Source: https://www.howtocrackanut.com/blog/tag/art+267+TFEU
Timestamp: 2019-10-14 07:13:04
Document Index: 776043644

Matched Legal Cases: ['Art 50', 'UKSC ', 'UKSC ', 'UKSC ', 'Art 50', 'Art 50', 'Art 263', 'UKSC ', 'UKSC ', 'Art 50', 'UKSC ', 'Art 267', 'Art 50', 'UKSC ', 'UKSC ', 'Art 50', 'Art 50', 'Art 50', 'Art 50', 'UKSC ', 'UKSC ', 'Art 50', 'Art 50', 'Art 50', 'Art 50', 'UKSC ', 'UKSC ', 'Art 50', 'UKSC ', 'art 267', 'CJEU ', 'Art 267', 'CJEU ', 'Art 267', 'Art 267', 'CJEU ', 'CJEU ', 'Art 267', 'Art 267', 'Art 267', 'Art 267', 'Art 267', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'art 267', 'CJEU ', 'CJEU ', 'Art 288', 'CJEU ', 'CJEU ', 'CJEU ', 'Art 288', 'art 267']

The UK Supreme Court (UKSC) has today handed down its Judgment in the well-known litigation concerning the UK's constitutional requirements for triggering Art 50 TEU and starting the process of leaving the EU -- see R (on the application of Miller and another) v Secretary of State for Exiting the European Union [2017] UKSC 5 (the Miller Judgment).
The UKSC has ruled that the UK Government cannot trigger Article 50 TEU without previous UK Parliament legislative intervention. In doing so, the UKSC has sought to reassert the basic constitutional principle of Parliamentary sovereignty. However, it has done so in a way that both infringes its duties under EU law and does a disservice to the UK Parliament.
Breach of UKSC's duties under EU law
One of the difficult legal issues on which the Brexit litigation hinged concerned the interpretation of Art 50 TEU and, in particular, the revocability of a notice given under Art 50(2) TEU. The interpretation of this point of law falls within the exclusive competence of the European Court of Justice (ECJ) under Art 263 TFEU. Interestingly, the UKSC stressed this monopoly of interpretation as a key element of EU law at para [64] of the Miller Judgment: 'so long as the United Kingdom is party to the EU Treaties, UK courts are obliged (i) to interpret EU Treaties, Regulations and Directives in accordance with decisions of the Court of Justice, (ii) to refer unclear points of EU law to the Court of Justice, and (iii) to interpret all domestic legislation, if at all possible, so as to comply with EU law' (emphasis added).
However, the UKSC has violated the ECJ's monopoly of interpretation of the EU Treaties by accepting the parties' commonly agreed position on the irrevocability of an Art 50(2) TEU notice at [26] of the Miller Judgment:
In these proceedings, it is common ground that notice under article 50(2) (which we shall call “Notice”) ... once given, it cannot be withdrawn. Especially as it is the Secretary of State’s case that, even if this common ground is mistaken, it would make no difference to the outcome of these proceedings, we are content to proceed on the basis that that is correct, without expressing any view of our own on either point. It follows from this that once the United Kingdom gives Notice, it will inevitably cease at a later date to be a member of the European Union and a party to the EU Treaties (emphases added).
In doing so, the UKSC has infringed its obligation under Art 267(3) TFEU to engage in a preliminary reference to the ECJ concerning the interpretation of Art 50 TEU (for legal background see here and here). This cannot be saved by an argument that, under domestic procedural rules (or conventions), the UKSC had the possibility of taking this approach--and effectively dodging one of the most complex and unpredictable legal issues on which the litigation rested.
There are several reasons for this, but the primary one is that, as matter of EU law, a preliminary reference by the highest court of an EU Member State is unavoidable where the interpretation of EU law is necessary to enable it to give judgement--or, in other words, where the judgment relies on a given interpretation of EU law.
In my view, it is beyond doubt that the UKSC Miller Judgment is based on the interpretation that an Art 50(2) TEU notice is irrevocable, and that this represents the legally binding view of the majority judgment, regardless of the attempt to save the UKSC's view on this point in para [26] -- or, in other words, it is not (logically, legally) true that the UKSC's Miller Judgment operates 'without expressing any view of our own on either point' (ie regarding the revocability or not of the Art 50(2) TEU notice).
There are explicit indications of this interpretation in paras [59], [81], [92] and [104], where the Judgment indicates that
... analyse the effect of the 1972 Act and the arguments as to whether, in the absence of prior authority from Parliament in the form of a statute, the giving of Notice by ministers would be ineffective under the United Kingdom’s constitutional requirements, as it would otherwise impermissibly result in a change in domestic law [59]
... A complete withdrawal represents a change which is different not just in degree but in kind from the abrogation of particular rights, duties or rules derived from EU law. It will constitute as significant a constitutional change as that which occurred when EU law was first incorporated in domestic law by the 1972 Act. And, if Notice is given, this change will occur irrespective of whether Parliament repeals the 1972 Act [81]
... There is a substantial difference between (i) ministers having a freely exercisable power to do something whose exercise may have to be subsequently explained to Parliament and (ii) ministers having no power to do that thing unless it is first accorded to them by Parliament. The major practical difference between the two categories, in a case such as this where the exercise of the power is irrevocable, is that the exercise of power in the first category pre-empts any Parliamentary action. When the power relates to an action of such importance to the UK constitution as withdrawing from the Treaties, it would clearly be appropriate for the power to be in the second category [92]
Although its invocation [of Art 50 TEU] will have the inevitable consequence which Lord Pannick described ... [104, all emphases added].
In view of the relevance of the points of irrevocability of the Art 50(2) TEU notice, it is clear to me that the UKSC had an obligation to seek the interpretation of this provision by the ECJ and that, in not doing so, it has breached EU law. Moreover, beyond what some may consider a highly technical or academic point, by not seeking this clarification the UKSC has also done a disservice to the UK Parliament.
Disservice to the UK Parliament
The UK Parliament will imminently enter into debates and legislative action concerning the trigger of the process to withdraw from the EU by serving notice under Art 50(2) TEU. Unless political events unfold in a surprising way, and based on a previous Parliamentary resolution, the UK Parliament should be considered to be politically committed to support the UK Government's stated commitment to trigger Art 50 TEU by the end of March 2017.
However, these debates and eventual Parliamentary decisions will develop under the shadow of uncertainty that remains around the revocability or not of the Article 50(2) TEU. In that regard, the debates and positions expressed by MPs will not be as meaningful as they could if it was clear that the triggering Art 50 TEU would actually put (or not) the UK in the unavoidable course of leaving the EU -- with or without an exit deal, and regardless of the assessment of the fallback position. This can result in the need to make wild assumptions and to necessarily decide on the basis of worse case scenario analysis that may not reflect an alternative (possible) reality of reduced definiteness of the triggering of Art 50 TEU.
The UKSC could have avoided this situation by referring the question for interpretation to the ECJ. On the contrary, by premising its Judgment on the irrevocability of the notice, the UKSC has raised the stakes and the risks of Parliamentary debate even higher and created a situation where decisions are bound to be made in a rushed fashion and in a scenario of all or nothing (perceived) implications of the giving of notice under Art 50(2) TEU. It is hard to see how this can contribute to the practical enablement of Parliamentary sovereignty.
Tags brexit, surpreme court, parliamentary sovereignty, parliamentary approval, Miller, [2017] UKSC 5, art 267 TFEU, breach of EU law
In its Judgment in Doc Generici, C-452/14, EU:C:2015:644, the Court of Justice of the EU (CJEU) was requested to interpret certain provisions of the EU framework for the evaluation of medicinal products by the Italian Consiglio di Stato. Beyond the technical details of the case concerning medicinal product evaluation, I find the Doc Generici case interesting because it presents a very strange question concerning the obligation to refer issues for preliminary ruling to CJEU under Art 267 TFEU.
Presented with contradictory interpretations of the relevant EU rules on medicinal product evaluation, the Consiglio di Stato decided to stay proceedings and to refer some questions to the CJEU for a preliminary ruling (C-452/14, para 27). This would seem to accord to the ordinary working of Art 267 TFEU, according to which second paragraph "any court or tribunal of a Member State [confronted with an issue regarding the validity and interpretation of acts of the institutions, bodies, offices or agencies of the Union] may, if it considers that a decision on the question is necessary to enable it to give judgment, request the [CJEU] to give a ruling thereon."
This clause in Art 267.II TFEU is generally understood as an enabling mechanism and, as far as I am aware, there is no controversy about the possibility for domestic courts to avail themselves of the preliminary ruling mechanism--which is, in any case, subjected to a check by the CJEU, which can reject the reference on several grounds (including the fact that such interpretation is already available to the referring court by means of previous case law of the CJEU). Thus, nothing out of the ordinary seemed to take place in Doc Generici and the referral by Consiglio di Stato could hardly be interpreted as a procedural anomaly.
However, the Consiglio di Stato does not seem worried about whether it is allowed to refer the questions for preliminary ruling, but about whether it is obliged to do so. In that regard, in Doc Generici, the Consiglio di Stato asked the CJEU whether '[i]n the circumstances in the present proceedings, may or must, as held by this court [ie the Consiglio di Stato itself], the question be referred to the Court of Justice?'.
In my view, given the Consiglio di Stato's willingness to refer the questions on the substantive EU law provisions for interpretation, the further question whether it could or had to do so seems quite superficial and legally irrelevant. The controversy about the obligation to refer questions generally arises when the would-be referring court does not intend to ask the CJEU to provide a preliminary ruling, in which case the extent to which the clause in Art 267.III TFEU forces it to do so can be controversial.
Under Art 267.III TFEU, "[w]here any such question is raised in a case pending before a court or tribunal of a Member State against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court" (emphasis added). This has given raise to a significant body of case law, including the relatively recent developments as to the liability in which the Member State incurs when its highest courts fail to comply with Art 267.III TFEU. In any case, though, as mentioned, this is only controversial when there is no referral.
In Doc Generici, the question of the Consiglio di Stato on whether it was obliged to refer the questions for interpretation under Art 267.III TFEU, or whether it was simply doing so out of a discretionary measure under Art 267.II TFEU, seems to respond to some argument of the parties in the case at hand (which domestic law implications exceed my imagination), but it is irrelevant from the perspective of EU law.
In fact, the answer given by the CJEU in paras 42-45 could not be more inane, as it simply reiterates the existing doctrine that
In accordance with the third paragraph of Article 267 TFEU, a court or tribunal against whose decisions there is no judicial remedy under national law is required, where a question of EU law is raised before it, to comply with its obligation to bring the matter before the Court of Justice, unless it has established that the question raised is irrelevant or that the provision of EU law in question has already been interpreted by the Court or that the correct application of EU law is so obvious as to leave no scope for any reasonable doubt (see, inter alia, judgments in Cilfit and Others, 283/81, EU:C:1982:335, paragraph 21, and Boxus and Others, C-128/09 to C-131/09, C-134/09 and C-135/09, EU:C:2011:667, paragraph 31) (C-452/14, para 43).
After that reminder, the CJEU simply proceeds to stress that the Consiglio di Stato was right in considering itself obliged to refer the question because
it is clear from the explanations provided by the Consiglio di Stato that it considers that it is obliged to make a reference to the Court of Justice for a preliminary ruling. Indeed, it is of the view that the dispute in the main proceedings raises a question of interpretation of EU law which is relevant and novel and the answer to which is not so clear as to leave no scope for any reasonable doubt as to the solution (C-452/14, para 44, emphasis added).
However, this is quite empty or circular reasoning, not least because the circumstances of the case the CJEU refers to are 'internal' to the decision of the Consiglio di Stato--ie the referring court is the one that assesses whether the question is useful and is not covered by the doctrine of acte claire. Under EU law, the CJEU would only second-guess such a judgment of a would-be referring court when there is no referral, and only when the non-referring domestic court incurred in a "manifest infringement" of the applicable EU law.
Thus, in a scenario where the domestic highest court decides to refer, the CJEU is hardly ever going to answer in a way that determines that the referral was not mandatory under 263.III TFEU, even if it eventually decides not to answer the specific questions referred for interpretation. Not least, because even if it was not mandatory, it was in any case possible, so the CJEU need not worry about how the question got to its docket--it need only be concerned when a question that had to be referred is not.
Overall, then, the issue of the obligation or mere possibility for a referral to the CJEU by the Consiglio di Stato in Doc Generici seems the result of an unnecessary domestic imbroglio concerning the effects of such a referral and, in my view, simply serves to strengthen the point that, when in (reasonable) doubt, highest domestic courts must refer questions for preliminary ruling to the CJEU. I am still curious as to the background reasons why the Consiglio di Stato felt the need to justify that it had to refer the issues to the CJEU. If any Italian reader would tell us in the comments, I would remain much obliged.
Tags art 267 TFEU, imbroglio, preliminary reference
In Federconsorzi and Liquidazione giudiziale dei beni ceduti ai creditori della Federconsorzi (Federconsorzi), C-104/14, EU:C:2015:125, the Court of Justice of the EU (CJEU) has addressed a rather obscure issue of succession of exemptions to comply with EU Directives that I find interesting. In my view, the underlying issue is one of good faith and estoppel related to the case law on anticipatory effect of Directives [such as Inter-Environnement Wallonie and Mangold; see M Klamert, The Principle of Loyalty in EU Law, Oxford Studies in European Law (Oxford, OUP, 2014) 76-77], although the CJEU has reached a different solution in Federconsorzi.
The preliminary reference sent by the Corte suprema di cassazione (Italy) concerned certain difficulties in the transition from the implementation of Directive 2000/35 to that of Directive 2011/7, both of them on combating late payment in commercial transactions, regarding Italian legislation modifying the interest on a debt predating those directives to the detriment of a State creditor.
Due to Italian post-WWII mechanisms to ensure supply of certain agricultural products that were in place until 1967, a large number of agricultural cooperatives held a significant volume of credit against the State (about €512 mn) due to the management of that centralised supply of cereals and other agri-food products. That debt was assigned to Federconsorzi (now in liquidation) in 1999 as part of a broader reform of the legislation applicable to agricultural cooperatives. The applicable 1999 legislation determined that the credits held by Federconsorzi against the State "up to 31 December 1997, shall be satisfied by the allocation [...] of government securities by the Minister for the Treasury, the Budget and Economic Planning".
This rule was complemented in 2003 by a provision whereby the “interest referred [applicable to those credits] is calculated up to 31 December 1995 on the basis of the official discount rate, plus 4.4 points, with annual capitalisation, and for the years 1996 and 1997, only at the statutory interest rate.” In 2012 there was a further reform of these rules, whereby all outstanding credits against Federconsorzi (not only those up to 31.12.97) "shall bear interest calculated up to 31 December 1995 on the basis of the official discount rate, plus 4.4 points, with annual capitalisation, and for the subsequent period only at the statutory interest rate."
In simple terms, Federconsorzi's claim is that both the 2003 and the 2012 reforms impose a detriment on the State creditors by setting too low interest rates on debts accrued after 1995, which would run contrary to (both the 2000 and 2011) EU rules on combating late payment in commercial transactions. The difficulty from a technical perspective is that Italy opted to limit the temporal effects of both Dir 2000/35 and Dir 2011/7 in their respective transpositions, so that the rules derived from Dir 2000/35 did not apply to contracts concluded before 8 August 2002, and those transposing Dir 2011/7 only apply to transactions concluded on or after 1 January 2013.
The most interesting point is thus to determine whether the legally-mandated changes (ie reduction or cap) of the interest rates applicable to credits derived from pre-existing contracts with Federsconsorzi, but which were enacted in the period of effectiveness of the rules transposing Dir 2000/35 (both of them happened between 8 Aug 2002 and 1 Jan 2013) and one of them during the period for transposition of Dir 2011/7, are contrary to EU law--implicitly, at least in the second case, on the basis of the latter's anticipatory effect.
The CJEU has found that the relevant provision of EU law, including the third paragraph of Art 288 TFEU, "must be interpreted as not precluding a Member State which has made use of the option under Article 6(3)(b) of Directive 2000/35 [ie has limited its effects to after 8 August 2002] from adopting, during the period prescribed for transposition of Directive 2011/7, legislative provisions, such as those at issue in the main proceedings, which are capable of modifying, to the detriment of a creditor of the State, the interest on a debt arising out of the performance of a contract concluded before 8 August 2002."
The reasoning followed by the CJEU to reach this conclusion deserves some closer look. According to the CJEU,
31 ... the option for a Member State, when transposing Directive 2000/35, of excluding contracts concluded before 8 August 2002, as the Italian Republic did [...] is expressly provided for in Article 6(3)(b) of that directive and, when exercised, that option has the effect of rendering all the provisions of that directive inapplicable ratione temporis to those contracts.
32 Furthermore, modifications to the disadvantage of a creditor of the State, made by a legislative act adopted during the period prescribed for transposition of Directive 2011/7, of the interest on a debt arising from the performance of a contract concluded before 16 March 2013 may not in any event be regarded as being capable of seriously compromising the attainment of the objective pursued by that directive (see judgment in Inter-Environnement Wallonie, C‑129/96, EU:C:1997:628, paragraph 45), as Article 12(4) of that directive gives Member States the option of excluding contracts concluded before that date, and the Member State concerned could therefore consider exercising that option.
33 Consequently, it does not follow from the obligation to transpose Directive 2011/7, nor can it be inferred from Article 12(3) of that directive, allowing Member States to retain or adopt provisions more favourable to the creditor than the provisions necessary to comply with that directive, or from Article 7 of that directive, on abusive agreements, terms or practices, that a Member State which has made use of the option under Article 6(3)(b) of Directive 2000/35 may not modify, to the detriment of a creditor of the State, during the period prescribed for transposition of Directive 2011/7, the interest on a debt arising out of the performance of a contract concluded before 8 August 2002, without prejudice, however, to the possibility of there being remedies under domestic law against such a modification (C-104/14, paras 31-33, emphasis added).
In my view, the reasoning of the CJEU at para 32 of Federconsorzi can be challenged regarding amendments of pre-existing credits that take place during the period of (unexcludable) validity of the Directives. An alternative reading would be that Member States are allowed to keep pre-existing credits as they were prior to 8 August 2002, but they cannot reduce commercial creditor protection because that goes against the very explicit goals of the Directives on combating late payment in commercial transactions.
That could easily be squared with the Inter-Environnement test of compromising the objective pursued by the Directives, given that it originally was to "prohibit abuse of freedom of contract to the disadvantage of the creditor. Where an agreement mainly serves the purpose of procuring the debtor additional liquidity at the expense of the creditor ... these may be considered to be factors constituting such an abuse" (rec 19 Dir 2000/35), and did not change later (if not to stress the objective to avoid abuses) with its 2011 rewording: "[t]his Directive should prohibit abuse of freedom of contract to the disadvantage of the creditor. As a result, where a term in a contract or a practice relating to ... the rate of interest for late payment ... is not justified on the grounds of the terms granted to the debtor, or it mainly serves the purpose of procuring the debtor additional liquidity at the expense of the creditor, it may be regarded as constituting such an abuse" (rec 28 Dir 2011/7, emphasis added).
Consequently, I think that once again the CJEU has taken an easy way out in order to provide legal certainty to Member States at the expense of substantive compliance with EU law.
However, the Federconsorzi Judgment at least clarifies two points regarding Directive's anticipatory effect: 1) that it is alive and kicking, in terms of it being a general principle of EU law that, during the period of transposition of a Directive, Member States must refrain from any legislative measure that may "be regarded as being capable of seriously compromising the attainment of the objective pursued by that directive"; and 2) that the easiest option for Member States to avoid that anticipatory effect is to include cut-off deadlines in the Directives themselves.
Tags Art 288 TFEU, Directive 2000/35, Directive 2011/7, EU Directives, Federconsorzi, art 267 TFEU, combating late payment in commercial transactions, compliance, infringement, transposition