Judgment of the Court (Fifth Chamber) of 8 March 2001 in Joined Cases C-397/98 and C-410/98 (reference for a preliminary ruling from the High Court of Justice of England and Wales, Chancery Division): Metallgesellschaft Ltd and Others (C-397/98), Hoechst AG, Hoechst UK Ltd (C-410/98) v Commissioners of Inland Revenue, H.M. Attorney General (Freedom of establishment — Free movement of capital — Advance payment of corporation tax on profits distributed by a subsidiary to its parent company — Parent company having its seat in another Member State — Breach of Community law — Action for restitution or action for damages — Interest)
Date: 2001-06-16
Institutions: Court of Justice
Subjects: EU law - national law, United Kingdom, corporation tax, indemnification, interpretation of the law, subsidiary

16.6.2001

EN

Official Journal of the European Communities

C 173/13

judgment set aside, the other party to the proceedings being:
Commission of the European Communities (Agents: G. Valses-
ia, and J. Currall, assisted by D. Waelbroeck) — the Court,
composed of G.C. Rodrı´guez Iglesias, President, C. Gulmann,
A. La Pergola, M. Wathelet
(Rapporteur) and V. Skouris
(Presidents of Chambers), D.A.O. Edward, J.-P. Puissochet,
P. Jann, L. Sevo´ n, R. Schintgen and N. Colneric, Judges; D. Ruiz-
Jarabo Colomer, Advocate General; R. Grass, Registrar, has
given a judgment on 6 March 2001, in which it:

1. Dismisses the appeal;

2. Orders Mr Connolly to pay the costs.

(1) OJ C 299 of 16.10.1999.

1. Dismisses the appeal;

2. Orders Mr Connolly to pay the costs.

(1) OJ C 281 of 2.10.1999.

JUDGMENT OF THE COURT

of 6 March 2001

in Case C-274/99 P: Bernard Connolly v Commission of
the European Communities (1)

(Appeal — Officials — Disciplinary proceedings —
Articles 11, 12 and 17 of the Staff Regulations — Freedom
of expression — Duty of loyalty — Conduct reflecting on an
official’s position)

(2001/C 173/21)

(Language of the case: French)

(Provisional translation; the definitive translation will be published
in the European Court Reports)

In Case C-274/99 P: Bernard Connolly, a former official of
the Commission of the European Communities, residing in
London, United Kingdom, represented by J. Sambon and
P.-P. van Gehuchten, avocats, with an address for service in
Luxembourg, appeal against the judgment of the Court of First
Instance of the European Communities (First Chamber) of
19 May 1999 in Joined Cases T-34/96 and T-163/96 Connolly
v Commission [19991 ECR-SC I-A-87 and II-463, seeking to
have that judgment set aside, the other party to the proceedings
being: Commission of the European Communities (Agents:
G. Valsesia and J. Currall, assisted by D. Waelbroeck) —
the Court, composed of: G.C. Rodrı´guez Iglesias, President,
C. Gulmann, A. La Pergola, M. Wathelet (Rapporteur) and
V. Skouris
(Presidents of Chambers), D.A.O. Edward,
J.-P. Puissochet, P. Jann, L. Sevo´ n, R. Schintgen and N. Colneric,
Judges; D. Ruiz-Jarabo Colomer, Advocate General; R. Grass,
Registrar, has given a judgment on 6 March 2001, in which it:

JUDGMENT OF THE COURT

(Fifth Chamber)

of 8 March 2001

in Joined Cases C-397/98 and C-410/98 (reference for a
preliminary ruling from the High Court of Justice of
England and Wales, Chancery Division): Metallgesellschaft
Ltd and Others (C-397/98), Hoechst AG, Hoechst UK Ltd
(C-410/98) v Commissioners of Inland Revenue, H.M.
Attorney General (1)

(Freedom of establishment — Free movement of capital —
Advance payment of corporation tax on profits distributed
by a subsidiary to its parent company — Parent company
having its seat in another Member State — Breach of
Community law — Action for restitution or action for
damages — Interest)

(2001/C 173/22)

(Language of the case: English)

In Joined Cases C-397/98 and C-410/98: reference to the
Court under Article 177 of the EC Treaty (now Article 234
EC) from the High Court of Justice of England and Wales,
Chancery Division, (United Kingdom) for a preliminary ruling
in the proceedings pending before that court between Metallge-
sellschaft Ltd and Others (C-397/98), Hoechst AG, Hoechst
UK Ltd (C-410/98) and Commissioners of Inland Revenue,
H.M. Attorney General — on the interpretation of Articles 6
and 52 of the EC Treaty (now, after amendment, Articles 12
EC and 43 EC), Article 58 of the EC Treaty (now Article 48
EC) and/or Article 73b of the EC Treaty (now Article 56 EC)
— the Court (Fifth Chamber), composed of: A. La Pergola,
President of
(Rapporteur),
the Chamber, M. Wathelet
D.A.O. Edward, P. Jann and L. Sevo´ n, Judges; N. Fennelly,
Advocate General; L. Hewlett, Administrator, for the Registrar,
has given a judgment on 8 March 2001, in which it has ruled:

C 173/14

EN

Official Journal of the European Communities

16.6.2001

1.

It is contrary to Article 52 of the EC Treaty (now, after
amendment, Article 43 EC) for the tax legislation of a Member
State, such as that in issue in the main proceedings, to afford
companies resident in that Member State the possibility of
benefiting from a taxation regime allowing them to pay
dividends to their parent company without having to pay
advance corporation tax where their parent company is also
resident in that Member State but to deny them that possibility
where their parent company has its seat in another Member
State.

2. Where a subsidiary resident in one Member State has been
obliged to pay advance corporation tax in respect of dividends
paid to its parent company having its seat in another Member
State even though, in similar circumstances, the subsidiaries of
parent companies resident in the first Member State were
entitled to opt for a taxation regime that allowed them to avoid
that obligation, Article 52 of the Treaty requires that resident
subsidiaries and their non-resident parent companies should
have an effective legal remedy in order to obtain reimbursement
or reparation of the financial loss which they have sustained
and from which the authorities of the Member State concerned
have benefited as a result of the advance payment of tax by the
subsidiaries.

The mere fact that the sole object of such an action is the
payment of interest equivalent to the financial loss suffered as a
result of the loss of use of the sums paid prematurely does not
constitute a ground for dismissing such an action.

While, in the absence of Community rules, it is for the domestic
legal system of the Member State concerned to lay down the
detailed procedural rules governing such actions,
including
ancillary questions such as the payment of interest, those rules
must not render practically impossible or excessively difficult the
exercise of rights conferred by Community law.

3.

It is contrary to Community law for a national court to refuse
or reduce a claim brought before it by a resident subsidiary
and its non-resident parent company for reimbursement or
reparation of the financial loss which they have suffered as a
consequence of the advance payment of corporation tax by the
subsidiary, on the sole ground that they did not apply to the
tax authorities in order to benefit from the taxation regime
which would have exempted the subsidiary from making
payments in advance and that they therefore did not make use
of the legal remedies available to them to challenge the refusals
of the tax authorities, by invoking the primacy and direct effect
of the provisions of Community law, where upon any view
national law denied resident subsidiaries and their non-resident
parent companies the benefit of that taxation regime.

(1) OJ C 1 of 4.1.1999.

JUDGMENT OF THE COURT

(Sixth Chamber)

of 8 March 2001

in Case C-405/98 (reference for a preliminary ruling from
the Stockholms Tingsrätt, Sweden): Konsumentom-
budsmannen (KO) v Gourmet International Products AB
(GIP) (1)

(Free movement of goods — Articles 30 and 36 of the EC
Treaty (now, after amendment, Articles 28 EC and 30 EC)
— Freedom to provide services — Articles 56 and 59 of the
EC Treaty (now, after amendment, Articles 46 EC and 49
EC) — Swedish legislation on the advertising of alcoholic
beverages — Selling arrangements — Measure having an
effect equivalent to a quantitative restriction — Justification
in the interest of the protection of health)

(2001/C 173/23)

(Language of the case: Swedish)

(Provisional translation; the definitive translation will be published
in the European Court Reports)

In Case C-405/98: reference to the Court under Article 177 of
the EC Treaty (now Article 234 EC) from the Stockholms
Tingsrätt, Sweden for a preliminary ruling in the proceedings
pending before that court between Konsumentombudsmannen
(KO) and Gourmet International Products AB (GIP) — on the
interpretation of Articles 30, 36, 56 and 59 of the EC Treaty
(now, after amendment, Articles 28 EC, 30 EC, 46 EC and 49
EC), — the Court (Sixth Chamber), composed of: C. Gulmann,
President of the Chamber, V. Skouris, J.-P. Puissochet (Rappor-
teur), R. Schintgen and F. Macken, Judges; F.G. Jacobs, Advocate
General; H. von Holstein, Deputy Registrar, for the Registrar,
has given a judgment on 8 March 2001, in which it has ruled:

Articles 30 and 36 of the EC Treaty (now, after amendment,
Articles 28 EC and 30 EC) and Articles 56 and 59 of the EC Treaty
(now, after amendment, Articles 46 EC and 49 EC) do not preclude
a prohibition on the advertising of alcoholic beverages such as that
laid down in Article 2 of Lagen 1978:763 med vissa bestämmelser
om marknadsföring av alkoholdrycker (Swedish Law laying down
provisions on the Marketing of Alcoholic Beverages), as amended,
unless it is apparent that, in the circumstances of law and of fact
which characterise the situation in the Member State concerned, the
protection of public health against the harmful effects of alcohol can
be ensured by measures having less effect on intra-Community trade.

(1) OJ C 1 of 4.1.1999.