61970C0001
OPINION OF MR ADVOCATE-GENERAL ROEMER
DELIVERED ON 27 MAY 1970 (
1
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Mr President,
Members of the Court,
First of all I want to make some comments on the facts on which today's case is based.
The applicant and respondent in the main action is a sole distributor in Munich with the legal status of a limited liability company. On 14 March 1963, it concluded a five-year agreement with the Parfums Marcel Rochas, Paris, undertaking (a limited company under French law producing toilet articles and selling them under its mark). The contract took effect from 1 January 1963 and conferred the exclusive right to buy, produce and sell Rochas Paris products within the territory of the Federal Republic of Germany and West Berlin and to use the Rochas Paris mark for these purposes. On its part, the German sole distributor undertook, inter alia, not to import or sell goods which were in competition with Rochas company products. In addition, it undertook to sell the products in question under the ‘deposit’ system and accordingly to deliver the products only to a restricted number of listed retailers who, in turn, undertook by special agreement to sell only direct to the consumer. On 30 January 1963, the Rochas Paris undertaking sent by way of notification to the Commission, pursuant to Regulation No 17, a copy of the standard contract which was used for the agreement as well as for one which it had concluded with another sole distributor established in another country of the EEC (the Netherlands). The contract was brought into line with the provisions of Regulation No 67/67 on 31 July 1967, namely, before expiry of the period laid down in Article 5 of the regulation which, as you know, makes provision for exemption by category of certain exclusive dealing agreements. The prohibition on exports, originally imposed upon a sole distributor, was restricted in accordance with the provisions of the EEC Treaty and of Regulation No 67/67; in other words, the sole distributor could henceforth supply dealers established in other Member States and approved by the Rochas undertaking. The text of the contract as amended was notified to the Commission by the Rochas Paris undertaking on 2 October 1967, (that is, before expiry of the period in Article 5 of Regulation No 67/67). Although this is of no importance in the present case, it should be added that the contract was extended to 1 January 1968.
It appears that in France itself Rochas products are distributed and sold by authorized dealers who are supplied direct by the Rochas company. The arrangements are governed by a ‘standard contract’ (‘contrat de concession’) under which the retailer agrees to take a comprehensive selection of Rochas products and to make effective arrangements for their sale. In addition, the distributor undertakes ‘to sell products for which the Rochas company has appointed him distributor only on a retail basis and direct to consumers’. Again, ‘he expressly binds himself in no circumstances to dispose of them, in any form, to other dealers, “deposit” sellers or wholesalers, and not to export’. It was a contract in these terms which, on 29 June 1964, was concluded between Rochas and the Saint-Roch perfumery in Paris. This contract was not notified to the Commission, in view of the fact that Rochas Paris had, on 30 January 1963, already sent notification of an identical standard contract on Form B as provided for under Regulation No 27 of the Commission. So far, the Commission has not taken any decision on this contract.
It appears that the retailer, the Saint-Roch perfumery, has infringed the contract binding it to Rochas by supplying Rochas products on several occasions during the first six months of 1967 to one Helmut Bitsch, a dealer in toilet articles established at Breisach-am-Rhein (the defendant, and appellant in the main action) in other words a dealer who is not a member of the distribution network of the distributor, Parfums Marcel Rochas, Munich. The products were sold in the sales area of the authorized dealer to a Karlsruhe beauty parlour. When the manufacturing company heard of this, it immediately rescinded the contract concluded with the Saint-Roch perfumery (by letter of 30 June 1967). The reaction of the German distributor was to bring proceedings on 1 June 1967 before the Landgericht Freiburg. In the action, the Munich company claimed that the Breisach dealer had procured Rochas products by taking advantage of a breach of contract committed by a third party, thereby infringing the principles of fair competition and business practice. It asked the Court to prohibit the defendant from offering, placing on sale, selling or in any way trading in products of the Marcel Rochas company as these actions would be in breach of paragraph 1 of the German law on unfair competition. In a judgment of 4 December 1967 the Landgericht Freiburg upheld the application. It held that the exclusive dealing arrangements were perfectly ‘watertight’ (‘lückenlos’) and specifically confirmed the validity of the obligations arising therefrom in view of the fact that they had been notified to the Commission in due time and that the contract concluded between Rochas Paris and Rochas Munich had been brought into line with the provisions of Regulation (EEC) No 67/67. The plaintiff, accordingly, succeeded in his claim and Helmut Bitsch was enjoined to discontinue the practices complained of. The latter appealed and, before the Oberlandesgericht Karlsruhe, again argued that, in compelling one of the parties to supply only direct to the consumer and to refrain from exporting the contract concluded between the Rochas company and the Saint-Roch perfumery resulted in a walling off of the markets. As this was contrary to Article 85 (1) of the EEC Treaty and was consequently null and void, it provided no valid basis on which to apply for an injunction. In these circumstances the Oberlandesgericht Karlsruhe held it to be necessary to interpret Community law in order to reach a decision on the validity or provisional validity of the contract concluded on 29 June 1964 between the Rochas company and the Saint-Roch perfumery, the standard form of which had alone been notified to the Commission on 30 January 1963. As the Oberlandesgericht did not wish to undertake the task of interpretation itself, it stayed proceedings by decision of 27 November 1969 and, under Article 177 of the EEC Treaty, referred to the Court for a preliminary ruling on the following questions :
(1)
Nothwitstanding that it contains a prohibition on exports and that it has not been notified pursuant to the provisions of Regulation No 17/62, is a contract concluded on 29 June 1964 provisionally valid if a standard contract in precisely the same terms has been duly notified to the Commission of the EEC within the period laid down in the regulation?
(2)
If the answer is in the affirmative, did the standard contract which has been and will be used for a large number of individual contracts between the said undertaking and various other undertakings have to be notified to the Commission of the EEC before 1 November 1962 or before 31 January 1963?
Under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, the applicant and respondent in the main action, together with the Commission of the European Economic Community, submitted oral and written observations.
It is in the light of these comments that I should now like to give my opinion on the issues raised in this case.
1.
Let us first of all see whether, when an undertaking concludes or contemplates concluding several identical contracts with various other undertakings, it suffices, under the Community's legislation on agreements, that a standard contract has been duly notified, in due time, to the Commission for a contract in identical terms and subsequently concluded to be deemed to have been notified, without need for any specific notification to this effect. The answer to this question does not, in fact, appear to present any difficulty; not only are the parties in the present proceedings of the same view on this point but the spirit and the letter of the relevant provisions leave no doubt about the answer.
The decisive factor in this case is the authority conferred on the Commission under Article 24 of Regulation No 17 ‘to adopt implementing provisions concerning the form, content and other details … of notifications pursuant to Articles 4 and 5’. The Commission made use of this authority in Regulation No 27 of 3 May 1962 (OJ Special Edition 1959-1962, p. 132). Under the terms of Article 4 of the regulation, the above-quoted notification (which applies to agreements etc. referred to under Article 85, concluded before and after the entry into force of Regulation No 17 on 13 March 1962 and in respect of which the advantages of exception under Article 85 (3) of the Treaty are being sought) must be submitted on Form B as shown in the annex to the regulation and is therefore an integral part of it. It is irrelevant on this point that a section of the form is in the following terms : ‘II. Information regarding contents of agreement, decision or concerted practice: 1. If the contents have been reduced to writing, attach a copy of the full text… (b) Is there a standard contract, that is, a contract which the undertaking submitting the notification regularly concludes with particular persons or groups of persons (for example, a contract restricting the freedom of action of one of the contracting parties in respect of resale prices or terms of business for goods supplied by the other contracting party)? If so, only the text of the standard contract need be attached.’ It is clear, therefore, that under Community law it is enough for a standard contract to have been notified for contracts concluded on the basis of it to be deemed to have been notified.
As the Commission rightly emphasizes, this simplification of the procedure was introduced as much in the interest of undertakings as of the Commission and it is a faithful reflection of the need to ‘ensure effective supervision’ and ‘to simplify administration to the greatest possible extent’, referred to in Article 87 (2) (b). This simplification presents no difficulty in law, since there can be no doubt that agreements will receive adequate scrutiny from the legal point of view. Appraisal cannot in fact be carried out solely on the basis of the factors which are the subject of notification, since (especially in view of the judgment of the Court of 12 December 1967 in SA Brasserie de Haecht v Wilkin and Wilkin, Case 23/67 [1967] E.C.R. 407) consideration must be given to the effects of an agreement ‘in the context in which they occur, that is to say, in the economic and legal context of such agreements…’. Where notification is given of a standard contract, the Commission is reminded that such consideration should be given by the very nature of the agreement. If, subsequently, the Commission deems it necessary to open an inquiry in greater depth it can in any case send a request for information within the meaning of Article 11 of Regulation No 17.
From this we can accept without further ado that the timely notification of a standard contract has the same effect in the case of contracts in identical terms concluded at a later date (in the present case, on 29 June 1964) and exempts them from the obligation to be notified.
2.
In its second question, the Court making the reference is concerned with the time-limit for notification of a standard contract (in the particular case of a standard contract which existed when Regulation No 17 came into force), in other words, it would like to know whether a contract which has been used by an undertaking as the prototype for contracts with several other different undertakings must be notified before 1 November 1962 or before 31 January 1963. The question arises from the fact that, for so-called ‘old’ agreements, the original time-limit under Article 5 (1) of Regulation No 17, which as you know was laid down as 1 August 1962, was, by Regulation No 59 of the Council of 3 July, 1962, extended to 1 November 1962 and until 1 February 1963 for agreements to which only two undertakings were parties.
The parties in the present proceedings are of the same opinion regarding this question and there is no doubt that we, too, can share it.
Clearly, the only consideration which should be taken into account in establishing whether two undertakings only are parties to an agreement is the number of parties to the agreement and not the fact that an undertaking has concluded a large number of identical agreements with different undertakings. Even the wording of the provision to which reference is being made argues in favour of this contention; it cannot be interpreted restrictively to the detriment of those concerned in view of the fact that the words grant them unfavourable treatment in the form of an extension of time-limits. This interpretation is also confirmed by Regulation No 153 of the Commission of 21 December 1962, under which a simplified procedure for notification is provided in the case of exclusive dealing agreements to which only two undertakings are parties and the annex to which (Form B 1) also deals with standard contracts. Finally the practical guide to Articles 85 and 86 of the Treaty establishing the EEC and their implementing regulations, published by the Commission, upon which the undertakings concerned must be able to rely to a certain extent, is further corroboration of this view. Accordingly, agreements to which not more than two undertakings are parties must be notified before 1 February 1963, that is to say, before the expiry of the extended period, even if they form part of a general system of identical contracts. The reason behind it is the quantitative problem which, in the circumstances, arises in the form of a further administrative burden for the Commission. Furthermore, the Community legislature may have considered that the contracts mentioned above were of less importance in terms of legislation on competition and that, consequently, their notification could conveniently be deferred until a later date.
This is my reply on the second question and no further comment is necessary.
3.
So far as the Commission is concerned, however, the case has not been plumbed to its depths. It takes the view that certain expressions in the first question call for further investigation into the problem of the provisional validity of agreements containing a clause prohibiting exports, even though this issue has not been expressly raised. The applicant in the main action objected to this. In its view, the Oberlandesgericht had no intention of raising the issue of provisional validity since the order referring the matter was subsequent to the decision in Portelange (Case 10/69) and, for this very reason, the issue can be regarded as settled. However, the defendant expressly leaves it to the Court to decide on the additional questions raised by the Commission.
In the case of a preliminary ruling, there is, in principle, nothing from the procedural point of view against widening the discussion in this way, as the Court has already on several occasions answered questions which had not been expressly referred when the circumstances so required and they could therefore be regarded as having been implied. Let us see whether in this case there are grounds for making a detailed explanation on the question of the provisional validity of agreements containing a prohibition on exports.
The conclusions which I have so far arrived at compel me to base my reasoning on the concept that, although the contract was concluded in June 1964, it is nevertheless an ‘old agreement’ because it is in accordance with a standard contract which was notified within the prescribed period. Contrary to the view expressed by the defendant, one must accept that the authorized dealer's contract between the Rochas company and the Saint-Roch perfumery contains what is indisputably a prohibition on exports. Not only is the clause referred to by the court making the reference but it can also be regarded as expressed in the contract since it was clearly the intention of the contracting parties to confine the operations of the distributor to the general French consumer — to the exclusion of any sales to consumers or to dealers accepted as strangers to the contract. Finally, again contrary to the view expressed by the defendant, it must also be recognized that, while it is true that two undertakings established in the same Member State are the only parties to the contract, it is nevertheless concerned with exports because it prohibits them and is consequently not exempt from the notification required under Article 4 (2) of Regulation No 17. That the contract cannot, in such circumstances, be regarded as valid unless it has been notified seems to me to have been already established by certain passages in the judgment of the Court in Bosch (given on 6 April 1962, Case 13/61 Kledingverkoopbedrijf de Geus en Uitdenbogerd v Bosch and Van Rijn [1962] E.C.R. 45).
But granted all this, unlike the Commission, I cannot see why it should be necessary to go into further detail, as the Commission suggests. It seems to me that the precedents established by the Court, as they emerge from the judgments in Bosch and Portelange taken together, provide a clear answer on the issue with which we are here concerned. Portelange established beyond any possibility of doubt that agreements notified within the prescribed period are wholly valid so long as the Commission has not declared that they fall under the conditions laid down in Article 85 (1) and that Article 85(3) does not apply to them (which assumes that they have been the subject of appraisal in economic and legal terms). What seems to me to be important is that this interpretation was a gloss on Bosch, where the idea of provisional validity appeared for the first time. As shown by the wording of the judgment (Reports, 1962 pp. 48 and 53) the Bosch case was in fact concerned with an agreement containing a prohibition on exports. It was in connexion with this clause prohibiting exports that provisional validity was referred to and it is this clause which is the subject of the rider in Portelange.
In view of this the only real question which arises is whether there is today any reason for altering or refining this case-law. The Commission appears to think that there is. In its view, provisional validity cannot extend to prohibitions on exports or at least should continue to apply only to the parties to the contract and should not be applicable to dealings with third parties. In the Commission's view, the decisive factor is the complete territorial protection which the parties to an exclusive dealing agreement endeavour to establish by means of prohibitions on exports, and the padlocking of markets by this method is contrary to the fundamental objectives of the Community. According to the Commission, this is clearly embodied in the case-law of the Court (especially in the judgment in Joined Cases 56 and 58/64). The practice followed by the Commission and particularly the provisions of Regulation No 67/67 also point in the same direction. According to the Commission, prohibitions on exports can therefore be generally regarded as contrary to the rule in Article 85 (1) of the Treaty and void because they are incapable of being the subject of exemption. Against this background the Commission's contention has the advantage of avoiding conflict with the principle of legal certainty, which is also stressed in Portelange, while ensuring that developments incompatible with the Common Market cannot arise from the simple fact that they have been notified to the Commission.
It would certainly not be correct to describe this conclusion as baseless. But I am reluctant to follow the Commission on this point. Is not the Commission in effect saying that prohibitions on exports may be tolerated in certain cases, for example when territorial protection appears to be necessary to enable a product to be placed on a foreign market (which is not done without considerable expense) or when, as in the Volk case, the parties are in a weak position on the market (a position which could clearly not be accepted by the Commission because it takes it for granted that there will be a large number of identical supply contracts each of which will be subject to separate consideration)? Given this, to contend that the prohibitions on exports ought not in general to be recognized as provisionally valid seems as indefensible as to ask for each case to be examined on its merits and thus oblige the national courts to make a judgment which is in fact reserved to the Commission. Such an approach would above all be incompatible with the principle of legal certainty which the Court emphasized several times in Portelange and on the subject of which it took the view that ‘the difficulties which might arise from uncertainty in legal relationships based on agreements notified would be still more harmful’ than the ‘practical disadvantages’ which could arise from recognizing notified agreements as fully valid. This consideration is what should, in the main, deter us from tinkering with the firm and clear-cut findings of the Portelange judgment on the basis of the tenor of the agreement or depending on whether the internal or external effects of a contract are involved. Here too, it must be recognized that, when the Commission believes that it recognizes the existence of an impediment to competition and that, in view of the provisions of Regulation No 17, normal procedure does not produce results quickly enough, this unsatisfactory situation can be resolved only by having recourse to the provisions of Article 15 (6) of Regulation No 17. The Court has already emphasized this in its judgment in Portelange. Although the Court held at the same time that where Article 15 (6) has been applied, it is ‘at their own risk’ that the parties ‘proceed, from there on, with the implementation of the agreement’, this must, of course, be interpreted to mean that even though application of Article 15 (6) of Regulation No 17 does not annul the agreement, it does, however, rule out the right to enforce it at law.
4.
In view of these considerations and without considering it to be necessary to go any further into the question raised by the Commission, I propose that the questions referred should be answered as follows:
(1)
A contract concluded before 29 June 1964 which contains, inter alia, a prohibition on exports and which has not been separately notified is provisionally valid provided that a standard contract in identical terms has been notified to the Commission of the EEC in accordance with the rules and time-limits prescribed for this purpose.
(2)
A contract concluded and applied at the time of the entry into force of Regulation No 17, which has been used as the basis for a number of individual contracts or will be so used between a given undertaking and several other different undertakings, must be notified to the Commission of the EEC before 31 January 1963.
Costs are a matter for decision by the court making the reference.
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)	Translated from the French version.