CELEX: 62012CC0516
Language: en
Date: 2014-02-06
Title: Opinion of Mr Advocate General Cruz Villalón delivered on 6 February 2014. # CTP - Compagnia Trasporti Pubblici SpA v Regione Campania (C-516/12 to C-518/12) and Provincia di Napoli (C-516/12 and C-518/12). # References for a preliminary ruling: Consiglio di Stato - Italy. # Reference for a preliminary ruling - Regulation (EC) No 1191/69 - Public passenger transport services - Article 4 - Application for termination of public service obligation - Article 6 - Right to compensation in respect of the financial burdens resulting from the performance of a public service obligation. # Joined cases C-516/12 to C-518/12.

OPINION OF ADVOCATE GENERAL
      CRUZ VILLALÓN
      delivered on 6 February 2014 (
            1
         )
      
         Joined Cases C‑516/12 to C‑518/12
      
      
         CTP – Compagnia Trasporti Pubblici SpA
      
      
         v
      
      
         Regione Campania,
      
      
         Provincia di Napoli
      
      
         (Request for a preliminary ruling from the Consiglio di Stato (Italy))
      
      ‛Transport — Regulation No 1191/69 — Right of private undertakings to compensation for financial burdens arising from a public service obligation — Transport undertakings obliged to apply for the termination of a public service obligation which imposes economic disadvantages on them’
      
               1. 
            
            
               The present case offers the Court of Justice the opportunity of clarifying a particular aspect of the rules on compensation for compliance with public service obligations in transport by rail, road and inland waterway, laid down in Regulation No 1191/69, (
                     2
                  ) the amendment of which by Regulation No 1893/91 (
                     3
                  ) raises difficulties concerning the reconciliation of the two texts.
            
         
               2. 
            
            
               More specifically, the issue is the situations in which an application for compensation for the economic disadvantages caused by the performance of a public service obligation must be preceded by an application for the partial or total termination of that obligation. As yet, the Court has had no opportunity of giving a ruling on that issue.
            
         
         I – Legislative framework
      
      A – Union law
      
      
               3.
            
            
               Article 1 of Regulation No 1191/69, as amended by Regulation No 1893/91, is worded as follows:
               ‘1.   This Regulation shall apply to transport undertakings which operate services in transport by rail, road and inland waterway.
               Member States may exclude from the scope of this Regulation any undertakings whose activities are confined exclusively to the operation of urban, suburban or regional services.
               2.   For the purpose of this Regulation the following definitions shall apply:
               
                        —
                     
                     
                        “urban and suburban services” means transport services meeting the needs of an urban centre or conurbation, and transport needs between it and surrounding areas,
                     
                  
                        —
                     
                     
                        “regional services” means transport services operated to meet the transport needs of a region.
                     
                  3.   The competent authorities of the Member States shall terminate all obligations inherent in the concept of a public service as defined in this Regulation imposed on transport by rail, road and inland waterway.
               4.   In order to ensure adequate transport services which in particular take into account social and environmental factors and town and country planning, or with a view to offering particular fares to certain categories of passenger, the competent authorities of the Member States may conclude public service contracts with a transport undertaking. The conditions and details of operation of such contracts are laid down in Section V.
               5.   However, the competent authorities of the Member States may maintain or impose the public service obligations referred to in Article 2 for urban, suburban and regional passenger transport services. The conditions and details of operation, including methods of compensation, are laid down in Sections II, III and IV.
               …’
            
         
               4.
            
            
               Under Article 2(1) of the regulation, ‘“[p]ublic service obligations” means obligations which the transport undertaking in question, if it were considering its own commercial interests, would not assume or would not assume to the same extent or under the same conditions’.
            
         
               5.
            
            
               Article 4 of the regulation is worded as follows:
               ‘1.   It shall be for transport undertakings to apply to the competent authorities of the Member States for the termination in whole or in part of any public service obligation where such obligation entails economic disadvantages for them.
               2.   In their applications, transport undertakings may propose the substitution of some other form for the forms of transport being used. Undertakings shall apply the provisions of Article 5 to calculate what savings could be made as a means of improving their financial position.’
            
         
               6.
            
            
               Article 5 of the regulation provides:
               ‘1.   Any obligation to operate or to carry shall be regarded as imposing economic disadvantages where the reduction in the financial burden which would be possible as a result of the total or partial termination of the obligation in respect of an operation or a group of operations affected by that obligation exceeds the reduction in revenue resulting from that termination.
               …
               Economic disadvantages shall be determined taking into account the effects of the obligation on the undertaking’s activities as a whole.
               2.   A tariff obligation shall be regarded as entailing economic disadvantages where the difference between the revenue from the traffic to which the obligation applies and the financial burden of such traffic is less than the difference between the revenue which would be produced by that traffic and the financial burden thereof if working were on a commercial basis[,] account being taken both of the costs of those operations which are subject to the obligation and of the state of the market.’
            
         
               7.
            
            
               Article 6 of the regulation provides as follows:
               ‘1.   Within one year of the date of the entry into force of this Regulation transport undertakings shall lodge with the competent authorities of the Member States the applications referred to in Article 4.
               Transport undertakings may lodge applications after the expiry of the aforementioned period if they find that the provisions of Article 4(1) are satisfied.
               2.   Decisions to maintain a public service obligation or part thereof, or to terminate it at the end of a specified period, shall provide for compensation to be granted in respect of the financial burdens resulting therefrom; the amount of such compensation shall be determined in accordance with the common procedures laid down in Articles 10 to 13.
               3.   The competent authorities of the Member States shall take decisions within one year of the date on which the application is lodged as regards obligations to operate or to carry, and within six months as regards tariff obligations.
               The right to compensation shall arise on the date of the decision by the competent authorities but in any event not before 1 January 1971.
               4.   However, if the competent authorities of the Member States consider it necessary by reason of the number and importance of the applications lodged by each undertaking, they may extend the period prescribed in the first subparagraph of paragraph 3 until 1 January 1972 at the latest. In such case, the right to compensation shall arise on that date.
               Where they intend to avail themselves of this power, the competent authorities of the Member States shall so inform the undertakings concerned within six months following the lodging of applications.
               Should any Member State meet with special difficulties, the Council may, at the request of that State and on a proposal from the Commission, authorise the State concerned to extend until 1 January 1973 the time limit indicated in the first subparagraph of this paragraph.
               5.   If the competent authorities have not reached a decision within the time limit laid down, the obligation in respect of which the application under Article 4(1) for termination was made shall stand terminated.
               6.   The Council shall, on the basis of a report submitted by the Commission before 31 December 1972, study the situation in each Member State with regard to the implementation of this Regulation.’
            
         
               8.
            
            
               In accordance with Article 9(1) and (2) of the regulation:
               ‘1.   The amount of compensation in respect of financial burdens devolving upon undertakings by reason of the application to passenger transport of transport rates and conditions imposed in the interests of one or more particular categories of person shall be determined in accordance with the common procedures laid down in Articles 11 to 13.
               2.   Compensation shall be payable from 1 January 1971.
               Should any Member State meet with special difficulties, the Council may, at the request of that State and on a proposal from the Commission, authorise the State concerned to alter that date to 1 January 1972.’
            
         
               9.
            
            
               In its current version, Article 14 of the regulation provides as follows:
               ‘1.   “A public service contract” shall mean a contract concluded between the competent authorities of a Member State and a transport undertaking in order to provide the public with adequate transport services.
               A public service contract may cover notably:
               
                        —
                     
                     
                        transport services satisfying fixed standards of continuity, regularity, capacity and quality,
                     
                  
                        —
                     
                     
                        additional transport services,
                     
                  
                        —
                     
                     
                        transport services at specified rates and subject to specified conditions, in particular for certain categories of passenger or on certain routes.
                     
                  
                        —
                     
                     
                        adjustments of services to actual requirements.
                     
                  2.   A public service contract shall cover, inter alia, the following points:
               
                        (a)
                     
                     
                        the nature of the service to be provided, notably the standards of continuity, regularity, capacity and quality;
                     
                  
                        (b)
                     
                     
                        the price of the services covered by the contract, which shall either be added to tariff revenue or shall include the revenue, and details of financial relations between the two parties;
                     
                  
                        (c)
                     
                     
                        the rules concerning amendment and modification of the contract, in particular to take account of unforeseeable changes;
                     
                  
                        (d)
                     
                     
                        the period of validity of the contract;
                     
                  
                        (e)
                     
                     
                        the penalties in the event of failure to comply with the contract.
                     
                  3.   Those assets involved in the provision of transport services which are the subject of a public service contract may belong to the undertaking or be placed at its disposal.
               4.   Any undertaking which intends to discontinue or make substantial modifications to a transport service which it provides to the public on a continuous and regular basis and which is not covered by the contract system or the public service obligation shall notify the competent authorities of the Member State thereof at least three months in advance.
               The competent authorities may decide to waive such notification.
               This provision shall not affect other national procedures applicable as regards entitlement to terminate or modify transport services.
               5.   After receiving the information referred to in paragraph 4 the competent authorities may insist on the maintenance of the service concerned for up to one year from the date of notification and they shall inform the undertaking at least one month before the expiry of the notification.
               They may also take the initiative of negotiating the establishment or modification of such a transport service.
               6.   Expenditure arising for transport undertakings from the obligations referred to in paragraph 5 shall be compensated in accordance with the common procedures laid down in Sections II, III and IV.’
            
         
               10.
            
            
               In its original version, Article 14 provided as follows:
               ‘1.   Save for cases falling within Article 1(3), after the date of entry into force of this Regulation Member States may impose public service obligations on a transport undertaking only in so far as such obligations are essential in order to ensure the provision of adequate transport services.
               2.   Where obligations thus imposed entail for transport undertakings economic disadvantages within the meaning of Article 5(1) and (2) or financial burdens within the meaning of Article 9, the competent authorities of the Member States shall, when deciding to impose such obligations, provide for grants of compensation in respect of the financial burdens resulting therefrom. The provisions of Articles 10 to 13 shall apply.’
            
         B – National law
      
      
               11.
            
            
               Article 17 of Legislative Decree No 422 of 19 November 1997 on the transfer to regions and local bodies of functions and tasks concerning local public transport, in accordance with Article 4(4) of Law No 59 of 15 March, (
                     4
                  ) provides as follows:
               ‘With a view to ensuring mobility for public transport users, the regions, provinces and municipalities shall determine public service obligations, for the purpose of Article 2 of Regulation (EEC) No 1191/69, as amended by Regulation (EEC) No 1893/91, and, in the service contracts referred to in Article 19, shall provide for the corresponding financial compensation to be paid to the undertakings providing the services, taking into account, for the purpose of the Community provision referred to above, revenue from fares and also, as the case may be, revenue deriving from the management of complementary mobility services’.
            
         
         II – Facts
      
      
               12.
            
            
               Compagnia Trasporti Pubblici SpA (‘CTP’) provides local public transport services in the Province of Naples and it has lodged repeated, unsuccessful, applications with the regional and local authorities for compensation for the economic disadvantage suffered as a result of the provision of those services.
            
         
               13.
            
            
               CTP appealed to the Regional Administrative Court, Campania (Tribunale amministrativo regionale per la Campania) against the decisions refusing compensation; that court dismissed the appeals on the grounds that, in accordance with Article 4 of Regulation No 1191/69, compensation may be applied for only where an application has previously been submitted for termination of the public service obligation and that application has been refused by the competent authority, which was not the case.
            
         
               14.
            
            
               An appeal having been lodged before it, the Council of State (Consiglio di Stato) has decided to make these references for a preliminary ruling, now joined.
            
         
         III – The question referred for a preliminary ruling
      
      
               15.
            
            
               The three questions referred for a preliminary ruling by the Consiglio di Stato are worded identically:
               ‘Does the right to compensation arise, for the purposes of Article 4 of Regulation (EC) No 1191/69, only where, following the submission of an appropriate application, the competent authorities have not terminated the public service obligation which imposes an economic disadvantage on the transport undertaking, or is that provision applicable only in respect of service obligations which are to be terminated and cannot be maintained under the regulation?’
            
         
               16.
            
            
               The referring court takes the view that Articles 1, 4 and 6 of Regulation No 1191/69 lend themselves to two different interpretations as regards how the right to compensation arises.
            
         
               17.
            
            
               In accordance with an interpretation which the referring court describes as ‘purposive’, and which is the interpretation adopted by the Tribunale amministrativo, the right to compensation can arise only if an application for termination of the public service obligation has previously been refused.
            
         
               18.
            
            
               According to an interpretation which the referring court calls ‘systemic’, the right to compensation arises without the need of a prior application to terminate the service, given that it is an obligation the maintenance of which may be required under Article 1 of Regulation No 1191/69.
            
         
         IV – The procedure before the Court of Justice
      
      
               19.
            
            
               The three references for a preliminary ruling from the Consiglio di Stato were joined by Order of the President of the Court of Justice on 29 November 2012.
            
         
               20.
            
            
               As well as CTP, the Regione Campania (the Campania Region), the Provincia di Napoli (the Province of Naples), the Italian Government and the Commission took part in the proceedings.
            
         
               21.
            
            
               At the hearing, held on 20 November 2013, oral argument was presented by CTP, the Regione Campania, the Italian Government and the Commission.
            
         
         V – Arguments
      
      
               22.
            
            
               CTP denies that the contract is of a kind involving reciprocal obligations, describing it as a ‘bridging contract’ and claiming that it includes the same conditions as the concession that preceded it. According to CTP, such conditions are imposed by the Regions on all transport undertakings, without the services concerned having been put out to public tender.
            
         
               23.
            
            
               For its part, the Regione Campania submits that CTP’s obligations are derived from a contract involving reciprocal obligations which has been in force since February 2003.
            
         
               24.
            
            
               CTP supports the so-called ‘’systemic’ interpretation referred to above. It points out, furthermore, that the Italian State has not implemented the procedure for dealing with applications for the termination of public service obligations, thereby infringing Article 18 of Regulation No 1191/69.
            
         
               25.
            
            
               Finally, CTP argues that the procedure provided for in Articles 4 and 6 of Regulation No 1191/69 was transitional, with a period of one year from 1 January 1973 set for the lodging of applications for the termination of public service obligations. CTP submits that it would be absurd to make compensation conditional on the lodging of such an application, since that would mean denying the right to compensation to any undertaking on which a public service obligation was imposed after 1 January 1973.
            
         
               26.
            
            
               The Regione Campania, the Provincia di Napoli and the Italian Government adopt the so-called ‘purposive’ interpretation, taking the view that failure to lodge an application for termination of the service implies an intention on the part of the undertaking to assume that obligation, which means that there is no economic disadvantage and, therefore, no right to compensation.
            
         
               27.
            
            
               In particular, the Italian Government points out that although, at first, Regulation No 1191/69 required an application for termination of a public service obligation only in the case of obligations preceding the entry into force of that regulation, the situation changed significantly with the amendment effected by Regulation No 1893/91; pursuant to that regulation, Article 1 was reworded and a paragraph 5 was inserted, allowing the Member States to maintain or impose public service obligations in accordance with the conditions and details of operation (including methods of compensation) laid down in Sections II, III and IV of Regulation No 1191/69, which include Article 4, that is, the provision requiring the prior submission of an application for termination of the public service obligation.
            
         
               28.
            
            
               Finally, the Commission maintains that Regulation No 1191/69 imposes different duties for public service obligations (Article 1(5) and Section IV) and public service contracts (Article 1(4) and Section V). If the obligations assumed by CTP were derived from a public service contract, that contract would stipulate the price of the services, and the obligation to lodge an application for termination, laid down in Article 4 of the regulation, would not be applicable.
            
         
               29.
            
            
               The Commission submits that it is not apparent from the order for reference whether the transport services provided by CTP are the result of a public service obligation imposed unilaterally by the public authorities or whether they are derived from a public service contract.
            
         
               30.
            
            
               In addition, the Commission argues that the obligation to lodge an application for termination of the service applies only to public service obligations already existing at the time Regulation No 1191/69 entered into force, that is to say, 1 July 1969. In that connection, it points out that, before being amended by Regulation No 1893/91, Article 14 of the regulation allowed the Member States to impose public service obligations unilaterally after the entry into force of Regulation No 1191/69, and the right to compensation was not conditional on an application for termination of the service. Following the entry into force of Regulation No 1893/91, Article 14 of Regulation No 1191/69 provides for the conclusion of public service contracts without amending the rules applicable to public service obligations imposed unilaterally after the entry into force of the regulation.
            
         
               31.
            
            
               Lastly, the Commission adds that the concepts of ‘maintenance’ and ‘termination’ of public service obligations used in recital 5 in the preamble to Regulation No 1191/69 refer to situations already existing at the time the regulation entered into force.
            
         
         VI – Assessment
      
      
               32.
            
            
               Beyond the strict terms in which the question referred for a preliminary ruling is framed, its purpose, as is confirmed by the exchange of views between the parties, is to determine the situations in which compensation for the economic disadvantages imposed as a result of compliance with a public service obligation must be preceded by an application for the total or partial termination of that obligation.
            
         A – The legal nature of the relationship at issue
      
      
               33.
            
            
               The first point to determine for the purpose of disposing of the dispute in the main proceedings is the nature of the legal relationship binding CTP and the local authority.
            
         
               34.
            
            
               If the relationship concerned is a ‘public service contract’, Article 14(2) of Regulation No 1191/69 will be applicable, under which a contract of that kind must include, inter alia, ‘the rules concerning amendment and modification of the contract, in particular to take account of unforeseeable changes’. As Article 14(4) to (6) provides, any amendments to the contract are subject to the following rules: (1) notice (three months) from the undertaking to the administrative authority of its intention to cancel or amend the contract; (2) the administrative authority has the right to impose on the undertaking, within a period of one month, the obligation to maintain the service for up to one year, without prejudice to its being possible for the authority to take the initiative of negotiating; (3) compensation for the financial burdens arising from the obligation to maintain the service for one year.
            
         
               35.
            
            
               If, on the other hand, the relationship is a ‘public service obligation’, according to the approach to the case taken by the parties, it will be Article 4 of Regulation No 1191/69 that applies, pursuant to which the right to compensation is conditional on a prior application for the total or partial termination of a public service obligation.
            
         
               36.
            
            
               The reply to that question is not clear from the documents in the case as a whole. On the one hand, there is evidence that the relationship in question is a contract but, on the other hand, evidence has also been adduced that the relationship is an administrative concession with elements of a public service obligation.
            
         
               37.
            
            
               Nor was it possible at the hearing to resolve the uncertainties in that regard.
            
         
               38.
            
            
               To my mind, there are compelling reasons for considering that CTP’s activities satisfy the definition of ‘public service obligations’ within the meaning of Article 2(1) of Regulation No 1191/69, that is to say, ‘obligations which the transport undertaking in question, if it were considering its own commercial interests, would not assume or would not assume to the same extent or under the same conditions’. At all events, I believe that it is ultimately for the referring court to classify the legal nature of the concept in question.
            
         
               39.
            
            
               Should the Consiglio di Stato find that the relationship at issue is a contract, then, for the reasons set out in point 34, Article 4 of Regulation No 1191/69, with which the question referred in these proceedings is concerned, would not be applicable in any circumstances.
            
         
               40.
            
            
               Only if the Consiglio di Stato takes the view that the relationship at issue satisfies the concept of a public service obligation will it be necessary for the Court to reply to the question whether an application for termination of the public service obligation is a prerequisite for an application for compensation. If that is the case, the following considerations must be taken into account.
            
         B – Compensation for compliance with a public service obligation within the framework of Regulation No 1191/69
      
      
               41.
            
            
               As has been seen, the parties who have participated in these proceedings have put forward conflicting interpretations of the rules governing compensation for compliance with public service obligations.
            
         
               42.
            
            
               On the one hand, the Regione Campania, the Provincia di Napoli and the Italian Government adopt an interpretation described as ‘purposive’, concluding that the right to compensation arises only when a prior application for termination of the public service obligation has been refused.
            
         
               43.
            
            
               For its part, CTP advocates a ‘systemic’ interpretation, in accordance with which, since the obligation in question is imposed unilaterally, the right to compensation arises without the need of a prior application for termination of the obligation.
            
         
               44.
            
            
               Finally, the Commission proposes a third line of interpretation, to the effect that a prior application for termination of the obligation is required only in the case of public service obligations that existed when Regulation No 1191/69 entered into force, that is to say, 1 July 1969.
            
         
               45.
            
            
               To my mind, it is that third approach that best does justice to the regulatory regime of Regulation No 1191/69.
            
         
               46.
            
            
               Under Article 1(1) of Regulation No 1191/69, in its original version, the Member States were required to terminate public service obligations imposed on transport by rail, road and inland waterway. However, in accordance with Article 1(2), those obligations could be maintained if they were essential in order to ensure the provision of adequate transport services.
            
         
               47.
            
            
               Article 4 of the regulation — which was not amended in 1991 — provided, and provides, that transport undertakings must apply for the termination of any public service obligation where such obligation entails economic disadvantages for them. In accordance with Article 6(1) — which was not amended either — such applications must be lodged ‘within one year of the date of the entry into force of this Regulation’, in other words, 1 July 1969. Accordingly, it is clear that Article 4 referred — and refers — only to the case of obligations which existed before 1969 and were maintained after that date.
            
         
               48.
            
            
               Admittedly, the second subparagraph of Article 6(1) provides that ‘[t]ransport undertakings may lodge applications after the expiry of the aforementioned period if they find that the provisions of Article 4(1) are satisfied’, in other words, if the obligation entails economic disadvantages for them. That does not mean, however, that undertakings on which obligations were imposed after 1 July 1969 may lodge such applications but rather, simply, that undertakings which had not applied, within one year, for the termination of an obligation already in existence when Regulation No 1191/69 entered into force could do so after that date where the requirements of Article 4(1) were only satisfied later. In other words, Article 1 of Regulation No 1191/69, in its original version, and Articles 4 and 6 of the regulation refer only to public service obligations which already existed on 1 July 1969.
            
         
               49.
            
            
               Although the objective of Regulation No 1191/69 was the termination of public service obligations in transport by rail, road and inland waterway existing on 1 July 1969, it is the case that, as already stated, the regulation allowed those obligations to be maintained in certain circumstances and, what is more relevant to the present case, allowed the imposition of new obligations in the future too.
            
         
               50.
            
            
               In accordance with Article 14(1), in its original version, the Member States could impose public service obligations after the entry into force of Regulation No 1191/69 on condition that, when they did so, they provided for ‘grants of compensation in respect of the financial burdens resulting therefrom’. For the purpose of such grants of compensation, there was no requirement of a prior application for termination of the service, for Article 14(2) merely provided that the Member States would, ‘when deciding to impose such obligations, provide for grants of compensation’; in other words, the provisions of Articles 4 and 6 were not applicable. That was perfectly consistent with those provisions which, as we have seen, referred to the termination of obligations which preceded Regulation No 1191/69, not to obligations imposed pursuant to that regulation.
            
         
               51.
            
            
               That being so, the application for termination of the public service obligation was a necessary condition only when compensation was sought for financial burdens arising from obligations assumed before 1 July 1969. For its part, compensation for economic disadvantages arising as a result of a subsequent obligation was to be provided for in the decision imposing the obligation and, therefore, the conditions for the grant of such compensation and for any alteration of its content had to be stipulated in that decision too.
            
         
               52.
            
            
               That finding is not invalidated by the argument put forward by the Italian Government, to the effect that the scope of Article 14 changed following the amendment of 1991. The rationale of its argument is that if, previously, it was Article 14 which allowed Member States to impose new public service obligations, that authorisation is now contained in the new Article 1 of Regulation No 1191/69, as a result of the amendment effected by Regulation No 1893/91; the new paragraph 5 of Article 1 provides that the competent authorities ‘may maintain or impose [specified] public service obligations’, ‘[t]he conditions and details of operation [of which], including methods of compensation, are laid down in Sections II, III and IV’. Article 4, the provision that makes compensation conditional on a prior application for termination of the public service obligation, is in fact included in Section II. A systemic interpretation of Article 1 allows that argument to be rejected.
            
         
               53.
            
            
               As has been seen, Article 6 lays down a period of one year from the date of entry into force of Regulation No 1191/69 for the lodging of the applications referred to in Article 4. That requirement did not undergo any amendment and, accordingly, the reference date continues to be 1 July 1969. Consequently, in this connection the 1991 amendment did not result in any change, meaning that now, as before, an application for termination is required only for obligations already existing at the time of the entry into force of Regulation No 1191/69.
            
         
               54.
            
            
               On the basis of that finding, it must be concluded that the reference to the conditions laid down in Sections II, III and IV of Regulation No 1191/69 has to take into account the respective ambits of the different public service obligations referred to in the new Article 1(5).
            
         
               55.
            
            
               That new provision authorises the Member States to ‘maintain’ or ‘impose’ — in the wording of the provision — public service obligations. The right to maintain public service obligations continues to refer to obligations existing before 1 July 1969, to which each of the provisions contained in Sections II, III and IV will apply in full; that includes, therefore, Articles 4 and 6 which are aimed specifically at such obligations. For its part, in cases where new obligations are imposed, the reference to Sections II, III and IV can only be to those of their provisions that are naturally applicable to those obligations; in other words, all provisions apart from Articles 4 and 6, the rationale for which is explained only vis-à-vis previously existing obligations.
            
         
               56.
            
            
               In short, it is my view that the answer to the question referred is dependent, firstly, on whether the legal relationship at issue must be classified as a service contract or a public service obligation, which it is for the referring court to determine. Should the referring court find that it is a public service contract, regard must be had to the terms of the contract. If, on the other hand, it is a public service obligation, it will be necessary to determine whether that obligation came into existence before or after the entry into force of Regulation No 1191/69, with the result that only in the first case will it be necessary to submit a prior application for termination of the obligation in order to obtain compensation for the economic disadvantage suffered.
            
         
               57.
            
            
               Accordingly, it is my view that Article 4 of Regulation No 1191/69 must be interpreted as meaning that the condition under which the right to compensation arises only if, following the submission of an appropriate application, the competent authorities have not terminated the public service obligation which imposes an economic disadvantage on the transport undertaking, is applicable only in respect of public service obligations that existed before the entry into force of that regulation.
            
         
         VII – Conclusion
      
      
               58.
            
            
               In the light of the foregoing considerations, I propose that the Court should reply as follows to the question referred:
               Article 4 of Regulation (EEC) No 1191/69 of the Council of 26 June 1969 on action by Member States concerning the obligations inherent in the concept of a public service in transport by rail, road and inland waterway, as amended by Council Regulation (EEC) No 1893/91 of 20 June 1991, must be interpreted as meaning that the condition under which the right to compensation arises only if, following the submission of an appropriate application, the competent authorities have not terminated the public service obligation which imposes an economic disadvantage on the transport undertaking, is applicable only in respect of public service obligations which existed before the entry into force of that regulation.
            
         (
            1
         )	Original language: Spanish.
      (
            2
         )	Regulation (EEC) No 1191/69 of the Council of 26 June 1969 on action by Member States concerning the obligations inherent in the concept of a public service in transport by rail, road and inland waterway (OJ, English Special Edition 1969 (I), p. 276).
      (
            3
         )	Council Regulation (EEC) No 1893/91 of 21 June 1991 (OJ 1991 L 169, p. 1).
      (
            4
         )	GURI No 287, 10 December 1997, p. 4.