61992CC0060_EN
Opinion of the Advocate-General
Opinion of the Advocate-General
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1. In its judgment in the Orkem case the Court held that it followed from the principle of respect for the rights of the defence that, in an investigation under Regulation 17, the Commission could not compel an undertaking to answer questions where that might involve an admission on its part of the existence of an infringement of Community competition rules. (1)
In the present case, the Arrondissementsrechtbank, Amsterdam, has asked the Court to rule on the extent to which that restriction on an undertaking' s obligation to reply to questions also applies to an examination of witnesses in a civil case before a national court.
2. That question is raised in the context of a case in which the mail order company, Otto BV (hereafter "Otto"), has applied for a preliminary examination, as witnesses, of managerial staff of the Netherlands bank Postbank NV (hereafter "Postbank") in order to provide Otto with the basis for assessing whether it can institute civil proceedings against Postbank.
3. Any civil proceedings would concern the question of the lawfulness of a charge of HFL 0.45 introduced by Postbank in July 1991 for the processing of each giro transfer slip. Otto, for which Postbank processes approximately one million giro transfer slips each year, considers that to be contrary to both the Netherlands and Community competition rules. Associations to which Otto belongs have submitted complaints to the Commission against the introduction of the charge, claiming in particular that it was introduced following an agreement between banks in the Netherlands. According to the information available, the Commission has not yet terminated its investigation of those complaints. At the same time a complaint was submitted to the Netherlands Competition Authority which, we have been informed, rejected it.
4. In its application for a preliminary examination of witnesses Otto set out the purpose of that examination in a series of points. Postbank objected to such an examination relying on both Netherlands law and Community law.
5. The Arrondissementsrechtbank has explained that the witnesses which the application seeks to have examined must be regarded as parties called as a witness (partijgetuige), as that concept is laid down in the Netherlands law of civil procedure. Such witnesses may be examined on oath, and may hence be punished for perjury. Witnesses may be compelled to attend court by the police and are obliged to give evidence. However, that obligation cannot be enforced by penal sanctions, although the court may draw conclusions from the silence of the witness. The court may require an explanation for the refusal of a witness to give evidence. A general rule exempts the witness from the obligation to give evidence where it would expose him or those close to him to criminal prosecution for breach of the law.
6. The Arrondissementsrechtbank ruled on the purpose of the examination of witnesses as a matter of Netherlands law and rejected the application for an examination with respect to three of the six points referred to in Otto' s application. With respect to the other three points, Postbank claimed that the examination of witnesses on those points would lead to their having to answer questions which would oblige them to admit the existence of an infringement of Community competition rules, which would infringe the principle of Community law laid down by the Court of Justice in Orkem (hereafter "the Orkem principle").
The Arrondissementsrechtbank shares Postbank' s view that Otto' s request for an examination of witnesses cannot be granted if the Orkem principle applies in this case, but wonders whether that principle of Community law is so fundamental that it has a direct effect between the parties in civil proceedings. It states that Otto' s claims in any future civil action would be based in particular on Articles 85 and 86 of the EEC Treaty and it therefore considers that a question arises as to the direct effect of Community law.
7. It is against that background that the following request for a preliminary ruling was made:
"Is a national court, when assessing an application for an order for provisional examination of witnesses prior to the initiation of civil proceedings, bound by Article 5 of the EEC Treaty to apply the principle that an undertaking is not obliged to answer questions if the answer thereto entails admission that the rules of competition have been infringed?"
The Orkem principle
8. It is appropriate to make some preliminary remarks as to the basis and scope of that principle.
In the course of an inquiry concerning infringements of Article 85 of the Treaty in the thermoplastics sector, the Commission sent to the French company Orkem a decision adopted under Article 11(5) of Regulation No 17 requiring the company to provide it with information on specific points. The French company refused to give that information, contending in particular that the Commission' s request breached the general principle of law that a person is entitled to refuse to give evidence against himself.
The Court began by considering whether Regulation No 17 gives undertakings under investigation by the Commission a right to evade the investigation on the ground that the results thereof might provide evidence of an infringement by it of the competition rules. It found that there was no such right (paragraph 27).
The Court then examined whether such a right could be inferred from the general principles of Community law, of which fundamental rights form an integral part. The Court found that this was not the case (paragraphs 28 to 31).
Finally, the Court considered "whether certain limitations on the Commission' s powers of investigation are implied by the need to safeguard the rights of the defence which the Court has held to be a fundamental principle of the Community legal order" (paragraph 32) (emphasis added). The Court found, first, that it was necessary to preserve "the useful effect of Article 11(2) and (5) of Regulation No 17", which is why "the Commission is entitled ... to compel an undertaking to provide all necessary information concerning such facts as may be known to it and to disclose to it, if necessary, such documents relating thereto as are in its possession, even if the latter may be used to establish, against it or another undertaking, the existence of anti-competitive conduct" (paragraph 34). The Court held, secondly, that it followed from the principle of the rights of the defence that "the Commission may not compel an undertaking to provide it with answers which might involve an admission on its part of an infringement which it is incumbent upon the Commission to prove" (paragraph 35).
9. That is the basis on which the Court ruled on the question of whether it was justifiable for the Commission to require Orkem to provide the information referred to above. The Court held that certain of the Commission' s questions did actually undermine Orkem' s right to refuse to reply, since the fact of replying would have compelled Orkem to admit an infringement of Article 85(1) of the Treaty (paragraph 41). The Court found that the Commission could not be criticized for having sought information concerning material facts, but it considered, on the other hand, that the Commission was not entitled to demand of the company that, in its reply to the questions, it should itself appraise, by reference to the relevant provisions of Community law, facts on which it was obliged to give information, if such an appraisal would involve admitting an infringement (see in that regard, for example, paragraph 38 where the Court declared that the questions were not open to criticism in so far as the Commission merely sought "factual clarification", whereas questions concerning "the purpose of the action taken and the objective pursued by those measures" were open to criticism (paragraph 38).
10. If the Court replies in the affirmative to the national court' s question, and rules that the Orkem principle applies also to an examination of a witness in a civil case before a national court, it will at all events be important for the national court to be aware that the principle is an exception to the fundamental obligation on undertakings to provide information regarding the relevant factual circumstances relating to the possible application of the competition rules of the Treaty, and that, in reality, the scope of that exception is relatively narrow. It does not seem to me to be unreasonable to take the view that in the majority of legal systems it will be possible to observe that limited exception by applying the usual rules relating to the examination of witnesses, in particular that prohibiting the asking of leading questions.
It may also be important for the national court to bear in mind that an over-wide application of the Orkem principle might lead to a restriction on the rights granted to individuals by Articles 85 and 86 of the Treaty and, accordingly, the practical effect of those provisions.
It may also be important for national courts to be aware of the fact that the Orkem principle does not mean that there are certain matters about which questions may not be asked, but only that there are certain types of questions which may not be asked. There is therefore a presumption against the Orkem principle, considered in general terms, applying in such a manner as to exclude the examination of witnesses on certain lines of evidence. (2)
Is the national court' s question based on an incorrect premiss?
11. The Italian Government contends that the national court' s question is devoid of purpose, because there is no general principle of Community law such as that referred to in the question. One of its arguments in support of that view is that the court making the reference has attributed to the Orkem principle a scope which is different from and wider than its actual scope. That view may perhaps be correct, but, in my opinion, it serves only to underline the limited scope of the principle and it does not lead to the question being regarded as devoid of purpose.
In my opinion, the Italian Government' s argument on that point is relevant, first and foremost, to determining whether, having regard to its purpose and content, the Orkem principle is applicable outside the field within which its existence has been expressly laid down.
Is the Orkem principle to be applied in a civil case before a national court?
12. The question submitted for a preliminary ruling arose in the context of a civil procedure before a national court, in which it will be necessary to rule whether the directly applicable prohibitions in Articles 85 and 86 of the Treaty are to be applied. Of course, the starting point for the national court is that the case is to be heard in accordance with the general procedural rules applicable to that case under national law, including the national rules on who is obliged to give evidence and how an examination of witnesses is to take place.
In the present case, the question is whether a party called as a witness in a national court may rely on a limitation of the obligation on undertakings to provide information to the Commission under Regulation No 17, in order not to reply to questions of the same kind as those which undertakings are not obliged to answer vis-à-vis the Commission.
13. In other words, the question is whether a principle of Community law, whose existence has been laid down in the context of an administrative procedure under the Community system itself and which limits the right of a Community institution to require certain information from undertakings, must be applied in another type of procedure before a national court, on the ground that those two cases are procedures concerning the application of directly applicable provisions of the Treaty.
14. An affirmative reply would signify not only that, by virtue of its purpose and its tenor, the Orkem principle applies outside the field within which it has been expressly held to apply, but also that a principle of Community law of that kind has direct effect in the national legal systems, so that national courts must apply it.
15. Postbank and the French Government propose that the question be answered in the affirmative, whereas the Commission, the Italian Government and the United Kingdom suggest a negative answer. The Commission and the Italian Government contend that the Orkem principle cannot be held, by virtue of its purpose and its tenor, to apply in a case such as this, while the United Kingdom also claims that such a Community principle does not have direct effect in national legal systems.
16. It should first be considered whether a negative answer ought to be given quite simply on the ground that the Orkem principle does not apply outside the field in which the Court has expressly held it to apply.
It may properly be stated that in the Orkem judgment the Court stressed the special circumstances surrounding the conduct of an investigation by the Commission under Regulation No 17 and that there are several differences between the facts of the Orkem case and those of a procedure in which the competition rules of the Treaty are invoked by an undertaking against another undertaking.
17. It is true that, as stated by both the Commission and the Italian Government, the Court probably attached importance to the fact that Regulation No 17 grants the Commission very wide powers of investigation and there may therefore be grounds for granting undertakings special protection in their relations with the Commission (in paragraph 35 the Court linked the burden of proof on the Commission with the limitation of the undertaking' s obligation to reply to the Commission' s questions). That might serve as an argument, as the Commission claims, for saying that there is no need to give special protection to an undertaking from which information is required in a civil procedure, in which the court plays a more "passive" role.
18. It is also correct ° as particularly stressed by the Commission ° that the questions under Regulation No 17 are submitted in writing to the undertakings as such, which means that the obligation to reply falls on those persons who, under Article 11(4), are to reply in the name of the undertaking, whereas in a procedure such as that in the present case the questions are posed orally to employees of the undertaking, who, despite their elevated position, are not necessarily empowered to represent the undertaking.
19. Those differences are however not necessarily relevant in the sense that they preclude the Orkem principle from being applicable in a procedure such as that in the present case. I do not see why the consequence of those differences should be that the Orkem principle can apply only in connection with Commission investigations under Regulation No 17. There is also an "obligation to give evidence" outside the field covered by Regulation No 17 and the scope of that obligation is not necessarily less extensive or less severely sanctioned. Nor does it seem obvious to me that the undertakings must enjoy better protection when they reply to written questions than employees of undertakings when they reply to oral questions.
It must not be forgotten that the Court deduced the Orkem principle from the principle of the rights of the defence, which is one of the unwritten general principles of Community law whose fundamental nature was expressly emphasized by the Court in its judgment.
20. In my opinion, it would be wrong to find, merely on the basis of those differences, that the Orkem principle ought not to be applied. It would be unfortunate if the Court were indirectly to give the impression here that it considers that that principle ought not to apply in regard to examination of witnesses in civil proceedings. It is not wholly inconceivable that in the course of proceedings before the Community courts themselves, for example, a case brought on the basis of an arbitration agreement under Article 181 of the Treaty, the question of the application of the Orkem principle might be raised and, in my opinion, it cannot be excluded a priori that the Community courts might consider it to be contrary to the principle of the rights of the defence to require defendants to reply to questions of a kind corresponding to those which the Commission is not entitled to ask in a procedure under Regulation No 17.
21. However, that does not mean that it follows from Community law that the Orkem principle must be applied by the national courts.
22. It does not follow from the case-law of the Court of Justice that, when applying directly applicable Community rules, the national courts must automatically apply the unwritten general principles which form an integral part of Community law.
In particular, no general duty may be inferred from the Court' s case-law for national courts to apply procedural principles of Community law in connection with the application of directly applicable Community rules.
The usual premiss is that directly applicable, substantive Community rules are administered and enforced by national authorities and courts in accordance with the administrative and procedural rules laid down in national law. In my opinion, it follows from the case-law of the Court that there is an obligation on national authorities and courts to apply the special administrative-law and procedural principles which apply in Community law only where there are special grounds for doing so.
The Court has laid down on numerous occasions that "in the absence of Community rules on the subject, it is for the domestic legal system of each Member State to determine the procedural conditions governing actions at law intended to ensure the protection of the rights which individuals derive from the direct effect of Community law". (3) That principle is supplemented by the general requirement laid down by Community law as to the content of national procedural rules, that is to say that normally national rules "are not less favourable than those relating to similar actions of a domestic nature nor framed so as to render virtually impossible the exercise of rights conferred by Community law".
23. That premiss, laid down in cases where an undertaking seeks within the framework of the national legal system to enforce the rights which Community law confers on it, must apply at least to the same extent when a general unwritten principle of Community law is invoked by an undertaking in order to obtain the protection of its right to "fair" treatment in a procedure where an obligation arising from a Community rule is relied on against the undertaking.
24. The Court' s case-law shows that there may be considerations of Community law other than those referred to above which indicate that the premiss should not be applied. The most important of those is undoubtedly that, in order to ensure the effective application of Community law, it may be necessary to require compliance with general unwritten principles of Community law, when national administrations administer or otherwise apply Community law. One example, amongst many, is a requirement for a statement of reasons and the availability of review by the courts, as the Court laid down in the Heylens case. (4)
25. The decisive factor in answering the national court' s question is therefore whether considerations of Community law militate in favour of the Orkem principle being applied by national courts when they are dealing with cases concerning the competition rules of the Treaty.
26. No one has submitted in the present case that compliance with the Orkem principle is necessary in order to ensure the effective application of Community law in Netherlands law.
Postbank and the French Government have claimed, on the other hand, that the application of that principle is necessary in order to ensure the uniform application of the Treaty' s competition rules in all Member States and to prevent the Commission from acquiring, through examinations of national witnesses, "information" which it could not obtain through its own investigations under Regulation No 17.
27. In my opinion, those two considerations cannot lead to an obligation for national courts to apply the Orkem principle as part of their procedural rules governing examination of witnesses. There are several reasons for that.
28. It may be appropriate to state, at the outset, that the relevant national procedural rules must be regarded as the result of a balance between the need to ensure thorough investigation of cases and the need to protect witnesses.
The Orkem judgment was the expression of the Court' s balancing of those two considerations in the context of the system laid down by Regulation No 17 with respect to the Commission' s powers to demand information from undertakings.
There must be weighty considerations of Community law to require the transposition of an individual element of the Community law system into national law, when it is possible to satisfy the considerations underlying the Orkem principle by means of other rules. In other words, there must be good reasons for requiring a principle of procedural law from one legal system to be applied in another system, where there is a strong risk of that having an untoward effect on the existing system and upsetting the balance sought between the abovementioned considerations.
29. I would also point out that there seems a priori to be little sense in assuming that there is a need for special protection of parties called as witnesses in the national legal systems on the basis of general unwritten principles of Community law. In my opinion, in that context particular importance should be given to the fact that all the Member States have undertaken to observe the provisions of the European Convention on Human Rights, Article 6 of which enshrines a general and fundamental right to the fair administration of justice, which, of course, includes the obligation to observe the rights of the defence.
30. Those factors seem to me to be sufficient to cast grave doubts on the view that the concern to ensure uniform application of Articles 85 and 86 may lead to a requirement that national courts observe the Orkem principle in civil cases.
31. There are, however, several more concrete reasons showing, in my opinion, that such a concern cannot lead to an affirmative reply to the national court' s question.
32. First, it should be borne in mind that acceptance of such an approach would have far-reaching consequences. It would make it necessary to investigate whether other rules applicable to the Commission' s measures of investigation should also be applied by the national courts when dealing with cases concerning infringement of Articles 85 and 86.
33. Secondly, it follows from the case-law of the Court of Justice that Community law is not based on the hypothesis that Article 85 and Article 86 must be applied and enforced in the Member States according to the same rules of administrative procedure and civil procedure as apply to the handling of cases by the Commission.
In the "Spanish Banks" case, (5) for example, the Court stated that "even in cases where they apply the substantive provisions of Articles 85(1) and 86 of the Treaty, it is incumbent upon the national authorities to implement them in accordance with national rules" (paragraph 32). Also, in its judgment in the Hoechst case, (6) the Court stated that, if the Commission intends, with the assistance of the national authorities, to carry out an investigation other than with the cooperation of the undertakings concerned, it is "required to respect the relevant procedural guarantees laid down by national law" (paragraph 34), which necessarily amounts to accepting that the Commission' s investigations cannot be implemented uniformly throughout the Member States.
34. Thirdly, the obligation to observe the Orkem principle in all the Member States would still be far removed from the uniform procedural treatment in the Member States of cases concerning the Community' s competition rules. Differences would continue to exist with respect to all those points for which there are no general Community principles capable of being transposed. In addition, even in the field where the Orkem principle applies differences may be found, because it is difficult to conceive of anyone drawing from the application of that principle in the national legal systems the conclusion that the national courts are obliged to apply that principle in the cases where existing national rules offer witnesses better protection than that given by the Orkem principle.
35. Fourthly, the obligation to apply the Orkem principle might lead, in a case concerning an infringement of both national competition rules and Community competition rules, to a national court being prevented from asking questions which could legitimately be asked under national law, which might hinder implementation of national competition rules (possibly in conflict with the intention of the national legislature). If the Orkem principle were to be applied, the further question would arise whether the principle may be relied on in cases which do not concern Articles 85 and 86 of the Treaty if the party called as a witness claimed that a reply to the question might entail admission of infringement of the Community competition rules.
36. Nor can an affirmative response to the national court' s question be justified by the fact that the Orkem principle would prevent the Commission from being able, as a result of examination of witnesses in civil cases before national courts, "to obtain information which is not directly available to it" ° as Postbank argues ° namely admission by the undertaking that it has infringed the Community competition rules.
37. It is true that the national court' s question is based on the premiss that a witness examined by a national court may be obliged to reply to a question leading to an admission of infringement of the Community' s competition rules, and that the Commission may in that way learn something of which it would not have been aware on the basis of its own investigatory powers under Regulation No 17.
38. But quite apart from my surmise, set out above, that that premiss is probably more theoretical than practical, I do not believe that any decisive weight can be given to that factor.
39. It is not impossible, in my view, that such a consequence of answering the question in the negative is an inevitable result of the fact that the Treaty has left the enforcement of its competition rules in part to the Commission, which acts on the basis of procedural rules laid down by Community law, and in part to the national courts, which decide disputes on the basis of national procedural rules.
40. It is also possible ° and at first sight it seems to be me to be more likely ° that such a consequence may, and ought to be, avoided by means other than requiring national courts to observe the Orkem principle. The United Kingdom has rightly referred to the potential significance in this regard of the Court' s judgment in the "Spanish Banks" case. In that case the Court held that "in the exercise of their power to apply national and Community rules on competition, the Member States may not use as evidence unpublished information contained in replies to requests for information addressed to undertakings pursuant to Article 11 of Regulation No 17 or information contained in the applications and notifications provided for in Articles 2, 4 and 5 of Regulation No 17". (7) At the hearing in this case the Commission' s representative expressed a positive view of the possibility that it might apply a corresponding principle in a situation where "information" had been obtained in proceedings before the national courts contrary to the Orkem principle. I can see good reasons for holding that the Commission will in fact be prevented in a situation such as the present case from using "information" obtained in national proceedings on the basis of questions which it was not entitled to ask in the course of its own investigations.
41. It must, however, be borne in mind that in the "Spanish Banks" case the judgment concerned the "converse" situation to this and the result was based to a certain extent on the express rules of Regulation No 17.
Furthermore, the problem discussed here seems to me to be of such fundamental importance that a definitive ruling should not be made on it in this case, since it has been discussed only to a very limited extent in the observations submitted to the Court.
42. Nor, in my view, is it necessary for the Court to adopt a definitive position on the matter in the present case since it can be held that the solution to that problem is not decisive for a reply to the national court' s question. I believe that the reply to that question should in any event be that the Orkem principle does not have to be applied in a civil case before a national court. There is no obligation under Community law on a national court to observe, directly or indirectly, that principle which the Court has held to apply to the Commission' s investigations under Article 11 of Regulation No 17.
Conclusion
43. Accordingly I propose that the Court should reply as follows to the question referred for a preliminary ruling:
A national court which is required to rule on an application for the examination of witnesses prior to civil law proceedings is not required by Community law to apply the principle that an undertaking is not obliged to answer questions if the answer might entail admission of infringement of the competition rules.
(*) Original language: Danish.
(1) ° Case 374/87 Orkem v Commission [1989] ECR 3283. The Court gave a corresponding judgment on the same day in Case 27/88 Solvay v Commission [1989] ECR 3355 (summary publication).
(2) ° In the order for reference it is stated that the national court' s question is to enable it to be established whether an examination of witnesses can be carried out.
in order to elicit proof in support of the following contentions:
...
(c) The charge of HFL 0.45 is not based on any (financial) calculation by Postbank of the costs of processing giro transfer slips;
(d) The charge was imposed by Postbank under an inter-bank agreement to charge HFL 0.30 for the mutual processing of giro transfer slips;
(e) Postbank either consulted with other banks with regard to the introduction of a charge for processing transfer giro slips, or else there is a tacit agreement that the charge is to be fixed at HFL 0.30 plus a small profit margin .
In the order for reference the Arrondissementsrechtbank stated that if its question is answered in the affirmative, it considered that it would have to reject the application for examination of witnesses with regard to those three matters. Postbank, which disputes that it has infringed the competition rules of the Treaty, shares that opinion. That an affirmative reply should have such consequences does not appear to me to be beyond doubt.
(3) ° Case C-208/90 Emmott v Minister for Social Welfare and the Attorney General [1991] ECR I-4269, paragraph 16.
(4) ° Case 222/86 UNECTEF v Heylens [1987] ECR 4097. See also the requirement for review by the courts in Case 222/84 Johnston [1986] ECR 1651.
(5) ° Case C-67/91 Dirección General de Defensa de la Competencia v Asociación Española de Banca Privada and Others [1992] ECR I-4785.
(6) ° Joined Cases 46/87 and 227/88 Hoechst v Commission [1989] ECR 2859.
(7) ° Cited in footnote 5.