But what is the relationship between a national action in damages and an infringement procedure brought by the Commission pursuant to Article 226 ? Does an infringement action interrupt a national limitation period ? When does the national limitation period start to run if a member State has failed to implement a directive properly ? Must the person alleging loss and damage mitigate the loss suffered ? Those are some of the questions dealt with by the Court of Justice's judgment in Case C-445/06 Danske Slagterier v. Bundesrepublik Deutschland.
The facts are.... agricultural. Danske Slagterier is an association of Danish slaughterhouse companies and pig farmers. It claims compensation from the German Federal state for loss due to an infringement of EU law. It alleges that, in breach of EU law, Germany imposed an import ban on meat from uncastrated male pigs from 1993 to 1999. That ban led to a considerable financial loss.
What happened was that at the beginning of the 1990s, a project called the ‘Male-Pig-Projekt’, whose objective was the farming of uncastrated male pigs, was launched in Denmark. That type of farming, which is profitable, entails the risk of the meat, when heated, giving off a pronounced sexual odour. The German authorities considered that the smell was attributable to the hormone androstenone, the formation of which can be avoided by castration at an early stage.
In January 1993, Germany informed the other member States that the rule laid down in Article 6(1)(b) of Directive 64/433 had been transposed into national law in such a way that a threshold of 0.5 µg/g was fixed for androstenone; if that threshold were exceeded, the meat would give off a pronounced boar taint and would thus be unfit for human consumption. Germany also stated then that only Professor Claus’s modified enzyme immunoassay was recognised as a specific method for identifying androstenone and that meat from uncastrated male pigs exceeding that threshold could not be transported as fresh meat into Germany.
As a consequence, many consignments of pigmeat from Denmark were subsequently checked by the German authorities and rejected because they exceeded the threshold for androstenone. Also, the pig farmers and slaughterhouse companies which had almost ceased production of castrated male pigs had to resume such production in order not to put exports to Germany at risk. Danske Slagterier claims that if the pigmeat exported had come from uncastrated pigs as envisaged by the Male-Pig-Projekt, considerable costs savings could have been achieved.
Danske Slagterier brought an action for damages against the German Federal state before the competent court in Bonn. At first instance it was held that the action was well founded in respect of the period commencing on 7 December 1996 and dismissed the action as time-barred in respect of losses which had arisen before that date. On appeal, the entire claim was uheld on the merits. The Federal State then appealed to the Supreme court, the Bundesgerichtshof.
Meanwhile, the Commission had commenced article 226 proceedings against Germany. The Court of Justice held in those proceedings by its judgment of November 12th 1998 in Case C-102/96 Commission v. Germany that Germany had breached Directive 64/433 and Directive 89/662 by imposing the obligation of marking the carcasses of uncastrated male pigs and subjecting them to heat treatment whenever the meat, regardless of carcasse weight, had an androstenone content of more than 0.5 μg/g, as shown by Professor Claus's modified enzyme immunoassay, and by regarding the meat as giving off a pronounced sexual odour and consequently unfit for human consumption if the threshold of 0.5 μg/g of androstenone was exceeded.
The German Federal Supreme Court asked the Court of Justice a series of questions on the relationship between the Article 226 judgment and the pending action in damages.
The national court asked whether, where the Commission has brought infringement proceedings under Article 226 EC, EU law requires the limitation period laid down by national legislation for a claim seeking reparation on account of State liability for breach of EU law to be interrupted or suspended during those proceedings, if there is no effective legal remedy in the State in question to compel it to transpose a directive.
The Court of Justice held that that, where the Commission has brought infringement proceedings, EU law does not require any such interruption or suspension during those proceedings.In that regard, the Court recalls that the purpose of infringement proceedings is not to safeguard individual rights and individuals have no right to require the Commission to adopt a specific position (Case 247/87 Star Fruit v. Commission).
The national court also asked whether the limitation period applicable to an action for damages against the State for incorrect transposition of a directive begins to run, irrespective of the applicable national law, only when the directive has been fully transposed, or whether that period begins to run, in accordance with national law, on the date on which the first injurious effects of the incorrect transposition have been produced and further injurious effects thereof are foreseeable.
The Court held that EU law does not preclude the limitation period applicable to an action for damages against the State for incorrect transposition of a directive from beginning to run on the date on which the first injurious effects of the incorrect transposition have been produced and the further injurious effects are foreseeable, even if that date is prior to the correct transposition of the directive. The Court confronted the problem judgment of Case C-208/90 Emmott in which it had held in paragraph 23 that, until such time as a directive has been properly transposed, a defaulting member State may not rely on an individual’s delay in initiating proceedings against it in order to protect rights conferred upon him by the provisions of the directive and that a period laid down by national law within which proceedings must be initiated cannot begin to run before that time. But, recalled the Court, was confirmed in Case C-410/92 Johnson, paragraph 26, it was clear from Case C-338/91 Steenhorst-Neerings that the solution adopted in Emmott was justified by the particular circumstances of that case, in which a time-bar had the result of depriving the applicant in the main proceedings of any opportunity whatsoever to rely on her right to equal treatment under a directive (see also Case C-90/94 Haahr Petroleum, paragraph 52; Joined Cases C-114/95 and C‑115/95 Texaco and Olieselskabet Danmark, paragraph 48; and Joined Cases C-279/96 to C-281/96 Ansaldo Energia and Others, paragraph 20).
The Court held that it was clear in this case that the existence of the time-limit at issue did not have the result, as in the proceedings which gave rise to the judgment in Emmott, of depriving the injured parties of any opportunity whatsoever to rely on their rights before the national courts.
Finally, the German court asked whether EU law precludes a rule such as that laid down in Paragraph 839(3) of the BGB which provides that an individual cannot obtain reparation for loss or damage which he has wilfully or negligently failed to avert by utilising a legal remedy.
The Court answered that EU law does not preclude the application of a national rule requiring mitigation of damage. It recalled that it is a general principle common to the legal systems of the Member States that the injured party must show reasonable diligence in limiting the extent of the loss or damage, or risk having to bear the loss or damage himself (Joined Cases C‑104/89 and C-37/90 Mulder and Others v. Council and Commission>, paragraph 33, and Joined Cases C-46/93 and C-48/93 Brasserie du Pêcheur and Factortame, paragraph 85).