Opinion of Mr Advocate General La Pergola delivered on 5 March 1998. - Commission of the European Communities v Kingdom of Belgium and Grand Duchy of Luxembourg. - Failure to fulfil obligations - Regulation (EEC) No 4055/86 - Freedom to provide maritime transport services - Maritime Agreement concluded with a third country - Cargo-sharing arrangement. - Joined cases C-176/97 and C-177/97.



European Court reports 1998 Page I-03557



Opinion of the Advocate-General

I - Introduction

1. In these proceedings the Court of Justice is asked to give judgment in actions for failure to fulfil obligations brought by the Commission against the Kingdom of Belgium (Case C-176/97) and against the Grand Duchy of Luxembourg (Case C-177/97).

In these actions the Commission claims that the two defendant Member States, by entering into and maintaining in force agreements concerning shipping cargoes - namely the agreement between the Belgo-Luxembourg Economic Union and Malaysia (hereinafter `the Agreement') which was approved by Belgium in its own name and on behalf of the Belgo-Luxembourg Economic Union and entered into force on 17 August 1987 - have infringed Article 5 of Council Regulation (EEC) No 4055/86 of 22 December 1986 applying the principle of freedom to provide services to maritime transport between Member States and between Member States and third countries (1) (hereinafter `the Regulation').

II - The legislation

A - The Community provisions

2. The Regulation entered into force on 1 January 1987 (Article 12).

Article 5(1) of the Regulation provides:

`Cargo-sharing arrangements in any future agreements with third countries are prohibited other than in those exceptional circumstances where Community liner shipping companies would not otherwise have an effective opportunity to ply for trade to and from the third country concerned. In these circumstances such arrangements may be permitted in accordance with the provisions of Article 6.'

Article 6 of the Regulation provides inter alia that if a Member State's nationals or shipping companies do not have an effective opportunity to ply for trade to and from a particular third country, the Council, acting by qualified majority on a proposal of the Commission, is to decide on the necessary action. Such action may include the negotiation and conclusion of cargo-sharing arrangements.

B - The provisions of the Agreement

3. Articles 2, 3 and 16 (in particular, Article 16(2)) of the Agreement contain a series of provisions to the effect that only the national shipping companies of the contracting parties may participate in the freight and volume of maritime trade between the contracting parties. Ships flying the flag of other Member States are excluded from the system set up by the Agreement.

4. It is clear from the documents before the Court that the Agreement entered into force for the contracting states on 17 August 1987.

III - The facts of the case

5. The events which led to the bringing of these actions can be summarised as follows.

On 23 June 1992 the Commission proposed to the Belgian Government that the Agreement should be brought into line with Community law. The Commission's proposal expresses the view that Articles 2, 3 and 16 of the Agreement are contrary to Articles 5 and 6 of the Regulation.

However, the Agreement remained unaltered, although the Belgian Government stated on several occasions that it was prepared to bring it into line with Community law in collaboration with the Luxembourg Government.

6. The Commission therefore set in train the pre-litigation procedure alleging that the two defendant Member States were in breach of the provisions of the Regulation as detailed above. As that procedure did not achieve any result, on 5 May 1997 the Commission brought these two direct actions seeking a declaration by the Court that the Member States in question had failed to fulfil their obligations.

IV - The dispute

7. The defendant Member States acknowledge that the Agreement is contrary to the abovementioned Community provisions. However, in defence of their conduct, they point to the fact that their attempts to bring about an amendment of the Agreement that would render it compatible with the Regulation, notwithstanding the effort they made, did not achieve any tangible result. Moreover, the defendant Member States consider that the outright denunciation of the Agreement as the only means at their disposal, in the present circumstances, of putting an end to the infringement with which they are charged, is disproportionate to the objective pursued by the Commission in bringing these actions.

8. In that connection, I would point out that the Court has consistently held (2) that Member States cannot rely on justifications of the kind outlined above to deny the breach of obligations with which they are charged. The pleadings in this case show unequivocally that the Agreement was entered into by Belgium and Luxembourg after the entry into force of the Regulation. It is therefore irrelevant that the attempts made by the defendant Member States to assert their right to amend that agreement have not yet achieved any practical result and that, accordingly, the denunciation of the Agreement appears to be the only means available to them to put an end to the infringement with which they are charged.

V - Costs

9. Under Article 69 of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. The Commission has applied for costs. I therefore propose that the two Member States in question be ordered to pay the costs.

VI - Conclusion

In the light of the foregoing observations, I therefore propose that the Court should:

- declare that, by introducing and maintaining in force cargo-sharing arrangements, in the Agreement between the Belgo-Luxembourg Economic Union and Malaysia which entered into force on 17 August 1987, the Kingdom of Belgium has failed to fulfil its obligations under Article 5 of Council Regulation (EEC) No 4055/86 of 22 December 1986 applying the principle of freedom to provide services to maritime transport between Member States and between Member States and third countries;

- declare that, by introducing and maintaining in force cargo-sharing arrangements, in the Agreement between the Belgo-Luxembourg Economic Union and Malaysia which entered into force on 17 August 1987, the Grand Duchy of Luxembourg has failed to fulfil its obligations under Article 5 of Council Regulation (EEC) No 4055/86 of 22 December 1986 applying the principle of freedom to provide services to maritime transport between Member States and between Member States and third countries;

- order the Kingdom of Belgium and the Grand Duchy of Luxembourg to pay the costs.

(1) - OJ 1986 L 378, p. 1.

(2) - In a number of cases (Case 100/77 Commission v Italy [1978] ECR 879; Case 93/79 Commission v Italy [1979] ECR 3837; Case 137/80 Commission v Belgium [1981] ECR 2393; Joined Cases 30/81 to 34/81 Commission v Italy [1981] ECR 3379; Case 46/88 Commission v Belgium [1989] ECR 1133; Case C-287/87 Commission v Greece [1990] ECR I-125; Case C-240/89 Commission v Italy [1990] ECR I-4853), the Court has held that domestic provisions or administrative practices cannot be relied on to justify a failure to fulfil obligations. This case concerns certain provisions of an international treaty the amendment of which also requires the cooperation of a third country. However, the case does not differ substantially from those considered in the past in the decisions of the Court precisely because the treaty, which conflicts with Community law, was concluded after entry into force of the Regulation and, given the length of time which has now elapsed, it cannot be argued that this is still a case of force majeure (Case 101/84 Commission v Italy [1985] ECR 2629).