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++++ Community law - Direct effect - Primacy -
Proceedings brought before a national court in order to penalize an
infringement of Community law attributable to a provision of national
law - Infringement not yet established - Application for interim relief
- Existence of a national rule prohibiting that application from being
granted - Duties and powers of the court seised ( EEC Treaty, Arts 5 and 177 )
It is for the national courts, in
application of the principle of cooperation laid down in Article 5 of
the EEC Treaty, to ensure the legal protection which persons derive
from the direct effect of provisions of Community law . Any
provision of a national legal system and any legislative,
administrative or judicial practice which might impair the
effectiveness of Community law by withholding from the national court
having jurisdiction to apply such law the power to do everything
necessary at the moment of its application to set aside national
legislative provisions which might prevent, even temporarily, Community
rules from having full force and effect are incompatible with the
requirements inherent in the very nature of Community law . The
full effectiveness of Community law would be just as much impaired if a
rule of national law could prevent a court seised of a dispute governed
by Community law from granting interim relief in order to ensure the
full effectiveness of the judgment to be given on the existence of the
rights claimed under Community law . It follows that a court which in
those circumstances would grant interim relief, if it were not for a
rule of national law, is obliged to set aside that rule . That
interpretation is reinforced by the system established by Article 177
of the EEC Treaty whose effectiveness would be impaired if a national
court, having stayed proceedings pending the reply by the Court of
Justice to the question referred to it for a preliminary ruling, were
not able to grant interim relief until it delivered its judgment
following the reply given by the Court of Justice .
In Case C-213/89 REFERENCE
to the Court under Article 177 of the EEC Treaty by the House of Lords
for a preliminary ruling in the proceedings pending before that court
in the case of The Queen v Secretary of State for Transport, ex parte : Factortame Ltd and Others, on
the interpretation of Community law with regard to the extent of the
power of national courts to grant interim relief where rights claimed
under Community law are at issue, THE COURT composed of : O .
Due, President, Sir Gordon Slynn, C . N . Kakouris, F . A .
Schockweiler, M . Zuleeg ( Presidents of Chambers ), G . F . Mancini, R
. Joliet, J . C . Moitinho de Almeida, G . C . Rodríguez Iglesias, F .
Grévisse and M . Diez de Velasco, Judges, Advocate General : G . Tesauro Registrar : H . A . Ruehl, Principal Administrator after considering the written observations submitted on behalf of the
United Kingdom, by T . J . G . Pratt, Principal Assistant Treasury
Solicitor, acting as Agent, assisted by Sir Nicholas Lyell, QC,
Solicitor-General, Mr Christopher Bellamy, QC, and Mr Christopher
Vajda, barrister, Ireland, by Louis J . Dockery, Chief State Solicitor, acting as Agent, assisted by James O' Reilly, SC, Factortame
Ltd and Others, by David Vaughan QC, Gerald Barling, barrister, David
Anderson, barrister, and Stephen Swabey, solicitor, of Thomas Cooper
& Stibbard, the Commission, by Mr Goetz zur Hausen, Legal Adviser, and Peter Oliver, a member of its Legal Department, acting as Agents, having regard to the Report for the Hearing, after
hearing the oral argument presented at the hearing on 5 April 1990 by
the United Kingdom, Factortame Ltd and Others, Rawlings ( Trawling )
Ltd ., the latter represented by N . Forwood, QC, and by the
Commission, after hearing the Opinion of the Advocate General delivered at the sitting on 17 May 1990, gives the following Judgment
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By a judgment of 18 May 1989, which was received at the Court on 10
July 1989, the House of Lords referred to the Court of Justice for a
preliminary ruling under Article 177 of the EEC Treaty two questions on
the interpretation of Community law . Those questions concern the
extent of the power of national courts to grant interim relief where
rights claimed under Community law are at issue .
- The questions
were raised in proceedings brought against the Secretary of State for
Transport by Factortame Ltd and other companies incorporated under the
laws of the United Kingdom, and also the directors and shareholders of
those companies, most of whom are Spanish nationals ( hereinafter
together referred to as the "appellants in the main proceedings ").
-
The companies in question are the owners or operators of 95 fishing
vessels which were registered in the register of British vessels under
the Merchant Shipping Act 1894 . Of those vessels, 53 were originally
registered in Spain and flew the Spanish flag, but on various dates as
from 1980 they were registered in the British register . The remaining
42 vessels have always been registered in the United Kingdom, but were
purchased by the companies in question on various dates, mainly since
1983 .
- The statutory system governing the registration of
British fishing vessels was radically altered by Part II of the
Merchant Shipping Act 1988 and the Merchant Shipping ( Registration of
Fishing Vessels ) Regulations 1988 ( SI 1988, No 1926 ). It is common
ground that the United Kingdom amended the previous legislation in
order to put a stop to the practice known as "quota hopping" whereby,
according to the United Kingdom, its fishing quotas are "plundered" by
vessels flying the British flag but lacking any genuine link with the
United Kingdom .
- The 1988 Act provided for the establishment of
a new register in which henceforth all British fishing vessels were to
be registered, including those which were already registered in the old
general register maintained under the 1894 Act . However, only fishing
vessels fulfilling the conditions laid down in Section 14 of the 1988
Act may be registered in the new register .
- Paragraph 1 of that
section provides that, subject to dispensations to be determined by the
Secretary of State for Transport, a fishing vessel is eligible to be
registered in the new register only if :
"( a ) the vessel is British-owned, ( b ) the vessel is managed, and its operations are directed and controlled, from within the United Kingdom and; ( c ) any charterer, manager or operator of the vessel is a qualified person or company ". According
to Section 14(2 ), a fishing vessel is deemed to be British-owned if
the legal title to the vessel is vested wholly in one or more qualified
persons or companies and if the vessel is beneficially owned by one or
more qualified companies or, as to not less than 75%, by one or more
qualified persons . According to Section 14(7 ) "qualified person"
means a person who is a British citizen resident and domiciled in the
United Kingdom and "qualified company" means a company incorporated in
the United Kingdom and having its principle place of business there, at
least 75% of its shares being owned by one or more qualified persons or
companies and at least 75% of its directors being qualified persons .
-
The 1988 Act and the 1988 Regulations entered into force on 1 December
1988 . However, under Section 13 of the 1988 Act, the validity of
registrations effected under the previous Act was extended for a
transitional period until 31 March 1989 .
- On 4 August 1989 the
Commission brought an action before the Court under Article 169 of the
EEC Treaty for a declaration that, by imposing the nationality
requirements laid down in Section 14 of the 1988 Act, the United
Kingdom had failed to fulfil its obligations under Articles 7, 52 and
221 of the EEC Treaty . That action is the subject of Case 246/89, now
pending before the Court . In a separate document, lodged at the Court
Registry on the same date, the Commission applied to the Court for an
interim order requiring the United Kingdom to suspend the application
of those nationality requirements as regards the nationals of other
Member States and in respect of fishing vessels which until 31 March
1989 were carrying on a fishing activity under the British flag and
under a British fishing licence . By an order of 10 October 1989 in
Case 246/89 R Commission v United Kingdom (( 1989 )) ECR 3125, the
President of the Court granted that application . Pursuant to that
order, the United Kingdom made an Order in Council amending Section 14
of the 1988 Act with effect from 2 November 1989 .
- At the time
of the institution of the proceedings in which the appeal arises, the
95 fishing vessels of the appellants in the main proceedings failed to
satisfy one or more of the conditions for registration under Section 14
of the 1988 Act and thus could not be registered in the new register .
-
Since those vessels were to be deprived of the right to engage in
fishing as from 1 April 1989, the companies in question, by means of an
application for judicial review, challenged the compatibility of Part
II of the 1988 Act with Community law . They also applied for the grant
of interim relief until such time as final judgment was given on their
application for judicial review .
- In its judgment of 10 March
1989, the Divisional Court of the Queen' s Bench Division : ( i )
decided to stay the proceedings and to make a reference under Article
177 of the EEC Treaty for a preliminary ruling on the issues of
Community law raised in the proceedings; and ( ii ) ordered that, by
way of interim relief, the application of Part II of the 1988 Act and
the 1988 Regulations should be suspended as regards the applicants .
-
On 13 March 1989, the Secretary of State for Transport appealed against
the Divisional Court' s order granting interim relief . By judgment of
22 March 1989, the Court of Appeal held that under national law the
courts had no power to suspend, by way of interim relief, the
application of Acts of Parliament . It therefore set aside the order of
the Divisional Court .
- The House of Lords, before which the
matter was brought, gave its abovementioned judgment of 18 May 1989 .
In its judgment it found in the first place that the claims by the
appellants in the main proceedings that they would suffer irreparable
damage if the interim relief which they sought were not granted and
they were successful in the main proceedings were well founded .
However, it held that, under national law, the English courts had no
power to grant interim relief in a case such as the one before it .
More specifically, it held that the grant of such relief was precluded
by the old common-law rule that an interim injunction may not be
granted against the Crown, that is to say against the government, in
conjunction with the presumption that an Act of Parliament is in
conformity with Community law until such time as a decision on its
compatibility with that law has been given .
- The House of Lords
then turned to the question whether, notwithstanding that rule of
national law, English courts had the power, under Community law, to
grant an interim injunction against the Crown .
- Consequently,
taking the view that the dispute raised an issue concerning the
interpretation of Community law, the House of Lords decided, pursuant
to Article 177 of the EEC Treaty, to stay the proceedings until the
Court of Justice had given a preliminary ruling on the following
questions :
"( 1 ) Where ( i ) a party before the national
court claims to be entitled to rights under Community law having direct
effect in national law ( the 'rights claimed' ), ( ii ) a national measure in clear terms will, if applied, automatically deprive that party of the rights claimed, (
iii ) there are serious arguments both for and against the existence of
the rights claimed and the national court has sought a preliminary
ruling under Article 177 as to whether or not the rights claimed exist,
( iv ) the national law presumes the national measure in question
to be compatible with Community law unless and until it is declared
incompatible, ( v ) the national court has no power to give
interim protection to the rights claimed by suspending the application
of the national measure pending the preliminary ruling, ( vi ) if
the preliminary ruling is in the event in favour of the rights claimed,
the party entitled to those rights is likely to have suffered
irremediable damage unless given such interim protection, does Community law either ( a ) oblige the national court to grant such interim protection of the rights claimed; or ( b ) give the Court power to grant such interim protection of the rights claimed? (
2 ) If Question 1(a ) is answered in the negative and Question 1(b ) in
the affirmative, what are the criteria to be applied in deciding
whether or not to grant such interim protection of the rights claimed?"
- Reference is made to the Report for the Hearing for a fuller
account of the facts in the proceedings before the national court, the
course of the procedure before and the observations submitted to the
Court of Justice, which are mentioned or discussed hereinafter only in
so far as is necessary for the reasoning of the Court .
- It is
clear from the information before the Court, and in particular from the
judgment making the reference and, as described above, the course taken
by the proceedings in the national courts before which the case came at
first and second instance, that the preliminary question raised by the
House of Lords seeks essentially to ascertain whether a national court
which, in a case before it concerning Community law, considers that the
sole obstacle which precludes it from granting interim relief is a rule
of national law, must disapply that rule .
- For the purpose of
replying to that question, it is necessary to point out that in its
judgment of 9 March 1978 in Case 106/77 Amministrazione delle finanze
dello Stato v Simmenthal SpA (( 1978 )) ECR 629 the Court held that
directly applicable rules of Community law "must be fully and uniformly
applied in all the Member States from the date of their entry into
force and for so long as they continue in force" ( paragraph 14 ) and
that "in accordance with the principle of the precedence of Community
law, the relationship between provisions of the Treaty and directly
applicable measures of the institutions on the one hand and the
national law of the Member States on the other is such that those
provisions and measures ... by their entry into force render
automatically inapplicable any conflicting provision of ... national
law" ( paragraph 17 ).
- In accordance with the case-law of the
Court, it is for the national courts, in application of the principle
of cooperation laid down in Article 5 of the EEC Treaty, to ensure the
legal protection which persons derive from the direct effect of
provisions of Community law ( see, most recently, the judgments of 10
July 1980 in Case 811/79 Ariete SpA v Amministrazione delle finanze
dello Stato (( 1980 )) ECR 2545 and Case 826/79 Mireco v
Amministrazione delle finanze dello Stato (( 1980 )) ECR 2559 ).
-
The Court has also held that any provision of a national legal system
and any legislative, administrative or judicial practice which might
impair the effectiveness of Community law by withholding from the
national court having jurisdiction to apply such law the power to do
everything necessary at the moment of its application to set aside
national legislative provisions which might prevent, even temporarily,
Community rules from having full force and effect are incompatible with
those requirements, which are the very essence of Community law (
judgment of 9 March 1978 in Simmenthal, cited above, paragraphs 22 and
23 ).
- It must be added that the full effectiveness of Community
law would be just as much impaired if a rule of national law could
prevent a court seised of a dispute governed by Community law from
granting interim relief in order to ensure the full effectiveness of
the judgment to be given on the existence of the rights claimed under
Community law . It follows that a court which in those circumstances
would grant interim relief, if it were not for a rule of national law,
is obliged to set aside that rule .
- That interpretation is
reinforced by the system established by Article 177 of the EEC Treaty
whose effectiveness would be impaired if a national court, having
stayed proceedings pending the reply by the Court of Justice to the
question referred to it for a preliminary ruling, were not able to
grant interim relief until it delivered its judgment following the
reply given by the Court of Justice .
- Consequently, the reply
to the question raised should be that Community law must be interpreted
as meaning that a national court which, in a case before it concerning
Community law, considers that the sole obstacle which precludes it from
granting interim relief is a rule of national law must set aside that
rule .
Costs 24 The costs incurred by the
United Kingdom, Ireland and the Commission of the European Communities,
which have submitted observations to the Court, are not recoverable .
Since these proceedings are, in so far as the parties to the main
proceedings are concerned, in the nature of a step in the proceedings
pending before the national court, the decision on costs is a matter
for that court .
On those grounds, THE COURT, in
reply to the question referred to it for a preliminary ruling by the
House of Lords, by judgment of 18 May 1989, hereby rules : Community
law must be interpreted as meaning that a national court which, in a
case before it concerning Community law, considers that the sole
obstacle which precludes it from granting interim relief is a rule of
national law must set aside that rule .
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