Air Transport Association of America and Others v Secretary of State for Energy and Climate Change.
Date: 2011-12-21
47. It is to be recalled at the outset that, in accordance with settled case-law, national courts do not have the power to declare acts of the European Union institutions invalid. The main purpose of the jurisdiction conferred on the Court by Article 267 TFEU is to ensure that European Union law is applied uniformly by national courts. That requirement of uniformity is particularly vital where the validity of an act of European Union law is in question. Differences between courts of the Member States as to the validity of acts of European Union law would be liable to jeopardise the very unity of the European Union legal order and to undermine the fundamental requirement of legal certainty (Case C‑344/04 IATA and ELFAA  [2006] ECR I‑403, paragraph 27 and the case-law cited).
48. The Court of Justice alone therefore has jurisdiction to determine that an act of the European Union, such as Directive 2008/101, is invalid (see Case 314/85 Foto‑Frost  [1987] ECR 4199, paragraph 17; Joined Cases C‑143/88 and C‑92/89 Zuckerfabrik Süderdithmarschen and Zuckerfabrik Soest  [1991] ECR I‑415, paragraph 17; Case C‑6/99 Greenpeace France and Others  [2000] ECR I‑1651, paragraph 54; IATA and ELFAA , paragraph 27; and Joined Cases C‑188/10 and C‑189/10 Melki and Abdeli  [2010] ECR I‑5667, paragraph 54).
1. The international treaties relied upon
49. First of all, in conformity with the principles of international law, European Union institutions which have power to negotiate and conclude an international agreement are free to agree with the third States concerned what effect the provisions of the agreement are to have in the internal legal order of the contracting parties. Only if that question has not been settled by the agreement does it fall to be decided by the courts having jurisdiction in the matter, and in particular by the Court of Justice, in the same manner as any question of interpretation relating to the application of the agreement in the European Union (see Case 104/81 Kupferberg  [1982] ECR 3641, paragraph 17, and Case C‑149/96 Portugal  v Council  [1999] ECR I‑8395, paragraph 34).
50. It should also be pointed out that, by virtue of Article 216(2) TFEU, where international agreements are concluded by the European Union they are binding upon its institutions and, consequently, they prevail over acts of the European Union (see, to this effect, Case C‑61/94 Commission  v Germany  [1996] ECR I‑3989, paragraph 52; Case C‑311/04 Algemene Scheeps Agentuur Dordrecht  [2006] ECR I‑609, paragraph 25; Case C‑308/06 Intertanko and Others  [2008] ECR I‑4057, paragraph 42; and Joined Cases C‑402/05 P and C‑415/05 P Kadi and Al Barakaat International Foundation  v Council and Commission  [2008] ECR I‑6351, paragraph 307).
51. It follows that the validity of an act of the European Union may be affected by the fact that it is incompatible with such rules of international law. Where such invalidity is pleaded before a national court, the Court of Justice ascertains, as is requested of it by the referring court’s first question, whether certain conditions are satisfied in the case before it, in order to determine whether, pursuant to Article 267 TFEU, the validity of the act of European Union law concerned may be assessed in the light of the rules of international law relied upon (see, to this effect, Intertanko and Others , paragraph 43).
52. First, the European Union must be bound by those rules (see Joined Cases 21/72 to 24/72 International Fruit Company and Others  [1972] ECR 1219, paragraph 7, and Intertanko and Others , paragraph 44).
53. Second, the Court can examine the validity of an act of European Union law in the light of an international treaty only where the nature and the broad logic of the latter do not preclude this (see Joined Cases C‑120/06 P and C‑121/06 P FIAMM and Others  v Council and Commission  [2008] ECR I‑6513, paragraph 110).
54. Finally, where the nature and the broad logic of the treaty in question permit the validity of the act of European Union law to be reviewed in the light of the provisions of that treaty, it is also necessary that the provisions of that treaty which are relied upon for the purpose of examining the validity of the act of European Union law appear, as regards their content, to be unconditional and sufficiently precise (see IATA and ELFAA , paragraph 39, and Intertanko and Others , paragraph 45).
55. Such a condition if fulfilled where the provision relied upon contains a clear and precise obligation which is not subject, in its implementation or effects, to the adoption of any subsequent measure (see Case 12/86 Demirel  [1987] ECR 3719, paragraph 14; Case C‑213/03 Pêcheurs de l’étang de Berre  [2004] ECR I‑7357, paragraph 39; and Case C‑240/09 Lesoochranárske zoskupenie  [2011] ECR I‑0000, paragraph 44 and the case-law cited).
61. Although the first paragraph of Article 351 TFEU implies a duty on the part of the institutions of the European Union not to impede the performance of the obligations of Member States which stem from an agreement prior to 1 January 1958, such as the Chicago Convention, it is, however, to be noted that that duty of the institutions is designed to permit the Member States concerned to perform their obligations under a prior agreement and does not bind the European Union as regards the third States party to that agreement (see, to this effect, Case 812/79 Burgoa  [1980] ECR 2787, paragraphs 8 and 9).
62. Consequently, in the main proceedings, it is only if and in so far as, pursuant to the EU and FEU Treaties, the European Union has assumed the powers previously exercised by its Member States in the field, as set out in paragraphs 57 to 59 of the present judgment, to which that international convention applies that the convention’s provisions would have the effect of binding the European Union (see, to this effect, International Fruit Company and Others , paragraph 18; Case C‑379/92 Peralta  [1994] ECR I‑3453, paragraph 16; and Case C‑301/08 Bogiatzi  [2009] ECR I‑10185, paragraph 25).
65. Certain matters falling within the Chicago Convention have been covered by legislation adopted at European Union level, in particular on the basis of Article 80(2) EC. As regards air transport, as the Court has already had occasion to point out in Case C‑382/08 Neukirchinger  [2011] ECR I‑0000, paragraph 23, that is true, for example, of Regulation (EC) No 1592/2002 of the European Parliament and of the Council of 15 July 2002 on common rules in the field of civil aviation and establishing a European Aviation Safety Agency (OJ 2002 L 240, p. 1) and of Council Regulation (EEC) No 3922/91 of 16 December 1991 on the harmonisation of technical requirements and administrative procedures in the field of civil aviation (OJ 1991 L 373, p. 4), as amended by Regulation (EC) No 1900/2006 of the European Parliament and of the Council of 20 December 2006 (OJ 2006 L 377, p. 176).
67. As regards the issue of taxation of the fuel load, the Council has also adopted Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity (OJ 2003 L 283, p. 51) which, in Article 14(1)(b), lays down a tax exemption for energy products supplied for use as fuel for the purpose of air navigation other than in private pleasure-flying, in order that, as is apparent from recital 23 in the preamble to that directive, the European Union complies in particular with certain international obligations, including those connected with the tax exemptions on energy products intended for civil aviation which are granted to airlines on the basis of the Chicago Convention and of international bilateral air service agreements concluded by the European Union and/or the Member States with certain third States (see Case C‑79/10 Systeme Helmholz  [2011] ECR I‑0000, paragraphs 24 and 25).
69. Nevertheless, whilst it is true that the European Union has in addition acquired certain exclusive powers to agree with third States commitments falling within the field of application of the European Union legislation on international air transport and, consequently, of the Chicago Convention (see, to this effect, Case C‑476/98 Commission  v Germany  [2002] ECR I‑9855, paragraph 124), that does not mean that it has exclusive competence in the entire field of international civil aviation as covered by that convention.
73. It is apparent from Decisions 94/69 and 2002/358 that the European Union has approved the Kyoto Protocol. Consequently, its provisions form an integral part of the legal order of the European Union as from its entry into force (see Case 181/73 Haegeman  [1974] ECR 449, paragraph 5).
79. The Open Skies Agreement has been approved on behalf of the European Union by Decisions 2007/339 and 2010/465. Consequently, its provisions form an integral part of the legal order of the European Union as from its entry into force (see Haegeman , paragraph 5).
83. With regard to the fact that the parties have agreed, under Article 19 of the Open Skies Agreement, that any dispute relating to the application or interpretation of the agreement may be subject to a procedure that can result in referral to an arbitration tribunal, it should be borne in mind that the fact that the contracting parties have established a special institutional framework for consultations and negotiations between them in relation to the implementation of that agreement is not sufficient to exclude all judicial application of the agreement (see, to this effect, Kupferberg , paragraph 20).
90. So far as concerns the fuel load for international flights, it is to be noted that the European Union has expressly laid down an exemption from taxation for energy products supplied for use as fuel for the purpose of air navigation, in order in particular to comply with existing international obligations resulting from the Chicago Convention and with those owed by it under international bilateral air service agreements which it has concluded with certain third States and which prove, in this respect, to be of the same nature as the Open Skies Agreement (see Systeme Helmholz , paragraphs 24 and 25).
91. It is also undisputed that, so far as concerns international commercial flights, that exemption existed before Directive 2003/96 was adopted (see, in this regard, Systeme Helmholz , paragraph 22) and that in laying down in Article 11(1) and (2)(c) of the Open Skies Agreement an obligation to exempt the fuel load from taxation, the parties to that agreement, both the European Union and the Member States and the United States, merely reiterated, in the case of the fuel load, an obligation derived from international treaties, in particular the Chicago Convention.
96. That sentence thus appears unconditional and sufficiently precise for the Court to be able to assess the validity of Directive 2008/101 in the light thereof (see, with regard to compliance with environmental norms derived from a convention, Pêcheurs de l’étang de Berre , paragraph 47).
101. Under Article 3(5) TEU, the European Union is to contribute to the strict observance and the development of international law. Consequently, when it adopts an act, it is bound to observe international law in its entirety, including customary international law, which is binding upon the institutions of the European Union (see, to this effect, Case C‑286/90 Poulsen and Diva Navigation  [1992] ECR I‑6019, paragraphs 9 and 10, and Case C‑162/96 Racke  [1998] ECR I‑3655, paragraphs 45 and 46).
107. The principles of customary international law mentioned in paragraph 103 of the present judgment may be relied upon by an individual for the purpose of the Court’s examination of the validity of an act of the European Union in so far as, first, those principles are capable of calling into question the competence of the European Union to adopt that act (see Joined Cases 89/85, 104/85, 114/85, 116/85, 117/85 and 125/85 to 129/85 Ahlström Osakeyhtiö and Others  v Commission  [1988] ECR 5193, paragraphs 14 to 18, and Case C‑405/92 Mondiet  [1993] ECR I‑6133, paragraphs 11 to 16) and, second, the act in question is liable to affect rights which the individual derives from European Union law or to create obligations under European Union law in his regard.
110. However, since a principle of customary international law does not have the same degree of precision as a provision of an international agreement, judicial review must necessarily be limited to the question whether, in adopting the act in question, the institutions of the European Union made manifest errors of assessment concerning the conditions for applying those principles (see, to this effect, Racke , paragraph 52).
123. The European Union must respect international law in the exercise of its powers, and therefore Directive 2008/101 must be interpreted, and its scope delimited, in the light of the relevant rules of the international law of the sea and international law of the air (see, to this effect, Poulsen and Diva Navigation , paragraph 9).
124. On the other hand, European Union legislation may be applied to an aircraft operator when its aircraft is in the territory of one of the Member States and, more specifically, on an aerodrome situated in such territory, since, in such a case, that aircraft is subject to the unlimited jurisdiction of that Member State and the European Union (see, by analogy, Poulsen and Diva Navigation , paragraph 28).
129. Furthermore, the fact that, in the context of applying European Union environmental legislation, certain matters contributing to the pollution of the air, sea or land territory of the Member States originate in an event which occurs partly outside that territory is not such as to call into question, in the light of the principles of customary international law capable of being relied upon in the main proceedings, the full applicability of European Union law in that territory (see to this effect, with regard to the application of competition law, Ahlström Osakeyhtiö and Others  v Commission , paragraphs 15 to 18, and, with regard to hydrocarbons accidentally spilled beyond a Member State’s territorial sea, Case C‑188/07 Commune de Mesquer  [2008] ECR I‑4501, paragraphs 60 to 62).
139. Furthermore, while the ultimate objective of the allowance trading scheme is the protection of the environment by means of a reduction of greenhouse gas emissions, the scheme does not of itself reduce those emissions but encourages and promotes the pursuit of the lowest cost of achieving a given amount of emissions reductions. The benefit for the environment depends on the stringency of the total quantity of allowances allocated, which represents the overall limit on emissions allowed by the scheme (Case C‑127/07 Arcelor Atlantique et Lorraine and Others  [2008] ECR I‑9895, paragraph 31).
144. Thus, such a scheme is fundamentally different from the Swedish scheme at issue in Case C‑346/97 Braathens  [1999] ECR I‑3419, where the Court held in paragraph 23 of its judgment, with regard to an environmental protection tax paid fully to the State, that such a tax was levied on fuel consumption itself, in particular because there was a direct and inseverable link between fuel consumption and the polluting substances covered by that tax, and that the tax thus constituted an excise duty on domestic commercial aviation in breach of the exemption laid down by the relevant directives.