CELEX: 61995CC0043
Language: en
Date: 1996-05-23
Title: Opinion of Mr Advocate General La Pergola delivered on 23 May 1996. # Data Delecta Aktiebolag and Ronny Forsberg v MSL Dynamics Ltd. # Reference for a preliminary ruling: Högsta Domstolen - Sweden. # Equal treatment - Discrimination on grounds of nationality - Security for the costs of judicial proceedings. # Case C-43/95.

OPINION OF ADVOCATE GENERAL
      LA PERGOLA
      delivered on 23 May 1996 (
            *1
         )
      I — Introduction
      
               1.
            
            
               The question referred for a preliminary ruling by the national court relates to the interpretation of the principle of nondiscrimination enshrined in Article 6 of the Treaty. Specifically, the question is intended to ascertain whether the obligation to furnish a cantío indicatum solvi or security for the costs of judicial proceedings provided for by Swedish legislation on the part of foreign plaintiffs, where they intend to bring proceedings against Swedish citizens or companies and they do not have the benefit of rules laid down by international agreements relating to judicial matters, is compatible with the provision of the Treaty mentioned in the order for reference.
            
         II — Facts
      
               2.
            
            
               In May 1993 the English company MSL Dynamics Ltd (‘MSL’) brought proceedings against the Swedish company limited by shares Data Delecta AB (‘Data Delecta’) and Ronny Forsberg. The plaintiff claimed that the Solna District Court should order the defendants jointly and severally to pay the sum of US $173335 owing to it by reason of the non-payment on the due dates of a claim asserted against Data Delecta. The claim in question derived from the sale of computer equipment by the plaintiff to Data Delecta between April 1990 and September 1991. Ronny Forsberg was summoned because he stood surety for the debts of the defendant company.
            
         
               3.
            
            
               The defendants contested the claim brought in the judicial proceedings for payment and claimed at the same time that the plaintiff should be ordered to pay the sum of SKR 500000 by way of security to guarantee payment of any costs for judicial proceedings which MSL might be ordered to pay. The District Court dismissed the defendants' application for provision of security for costs on the ground that the relevant Swedish legislative provision was contrary to the Lugano Convention, which derogated in this case from the generally applicable Swedish provision.
            
         
               4.
            
            
               The defendants appealed against the decision of the Solna District Court to the Svea Hövratt (Court of Appeal), which upheld the first-instance judgment on 8 February 1994. The defendants then appealed against the Svea Hövratt's judgment to the Supreme Court. The latter considered that it should refer the following question to the Court of Justice for a preliminary ruling:
               ‘Is it contrary to the EC Treaty — primarily Article 6 (formerly Article 7) — to require a plaintiff who is a United Kingdom legal person to lodge such a security when no such security can be demanded from Swedish legal persons?’
            
         III — The relevant national provisions
      
               5.
            
            
               It appears from the order for reference that, according to Article 1 of Law 307:1980, a foreign national, not resident in Sweden, or a foreign legal person intending to bring an action in a Swedish court against Swedish nationals or a Swedish legal person must, on application by the other side, furnish security for such costs of the judicial proceedings as the foreign national or foreign legal person may be ordered to pay upon delivery of final judgment. Under Article 4 of that law, the judicial action must be dismissed if security deemed sufficient by the other side or the court is not lodged. Under Article 5 of the Law, foreign legal persons are exempt from this requirement where this is laid down by international conventions binding on Sweden.
               The national court further states that foreign nationals and legal persons from various countries are exempt from the obligation to furnish the security in question as a result of the accession of the States in question to the international conventions mentioned in Article 5 of Law 307:1980. All nationals of western European countries and the great majority of legal persons established in those States are exempt in this way, with the exception of those of the United Kingdom, Greece and Ireland. As a result of Sweden's accession to the Lugano Convention of 16 September 1988, which entered into force as far as Sweden is concerned on 1 January 1993 (Law 794:1992), Swedish judgments and judicial decisions are directly enforceable in the United Kingdom, since that country has also acceded to the Convention. It should, however, be pointed out that not all the Member States of the Communities have ratified the Lugano Convention.
            
         
               6.
            
            
               The national court puts forward the hypothesis that, as a result of that agreement, there is no longer any need to apply the contested provision of Law 307:1980 in this case. However that may be, the question before the Court, and the only one which it has to consider, concerns the requirements of the Community Treaty and not those of any other contractual instrument governed by international law which may come into consideration for the purposes of resolving the case before the Swedish court.
            
         IV — Observations on the admissibility of the question
      
               7.
            
            
               The cautio indicatum solvi or security for the costs of judicial proceedings is provided for in the Swedish legal system by a rule of civil procedure. The question is to determine whether the principle of non-discrimination enshrined in Article 6 of the Treaty, as raised by the national court, is at odds with that rule of national law, which applies, as I have already mentioned, only to nationals or legal persons of foreign States and, as far as is material for the Court, of Member States of the Community other than Sweden.
            
         
               8.
            
            
               I must point out in limine that, to my mind, it is doubtful whether the question as formulated is admissible.
               The Court has held that Article 6 of the Treaty ‘requires that persons in a situation governed by Community law be placed on a completely equal footing with nationals of the Member State’ (
                     1
                  ) (my emphasis). The question has been raised because the constraint of the security for costs provided for by the Swedish legislation in the context of judicial protection allegedly operates to the disadvantage of natural and legal persons from other Member States and hence has the effect (albeit indirect) of discriminating — again to the detriment of the said persons — as regards the manner in which a freedom guaranteed by the Treaty, namely the free movement of goods, is exercised. It is alleged, in fact, that the security at issue makes it more difficult for foreign traders to recover claims arising out of dealings and transactions conducted pursuant to the free movement of goods. This has precisely the effect of discriminating against the exercise of a right conferred by the Treaty on foreign natural and legal persons on terms of perfect equality with Swedish nationals, by constituting a disincentive thereto. That the question is framed with this end in mind has been made plain by the Greek and Swedish Governments, which, along with the Irish Government, have submitted observations. The Commission takes the same view. There is no doubt that the Court has jurisdiction to consider such a question. The doubt as to admissibility emerges, however, when it is considered that the commercial transaction underlying the claim which is contested in the main proceedings goes back to the period between April 1990 and September 1991, when Sweden was not yet a member of the European Community. In view of that fact, it cannot consequently be presumed that the civil action brought by the plaintiff in order to recover its claim in the Swedish court of first instance is the upshot of, or in any event relates to, any legal act or relationship capable, at the time when it was brought into being, of coming under the provisions of Community law, and hence under the principle referred to in the order for reference. Moreover, the Court has repeatedly held that it has no jurisdiction to rule on questions referred for preliminary rulings where the interpretation of Community law does not have a bearing on the ‘effectiveness’, in addition, of course, to the subject-matter, of the main proceedings. (
                     2
                  ) In my view, ‘effectiveness’ also signifies in this context that the Community provisions must be applicable ratione temporis.
               
            
         
               9.
            
            
               Here we are faced with a case in which Community law is the ius superveniens before the national court which has referred the question for a preliminary ruling. (
                     3
                  ) If this aspect of the case is considered solely in the light and with the aid of the rulings of the Court, we encounter the criterion recently formulated according to which Community law can operate retroactively if it is coupled with the fundamental principle of the application of the more favourable provision of criminal law. (
                     4
                  ) However, that criterion is obviously not in point in this case. The ius superveniens in this case consists only of the general principle of non-discrimination. Having said this, I would recall in what terms the national court, faced with the security for costs provided for by Swedish law, has asked the Court to rule on the interpretation (and possibly the failure to observe) Article 6 of the Treaty. It maintains that the principle of non-discrimination is not intended only to bear on the procedural law, in respect of which new provisions are generally applicable also to facts which occurred or proceedings which were initiated before they entered into force. It is also claimed to have a substantive content, in so far as the Court has regard to the potential discriminatory effects of the domestic provision on the exercise of the freedoms and rights guaranteed by the Treaty. Yet the Swedish court has not explained in any way on what basis the application of Community law is justified in the main proceedings. We do not know how and why the case before the national court comes within the sphere in which the principle of non-discrimination operates inasmuch as it is laid down by the Treaty, and not by the Lugano Convention or other possible sources of protection. (
                     5
                  )
               Consequendy, the doubt as to admissibility is due, in my view, precisely to the lack of explanation as to the relevance of the question. In case the Court should consider that it can dispel this doubt or, in any event, leave it to the national court to assess the applicability of Community law to the dispute before it, I shall now consider the substance of the question.
            
         V — The substance
      Legal basis of the principle of nondiscrimination
      
               10.
            
            
               The Court has considered the effect of the principle of non-discrimination on procedural rules laid down by national law in two cases similar to this. (
                     6
                  ) The way in which the issue was stated and the Court's solution differ in the two cases. In the case of Hubbard, what was at issue was the provision for security for costs in the German legal system and it was decided that the provision in question conflicted with the principle of equal treatment enshrined in Articles 59 and 60 of the Treaty. Although the Court was also asked by the national court to rule on Article 7 (now Article 6) of the Treaty, it based its decision only on the specific provisions relating to the free movement of services which were relevant to the case, thereby accepting the suggestion made to that effect by Advocate General Darmon, who, for his part, had relied on the principle specialia generalibus derogarti. Indeed, according to Article 6 of the Treaty, the principle of non-discrimination operates ‘without prejudice to any special provisions’ contained in the Treaty. In Hubbard, security for procedural costs was imposed, as I mentioned, by German law only on foreign nationals and proved to effect freedom to provide services in so far as it impeded the exercise of professional activities in Germany by nationals of other Member States.
            
         
               11.
            
            
               In Mund & Fester, the question arose of the compatibility with Community law of a provision of the German Civil Code enacted to enable assets to be seized as a precautionary measure where there was a risk that ‘enforcement of the judgment would otherwise be made impossible or substantially more difficult’. The provision in question also provided, by establishing an irrebuttable presumption, that ‘seizure [is authorized] simply on the ground that enforcement is to take place abroad’. It must be borne in mind that the national court's question in that case turned on the Brussels Convention. However, the Court reformulated the question in the way proposed by Advocate General Tesauro so as to consider whether the national provision was compatible also with the general rule of non-discrimination then contained in Article 7 of the Treaty.
               Having approached the question in that way, the Court answered it by holding that Article 7 was relevant, albeit via the combined provisions of Article 220 of the Treaty and the relevant provisions of the Brussels Convention. The German procedural rule was held to be incompatible with Community law having regard to the aforementioned parameters.
            
         
               12.
            
            
               In view of the precedents in the case-law, how should the reply to be given to the Swedish court be framed? First and foremost, we should consider whether the general provision of Article 6 suffices to resolve this case or whether the principle of nondiscrimination has been specified, for present purposes, by some other provision of the Treaty by reference to the specific rules relating to the particular subject-matter.
               Much has already been said about the scope of application of Article 6. It has moreover been clarified that that provision serves the purpose of closing off the system and enables any curiae in the Community legal order to be bridged. From that point of view, its nature is, I would venture to say, ancillary in relation to the provisions which are specifically designed to regulate defined situations. In addition, it has been seen that the application of the rule laid down by Article 6 may be subject to a limit where special rules govern the case under consideration. In other words, the provision in question covers the system in a general way, but specific rules may derogate from it (provided that they are reasonable and justified).
            
         
               13.
            
            
               As far as the instant case is concerned, it should be examined, in my estimation, whether the provision of Swedish law directly or only indirectly harms a legal position protected by the Community legal order. This is certain nothing new. The Court has already taken precisely this second approach, albeit in nuce, to the interpretation of Article 6 in the Phil Collins case. (
                     7
                  )
            
         
               14.
            
            
               In Phil Collins, the Court preferred to link the question of protecting copyrights with the principle of non-discrimination laid down by Article 7 ‘without there even being any need to connect them with the specific provisions of Articles 30, 36, 59 and 66’.Consequently, in a case in which various provisions of the Treaty were invoked, in particular on account of the very nature of the rights in question, the Court held that any discrimination exercised to the detriment of those rights conflicted with the freedoms enshrined in the Community legal order and were appropriately protected by Article 7 (now Article 6) of the Treaty.
               As has been rightly observed, (
                     8
                  ) the provisions criticized in that case did not have a direct effect on the right to the free movement of goods. They were not predestined to make the exercise of that freedom more difficult. However, the German law had an adverse effect, albeit only an indirect one, on the legal position of holders of copyrights, since they limited the judicial protection available to those persons. For that reason, the principle of non-discrimination was ascribed to the all-embracing provision of Article 7.
            
         
               15.
            
            
               In my view, the response to be adopted in the instant case can be found precisely in that approach taken by the Court. The Swedish provision at issue in this case is purely of a procedural nature and, if its prescriptive content is considered, it can be seen that it is not intended as such to regulate activity of a commercial kind or to impose barriers to the free movement of goods. Yet it has an indirect influence on the exercise of that freedom in the sense that it makes it more difficult to resolve disputes arising out of transactions and dealings connected with the free movement of goods.
            
         The autonomous nature of Article 6 of the Treaty
      
               16.
            
            
               What I have said above shows that the national court has correctly identified Article 6 as the reference provision for determining whether the Swedish law is consistent with Community law. Consequently, the only problem is whether that parameter is not only necessary but also sufficient in order to exhaust the inquiry into the question before the Court. I say this because in other cases similar to this one the Court has held that the principle of non-discrimination was capable of operating only jointly with provisions of agreements adopted by the Member States in the area of judicial cooperation. I have in mind specifically the solution adopted in Mund & Fester. (
                     9
                  ) It appears from the judgment in that case that the similar German procedural rule was incompatible with the combined provisions of Articles 7 and 220 of the Treaty, read together, however, with the Brussels Convention. It must be borne in mind, however, that the Court's answer in that case was influenced by the way in which the national court's question was actually worded, namely by reference only to the Brussels Convention. For my part, I consider that the reference made in that case to that Convention was attributable solely to the particular features of the case under consideration and to the need to tailor the interpretation of Article 7 to suit the terms in which the national court had framed the question referred for a preliminary ruling. The combined provision on which the Court based its reasoning — by supplementing Article 7 of the Treaty by the provisions of the Brussels Convention — must therefore, in my view, be regarded as having been contemplated ad abundantiam.
               
            
         
               17.
            
            
               The fact that the principle of nondiscrimination set forth in Article 6 is completely autonomous and does not need to be supported by conventions concluded by the Member States in the field of judicial cooperation in order to have effectiveness in its own right vis-à-vis national procedural rules is shown sufficiently clearly, moreover, by other cases of the Court. Apart from the judgment in Phil Collins, (
                     10
                  ) it is sufficient to recall the well-known ruling in Cowan, (
                     11
                  ) in which the Court held precisely that ‘the right to equal treatment laid down in Community law may not be made dependent on the existence of a reciprocal agreement between the relevant Member State and the country of which the person concerned is a national’. If that is so, in the absence of appropriate international instruments designed to regulate the matter, there is nothing to stop it from being held that the Swedish provision at issue cannot continue to be applied to situations falling within the scope of application of Community law. The observations put forward in support of the opposite view by the Swedish Government must be disregarded. The very principle of non-discrimination laid down by the Treaty places the Member States, where Community law applies, under a genuine obligation reciprocally to recognize the judgments in question. Again within the scope of application of Community law, Article 220 of the Treaty and the Brussels Convention do not serve to implement the principle of nondiscrimination, but are designed to simplify and standardize the formalities required in order to attain the outcome of mutual recognition of judgments.
            
         
               18.
            
            
               Lastly, a remark is called for on the direct applicability of Article 6. As the Court has already held, (
                     12
                  ) that provision has direct effects, obviously also between private persons, since it is moreover a rule of primary Community law.
            
         VI — Conclusion
      
               19.
            
            
               In view of the foregoing considerations, I propose that, should the Court decide that the request for a preliminary ruling is admissible, it should answer the national court's question in the following terms:
               Article 6 of the EC Treaty precludes requiring security to be lodged for judicial costs, as provided for by Article 1 of Law 307:1980 of the Kingdom of Sweden, by Community nationals in relation to disputes connected with the exercise of rights deriving from the Community legal order.
            
         (
            *1
         )	Original language: Italian.
      (
            1
         )	Case 186/87 Cowan ν Trésor Public [1989] ECR 195.
      (
            2
         )	Sec, ex mullis, the order in Case C-378/93 La Pyramide [1994] ECR I-3999.
      (
            3
         )	A similar precedent can be found in Case C-387/92 Banco Exterior de España [1994] ECR I-877. In that case, the Court held that a number of questions referred for a preliminary ruling by the Spanish court were irrelevant inasmuch as they related to situations which arose prior to Spain's accession to the European Communities.
      (
            4
         )	Joined Cases C-358/93 and C-416/93 Bordessa [1995] ECR I-361 and Joined Cases C-163/94, C-165/94 and C-250/94 Sanz de Lera [1995] ECR I-4821.
      (
            5
         )	The same remark may be made with regard to the possible application in the case at issue of the Agreement on the European Economic Area, of which Sweden forms a part. The Agreement on the European Economic Area, published in OJ 1994 L 1, p. 3, did not enter into force until 1 January 1994, that is to say, at a time after the facts adduced in the main proceedings. Article 4 of the Agreement provides that ‘Within the scope of this Agreement, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited’.
      (
            6
         )	Case C-20/92 Hubbard [1993] ECR I-3777 and Case C-398/92 Mund & Fester [1994] ECR I-467.
      (
            7
         )	Joined Cases C-92/92 and C-362/92 Phil Collins [1993] ECR I-5145.
      (
            8
         )	Rossi, ‘Principio di non discriminazione e diritti connessi al diritto di autore’, in Foro Italiano, 1994, Part IV, col. 316.
      (
            9
         )	Cited in footnote 5.
      (
            10
         )	Cited in footnote 6.
      (
            11
         )	Cited in footnote 1; see also the earlier judgment in Case 1/72 Frilli ν Belgian State [1972] ECR 457.
      (
            12
         )	Judgment in Phil Collins, cited above.