Opinion of Mr Advocate General Tesauro delivered on 16 December 1997. - Cabour SA and Nord Distribution Automobile SA v Arnor "SOCO" SARL, supported by Automobiles Peugeot SA and Automobiles Citroën SA. - Reference for a preliminary ruling: Cour d'appel de Douai - France. - Competition - Vehicle distribution - Validity of exclusive dealership agreement - Article 85(1) and (3) of the EC Treaty - Regulation (EEC) No 123/85 - Regulation (EC) No 1475/95. - Case C-230/96.



European Court reports 1998 Page I-02055



Opinion of the Advocate-General

1 The questions referred by the Cour d'Appel, Douai, turn on the interpretation of Article 85(1) of the Treaty, and certain provisions of Commission Regulation (EEC) No 123/85 of 12 December 1984 on the application of Article 85(3) of the Treaty to certain categories of motor vehicle distribution and servicing agreements, (1) and Commission Regulation (EC) No 1475/95 of 28 June 1995, (2) which repealed Regulation No 123/85 and replaced it, as from 1 October 1995.

To be more specific, in order to give judgment in the action for unfair competition brought by two authorised dealers against a reseller outside the network, the national court is asking the Court of Justice whether the exclusive dealership agreements for the distribution in France of Peugeot and Citroën cars are compatible with certain provisions of those block exemption regulations. In the light of the case-law of the Cour de Cassation and the applicable national legislation, if the agreements concerned were unlawful, then such an action would have no raison d'être.

The relevant provisions

2 It is appropriate first of all to consider those provisions of Regulation No 123/85 and Regulation No 1475/95 which the Court is asked to interpret, so that the grounds of the reference may be the better understood and the questions referred to the Court may be the more easily read. The national court asks the Court whether certain clauses in Peugeot and Citroën's distribution agreements, in particular those concerning the demonstration of objectively valid reasons permitting release from the obligation not to compete, the extent of that obligation not to compete and the sales targets imposed on the distributor by the supplier, are compatible with the relevant provisions of those regulations. The provisions are contained in Articles 3(3), 4(1)(3) and, last, 5(2)(1)(a) and (b) and 5(2)(2) and 5(2)(3) of Regulation No 123/85 and the corresponding provisions of Regulation No 1475/95.

3 Regulation No 123/85, like Regulation No 1475/85, exempts agreements by which a supplier makes an (authorised) reseller responsible for promoting the distribution of the contract goods within a defined territory and agrees to reserve the supply of vehicles and spare parts, within that territory, to that dealer, from the prohibition laid down in Article 85(1) of the Treaty (Article 1).

In accordance with Article 3(3) of Regulation No 123/85, the exemption under Article 85(3) of the Treaty also applies where the obligation described in Article 1 is linked to an obligation on the dealer `neither to sell new motor vehicles which compete with contract goods nor to sell, at the premises used for the distribution of contract goods, new motor vehicles other than those offered for supply by the manufacturer'. According to Article 4 of that regulation, the exemption also covers any obligation imposed on the dealer to `endeavour to sell, within the contract territory and within a specified period, such minimum quantity of contract goods as may be determined by agreement between the parties or, in the absence of such agreement, by the supplier on the basis of estimates of the dealer's potential sales' (Article 4(1)(3)).

Finally, the following subparagraphs of Article 5 are relevant to the case:

`2. In so far as the dealer has, in accordance with Article 5(1), assumed obligations for the improvement of distribution and servicing structures, the exemption referred to in Article 3, points 3 and 5 shall apply to the obligation not to sell new motor vehicles other than those within the contract programme or not to make such vehicles the subject of a distribution and servicing agreement, provided that

(1) the parties

(a) agree that the supplier shall release the dealer from the obligations referred to in Article 3, points 3 and 5 where the dealer shows that there are objectively valid reasons for doing so;

(b) agree that the supplier reserves the right to conclude distribution and servicing agreements for contract goods with specified further undertakings operating within the contract territory or to alter the contract territory only where the supplier shows that there are objectively valid reasons for doing so;

(2) the agreement is for a period of at least four years or, if for an indefinite period, the period of notice for regular termination of the agreement is at least one year for both parties, unless

- the supplier is obliged by law or by special agreement to pay appropriate compensation on termination of the agreement, or

- the dealer is a new entrant to the distribution system and the period of the agreement, or the period of notice for regular termination of the agreement, is the first agreed by that dealer.

(3) each party undertakes to give the other at least six months' prior notice of intention not to renew an agreement concluded for a definite period.

3. A party may only invoke particular objectively valid grounds within the meaning of this Article which have been exemplified in the agreement if such grounds are applied without discrimination to undertakings within the distribution system in comparable cases.'

4 The relevant provisions of Regulation No 1475/95, which entered into force on 1 October 1995, differ to a more or less significant degree from those set out above.

In accordance with Article 3(3) of Regulation No 1475/95, the exemption still applies to the obligation not to sell new motor vehicles offered by persons other than the manufacturer on the same commercial premises, but the sale of new cars of a different make is to be allowed if it takes place `on separate sales premises ..., in the form of a distinct legal entity and in a manner which avoids confusion between makes'. Furthermore, Article 4(1)(3) of the same regulation provides that the exemption is to apply notwithstanding any obligation whereby the dealer undertakes to `endeavour to sell, within the contract territory and during a specified period, a minimum quantity of contract goods, determined by the parties by common agreement or, in the event of disagreement between the parties as to the minimum number of contractual goods to be sold annually, by an expert third party, account being taken in particular of sales previously achieved in the territory and of forecast sales for the territory and at national level'.

Last, for our purposes, Article 5 of that regulation provides:

`2. Where the dealer has, in accordance with Article 4(1), assumed obligations for the improvement of distribution and servicing structures, the exemption shall apply provided that:

...

(2) the agreement is for a period of at least five years or, if for an indefinite period, the period of notice for regular termination of the agreement is at least two years for both parties; this period is reduced to at least one year where:

- the supplier is obliged by law or by special agreement to pay appropriate compensation on termination of the agreement, or

- the dealer is a new entrant to the distribution system and the period of the agreement, or the period of notice for regular termination of the agreement, is the first agreed by that dealer;

(3) each party undertakes to give the other at least six months' prior notice of intention not to renew an agreement concluded for a definite period.

3. The conditions for exemption laid down in (1) and (2) shall not affect;

- the right of the supplier to terminate the agreement subject to at least one year's notice in a case where it is necessary to reorganise the whole or a substantial part of the network,

- the right of one party to terminate the agreement for cause where the other party fails to perform one of its basic obligations.

In each case, the parties must, in the event of disagreement, accept a system for the quick resolution of the dispute, such as recourse to an expert third party or an arbitrator, without prejudice to the parties' right to apply to a competent court in conformity with the provisions of national law.'

The facts and the questions referred

5 Cabour SA (`Cabour') and Nord Distribution Automobile SA (`NDA'), sole dealers in Douai for Citroën and Peugeot cars respectively, brought an action before the Tribunal de Commerce (Commercial Court), Douai, against Arnor `SOCO' SARL (`Arnor'), a seller, not belonging to any distribution network, of inter alia new Citroën and Peugeot cars. In particular, they claimed - on the premiss that Regulation No 123/85 had the effect of prohibiting vehicles from being resold outside the distribution network - that Arnor's activity amounted to unfair competition. Cabour and NDA therefore asked the court hearing the matter to restrain Arnor from pursuing that business and to order it to pay damages.

By judgment of 16 June 1994, the Tribunal de Commerce, Douai, found against the applicants, on the grounds, first, that the exclusive Peugeot and Citroën dealership contracts did not qualify for the block exemption under Regulation No 123/85, and thus could not be relied on as against Arnor and, second, that since Arnor obtained its supplies lawfully, it could not have been in breach of those contracts.

6 Cabour and NDA appealed against that judgment, claiming that Arnor acted as a reseller, since it stocked and put on sale new vehicles in the exclusive sector of the Douai Peugeot and Citroën dealers, which resulted in unfair competition and the luring away of customers to the detriment of those dealers. It is noteworthy here that they emphasised that, while the relevant Community legislation merely authorises exclusive distribution networks but does not make non-network sales illegal, the fact remains that national law retains the full right to penalise the activity of unauthorised resellers under the provisions on unfair competition and under the case-law of the Cour de Cassation.

Cabour and NDA argued, in particular, that Arnor had admitted obtaining supplies from a car-hire company, thus demonstrating that the supplies were unlawful, since vehicles sold by a dealer to meet the requirements of a hire company were in this way diverted from their intended use, and it was on that basis that they asked the court hearing the case, first, to declare that in so far as Arnor obtained supplies of new vehicles `improperly' its method of carrying on business amounted to unfair competition vis-à-vis authorised dealers and, second, to order Arnor in consequence to make good the loss they had suffered.

7 Arnor rejoined: (a) that it had always claimed to be merely a reseller, so that there could be no risk of any confusion arising in relation to intermediaries appointed as agents in writing, let alone the authorised dealers; (b) that the latter had not proved that the distribution network, with which Arnor was alleged to compete unfairly, was lawful; (c) that the dealership agreements in question contained conditions - in particular those relating to objectively valid reasons permitting the parties to be released from the obligation not to compete, the extent of that obligation and sales targets fixed by the distributor - incompatible with Regulation No 123/85, with the result that the agreements could not qualify for any exemption; (d) that the effect of those agreements was to restrict competition within the meaning of Article 85(1) of the Treaty and that they could not therefore be relied on against Arnor and (e) lastly, that no fault might be imputed to Arnor in respect of the circumstances in which it obtained supplies of the vehicles in question and marketed them, particularly as regards the alleged unlawfulness of the supplies.

Arnor concluded therefore by requesting the Cour d'Appel to dismiss the appeal and to uphold the judgment at first instance of 16 June 1994.

8 Automobiles Peugeot SA (`Peugeot') and Automobiles Citroën SA (`Citroën'), interveners in the main proceedings in support of Cabour and NDA, commented in particular on the compatibility with Regulation No 123/85 of the contractual terms challenged by Arnor. In this respect, pointing out that the agreements at issue were notified to the Commission in accordance with the rules laid down in Article 8 of Regulation No 123/85, they claimed that: (a) that regulation does not in any way require contracting parties to specify expressly in the exclusive distribution agreement the objectively valid reasons allowing the dealer to be released from the obligation not to compete; (b) the obligation not to compete permitted by the regulation is not confined, so far as the dealer is concerned, only to vehicles competing with contract goods but can extend to new vehicles other than those in the range covered by the agreement; (c) Community rules also allow for exemption from the prohibition laid down by Article 85 of the Treaty in respect of conditions whereby the distributor undertakes to sell within a given period within the contract territory a minimum number of product goods.

In short, Peugeot and Citroën contend that at first instance the court was wrong to hold that the dealership agreements in question were not covered by the exemption and could not therefore be relied on against third parties. In any event, they have not failed to point out that any conflict between the contested clauses in those agreements and the relevant provisions of Regulation No 123/85 cannot be considered sufficient, at least not in itself, to render the agreements concerned void.

9 In response to those arguments the national court noted, first of all, that if, as Arnor contends, some of the conditions in the dealership contracts were not compatible with the relevant provisions of Regulation No 123/85, it could very well follow that the agreements in question could not be relied on against third parties, in particular against resellers outside the networks, with the further consequence that the preconditions for an action for unfair competition were not satisfied. In addition, that court stated that the definition of the dispute presupposed - if only as regards the aspects concerning the claims for compensation for loss suffered and for an injunction restraining resales in the future of the vehicles in question - that the relevant provisions of Regulation No 1475/95, which repealed and replaced Regulation No 123/85, also led to the same outcome. In any case, even if the conclusion reached were that the disputed clauses did not satisfy the conditions laid down by the block exemption regulations, it would still remain to be determined whether or a distribution network based on agreements of that kind was caught by the prohibition under Article 85(1) of the Treaty.

10 Taking the view that those problems raised complex questions of Community law, the Cour d'Appel, Douai, decided therefore to stay proceedings and refer three questions to the Court of Justice for a preliminary ruling. The questions were worded as follows:

`1. Can Commission Regulation No 123/85 of 12 December 1984 on the application of Article 85(3) of the EEC Treaty be interpreted as meaning that an exclusive dealership agreement binding a car manufacturer to a dealer qualifies for the exemption under Article 1 of that regulation where that contract:

(a) does not exemplify the "objectively valid reasons" referred to in Article 5(2)(1)(a) and (b) and Article 5(3) of that regulation;

(b) rules out any possibility for the dealer to sell new vehicles other than those offered for supply by the manufacturer, even at commercial premises separate from those at which contract goods are offered for sale, except where objectively valid reasons not existing at the time when the contract was concluded are proved, a stipulation which has to be considered in relation to the interpretation of Article 3(3) and Article 5(2) of the regulation;

(c) lays down a sales target whereby the dealer undertakes to use its best endeavours to sell during each annual period a quantity of contract vehicles which, if not specified by agreement between the parties, is fixed by the manufacturer on the basis of forecasts made by it or criteria determined by it, and specifies that, in the event that 90% of 7/11ths of the sales objective has not been achieved on 31 August in the current annual period and the "aggregate percentage penetration" of contract vehicles in the territory to which the concession relates, assessed on 31 July of the current annual period, is 15% to 45% - depending on where the territory is located - lower than the national average penetration of contract vehicles, the manufacturer may, on giving three or six months' notice, alter the contract territory and/or withdraw from the dealer its exclusivity in the territory, or terminate the dealership contract, which stipulations should be considered in relation to the interpretation of Article 4(1)(3), Article 5(2)(2) and Article 5(2)(3) of the regulation?

2. Can Commission Regulation No 1475/95 of 28 June 1995 replacing the aforementioned Regulation No 123/85 be interpreted as meaning that an exclusive dealership contract containing clauses of the sort referred to in Question 1(b) and (c) qualifies for exemption under Article 1 of that regulation, having regard respectively to Article 3(3) and Article 4(1)(3) of Regulation No 1475/95 in conjunction with Article 5(2)(2), Article 5(2)(3) and Article 5(3)?

3. If Regulations Nos 123/85 and 1475/95 cannot be interpreted as conferring the benefit of the exemption for which they provide on dealership contracts of the kind referred to in the first two questions, must Article 85(1) of the EEC Treaty be interpreted as meaning that an exclusive distribution network of a motor vehicle manufacturer which is based, throughout the territory of a Member State, on such dealership contracts is caught by the prohibition set out in that provision?'

11 The questions referred to the Court seek therefore to establish whether the Peugeot and Citroën dealership contracts are compatible with the requirements of Regulation No 123/85 (Question 1) and Regulation No 1475/95 (Question 2), thus whether they qualify for the block exemption provided for by those regulations. If not, then the Court is asked whether on a proper construction, Article 85(1) of the Treaty prohibits an exclusive and selective dealership network based on agreements such as those under consideration in this case (Question 3).

Before considering the substance of those questions, however, some attention must be devoted to their admissibility. Both the Commission and Peugeot and Citroën have maintained during the proceedings that the Court should not reply to the questions referred by the national court since they are clearly irrelevant to the subject-matter of the main dispute and therefore in no way necessary in order to resolve it.

Relevance of the questions

12 I would first of all point out that, as the Court has consistently held, `it is for the national courts alone ... which must assume responsibility for the judgment to be given, to determine, having regard to the particular features of each case, both the need for a preliminary ruling to enable them to give judgment and the relevance of the questions which they refer to the Court. A request for a preliminary ruling from a national court may be rejected only if it is quite obvious that the interpretation of Community law sought by that court bears no relation to the actual nature of the case or the subject-matter of the main action'. (3)

In order to determine whether it has jurisdiction the Court examines the conditions in which the case has been referred to it by the national court. (4) Such consideration, which is really only marginal, has until now led the Court to refuse to reply only where the questions raised `bear no relation to the subject-matter of the main action', (5) or are of a `hypothetical nature', (6) or are `not objectively required for the decision to be taken' by the national court. (7) By contrast, in declaring that it has jurisdiction to answer questions the relevance of which has been challenged, the Court has considered it sufficient to find that it was apparent, or at any rate could be deduced from the order for reference, that for the Court to reply would be of some use for the purposes of a decision in the main proceedings. (8)

13 Accordingly, when the Court makes its marginal assessment of the relevance of the questions in issue, particular importance attaches to any reasons stated by the national court in its order for reference to explain the connection between the questions referred and the dispute pending before it and, therefore, the need for an answer from the Court. (9)

In the present case the national court has stated clearly and unambiguously that the answer to the questions submitted `may be decisive for an action for unfair competition, which would be hard pressed to succeed if the dealers' position were not legally protected vis-à-vis unapproved resellers'. In other words, the national court has explained that Cabour and NDA's actions would be dismissed if the dealership contracts were held to be unlawful precisely because in those circumstances the essential condition for continuing an action for unfair competition would not be fulfilled.

14 According to Peugeot and Citroën, however, the questions referred are irrelevant to the substance of the case since, even if it were to be concluded that the disputed clauses in the contracts in issue were not covered by the block exemption, it would not follow that they were unlawful, still less that the contracts concerned were void. In support of their argument they cite the judgments in Grand Garage Albigeois and Nissan France in which the Court stated that `Regulation No 123/85 ... does not contain any mandatory provisions directly affecting the validity or content of the contractual provisions or oblige the contracting parties to adapt the content of their agreement but merely is limited to providing economic agents in the motor vehicle industry with certain possibilities enabling them to remove their distribution and servicing agreements from the scope of the prohibition contained in Article 85(1) despite the inclusion in those agreements of certain types of exclusivity and no-competition clauses'. (10)

Furthermore, they observe that in those judgments the Court added that `the provisions of the exempting regulation cannot affect the rights and obligations of third parties in relation to contracts concluded between vehicle manufacturers and their concessionaires, in particular those of independent dealers'. (11) In their view, that ruling means that Arnor's activity cannot be prohibited pursuant to Regulation No 123/85, but also and above all, for our purposes, it means that any consideration of the clauses in the dealership agreements with regard to the block exemption would be utterly irrelevant for the purposes of the outcome of the main proceedings, which should therefore be settled solely on the basis of the applicable national legislation and case-law.

15 The Commission also maintains that the questions referred are irrelevant in the circumstances, but its line of argument is different in part. In its opinion, there is no need to give a ruling on the compatibility of the disputed clauses with the block exemption regulations, since the Court has already clearly stated in Grand Garage Albigeois and Nissan France that since Regulation No 123/85 does not serve to regulate the activities of third parties who may operate in the market outside the framework of distribution agreements `it cannot be interpreted as prohibiting a trader who is outside the official distribution network for a given make of motor vehicle and is not an authorised intermediary within the meaning of that regulation from independently carrying on the business of marketing new vehicles of that make'. (12)

In those circumstances, the Commission considers it to be only too obvious that the validity of the dealership contracts in the light of the exemption regulations can have no bearing on the lawfulness of Arnor's resale activities, especially as regards the `lawfulness' of its supplies. According to the Commission, it is therefore sufficient for the national court, in order to determine the matter pending before it, to draw all the appropriate conclusions from the case-law according to which Regulation No 123/85 does not prohibit the activities of resellers who are outside the network and who do not hold written authorisation. The national court has, in its view, unnecessarily broadened the scope of the dispute by referring to the Court questions which are irrelevant for the purpose of assessing whether an action for unfair competition is well founded.

16 Having particular regard to the reasons given by the national court explaining why it needs the Court to answer its questions, and also to the points already raised in this respect, it seems to me that the arguments set out above are irrelevant for the purpose of maintaining that the questions in issue in these proceedings are irrelevant. I consider therefore that a few succinct remarks on this point will suffice.

First of all, it is not and cannot be denied that any incompatibility of the disputed clauses with the exemption regulations would not entail the contracts being unlawful, still less void. But such an argument has no raison d'être. I need merely point out that it was precisely because the national court was aware of this that it submitted to the Court a specific, precise question seeking to ascertain whether or not a distribution network based on agreements containing such clauses is caught by the prohibition laid down in Article 85(1) of the Treaty, if the Court should rule that the disputed clauses are not covered by the block exemption.

17 Similarly, it is apparent from the order for reference that the national court is well acquainted with the Court's case-law to the effect that the block exemption regulation cannot be construed as prohibiting the activities of resellers outside the network who hold no written authority from final consumers, given that the regulation does not regulate relations with third parties but only those between suppliers and the official distributors in their network. It does not, however, follow from that fact that any answer given to the questions concerned in these proceedings would be irrelevant for the purposes of determining the main dispute.

In fact, as explicitly stated, the national court wishes to ascertain whether the Peugeot and Citroën dealership contracts are contrary to Article 85(1) of the Treaty since, in that case, the action for unfair competition would lose all substance and Cabour and NDA's actions would certainly, therefore, be dismissed. In other words, the national court is not asking the Court whether or not the dealership contracts can be relied on against Arnor on the basis of Community law, as it is well aware that, having regard to the Court's decisions in this sphere, the block exemption regulations do not provide any rule for determining whether such contracts may or may not be relied on. (13) However, if those contracts proved to be void pursuant to Article 85(2) of the Treaty, then it would follow that they could not be relied on against third parties (14) and, in any event, that the right which it is sought to protect in an action for unfair competition would be vitiated.

18 In short, I consider it impossible not to recognise that it is definitely necessary and helpful to give an answer to the questions involved, at least in order to allow the national court to establish whether or not the action for unfair competition should be allowed. Moreover, while it is true, as Peugeot and Citroën have argued, that the matter must be resolved on the basis of national case-law and legislation, it must also be acknowledged that that is precisely what the national court intends to do.

It is not unhelpful to bear in mind here that, in accordance with the case-law of the Cour de Cassation, supplying an unauthorised reseller is unlawful and constitutes unfair competition where that reseller persuades the authorised distributor to supply him in breach of the competition rules governing the distribution network, or where the reseller sets up his own actual parallel network with other companies to disguise the identity of the original supplier. (15) In addition, the fact that Article 14 of Law No 96/588 of 1 July 1996 on fair trading - a law which entered into force after the material facts occurred and which closely follows the abovementioned case-law - provides that where producers, manufacturers or tradesmen `are directly or indirectly involved in contravening the prohibition on reselling outside the network imposed on distributors bound by a selective and/or exclusive distribution agreement covered by the exemption on the basis of the rules applicable to competition law', they are to incur liability and are required to make good the damage caused thereby.

19 In those circumstances, it is perfectly clear that it is precisely by application to the exclusive and selective distribution network that the relevant national legislation and, before that, the case-law of the Court of Cassation, come to characterise as `unlawful' the supply of new cars by unauthorised resellers without written authority within the meaning of the regulation. The equally obvious consequence of such a state of affairs is that it is only if the contracts in question should be found to be void that an action against unauthorised resellers for unfair competition will fail. From that point of view and in those terms, the questions referred to the Court must accordingly be considered relevant for the purposes of resolving the dispute.

To sum up, therefore, I consider that it would be, to say the least, a distortion to maintain that the questions submitted by the Cour d'Appel, Douai, manifestly have no connection with the subject-matter of the main proceedings or are not objectively required in order to decide the dispute. I shall therefore go on to consider the questions referred by the national court.

The first question

20 By its first question, the national court is asking whether the clauses in the Peugeot and Citroën contracts relating to the exemplification of objectively valid reasons for excluding the obligation not to compete, to the scope of that obligation and to the fixing of sales targets are compatible with the provisions of Regulation No 123/85, and therefore whether they are covered by the block exemption.

Objectively valid reasons

21 The issue here is whether the fact that the Peugeot and Citroën exclusive dealership contracts do not set out in detail the objectively valid reasons for which the obligation not to compete may be excluded means that they do not satisfy the conditions imposed by Regulation No 123/85 for the purposes of obtaining exemption. That is the argument put forward by Arnor and adopted by the national court at first instance.

22 I would first of all point out that, in accordance with Article 5(2)(1)(a) and (b), exemption from the undertaking not to sell new vehicles other than those within the contract programme and not to make such vehicles the subject of distribution and servicing agreements is subject to the condition that the parties provide for release from that obligation where objectively valid reasons can be shown. The provisions in question therefore merely establish the principle that the parties must provide in the relevant agreements for the possibility of release from the obligation not to compete where objectively valid reasons are shown to exist.

On this view, it is therefore sufficient for the purposes of exemption for the supplier or distributor to be able to adduce objectively valid reasons with respect to the particular situation involved, and those reasons need not be specified a priori at the time when the contract is concluded.

23 Next, I would observe that I do not think that any different conclusion can be drawn from the fact that Article 5(3) provides that the objectively valid grounds, which must `have been exemplified in the agreement', may be invoked only if they apply without discrimination to undertakings within the distribution system in comparable cases. Such a provision might well be interpreted as meaning that the objectively valid reasons, although exemplified in the agreement, may be invoked only if they are applied without discrimination in comparable cases. In any event, therefore, that provision must necessarily be read in the light and in terms of the provisions referred to above, which show very clearly that, for the purposes of exemption, it is sufficient for the parties to stipulate that the obligation not to compete may be excluded where there are objectively valid grounds.

In this context it is not unhelpful to add, finally, that to give a `static' definition of the objectively valid reasons allowing the parties to be released from the obligation not to compete might well be contrary to the objective pursued by the rules in issue and, more generally, the exemption regulation taken as a whole. Even if it is conceded that such a definition would have the advantage of making it easier to resolve any disputes that might arise, the fact none the less remains that it would not allow account to be taken of any objectively valid reasons which might appear in particular situations and which had not been contemplated when the contract was concluded. On this view it is, to my mind, certain that what is important is the obligation to put a clause in the contract expressly providing for the possibility of excluding the obligation not to compete where there are objectively valid reasons, whereas it is not in the least essential that the contract should contain an exhaustive list of the reasons which may be adduced.

24 In short, I believe that the fact that an exclusive dealership contract does no more than state that the parties may rely on objectively valid reasons in order to be released from the obligation not to compete, but without defining those reasons in detail, is not contrary to the relevant provisions of Regulation No 123/85.

- The obligation not to compete

25 Article 3(3) permits the supplier to impose on the dealer an obligation `neither to sell new motor vehicles which compete with contract goods nor to sell, at the premises used for the distribution of contract goods, new motor vehicles other than those offered for supply by the manufacturer'. Such a provision therefore implies, conversely, that the obligation imposed on the dealer not to sell new motor vehicles other than those offered for supply by the manufacturer does not qualify for exemption if it covers sales on commercial premises other than those at which the contract goods are sold.

The relevant clauses in the Peugeot and Citroën contracts, on the basis of which distributors are prohibited from selling new vehicles of other makes except where they put forward objectively valid reasons, cannot therefore be considered to be covered by Article 3(3). Contrary to the arguments of Peugeot and Citroën, this interpretation is not in any way contradicted by that part of Article 5(2) which provides that the exemption referred to in Article 3(3) is to apply also to the obligation `not to sell new motor vehicles other than those within the contract programme', provided that the dealer can be released from that obligation where he shows that there are objectively valid reasons for doing so. That provision therefore, far from being capable of interpretation to the effect that in order to be able to sell vehicles other than those offered for supply by the manufacturer at commercial premises other than those at which the contract goods are sold, permits dealers, where they can show good reason, to sell vehicles of a different make, but not competing with the contract goods, even at the premises where those are sold.

26 In short, I consider that, on a proper construction of Articles 3(3) and 5(2) of Regulation No 123/85, the exemption regulation does not apply to a clause in a contract which totally precludes, unless objectively valid reasons which were not in existence at the time the contract was concluded can be shown to exist, the dealer from selling new vehicles other than those offered for supply by the manufacturer, even at commercial premises separate from those at which the contract goods are offered for sale.

- Sales targets

27 The Court is asked, again with regard to Regulation No 123/85, finally whether the block exemption applies to a clause in a contract which imposes on a dealer a fixed sales target for a given period and which, if the target is not reached, gives the manufacturer the right, on three or six months' notice, to alter the contract territory or to withdraw the dealer's exclusivity or even to terminate the contract. In this context, the relevant provisions are Article 4(1)(3), on the basis of which the manufacturer may require the dealer to endeavour to sell, within the contract territory and within a specified period, a minimum quantity of contract goods, and Article 5(2)(2) and (3), which lay down rules for the termination of an exclusive contract.

The question concerned therefore calls for consideration of two separate points: (a) whether, and if so, how far, fixing sales targets is compatible with the regulation; (b) what penalties may be imposed, in accordance with the regulation, where dealers fail to meet sales targets.

28 With regard to the first point, it must at the outset be pointed out that Regulation No 123/85 expressly permits exemption for an obligation imposed on the dealer to `endeavour to sell' such minimum quantity of contract goods as determined by agreement between the parties or, in the absence of such agreement, on the basis of estimates.

Clearly, the expression `endeavour to sell' can imply no more than an obligation to use best endeavours, and not an obligation to achieve a certain result. It is equally obvious that where, as in the present case, the sales target has been fixed unilaterally by the manufacturer, and not on the basis of agreement between the parties, it cannot without examination be ruled out that such target-setting is arbitrary, having regard to the economic and social reality within which the dealer is constrained to operate. In such circumstances - and notwithstanding the fact that the regulation does not prohibit the fixing of sales targets to be reached within a certain period as such - it is for the national court to establish whether the fixing of a determined sales targets constitutes an obligation to use best endeavours and whether it is reasonable and fair, having regard in particular to the estimates relating to the territory and period of time in question.

29 As regards the second point mentioned, I would begin by noting that the regulation provides that the agreement must be for at least four years and the notice given, unless expressly provided otherwise, must be at least a year for both parties where the contract is for an indefinite period (Article 5(2)(2)), or six months where it is intended not to renew an agreement concluded for a definite period (Article 5(2)(3)). Furthermore, that regulation provides for the right to terminate the agreement for cause (Article 5(4)). Accordingly, the question whether it is sufficient and compatible with the exemption regulation for the manufacturer to set a notice period of three or six months, as provided for in the Peugeot and Citroën agreements, for the purposes of altering the contract territory and/or withdrawing the dealer's exclusivity, must be assessed in the light of those provisions.

There is no doubt in my mind that the hypothesis I have just set out, which is disputed by Arnor, is not in itself contrary to the regulation, in the sense that it may well be regarded as a case of termination for cause. Nevertheless, it must be stated that it is for the national court to determine whether the manufacturer's exercise of the right to terminate the contract is proportionate to the dealer's alleged failure to perform a contractual obligation and whether that sanction is applied in a way which is not discriminatory as regards other dealers in a similar situation.

The second question

30 By its second question, the national court is asking the Court whether the exemption as granted on the basis of Regulation No 1475/95 also applies to the contractual clauses already considered with regard to Regulation No 123/85 concerning the scope of the obligation not to compete and the fixing of sales targets. Before beginning that assessment, I shall have to devote some attention to considering the applicability of Regulation No 1475/95 to the material facts. Since it is not disputed that those occurred before that regulation entered into force, the French Government has maintained that the Court should not answer this question.

In this respect, it must however be borne in mind that the national court, precisely in order to justify the necessity and relevance of such a question for the purposes of resolving the dispute in the main proceedings, was careful to point out that `the claims made by the dealers in their action for unfair competition seek, in part, compensation for damage sustained over several years and, in part, an injunction for the future'. In the view of the national court, therefore, the very fact that, in relation to the factors referred to, the action for unfair competition also covers the period following the entry into force of Regulation No 1475/95 constitutes good and sufficient reason for asking for and receiving from the Court an answer relating to the relevant provisions of that regulation as well. That view, I need scarcely add, cannot but be endorsed.

31 I shall now go on to consider the substance of the question in issue, but not before pointing out that it is concerned solely with the compatibility with Regulation No 1475/95 of the contractual clauses relating to the obligation not to compete and to the fixing of sales targets. I would also note that my earlier observations on the relevant provisions of Regulation No 123/85 are to be treated, mutatis mutandis, as equally valid in this context.

- The obligation not to compete

32 The point is therefore to determine, this time in the light of Article 3(3) of Regulation No 1475/95, whether the block exemption applies to a clause in a contract which excludes any opportunity for a dealer to sell new vehicles offered by persons other than the manufacturer, even at premises separate from those at which the contract goods are sold.

I shall at once say that my earlier observations and the conclusions I reached in connection with the corresponding provision of Regulation No 123/85 apply a fortiori in this case, nor could it be otherwise. The provision in question expressly releases from the obligation not to compete which is exempted by the regulation the situation in which new motor vehicles offered by persons other than the manufacturer are sold `on separate sales premises ... in the form of a distinct legal entity and in a manner which avoids confusion between makes'. That subparagraph therefore utterly precludes the exemption from covering any clause prohibiting such a possibility.

- Sales targets

33 As regards the compatibility of the clause relating to sales targets imposed on the dealer by the manufacturer with Regulation No 1475/95, I consider it sufficient to point out here that Article 4(1)(3) of that regulation differs from the corresponding provision of Regulation No 123/85 in that it provides that where sales targets have not been determined by common agreement they are to be determined by an expert third party on the basis of forecast sales and of sales previously achieved in the territory concerned. This means that in accordance with Regulation No 1475/95 it is impossible for the manufacturer unilaterally to require the dealer to sell a minimum number of contract goods within the contract territory during a specified period.

Finally, as regards the manufacturer's right to alter the contract territory and/or withdraw the exclusive contract or even terminate the contract, on giving three or six months' notice, it must be pointed out that the second indent of Article 5(3) expressly provides for the right of one party to terminate the agreement for cause where the other party fails to perform one of its basic obligations. Accordingly, the observations concerning the relevant provisions of Regulation No 123/85 apply in this context, with the specific addition that Regulation No 1475/95 expressly provides that, in the event of disagreement, the parties must accept a system for the quick resolution of the dispute, in particular by recourse to the decisions of an impartial third party or an arbitrator.

34 In short, contractual clauses fixing sales targets are compatible with Regulation No 1475/95 only in so far as those targets are not fixed unilaterally and in so far as any alteration of the contract territory and/or withdrawal of exclusivity from the dealer, as a penalty for failing to attain the targets so fixed, complies with the conditions laid down in the regulation, in particular by providing for recourse to a third party or an arbitrator in the event of disagreement.

The third question

35 By its third question, the national court is asking the Court whether the prohibition laid down by Article 85(1) of the Treaty applies to the exclusive distribution network of a motor vehicle manufacturer if that network is based on contracts containing clauses such as those already considered which do not qualify for the block exemption.

In substance, the national court asks whether the fact that the distribution contracts in question contain clauses which are not exempted by Regulations No 123/85 or No 1475/95 - such as the obligation imposed on the dealer not to sell motor vehicles offered by persons other than the manufacturer, even at separate commercial premises and, subject to investigation by the national court, the fixing of sales targets - means that as a result a distribution network based on such contracts is caught by the prohibition laid down in Article 85(1) of the Treaty. Clearly, the national court starts from the assumption that (restrictive) clauses which are not expressly exempt are incompatible with Article 85(1), and that because of this incompatibility the contracts in their entirety are automatically ineligible for the exemption or else, for the same reason, automatically void in accordance with Article 85(2).

36 In this respect it should first of all be pointed out that long ago the Court stated that `to define a category is only to make a classification and it does not mean that the agreements which come within it all fall within the prohibition. Nor does it mean that an agreement within the exempted category, but not exhibiting all the features of the said definition, must necessarily fall within the prohibition'. In those circumstances, as explained on the same occasion, a block exemption regulation `does not create any presumption of law concerning the interpretation to be given to Article 85(1). Since the intention of the said regulation is to exempt from prohibition categories of agreements and concerted practices, it cannot have the effect, even by implication, of bringing under the prohibition in Article 85(1) categories for which it proposes favoured treatment or of assuming to the detriment of any particular agreement that the terms of the said article are properly applicable'. (16)

Maintaining the same line, the Court has subsequently stated, specifically in relation to Regulation No 123/85, that this act `is limited to providing economic agents in the motor vehicle industry with certain possibilities enabling them to remove their distribution and servicing agreements from the scope of the prohibition contained in Article 85(1) ... However, the provisions of Regulation No 123/85 do not compel economic agents to make use of those possibilities. Nor do those provisions have the effect of amending the content of such an agreement or of rendering it void where all the conditions laid down in the regulation are not satisfied'. (17)

37 Plainly, those statements mean that contractual clauses which do not meet the conditions for application of the block exemption are not on that account alone prohibited under Article 85(1). To that end, therefore, it is always necessary to determine, regardless of the exemption regulation, whether or not the clauses in question restrict competition and are liable to affect trade between Member States.

According to a line of settled case-law, in order to determine whether a clause has an anticompetitive object within the meaning of Article 85(1), its purpose must be examined in the context of the contractual relations of which it forms part. (18) From that point of view, the Court normally concludes that no anticompetitive object is contained in clauses which are necessary to ensure that a contract, which is not in itself harmful to competition, can fully discharge the legal and economic function which it is intended to perform. (19)

38 Turning to the facts of the present case, it must therefore be determined whether a clause which, for example, rules out any opportunity for the dealer to sell new vehicles supplied by persons other than the manufacturer, even at commercial premises separate from those at which the contract goods are offered for sale, is necessary in order to attain the objective of the contract of which it forms part. The answer, to my mind, must be that it is not, since in principle it cannot be necessary in the sense just discussed. In fact, it must be recognised that the sole purpose of the clause in question is to promote the sale of contract goods by means of restricting the dealers' commercial independence. Considering, moreover, that this clause is in addition to other obligations not to compete, even though those may be exempt by virtue of the regulations concerned, it is only too clear that by its very nature it cannot but have an anticompetitive purpose.

I scarcely need add that even if it were conceivable that such a clause had no anticompetitive object, its effects would still be irreconcilable with the proper `functioning' of competition in the common market. It is true that this conclusion requires an assessment to be made on the basis of a variety of factual circumstances such as, in particular, the level of competition prevailing on the market in question and the economic and legislative context in which it is intended the clause should take effect, so as to investigate the actual possibility of its distorting competition on the common market. Taking it as understood that, where there is no evidence in this connection, it is clearly for the national court to undertake that assessment, I shall merely point out here that the clause in issue appears in contracts which are binding on all the dealers in the distribution network and that, for that reason alone, it is such as to bring about an appreciable restriction of competition.

In conclusion - and without prejudice to the findings of the national court to which it falls to make the assessment in question - I consider that the clause in issue is anticompetitive in both its object and its effects.

39 As is well known, the application of Article 85(1) is also dependent on there being an effect on trade between Member States. According to settled case-law, an agreement must be held to damage trade where it is possible to foresee with a sufficient degree of probability on the basis of a set of factors of law or fact that it may have an influence, direct or indirect, actual or potential, on the pattern of trade between Member States such as to give rise to the fear that the realisation of a single market might be impeded. (20)

It is common ground here that both the Peugeot and Citroën distribution systems cover the whole of France and that all the dealers are bound by the contractual clauses under consideration. This is sufficient, it seems to me, to reach the conclusion that those clauses are liable to affect trade between Member States. As the Court has ruled on several occasions, `an agreement or practice restricting competition and extending over the whole territory of a Member State by its very nature has the effect of reinforcing the compartmentalisation of markets on a national basis, thereby holding up the economic interpenetration which the Treaty is intended to bring about.' (21)

40 It follows from the above - and without prejudice to the subsequent findings of the national court - that the contractual clauses in issue are caught by the prohibition laid down in Article 85(1) of the Treaty. This conclusion is not, however, sufficient to provide an exhaustive reply to the question. The national court wishes to ascertain whether a distribution network based on contracts containing clauses of the kind in question is incompatible with Article 85(1), and therefore whether the automatic nullity of such clauses by virtue of Article 85(2) may and/or must extend also to the exempted restrictive clauses, which would mean that the dealership contracts were void in toto.

41 On this point, it should be noted that the Court has had occasion to state that `the automatic nullity in question only applies to those parts of the agreement affected by the prohibition, or to the agreement as a whole if it appears that those parts are not severable from the agreement itself', (22) or, phrasing it differently, that such nullity applies `to the agreement as a whole if those parts do not appear to be severable from the agreement itself'. (23) To which I would add that the Court has also explained that `consequently any other contractual provisions which are not affected by the prohibition, and which therefore do not involve the application of the Treaty, fall outside Community law'. (24)

In short, it follows from the relevant case-law that `the automatic nullity decreed by Article 85(2) applies only to those contractual provisions which are incompatible with Article 85(1)' and that `[t]he consequences of such nullity for other parts of the agreement are not a matter for Community law' but `are to be determined by the national court according to its own law'. (25) On the understanding that the automatic nullity of the contract as a whole is not a matter for Community law where contractual clauses incompatible with Article 85(1) are severable from the exempt clauses and are not essential to the contract in question, it therefore falls to the national court to determine, on the basis of the applicable national law, the consequences for the contract as a whole of the nullity of the clauses in issue.

42 Having said that, I nevertheless believe it necessary to consider this matter in rather more depth, with particular regard to the severability of non-exempt clauses which are restrictive of competition from restrictive clauses which qualify for exemption, and also in relation to the essential character of a non-exempt restrictive clause in a dealership contract.

With regard to the first of those aspects, I believe it must be pointed out that the fact that a contract which would otherwise be covered by the block exemption contains a non-exempt clause restricting competition may be capable of creating an economic and competitive situation quite different from that envisaged by the legislature in providing for the block exemption. On this view, it must therefore be admitted that the block exemption is lost in respect of the entire contract, and in consequence the contract must be notified to the Commission for it to carry out an investigation designed to determine, in the light of the new economic and competitive context identified, whether or not to grant an individual exemption. With regard to the second aspect, however, I shall merely point out that it is difficult to see how an agreement not to compete which has not been expressly exempted and which rules out any opportunity for the dealer to sell new vehicles supplied by persons other than the manufacturer can be regarded as other than essential in the scheme of an exclusive dealership contract concerning the distribution of motor vehicles. It is naturally for the national court, which alone is in possession of all the facts relating to the contract and the economic context in which it operates, to make this assessment.

43 More particularly, I would note that in this case the decision to be taken is made easier, at least as regards the consequences resulting from the nullity of a contractual clause laying down an obligation not to compete, such as the one under consideration, which does not satisfy the requirements of Regulation No 1475/95. Article 6(1)(3) of that regulation expressly provides for the automatic loss of the exemption where the dealer is forbidden to sell vehicles supplied by persons other than the manufacturer on separate premises. (26) Only too plainly, this means that all the provisions of the agreement involved must be assessed in the light of Article 85(1) and that, it is only reasonable to suppose, most of them will have to be regarded as restrictive of competition, thus entailing the nullity of the entire contract.

The situation is different, however, as regards Regulation No 123/85, since it lays down no rules on this point. Here, therefore, it will be necessary to establish whether the contractual clause imposing an absolute obligation not to compete, even at separate commercial premises outside the contract territory, is or is not essential in the scheme of the contract and, from that point of view, whether or not it is severable from the exempted clauses. I can only stress that it is difficult to see how an obligation not to compete, such as the one under consideration here, can be regarded as other than essential to an exclusive dealership contract.

Conclusion

44 In the light of the foregoing considerations, I therefore propose that the Court reply as follows to the questions referred by the Cour d'Appel, Douai:

(1) On a proper construction of Commission Regulation (EEC) No 123/85 of 12 December 1984, the exemption granted by the regulation

(a) applies to an exclusive dealership agreement which does not set out in detail the objectively valid reasons referred to in Article 5(2)(1)(a) and (b) and 5(3), so long as the agreement provides that the parties may exclude the obligation not to compete in accordance with those provisions where one party puts forward objectively valid reasons, and so long as those reasons are applied without discrimination to undertakings in a similar position;

(b) does not apply to a clause in a contract which, unless objectively valid reasons which were not in existence at the time the contract was concluded can be shown to exist, makes it quite impossible for the dealer to sell new vehicles other than those offered for supply by the manufacturer, even at commercial premises separate from those at which the contract goods are offered for sale;

(c) applies to an agreement which imposes sales targets on a dealer, provided that this is not an obligation to achieve a certain result and that those targets are fixed fairly and reasonably; it is for the national court to establish those facts.

(2) On a proper construction of Commission Regulation (EEC) No 1475/95 of 28 June 1995 the exemption granted by the regulation

(a) does not apply to a clause in a contract which excludes any opportunity for a dealer to sell new vehicles offered by persons other than the manufacturer, even at premises separate from those at which the contract goods are sold;

(b) does not apply to a clause in a contract which allows the supplier unilaterally to fix sales targets and does not make provision for recourse to an impartial third party or an arbitrator in the event of the parties' disagreeing as to the alteration of the contract territory and/or withdrawal of exclusivity from the dealer on account of his failure to reach the target.

(3) Contractual clauses which are not expressly exempted under Regulations No 123/85 and No 1475/95, such as those concerned in this case, are caught by the prohibition laid down by Article 85(1) of the Treaty if they restrict competition and are capable of affecting trade between Member States. The automatic nullity of those clauses, as provided for by Article 85(2), may extend to the contract as a whole if they cannot be severed from the exempted clauses and are essential to the overall scheme of the contract.

(1) - OJ 1985 L 15, p. 16.

(2) - OJ 1995 L 145, p. 25.

(3) - See, inter alia, Case C-304/96 Hera v Unità Sanitaria Locale No 3 - Genovese (USL) and Impresa Romagnoli [1997] ECR I-5685, paragraph 11.

(4) - To that effect see, most recently, Case C-408/95 Eurotunnel and Others v SeaFrance [1997] ECR I-6315, paragraph 20.

(5) - To that effect, see the order in Case C-286/88 Falciola Angelo v Comune di Pavia [1990] ECR I-191, paragraph 9, and the judgment in Case C-343/90 Lourenço Dias v Director da Alfândega do Porto [1992] ECR I-4673, paragraph 18.

(6) - Case C-83/91 Meilicke v ADV/ORGA [1992] ECR I-4871, paragraphs 28 to 30.

(7) - Order in Case C-428/93 Monin Automobiles II [1994] ECR I-1707, paragraph 15; more recently, the judgment in Case C-291/96 Grado and Bashir [1997] ECR I-5531, paragraph 16.

(8) - Thus in Case C-105/94 Celestini v Saar-Sektkellerei Faber [1997] ECR I-2971, paragraph 25, for example, the Court considered it sufficient, as regards the relevance of the questions submitted, to show that `the national court has explained that should it follow from the answers given by the Court that the oxygen 16/18 method is compatible with Community law, Celestini's action would have to be dismissed', adding that `[i]t is not for the Court, in the context of these proceedings, to call that assessment in question'. Similarly, in Eurotunnel, cited at footnote 4, in order to counter the objection that a ruling that the contested directives were invalid could not have the slightest relevance to the claim for damages brought by the plaintiff in the main proceedings, the Court merely pointed out that `if the directives were unlawful the national court could, at the very least, order SeaFrance to refrain in future from effecting duty-free sales, as Eurotunnel requests' (paragraph 24).

(9) - Furthermore, this explains why the case-law on this subject increasingly frequently, particularly in recent years, contains the statement `it is essential for the national court to explain the reasons why it considers that a reply to its questions is necessary to enable it to give judgment' (see, to that effect, for example, Lourenço Dias, cited at footnote 5, paragraph 19).

(10) - Case C-226/94 Grand Garage Albigeois and Others v Garage Massol [1996] ECR I-651, paragraph 15, and Case C-309/94 Nissan France and Others v Dupasquier and Others [1996] ECR I-677, paragraph 15. To this effect see also Case 10/86 VAG France v tablissements Magne [1986] ECR 4071, paragraphs 12 and 16, and, most recently, Case C-41/96 VAG-Händlerbeirat v SYD-Consult [1997] ECR I-3123, paragraph 16.

(11) - Grand Garage Albigeois and Nissan France (cited in the previous footnote), both at paragraph 19.

(12) - See paragraph 20 in both the judgments cited at footnote 12. To the same effect, see Case C-128/95 Fontaine and Others v Aqueducs Automobiles [1997] ECR I-967, paragraph 20, and most recently, Syd-Consult, cited at footnote 10, paragraph 17.

(13) - In that connection, see in particular SYD-Consult (cited at footnote 10), paragraphs 9 to 19.

(14) - To this effect, see Case 22/71 Béguelin Import v G.L. Import Export [1971] ECR 949, paragraph 29, where the Court declared that `an agreement which is null and void by virtue of this provision has no effect as between the contracting parties and cannot be relied on as against third parties'.

(15) - This case-law has been consistently applied to unauthorised resellers in the context of products marketed through a selective and exclusive network. It evolved principally in connection with perfumery products, and was extended by judgment of 9 July 1996 to the vehicle distribution sector also.

(16) - Case 32/65 Italy v Council and Commission [1966] ECR 389, in particular p. 406.

(17) - VAG France, cited at footnote 10, paragraph 12.

(18) - See, for example, the judgment in Joined Cases 29/83 and 30/83 CRAM and Rheinzink v Commission [1984] ECR 1679.

(19) - See, inter alia, the judgments in Case 42/84 Remia v Commission [1985] ECR 2545; Case 161/84 Pronuptia [1986] ECR 353; Case 65/86 Bayer [1988] ECR 5249, and Case C-234/89 Delimitis [1991] ECR I-935. In addition, for a more detailed analysis of the question, see my Opinion in Case C-250/92 DLG [1994] ECR I-5644, in particular points 14-16.

(20) - See, to this effect, Case 56/65 Société Techniques Minière v Maschinenbau Ulm [1966] ECR 235, page 249, and, most recently, Case C-219/95 P Ferriere Nord v Commission [1997] ECR I-4411, paragraph 20.

(21) - Remia, cited above at footnote 19, paragraph 22.

(22) - Société Technique Minière, cited above at footnote 20, page 250.

(23) - Joined Cases 56/64 and 58/64 Consten and Grundig v Commission [1966] ECR 299, at p. 344.

(24) - Société Technique Minière, cited above at footnote 20, page 250. To the same effect, the Court has more recently given a ruling in VAG France, cited above at footnote 10, in which it held that `the consequences of the fact that those contractual provisions which are incompatible with Article 85(1) are automatically void for all other parts of the agreement or for other obligations flowing from it are not a matter for Community law' (paragraph 14), and that, accordingly, `[i]t is for the national court to determine in accordance with the relevant national law the extent and consequences, for the contractual relations as a whole, of the nullity of certain contractual provisions by virtue of Article 85(2)' (paragraph 15).

(25) - To this effect see Case 319/82 Société de Vente de Ciments et Bétons v Kerpen & Kerpen [1983] ECR 4173, paragraphs 11 and 12.

(26) - It would not be unhelpful here to note that in its explanatory pamphlet on the regulation the Commission stated that `measures adopted by a manufacturer in order to impose the distribution of a single make of vehicle ... will be considered as a restriction of competition not expressly exempted by the regulation (Article 6(1)(3)), which will lead automatically to the loss of the exemption'.