It is not every day that the Court of Justice beats up the Court of First Instance (as it was known) for violating the human rights of the parties. But that is just what it did in its judgment in Case C-89/08 P Commission v. Ireland and others.
What happened was this. The Commission adopted a decision partly approving state aid schemes introduced by France, Italy and Ireland and partly declaring them incompatible with the common market and ordering their recovery.
The problem with that, though, was that none of the applicants had pleaded lack of reasoning as a ground of annulment and the Court of First Instance did not question the parties on that aspect of the case at all during the written or oral phase of the proceedings: It just pulled that ground of annulment out of its hat when handing down the judgment.
And so the Commission appealed.
The Court of Justice upheld the Commission's appeal on that point.
So far so good. But then Court of Justice dealt with whether it was proper for the Court of First Instance to raise the plea of its own motion without hearing the parties on that point at all.
The Court of Justice drew the line at that and held that the Court of First Instance should have heard the parties before deciding the case on that point. It held that the principle that the parties should be heard means, as a rule, that the parties have a right to a process of inspecting and commenting on the evidence and observations submitted to the court (Case C‑450/06 Varec  ECR I‑581, paragraph 47) and, moreover, that that basic principle of law is infringed where a judicial decision is founded on facts and documents which the parties, or one of them, have not had an opportunity to examine and on which they have therefore been unable to comment (Joined Cases 42/59 and 49/59 SNUPAT v High Authority  ECR 53, 84; Case C‑480/99 P Plant and Others v Commission and South Wales Small Mines  ECR I‑265, paragraph 24; and Case C‑199/99 P Corus UK v Commission  ECR I‑11177, paragraph 19). It insisted that a court must itself observe the rule that the parties should be heard, in particular, when it decides a dispute on a ground it has identified of its own motion (see, by analogy, in the sphere of human rights, the judgments of the European Court of Human Rights in Skondrianos v. Greece, nos. 63000/00, 74291/01 and 74292/01, §29 and 30, 18 December 2003; Clinique des Acacias and Others v. France, nos. 65399/01, 65405/01 and 65407/01, §38, 13 October 2005; and Prikyan and Angelova v. Bulgaria, no. 44624/98, §42, 16 February 2006).
In a final rebuke to the Court of First Instance, the Court of Justice recalled that, in the analogous context of Article 6 of the ECHR, it has held that it is precisely in deference to that article and to the very purpose of every individual’s right to adversarial proceedings and to a fair hearing within the meaning of that provision that the Court may of its own motion, on a proposal from the Advocate General or at the request of the parties, order that the oral procedure be reopened, in accordance with Article 61 of its Rules of Procedure, if it considers that it lacks sufficient information, or that the case must be dealt with on the basis of an argument which has not been debated between the parties (Order of 4 February 2000 in Case C‑17/98 Emesa Sugar  ECR I‑665, paragraphs 8, 9 and 18, and Joined Cases C‑270/97 and C‑271/97 Deutsche Post  ECR I‑929, paragraph 30).
The Court of Justice has handed down an interesting judgment in Case C-118/07 Commission v Finland on the need to amend existing bilateral agreements with non member countries concluded by a member State before it acceded to the EU.
The Court held that Finland had failed to comply with Article 351 §2 TFEU (ex Article 307 §2 EC) because it had not amended the bilateral investment treaties it had concluded with the Russian Federation, the Republic of Belarus, the People’s Republic of China, Malaysia, the Democratic Socialist Republic of Sri Lanka and the Republic of Uzbekistan.
What had Finland not done ? It had failed amend those agreements to include stipulations to include possible exceptions, as required by Articles 64 §2 TFEU (ex Article 57 §2 EC), 66 TFEU (ex Article 59 EC) and 75 §1 TFEU (ex Article 60 §1 EC). Those provisions confer on the Council (and European Parliament now) the power to restrict in certain circumstances movements of capital and payments between the member States and non member countries.
That’s right. The Commission was reproaching Finland not for maintaining a restriction but for not providing for the possibility of a future restriction to be decided by the Council and Parliament. All of the agreements, apart from the one concluded with Russia, contained a clause which guarantees the protection of investments within the limits authorized by the laws of the Contracting Party. For example, the agreement concluded with Sri Lanka stipulates: ‘Every contracting party guarantees under all circumstances, within the limits authorized by its own laws and decrees and in conformity with international law, a reasonable and appropriate treatment of investments made by citizens or companies of the other Contracting Party."
The Commission brought infringement proceedings against Finland for failing to adapt those agreements. Article 351 TFEU obliges the member States to take all appropriate steps to eliminate incompatibilities with EU law which have been established in agreements concluded prior to their accession. Under that provision, the member States are required, where appropriate, to assist each other to that end and, where appropriate, to adopt a common attitude. Finland had done nothing and claimed it need not do anything because the Council (and Parliament) had as yet taken no measures restricting the free movement of capital.
The Court of Justice agreed with the Commission.
It recalled that, as it had held in Case C-205/06 Commission v Austria  ECR I-0000, paragraph 37, and Case C-249/06 Commission v Sweden  ECR I-0000, paragraph 38, those powers of the Council, which consist in the unilateral adoption of restrictive measures with regard to non member countries on a matter which is identical to or connected with that covered by an earlier agreement concluded between a member State and a non member country, reveal an incompatibility with that agreement where, first, the agreement does not contain a provision allowing the Member State concerned to exercise its rights and to fulfill its obligations as a member of the EU and, second, there is also no international-law mechanism which makes that possible.
The agreement with Russia in particular, without any clause allowing for restrictive measures, was incompatible with the Treaty.
As for the other agreements, which contained the clause quoted above or similar, the Court held that they too were incompatible with the Treaty. It held that the aim of the provisions of the bilateral agreements at issue, challenged by the Commission in its infringement action, is to ensure freedom of payments in respect of investments. The Court found it debatable whether the provision which guarantees the protection of investments within the limits authorized by the laws of the Contracting Party contained in the bilateral agreements concerned would allow either party to limit payment entitlement pursuant to decisions – whether national or otherwise – taken after the entry into force of the agreements, especially as in some agreements it is also stated that each Contracting Party is required to act ‘in accordance with international law’.
One last point is worth noting. Germany and Hungary, intervening in Finland's support, criticized the Commission for being selective in bringing an action against Finland and not against other member States with similar agreements.
The Court dismissed that argument. It recalled that a member State may not rely on the fact that other member States have also failed to perform their obligations in order to justify its own failure to fulfill its obligations under the Treaty. In the EU legal order established, the implementation of EU law by the member States cannot be made subject to a condition of reciprocity. Articles 258 TFEU (ex Article 226 EC) and 260 TFEU (ex Article 227 EC) provide the appropriate remedies in cases where member States fail to fulfil their obligations under the Treaty (Case C-38/89 Blanguernon  ECR I-83, paragraph 7, and Case C-163/99 Portugal v Commission  ECR I-2613, paragraph 22).
Here's a judgment of the Court of Justice that caught our eye recently. It is not a ground breaking judgment by any stretch of the imagination. But it does illustrate the chronic backlog of cases pending before the General Court and why, in those circumstances, plaintiffs just give up on direct annulment actions and prefer to get the matter resolved by the Court of Justice using the preliminary reference procedure via national courts.
We need not get into the technicalities of the case. The interesting point for our purposes is that Enviro Tech brought two sets of proceedings before what was then the Court of First Instance: a first annulment action in December 2003 (Case T-422/03) to attempt to prevent the classification of n-propyl bromide as a dangerous substance and a second annulment action in July 2004 seeking the annulment of Commission Directive 2004/73/EC (Case T-291/04). As the Court of First Instance was slow in dealing with the case on the substance (the plaintiffs were unsuccessful in two interim measures cases in February 2004 and July 2004) and because an issue of admissibility was probably at stake, Enviro Tech brought proceedings before the Belgian courts against the Belgian measure implementing Commission Directive 2004/73/EC in Belgium. It was in the course of those proceedings that the Belgian supreme administrative court, the Conseil d'Etat, referred the question to the Court of Justice on the validity of Commission Directive 2004/73/EC.
The Court of Justice was able to deal with the matter and settle the dispute for good in just over a year.
Also, Enviro Tech had commenced similar proceedings to their Belgian case before the English High Court. That court, however, decided to stay the proceedings pending the outcome of the litigation before the Court of First Instance in Cases T-422/03 and T-291/04. Meanwhile, the Court of First Instance, once the Court of Justice had been seised of the issue of validity of Commission Directive 2004/73/EC, the Court of First Instance stayed the proceedings pending the answer to the preliminary reference.
Note to potential plaintiffs: You are better off challenging measures not addressed to you via the national courts rather than getting bogged down in an annulment action before the General Court.
The information note is not binding but merely gives guidance to national courts on whether it is appropriate to make a reference for a preliminary ruling and, should they proceed, to help them formulate and submit questions to the Court.
It replaces the information note published in 2005 and supplements the one published in 2008 dealing with the urgent preliminary reference procedure (see our post on that here).
As our friends over at Adjudicating Europe have pointed out, a new Advocate General has been appointed at the Court of Justice to replace poor Advocate General Ruiz-Jarabo Colomer.
The new appointee is Mr. Pedro Cruz Villalón. His appointment is for the remainder of the term of Mr. Ruiz-Jarabo Colomer which ends on December 6th 2015.
He was appointed on November 30th 2009. That date is significant of course as it was the day before the entry into force of the Lisbon Treaty. Had he been appointed after that date, the appointment process would have been more complicated as it would have been necessary to have Mr. Cruz Villalón's candidature scrutinized by a special panel as laid down in the new Article 255 TFEU.
The Rules of Procedure deal with such matters as the preparation and follow-up to the proceedings of the European Council, the preparation of its meetings and its agenda, its composition, the composition of national delegations, representation before the European Parliament, the quorum and the language regime.
Rather sadly, the Rules specify that the meetings of the European Council will be held in secret. It limits the number of persons who can make up national delegations to 20. That's a circus of 540 people, plus 20 for the Commission and five for the High Representative of the Union for Foreign Affairs and Security Policy.
As you know by now, the Lisbon Treaty entered into force today, December 1st 2009.
The Court of Justice has published this very useful short guide to the changes that the Lisbon Treaty makes to the Court of Justice itself, the General Court, as the Court of First Instance is now known, their jurisdiction and their procedures.