought an action before the Sąd Rejonowy dla m. st. Warszawy (District Court for the Capital City of Warsaw, Poland). By judgment of 25 September 2017, that court dismissed KROL’s action for recovery of the interest for late payment specified, on the ground that the services performed by KROL formed part of a project co-financed by the EU Cohesion Fund and were therefore excluded from the scope of the Law of 12 June 2003.
KROL lodged an appeal against that judgment before the Sąd Okręgowy w Warszawie, XXIII Wydział Gospodarczy Odwoławczy (Regional Court, Warsaw, Commercial Appeals Division No 23, Polond). That court expresses doubts as to the compatibility of the Law of 12 June 2003 with Directive 2000/35, in so far as that law excludes from its scope commercial transactions financed, in whole or in part, by resources from the EU Structural Funds or the EU Cohesion Fund.
In that regard, the referring court observes that Directive 2000/35 does not differentiate between commercial transactions according to the origin of funds used as their source of finance, and does not provide for different treatment to be given to transactions financed by the EU Structural Funds. That court adds that excluding those transactions from the scope of the Law of 12 June 2003 is liable to undermine the objective of combating late payment in the internal market pursued by Directive 2000/35. Lastly, it points out that, on the date the contract was concluded, KROL was not aware that it would be financed in part by the EU Cohesion Fund and that, in any event, the co-financing agreement did not concern the contract concluded between KROL and Porr.
In those circumstances, the Sąd Okręgowy w Warszawie, XXIII Wydział Gospodarczy Odwoławczy (Regional Court, Warsaw, Commercial Appeals Division No 23) decided to stay the proceedings and to refer the following question for a preliminary ruling:
‘Does EU law, in particular recitals 13, 20 and 22 of Directive 2000/35 … and Article 18 TFEU laying down the principle of non-discrimination, permit the possibility of excluding compensation for late payment in respect of transactions financed in whole or in part by resources from the EU Structural Funds and the EU Cohesion Fund, which follows from Article 4(3)(c) of [the Law of 12 June 2003]?’

Consideration of the question referred

Admissibility of the request for a preliminary ruling
The Polish Government informed the Court, after the present request for a preliminary ruling was lodged, that the Law of 12 June 2003, which excluded compensation for late payment in respect of commercial transactions financed in whole or in part by resources from the EU Structural Funds and the EU Cohesion Fund, was repealed by the Law of 8 March 2013, which no longer provides for such an exclusion.
In those circumstances, the Court must determine whether it is necessary to respond to the question referred (see, to that effect, judgment of 15 July 2004,
Lenz
, C‑315/02, EU:C:2004:446, paragraphs 53 and 54).
In the present case, it must be recalled that Directive 2011/7, transposed into Polish law by the Law of 8 March 2013, provides, in Article 12(4), that Member States are to decide whether to exclude from its scope contracts concluded before 16 March 2013. Where a Member State makes use of that option, the first paragraph of Article 13 of that directive provides that Directive 2000/35 remains applicable to contracts concluded before that date.
The latter provision must be interpreted as meaning that the Member States may exclude from the scope of Directive 2011/7 late payments in the performance of a contract concluded before 16 March 2013, even where those late payments occur after that date (judgment of 1 June 2017,
Zarski
, C‑330/16, EU:C:2017:418, paragraph 34).
It is apparent from the material in the file submitted to the Court that Article 15 of the Law of 8 March 2013 expressly provides that commercial transactions concluded before the date of its entry into force are covered by the provisions applicable until that date, including, inter alia, those of the Law of 12 June 2003. The referring court states, in that regard, that since the contract at issue in the main proceedings was concluded on 9 September 2009, it is covered by the latter law, which transposed Directive 2000/35.
Accordingly, an interpretation of the provisions of that directive is required, in the light of the doubts expressed by the referring court as to whether the Law of 12 June 2003 is compatible with it.
It is therefore necessary to give a substantive answer to the question referred.

Substance
By its question, the referring court seeks, in essence, to ascertain whether Article 1 and Article 6(3) of Directive 2000/35 must be interpreted as precluding national legislation, such as that at issue in the main proceedings, pursuant to which commercial transactions financed in whole or in part by resources from the EU Structural Funds and the EU Cohesion Fund are excluded from the benefit of the compensation for late payment guaranteed by that directive.
In that regard, in the first place, it must be recalled that Directive 2000/35 applies, pursuant to Article 1 thereof, to ‘all payments made as remuneration for commercial transactions’.
In accordance with the first subparagraph of Article 2(1) of Directive 2000/35, the concept of ‘commercial transactions’ is to be understood as meaning ‘transactions between undertakings or between undertakings and public authorities which lead to the delivery of goods or the provision of services for remuneration’. That provision must be read in the light of recitals 13 and 22 of the directive, from which it is clear, inter alia, that, in essence, the directive is intended to apply to all payments made as remuneration for commercial transactions, including those between undertakings and public authorities, but excluding transactions with consumers and other types of payment.
It follows that Article 1 of Directive 2000/35, read in conjunction with the first subparagraph of Article 2(1) thereof, defines the scope of that directive very broadly.  Having regard to those provisions, there is nothing to suggest that a commercial transaction financed in whole or in part by resources from the EU Structural Funds and the EU Cohesion Fund is excluded from its scope.
In the second place, it should be noted that Article 6(3) of Directive 2000/35 does allow the Member States to exclude from the scope of the national legislation transposing that directive debts that are subject to insolvency proceedings instituted against the debtor, contracts concluded prior to 8 August 2002 and claims for interest of less than EUR 5.  However, as a provision which derogates from the principle established in Article 1 of Directive 2000/35, pursuant to which that directive applies to all payments made as remuneration for commercial transactions, Article 6(3) must be interpreted strictly (see, by analogy, judgment of 10 April 2014,
ACI Adam and Others
, C‑435/12, EU:C:2014:254, paragraph 22 and the case-law cited).
It follows from the foregoing that, since Directive 2000/35 does not provide for the exclusion, when it is transposed into national law, of commercial transactions financed in whole or in part by resources from the EU Structural Funds and the EU Cohesion Fund, it precludes national legislation which imposes such an exclusion.
That finding is supported by the objective of Directive 2000/35, which, as stated in recitals 9, 10 and 20 thereof, seeks to harmonise the consequences of late payment in order to make them dissuasive, so that commercial transactions throughout the internal market are not hindered.
The exclusion of a not insignificant proportion of commercial transactions, namely those financed in whole or in part by resources from the EU Structural Funds and the EU Cohesion Fund, from the benefit of the mechanisms for combating late payments prescribed by Directive 2000/35 would necessarily have the consequence of reducing the effectiveness of those mechanisms, including in relation to transactions that may involve operators from different Member States.
In those circumstances, an interpretation of  Article 18 TFEU is not necessary in the present context.
In the light of the foregoing considerations, the answer to the question referred is that Article 1 and Article 6(3) of Directive 2000/35 must be interpreted as precluding national legislation, such as that at issue in the main proceedings, pursuant to which commercial transactions financed in whole or in part by resources from the EU Structural Funds and the EU Cohesion Fund are excluded from the benefit of the compensation for late payment provided for by that directive.

Costs
Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.
On those grounds, the Court (Ninth Chamber) hereby rules:
Article 1 and Article 6(3) of Directive 2000/35/EC of the European Parliament and of the Council of 29 June 2000 on combating late payment in commercial transactions must be interpreted as precluding national legislation, such as that at issue in the main proceedings, pursuant to which commercial transactions financed in whole or in part by resources from the EU Structural Funds and the EU Cohesion Fund are excluded from the benefit of the compensation for late payment provided for by that directive.
[Signatures]
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Language of the case: Polish.