Information;Order — ECLI:EU:C:2021:861
Date: 2021-10-13
Language of the case: Portuguese
Court formation: Seventh Chamber
Subject matter: Approximation of laws;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Portugal

Summary C-375/20 – 1 
Case C-375/20 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged:  
10 August 2020 
Referring court:  
Tribunal da Relação de Coimbra (Portugal) 
Date of the decision to refer:  
11 May 2020 
Appellant:  
Liberty Seguros S.A. 
Respondent:  
DR 
  
Subject matter of the main proceedings 
The Third Civil Chamber of the Tribunal da Relação de Coimbra (Court of 
Appeal, Coimbra, Portugal) seeks a ruling from the Court of Justice on the 
compatibility with EU law (Directive 2009/103/EC) of the possibility, provided 
for in national law, of relying on the invalidity of an insurance contract, resulting 
from the unlawful nature of its transactional content, as against injured third 
parties and the Fundo de Garantia Automóvel (Portuguese Motor Vehicle 
Insurance Guarantee Fund, ‘the FGA’). 
Subject matter and legal basis of the request for a preliminary ruling 
Second paragraph of Article 267 TFEU. 
Questions referred 
Does [EU] law, and in particular Directive 2009/103/EC of the European 
Parliament and of the Council, preclude national legislation which allows the 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-375/20 
 
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nullity of a contract of insurance taken out against civil liability in respect of the 
use of motor vehicles to be relied on as against injured third parties and the Fundo 
de Garantia Automóvel where that nullity results from the fact that the 
policyholder has used the insured vehicle for the clandestine and illegal transport 
of persons and goods for remuneration and has concealed its use for that purpose 
from the insurer? Would the answer be the same even if the passengers had known 
that the transport was clandestine and unlawful? 
Provisions of EU law relied on 
Directive 2009/103/EC of the European Parliament and of the Council of 
16 September 2009 relating to insurance against civil liability in respect of the use 
of motor vehicles, and the enforcement of the obligation to insure against such 
liability, in particular Article 13(1). 
Judgment of 20 July 2017, Fidelidade-Companhia de Seguros, C-287/16, 
EU:C:2017:575; judgment of 4 July 2006, Adeneler and Others, C-212/04, 
EU:C:2006:443; judgment of 16 December 1993, Wagner Miret, C-334/92, 
EU:C:1993:945; and judgment of 13 November 1990, Marleasing, C-106/89, 
EU:C:1990:395. 
Provisions of national law relied on 
Decreto-Lei n.º 291/2007, de 21 de agosto (aprova o regime do sistema do seguro 
obrigatório de responsabilidade civil automóvel e transpõe parcialmente para a 
ordem jurídica interna a Diretiva n.º 2005/14/CE, do Parlamento Europeu e do 
Conselho, de 11 de maio, que altera as Diretivas n.os 72/166/CEE, 84/5/CEE, 
88/357/CEE e 90/232/CEE, do Conselho, e a Diretiva n.º 2000/26/CE, relativas ao 
seguro de responsabilidade civil resultante da circulação de veículos automóveis) 
(Decree-Law No 291 of 21 August 2007 adopting the rules governing the system 
of compulsory insurance against civil liability in respect of the use of motor 
vehicles and partially transposing Directive 2005/14/EC of the European 
Parliament and of the Council of 11 May 2005 amending Council Directives 
72/166/EEC, 84/5/EEC, 88/357/EEC and 90/232/EEC and Directive 2000/26/EC 
[of the European Parliament and of the Council] relating to insurance against civil 
liability in respect of the use of motor vehicles) (‘the CMVI [compulsory motor 
vehicle insurance] rules’), Diário da República No 160 Series I, of 21 August 
2007: in particular Articles 22, 47(1), 49(1)(a) and (b) and 54(3). 
Decreto-Lei n.º 72/2008, de 16 de abril (estabelece o regime jurídico do contrato 
de seguro) (Decree-Law No 72 of 16 April 2008 laying down the rules governing 
insurance contracts) (‘the ICR [insurance contract rules]’), Diário da República 
No 75, Series I, of 16 April 2008: in particular Articles 14(1), 24(1), 25(3) and 43. 
Articles 253, 254(1), 280 and 294 of the (Código Civil) Civil Code. 
LIBERTY SEGUROS 
 
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Brief presentation of the facts and the main proceedings 
1 Liberty Seguros S.A., brought an action for declaratory relief against the 
defendant, DR, now respondent, seeking a ‘declaration annulling the insurance 
contract concluded with the defendant on the ground of its substantive invalidity 
retroactively to the date on which it was concluded, without prejudice to the 
applicant’s right to retain the premiums paid by the defendant, in accordance with 
the provisions of Article 25(5) of Decree-Law No 72/2008’. 
2 The applicant, now appellant, claimed in essence that, on 27 August 2015, it had 
concluded with the defendant a contract of insurance against civil liability in 
respect of the use of motor vehicles in which the item insured was the vehicle 
(identified in greater detail in the documents in the main proceedings) bearing 
registration number 56-FB-46 (‘FB’), and that, in the application to take out that 
insurance, the defendant had identified himself as the owner of the 
aforementioned vehicle and stated that that vehicle was for private use by him as 
the owner and usual driver. 
3 In addition, it stated that, on 9 September 2015, the defendant had submitted an 
application to amend that contract in which he requested that the item insured be 
changed from vehicle ‘FB’ to another vehicle of the same make and model 
bearing registration number 80-PX-30 (‘PX’), of which he also identified himself 
as being the owner and usual driver. He further stated that the vehicle was 
intended for his private use, that it had six seats and that he was the policyholder 
and usual driver, but made no mention of the existence of a trailer. The applicant 
relied on those statements by the defendant and agreed to amend the contract, all 
of the other stipulations contained in the original contract concluded on 27 August 
having remained in force. 
4 The applicant also claimed that, as a result of an accident which had taken place 
on 24 March 2016 in France (the victims of which were twelve persons travelling 
inside the vehicle), it became aware of the following: the defendant, at the time 
when he had asked to change the insured vehicle, was not, then or subsequently, 
the owner of the vehicle in question; he was not its usual driver; he was not using 
it for the purpose or in the way indicated in his application [for insurance], that 
vehicle having been used for the unauthorised transport for remuneration of 
passengers migrating between Portugal and Switzerland; the vehicle was being 
used with a trailer weighing 1 300 kilograms gross, and had twelve seats (in 
addition to the driver’s seat); and, moreover, the usual driver of the vehicle was 
FN, aged 19 and the holder of a type-B non-professional licence authorising him 
to drive vehicles carrying a maximum of 9 passengers and towing a trailer the 
gross weight of which must not exceed 750 kilograms. 
5 Lastly, the applicant stated that the defendant had deliberately withheld those facts 
from it, in particular the use of the vehicle for the activity pursued, thus deceiving 
it as to the scope of the risk contracted, and added that, if it had been aware of 
those facts, it would have refused to conclude the contract. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-375/20 
 
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6 By its conduct, the defendant intentionally and wilfully infringed his duty to 
declare at the outset the risk to be transferred, provided for in Article 24(1) of 
Decree-Law No 72/2008. On that ground, in accordance with Article 25(3) of that 
Decree-Law and Articles 253 and 254(1) of the Civil Code, the applicant is 
entitled to cancel the contract and seeks a court order declaring this to be the case.  
7 The defendant, who was duly summoned, did not respond. 
8 The Fundo de Garantia Automóvel, within the time available to the defendant to 
respond [to the action], lodged an application to join the proceedings as a principal 
party in which, citing its standing to participate in the proceedings (on the ground 
that it has an interest equal to that of the defendant, inasmuch as, if the applicant’s 
claims are upheld, it will be liable for payment of the compensation), it challenged 
the facts alleged by the applicant and contended that the action should be 
dismissed; the FGA also filed a counterclaim and an application for the institution 
of third-party proceedings, and requested that VS (the registered owner of the 
insured vehicle), FN (the driver of the insured vehicle) and JT (the applicant’s 
broker) be compelled to join the proceedings. 
9 To that end, it argued that the insurance contract was concluded with the 
assistance of a broker from the place of residence of the defendant DR, the latter 
having been known to be professionally engaged in the activity of transporting 
persons between Switzerland and Portugal for remuneration. This was a fact 
known to the applicant’s insurance broker, who, at the time when the contract was 
concluded/amended, inspected the vehicle and was aware that it had three rows of 
seats and a trailer hitch. It added that the applicant itself has extensive means at its 
disposal to establish the truthfulness of the information given to it by the insured 
person and has an obligation to check and verify the accuracy of the replies 
provided by the policyholder, which is why the act of claiming that the contract is 
voidable constitutes abusive behaviour in the form of venire contra factum 
proprium. It further argues that, if that defect is present, it follows from Article 22 
of Decree-Law No 291/2007 that the voidability of the contract cannot be relied 
on as against the injured parties, and, on that ground, it has filed a counterclaim 
requesting that the applicant be ordered ‘to recognise that the possible voidability 
or nullity of the insurance contract concluded with the defendant DR cannot be 
relied on as against the injured parties and the FGA’.  
10 At the end of the adversarial proceedings between the original parties, the court 
granted the FGA leave to join the proceedings as a principal party and allowed the 
counterclaim which had been filed.  
11 In the meantime, the applicant submitted a document extending the application in 
which it maintained all the claims contained in its original application, but 
claimed that it follows from Article 43(1) of Decree-Law 72/2008 that the 
insurance contract in question, inasmuch as it was concluded with a person 
without any interest worthy of legal protection (the pursuit of an 
illegal/clandestine activity involving the transport of passengers) is a void contract 
LIBERTY SEGUROS 
 
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and, for that reason, it requested, in accordance with Article 265(2) and (3) of the 
Código de Processo Civil (Code of Civil Procedure), that the application be 
amended so as to henceforth contain the following claims: 
‘(a) ― principally, that the insurance contract should be declared void, and that all 
of the legal consequences that this entails should be brought to bear;  
(b) ― in the alternative, in the event that that contract is not declared void, that it 
should be declared to be annulled in the precise terms and on the grounds set out 
in the original application duly added to the documents in the case file’. 
12 The first-instance court found the facts set out below, in particular, to be proved. 
13 On 27 August 2015, the defendant proposed to the applicant the conclusion of a 
contract of insurance against civil liability in respect of the use of motor vehicles. 
14 By that proposal, the defendant, who identified himself as the owner of vehicle FB 
and stated that he was using that vehicle for private purposes, sought to obtain not 
only compulsory cover for the risk of civil liability for damage caused through the 
use of that vehicle as purported owner and usual driver, but also separate cover for 
windscreen damage repair by an approved repairer, cover for death or incapacity 
of the driver, driver’s medical expenses, temporary full incapacity and 
hospitalisation of the driver and additional travel assistance. 
15 The applicant, relying on the statements made by the driver at that time, which it 
assumed to be truthful and made in good faith, agreed to the cover proposed and 
issued the corresponding policy. 
16 On 9 September 2015, the defendant, in connection with the insurance contract 
which had entered into force only a few days before, put to the applicant a further 
proposal whereby, without changing the cover and capital agreed, sought to 
insure, instead of the vehicle insured up to that point, another vehicle of the same 
make and model carrying the registration PX. 
17 In the proposed amendment which he signed, the defendant stated in relation to 
that vehicle too that he was taking out the insurance as the owner and usual driver 
of the vehicle, that he would be using it for private purposes and that it had 6 (six) 
seats authorised for transporting passengers and the driver. He did not mention 
that he intended to insure a trailer.  
18 The applicant, again relying on the declarations which the defendant had made in 
the proposed amendment signed by him on 9 September 2015, and which the 
applicant presumed to be truthful and made in good faith, agreed to change the 
insured vehicle, under the terms of risk provided for in that proposal, with effect 
from that date and issued the corresponding addendum to the insurance contract. 
19 On 25 March 2016, the applicant became aware that the defendant had not, either 
at the time when he proposed the change of insured vehicle or subsequently, been 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-375/20 
 
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using the vehicle in question for the purpose or in the way stated in the insurance 
proposal, but had been using it for the international transport for remuneration of 
migrant passengers and goods between Switzerland and Portugal, and that that 
vehicle had been towing a trailer. 
20 The insured vehicle had been in use with nine people on board (in three rows of 
three seats each), except on 24 March 2016, when it had twelve people on board 
(in four rows of three seats each, the back row being removable). 
21 The defendant was pursuing that activity, which he had been advertising since at 
least April 2015, without authorisation from any authority.  
22 The defendant deliberately omitted to mention that activity to the applicant in his 
insurance proposal. 
23 The defendant and the joined party FN were the usual drivers of vehicle ‘PX’. 
24 The joined party FN was 19 years old on 23 March 2016 and held a type-B non-
professional driving licence authorising him to drive vehicles transporting a 
maximum of 9 passengers and a towed trailer the gross weight of which must not 
exceed 750 kilograms. 
25 In the period from August 2015 to 24 March 2016, FN, as the driver of vehicle 
‘PX’ and another vehicle of the defendant, made at least twenty (outbound and 
return) trips between Switzerland and Portugal, most of them using vehicle ‘PX’. 
26 On at least some of those trips, the insured vehicle was towing a trailer weighing 
1 300 kilograms gross.  
27 Vehicle ‘PX’ had nine fixed seats and, on 24 March 2016, a further three 
removable sets were added as a fourth row. Those seats were installed on the first 
day of the trip on which the accident occurred and were not fitted with seat belts.  
28 The defendant was fully aware that he could not advertise, let alone communicate 
to the applicant, the activity he was really and actually pursuing in using that 
vehicle (and trailer), from which he made a substantial profit through the price he 
charged the people using his services; that activity, it is worth noting, had not been 
authorised by the authorities competent to do so. 
29 The defendant charged each passenger he carried at least EUR 100 per outbound 
or return trip between Portugal and Switzerland. 
30 That price included ‘door to door’ carriage of the passenger and his or her 
luggage.  
31 The trips were completed by a single driver who, on most occasions, did not have 
a suitable driving licence, given the number of people being carried and the 
characteristics of the vehicle and relevant trailers. 
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32 The defendant was fully aware that, if, at the time when he requested insurance, 
he had told the applicant about the activity he was pursuing and wished to 
continue pursuing using the insured vehicle, the applicant would never have 
agreed to conclude the contested insurance contract with him, let alone make the 
change of insured vehicle agreed later. 
33 The applicant became aware of those facts (concerning the activity which the 
defendant had been pursuing and the use of the insured vehicle) after the serious 
accident in which vehicle PX was involved and the investigation which it ordered 
to be conducted.  
34 That accident took place at 23:40 on 24 March 2016 on Route Nationale 79, at 
Moulins, municipality of Montbeugny, Lyon, France. 
35 The accident occurred when the insured vehicle, being driven at that time by the 
joined party FN, while heading in the direction of Mâcon to Moulins, collided 
head-on with a heavy goods vehicle travelling in the opposite direction. 
36 The collision took place in the right-hand lane, according to the direction of travel 
of the heavy goods vehicle (Moulins to Mâcon), when vehicle ‘PX’, travelling in 
the opposite direction, after performing various manoeuvres to overtake other 
vehicles, and proceeding at a speed in excess of the maximum permitted on that 
road (80 km/h), breached that lane. 
37 The collision resulted in the death of the twelve migrant Portuguese citizens who 
were making their way from Switzerland back to their home country in order to 
spend the Easter holidays with their families. 
38 Each of those passengers had paid or was about to pay the defendant DR at least 
EUR 100 for the trip they were making. 
39 Had it not been tragically and definitively interrupted, the trip from Switzerland to 
Portugal would have had to be made non-stop in order for it to be capable of being 
concluded at its intended destination between 11:00 and 12:00 on 25 March 2016. 
40 No provision had been made for a rest break, either for the driver, who was 
exclusively responsible for driving the vehicle for the full length of the journey, or 
for the passengers, who, together with much of their luggage, were ‘crammed’ 
into a space of approximately 4.5 m2 and a volume of approximately 8.5 m3; four 
of those passengers (the three on the back row of seats and a child in arms) were 
without seat belts (which the vehicle did not have). 
41 The shortest available route for the trip from the city of Romont in Switzerland to 
the city of Guarda in Portugal was 1 643 kilometres, and would take 16 hours non-
stop. 
42 Vehicle ‘PX’ had no tachograph or system for recording the periods of continuous 
or intermittent driving by the relevant drivers.  
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-375/20 
 
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43 At the time of the fatal accident, vehicle ‘PX’ was towing a trailer the gross 
weight of which (when empty) was 1 300 kilograms and which was carrying the 
remaining luggage and belongings of the passengers. 
44 The weight of the people and items carried in that vehicle made it abnormally 
unstable and that instability was increased exponentially by the performance of 
manoeuvres such as overtaking and driving at speeds in excess of 90 km/h. 
45 As a result of the violence of the collision with the HGV, the projection of the 
passengers travelling without seat belts towards those sitting in front increased the 
risk of death of the latter and inevitably contributed towards it.  
46 The trailer was not covered by the insurance contract at issue in this case. 
47 The defendant told the joined party JT that he was taking out insurance and would 
if necessary request an amendment to the policy in his capacity as owner of 
vehicle ‘PX’, and that he was/would be the usual driver of the vehicle. 
48 The defendant stated that the answers given on the form were fully consistent with 
the truth and that he had not concealed any information that might influence the 
applicant’s decision on the insurance proposal. 
49 He also stated that he was aware of his obligation to provide an accurate account 
of all information which was known to him or which he considered reasonably 
important in order to enable the insurer to evaluate the risk, and further stated that 
he was aware of the obligation to communicate any change in the circumstances 
or in the risk covered by the contract during its period of validity. 
50 The judgment given at the conclusion of the proceedings granted the application 
in part, upheld in full the counterclaim made by the FGA and declared void, with 
inter partes effects and the legal consequences arising therefrom, the insurance 
contract concluded between the applicant and the defendant. It dismissed all 
further claims against the defendant and held that the invalidity of the contract 
could not be relied on as against the injured third parties or the FGA.  
51 The applicant Liberty Seguros S. A. brought an appeal against that judgment 
before the referring court. 
Essential arguments of the parties in the main proceedings 
52 Liberty S.A. submits in its appeal that, in so far as the judgment under appeal 
recognises and declares the nullity of the insurance contract at issue, it should also 
have held that nullity to be capable of being relied on as against the joined party 
Fundo de Garantia Automóvel and, consequently, as against the parties injured by 
the accident at issue in the main dispute, since it is that Fund which is obliged to 
pay the corresponding compensation. 
LIBERTY SEGUROS 
 
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53 The foregoing follows from an interpretation of Article 291 of the Civil Code in 
conjunction with Articles 2, 25(1) and (3) and 147(1) and (2) of Decree-Law 
No 72/2008 and Articles 22, 27 (by converse inference), 47(1), 49(1) and 54(4) of 
Decree-Law No 291/2007. 
54 The application of the aforementioned provisions of national law is not contrary to 
the EU directives on the system of compulsory insurance against civil liability in 
respect of the use of motor vehicles. 
55 This is because EU directives have vertical direct effect in relations between 
individuals and the Member State or the public authorities (the FGA in this case), 
meaning that individuals may rely on provisions of a directive which are 
sufficiently clear, precise and unconditional in the context of public-law relations. 
56 Horizontal direct effect occurs in relations between individuals (private-law 
relations) and, although the Court of Justice recognises the direct applicability of 
regulations (that is to say, vertical and horizontal direct effect), in the case of 
directives it envisages only the possibility of vertical direct effect in relations 
between individuals and the State or the public authorities. 
57 Thus, national courts have no discretion when it comes to the direct application or, 
put another way, the recognition of the horizontal direct effect of a directive in 
judicial proceedings between individuals, and, for that reason, they are not in a 
position to recognise that effect.  
58 In this case, Liberty Seguros is, under national law, exempt from civil liability as a 
consequence of the nullity of the insurance contract.  
59 The interpretation of national law in accordance with EU law is excluded where 
this gives rise to a contra legem interpretation of national law.  
60 It therefore submits that the judgment under appeal should be replaced with 
another judgment which, upholding the appeal, recognises and finds that the 
declared and recognised nullity of the contract of insurance against civil liability 
in respect of the use of motor vehicles concluded between the applicant and the 
defendant DR can be relied upon as against the joined party Fundo de Garantia 
Automóvel and as against the parties injured in the accident that took place in 
France on 24 March 2016, and that the obligation to compensate the injured 
parties for the harm they have sustained falls to the FGA (and not to the applicant 
Liberty Seguros). 
61 In its response, the Fundo de Garantia Automóvel requested that the subject 
matter of the appeal be extended, and submitted the following arguments in 
connection with the extension sought. 
62 The FGA considers that the referring court should have found it to be proved that 
the broker was fully aware of the unlawful activity being pursued by the defendant 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-375/20 
 
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DR, that is to say, the transport for remuneration of persons between Switzerland 
and Portugal. 
63 As a result, the insurer’s reliance on contractual exceptions constitutes without the 
slightest doubt abusive conduct in the sense of venire contra factum proprium, 
inasmuch as it seeks to adopt a legal position manifestly contrary to the conduct in 
which it itself engaged previously, in accordance with Article 334 of the Civil 
Code. 
64 Even on a different construction, in the context of a contract of insurance against 
civil liability in respect of the use of motor vehicles, the interest worthy of legal 
protection is that of the victim of the road traffic accident, the provisions of 
Article 43 of the CMVI rules being inapplicable. 
65 Consequently, even if it is accepted that the insurance contract does not reflect an 
interest worthy of legal protection, the special compulsory insurance scheme 
requires that the nullity referred to in Article 43 of the CMVI rules must be 
interpreted as a mere ground of voidability ― that must be based on false 
statements ― and cannot, therefore, be relied on as against injured parties. 
66 What is more, even if nullity is present ― quod non ― this could be relied on as 
against injured parties and, therefore, the FGA, only if it had been declared prior 
to the accident. 
67 In conclusion, the FGA contends that the appeal brought by Liberty Seguros 
should be dismissed as unfounded, that the judgment under appeal should be 
maintained and, in the alternative, that the extension of the subject matter of the 
appeal should be granted. 
Brief presentation of the grounds for the request for a preliminary ruling 
68 In order to dispose of the appeal pending before it, the referring court must assess 
whether, contrary to the conclusion reached at first instance, the nullity of the 
insurance contract for lack of interest worthy of legal protection must be regarded 
as being capable of being relied on as against third parties and the FGA. 
69 The first-instance court considered that the insurance contract at issue in this case 
is not only voidable but also void, in accordance with Article 43(1) of the CMVI 
rules, in so far as the insured person’s interest in the risk covered is not worthy of 
legal protection. 
70 Next, the judgment under appeal found that the defects which it identified in the 
insurance contract ― as mentioned previously, nullity for lack of an interest (on 
the part of the insured person) worthy of legal protection in the risk covered, and 
voidability for wilful breach of the duty of initial disclosure and the consequent 
risk inherent in driving the vehicle ― in accordance with the applicable national 
law, in particular Article 22 (which expressly provides that the nullity of a 
LIBERTY SEGUROS 
 
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contract may be relied on as against injured parties), and Articles 54(3) and (4) of 
Decree-Law 291/2007, in conjunction with the CMVI rules, may be relied on as 
against injured parties and the FGA. 
71 Nonetheless, the first-instance court concluded in the judgment under appeal that 
that outcome ― that is to say, reliance on the invalidity of a contract ― is not 
compatible with EU law. It stated that, ‘thus, since, in accordance with the 
provisions of Article 3(1) of the First Directive and Article 2(1) of the Second 
Directive, on an interpretation consistent with EU law and in accordance with the 
settled case-law of the Court of Justice of the European Union, Member States 
may not undermine the effectiveness of such directives, the Portuguese State 
could not provide in Article 22 of the CMVI rules for the insurer to be able to rely 
as against injured parties and the FGA on the exceptions arising from the 
invalidity of the contract, even if these existed at the time when the contract was 
concluded’. 
72 On the basis of that reasoning, it concluded finally that, ‘as a result of the 
foregoing, it is appropriate to take the view that the insurance contract, inter 
partes, is invalid (void for lack of an interest worthy of legal protection and 
voidable as a result of the false statements and wilful omissions of the 
policyholder), although the insurer cannot rely on that invalidity as against injured 
third parties and the FGA’. 
73 According to the referring court, the first-instance court appears to have started 
from the premiss that the situation at issue in the dispute in the main proceedings 
and that which gave rise to the case culminating in the judgment of the Court of 
Justice of the European Union of 20 July 2017, C-287/16, were equivalent. It 
inferred from this that the relevant national law is contrary to EU law in so far as 
it relates to reliance/non-reliance on the invalidity of a contract and gave priority 
to the solution advocated by EU law ― in accordance with the principle of the 
primacy of EU law over national law ― and thus concluded that the insurer could 
not rely as against the injured parties and the FGA on the invalidity of the 
insurance contract as resulting from its nullity for lack of an interest worthy of 
legal protection or its voidability in consequence of the false declarations or wilful 
omissions of the policyholder. 
74 That, in essence, is the conclusion which the insurer seeks to have reversed on 
appeal. It argues that, in adopting Decree-Law 291 of 21 August 2007, the 
legislature sought only to transpose in part into national law Directive 2005/14/EC 
on insurance against civil liability in respect of the use of motor vehicles, since it 
states as much in the preamble to that Decree-Law, and that directives do not 
produce horizontal direct effect, an interpretation which, as it endeavoured to 
demonstrate, is maintained largely intact in the case-law of the Court of Justice.  
75 The insurer also argues that that no point is served in relying on the principle that 
national law is to be interpreted in line with an EU directive — which is an 
alternative to the lack of horizontal direct effect of directives — given that, in the 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-375/20 
 
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situation at issue in this case, an interpretation of the national legislation in 
conformity with EU law would entail a contra legem interpretation of national 
law; as is manifestly apparent from the judgment under appeal, national law, if 
properly interpreted, does not permit any outcome other than the ability to rely on 
the invalidity of a contract, and the Court of Justice, in establishing the above-
mentioned principle, made it clear that it cannot form the basis of a contra legem 
interpretation of the law. 
76 Nonetheless, although the interpretation to the effect that directives do not have 
horizontal direct effect is largely maintained ― notwithstanding contributions to 
the contrary from the ‘principle of direct effect’ ― alternative approaches to the 
lack of horizontal direct effect have evolved and include by way of example the 
adoption of a broad definition of State, the use of the mechanism of interpretation 
of national law in line with an EU directive and the assertion of the principle of 
State liability for infringements of EU law. 
77 Use can also be made, ultimately, of the reference for a preliminary ruling 
mechanism as a means of avoiding the non-recognition of the horizontal direct 
effect of directives, since the decisions of the Court of Justice are of general 
application and the national courts are, therefore, obliged to respect the meaning 
and scope which such decisions confer on EU law. 
78 The legitimacy of turning to alternatives to the lack of horizontal direct effect in 
order to enforce as between individuals certain elements of a directive derives 
primarily from the principle of the primacy of EU law, which forms the basis for 
relying on the principle of effective judicial protection as a means of ensuring that 
the State cannot be held liable for infringements of EU law. 
79 Material among the alternative mechanisms to the lack of horizontal direct effect, 
in this case, is the mechanism of interpretation of national law in line with an EU 
directive, also known as the principle of indirect effect or the principle of fair 
interpretation, which consists in essence in the obligation incumbent on national 
courts to interpret national legislation transposing a directive in the light of its 
wording and its purpose. 
80 That principle was clearly recognised in the judgment of 13 November 1990, 
Marleasing (C-106/89), from which it is apparent that the mechanism of 
interpretation of national law in line with an EU directive must also be applied to 
relations between individuals, and not only to vertical relations, and that it is 
incumbent on all Member State authorities and is directed at all national 
legislation in its entirety, both prior and subsequent to the directive, not only to 
national legislation specifically adopted to transpose the directive. 
81 Nonetheless, in the judgment of 4 July 2006, Adeneler (C-212/04), the Court of 
Justice makes reference to the limits attaching to that interpretation: ‘the 
obligation on a national court to refer to the content of a directive when 
interpreting and applying the relevant rules of national law is limited by general 
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principles of law, particularly those of legal certainty and non-retroactivity, and 
that obligation cannot serve as the basis for an interpretation of national law 
contra legem’ (paragraph 110). 
82 The national court further reasons that it is appropriate to note that, even if it is 
assumed with sufficient certainty that it would be contrary to EU law to rely as 
against injured third parties and the FGA on the nullity of an insurance contract in 
the specific circumstances of the contract at issue in the main proceedings, this 
does not mean that the principle that national law must be interpreted in line with 
an EU directive will support the opposite conclusion to that reached at first 
instance; for as is clear from the analysis of national law carried out in that 
context, such an interpretation would probably give rise to a contra legem 
interpretation of national law, which, as has already been noted, is not permitted 
by that principle.  
83 The referring court is uncertain whether it is contrary to EU law to rely as against 
injured third parties and the FGA on the nullity of an insurance contract in the 
specific circumstances of the contract at issue in the dispute in the main 
proceedings.  
84 This, according to that court, is because neither in the successive directives on 
compulsory insurance against civil liability nor in the case-law of the Court of 
Justice in that sphere is reference made to the nullity of an insurance contract as 
resulting from the unlawful nature of its transactional content. At most, that case-
law, in the form of the aforementioned preliminary ruling of 20 July 2017 
(C-287/16), supports the inference of the non-reliance as against injured parties of 
the invalidity of insurance contracts voidable for the defect of consent as arising 
from the wilful making of false statements relating to the ownership of the vehicle 
and the identity of the usual driver, or of insurance contracts void because the 
insured person does not have an interest worthy of legal protection in the risk 
covered. That case-law does not address the (non-)reliance on nullity arising from 
an insurance contract which has as its subject matter an activity which is not only 
unauthorised, and therefore clandestine, but also cannot be authorised because it is 
illicit and unlawful; accordingly, the users of that activity, the injured third parties, 
might even be regarded – in the applicant’s view, which is unsubstantiated by the 
facts ― as having acted ‘in bad faith’ inasmuch as they could not have been 
unaware of the clandestine and illegal nature of that activity.  
85 Consequently, it is apparent that the insurance contract at issue in the dispute in 
the main proceedings is not only voidable but also void, as the decision under 
appeal found, because it cannot in any way be argued that the risk associated with 
an illegal activity is capable of constituting an ‘interest worthy of legal 
protection’. It may be that the provision applicable here is not Article 43 of CMVI 
rules but, most probably, Article 14 of those rules which (i) refers to ‘prohibited 
insurance’ and prohibits in paragraph 1(a) the conclusion of insurance contracts 
that cover risks arising from criminal liability for the commission of illegal or 
disciplinary acts and (ii) goes on to guarantee the applicability of ‘the general 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-375/20 
 
14  
rules on the legality of transactional content’, thus referring, of course, to the 
provisions of Articles 280 and 294 of the Civil Code. 
86 Furthermore, such nullity cannot under any circumstances be treated in the same 
way as voidability for wilful failure to make an initial or subsequent declaration of 
risk, in accordance with the provisions of Articles 24(1), 25 and 91 of the CMVI 
rules. The defendant, as policyholder, did not accidentally fail to mention the use 
he had in mind for the vehicle he wished to have insured. That being the case, 
such an omission is prejudicial not only to the insurer, in that it interferes with the 
synallagmatic balance sought between the premium payable and the risk, but also 
to society in general, in that it creates a significantly increased risk to road traffic, 
as is clear from the accident that took place in this case. 
87 It was decided at first instance, and this decision appears in principle to have 
become final, that the insurance contract at issue in the dispute in the main 
proceedings is void as a consequence of the unlawfulness of its subject matter, 
meaning that nullity on that ground cannot be converted into voidability, and it 
must, therefore, be concluded that the situation at issue in this dispute raises a 
false question in asking about the (non-) reliance on heads of voidability as 
against injured third parties and the FGA. 
88 What falls to be decided on appeal is, ultimately, whether or not it is possible to 
rely as against injured third parties and the FGA, in consequence of the use of a 
vehicle in respect of which civil liability has been the subject of an insurance 
contract, on the nullity of that contract resulting from the illegality of its subject 
matter, even in the case where the third parties could not have been unaware of 
that illegality.  
89 According to the referring court, that question is not answered by the 
aforementioned judgment of the Court of Justice of 20 July 2017, in the operative 
part of which the Court held: 
‘Article 3(1) of Council Directive 72/166/EEC […] and Article 2(1) of [Second 
Council Directive 85/5 EEC] must be interpreted as precluding national legislation 
which would have the effect of making it possible to invoke against third-party 
victims, in circumstances such as those at issue in the main proceedings, the 
nullity of a contract for motor vehicle insurance against civil liability arising as a 
result of the policyholder initially making false statements concerning the identity 
of the owner and of the usual driver of the vehicle concerned or from the fact that 
the person for whom or on whose behalf that insurance contract was concluded 
had no economic interest in the conclusion of that contract’. 
90 Making express reference to the report of Professor Menezes Cordeiro, which was 
added to the case file in the main proceedings, the referring court notes that ‘the 
defect considered by the Court of Justice in the judgment [C-287/16] under 
examination is very limited. The contract at issue in that case was ‘tainted’ only 
by an inaccurate statement as to the identity of the usual driver of the vehicle, that 
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inaccuracy not having given rise to a substantially increased risk. In the specific 
case of the fatal accident that took place in France, on the other hand, the contract 
was not ‘tainted’ in the same manner: here, the situation in practice is totally 
different from that envisaged in the contract, carrying an exponentially higher risk 
and entailing elements of serious illegality’.  
91 Accordingly, the Court of Appeal of Coimbra takes the view that the question 
forming the subject of this appeal is not answered by that judgment of the Court of 
Justice or in other judgments handed down in the area of road-traffic accidents, 
and the substance of EU law in relation to the question at issue in the dispute in 
the main proceedings is, therefore, unknown. 
92 For situations such as this, Article 267 TFEU provides for the possibility of 
making a reference for a preliminary ruling, a mechanism, it is appropriate to note, 
under which the Court of Justice has jurisdiction to interpret EU law alone, not 
national law. 
93 The second paragraph of Article 267 TFEU thus confers on all national courts the 
power to refer questions to the Court of Justice for a preliminary ruling in cases 
pending before them, the only condition for doing so being that they raise a 
question on the interpretation or validity of EU law which is relevant to the 
decision in question. 
94 The Third Civil Chamber of the Court of Appeal of Coimbra hereby decides to 
stay the proceedings in order to refer to the Court of Justice for a preliminary 
ruling the questions set out at the head of this order.