Judgment — ECLI:EU:C:2011:580
Date: 2011-09-15
Language of the case: Slovak
Court formation: First Chamber
Subject matter: Energy;Right of establishment;Approximation of laws;Freedom to provide services
Procedure: Action for failure to fulfil obligations - unfounded
Origin: Slovakia

Summary of the Judgment Approximation of laws – Measures for the establishment and proper functioning of the internal market in electricity – Directive 2003/54 – Third-party access to electricity transmission and distribution systems (Art. 307 EC; European Parliament and Council Directive 2003/54) A Member State whose system operator, before that State acceded to the Community, concluded with a company established in a non-member country a contract for preferential access reserving to that company a right of transit on the national, high-voltage electricity system in return for its financial contribution to the constructing of the transmission line on which it enjoys that right, does not fail to fulfil its obligations under Directive 2003/54 concerning common rules for the internal market in electricity and repealing Directive 96/92, for the preferential access granted to the company in question may be regarded as an investment protected by the agreement on the reciprocal promotion and protection of investments, concluded by the non-member country and the Member State concerned before the latter acceded to the Community and any termination of the contract would, under that Member State’s international obligations, give rise to a breach of that agreement by that Member State. The purpose of the first paragraph of Article 307 EC is to make clear, in accordance with the principles of international law, as set out in, inter alia, Article 30(4)(b) of the Vienna Convention on the Law of Treaties of 23 May 1969, that the application of the EC Treaty does not affect the duty of the Member State concerned to respect the rights of non-member countries under an earlier agreement and to perform its obligations thereunder. In order to determine whether a Community rule may be deprived of effect by an earlier international agreement, it is necessary to examine whether the latter imposes on the Member State concerned obligations whose performance may still be required by non-member countries parties to it. Although, in the context of Article 307 EC, the Member States have a choice as to the appropriate steps to be taken in order to eliminate any incompatibility existing between a pre-Community convention and the EC Treaty, if a Member State encounters difficulties which make adjustment of an agreement impossible, an obligation to denounce that agreement cannot be excluded. It must, however, be stated that the contract at issue in the present case does not contain any clause providing for a possibility of denunciation and terminating the contract would have the consequence of depriving the company of the remuneration provided for by that contract in return for its financial contribution towards the construction of the transmission line, would prejudice that company’s rights and so would have the same effect as expropriation, prohibited by the agreement on the reciprocal promotion and protection of investments. In those circumstances, even if the preferential access granted to the company is not compatible with Directive 2003/54, it is protected by the first paragraph of Article 307 EC. (see paras 38, 41-42, 44, 46, 48, 51-52)