As pointed out by our friends at the excellent Adjudicating Europe blog the Court of Justice has taken the unusual step of reviewing a judgment of the Court of First Instance (now the "General Court") at the request of the First Advocate General in its judgment in Case C-197/09 RX II M v. EMEA. That is the first time that Court of Justice has done so.
Review of a judgment of the General Court is a special competence given to the Court of Justice by Article 256 § 2 TFEU which provides:
"Decisions given by the General Court under this paragraph may exceptionally be subject to review by the Court of Justice, under the conditions and within the limits laid down by the Statute, where there is a serious risk of the unity or consistency of Union law being affected."
There were three previous attempts by the First Advocate General to get the Court to review judgments of the Court of First Instance under that provision: In Case C-216/08 RX, Case C-21/09 RX and C-180/09 RX. The Court of Justice had rejected the request in all of those cases.
In the present case, the Court of Justice decided first, that there were grounds for review of the judgment of the Court of First Instance in Case T-12/08 P M v EMEA and second, that the review should be a positive one in the sense that it set aside that judgment of the Court of First Instance and referred the case back to the General Court.
The case concerned a staff dispute. Mr M was employed by the EMEA and had a dispute with his employer the details of which need not concern us. The salient point is that he brought a first action before the Civil Service Tribunal for the annulment of a decision of the EMEA taken in his regard and for damages. The Civil Service Tribunal dismissed his action as inadmissible. Mr M then appealed to the Court of First Instance. The Court of First Instance in its judgment in Case T-12/08 M v. EMEA set aside the judgment of the Civil Service Tribunal, declared the action to be admissible and ordered the EMEA to pay Mr M €3000 in damages for non-material damage suffered.
There was a problem with that. The submissions made before the Court of First Instance all dealt with the issue of the admissibility of the action and not substance of the case such as liability in damages, whether compensation was due for non-material damage and the appropriate quantum of damages.
The First Advocate General of the Court of Justice picked up on the fact that there had been no discussion at all of the substance of the case before either the Civil Service Tribunal or the Court of First Instance and thus the latter court was simply not in a position to rule on the substance and in particular on liability for non-material damage. He therefore proposed that the Court of Justice review the judgment of the Court of First Instance because he considered that ruling on a claim for non-material damage without hearing argument on it constituted a serious risk of the the unity or consistency of EU law.
The Court of Justice in its judgment in Case C-197/09 RX II agreed, set aside the judgment of the Court of First Instance and sent the case back to the General Court for consideration of the merits.
The Court of Justice held first that the Court of First Instance was not in a position to rule on the issue of the award of damages for non-material loss. It recalled that according to constant case law the state of the proceedings does not permit final judgment to be given on the substance of an action brought before the General Court where that court dismissed the action as inadmissible by upholding a plea of inadmissibility and did not reserve a decision on that plea for the final judgment (Case C‑39/93 P SFEI and Others v Commission  ECR I‑2681, paragraph 38; Case C‑480/99 P Plant and Others v Commission and South Wales Small Mines  ECR I‑265, paragraph 57; Case C‑193/01 P Pitsiorlas v Council and ECB  ECR I‑4837, paragraph 32; Case C‑229/05 P PKK and KNK v Council  ECR I‑439, paragraphs 91 and 123 (see our post on that case here); Case C‑521/06 P Athinaïki Techniki v Commission  ECR I‑5829, paragraph 66; and Case C‑319/07 P 3F v Commission  ECR‑0000, paragraph 98). However, it is possible, in certain circumstances, for a ruling to be given on the substance of an action, even though the proceedings at first instance were confined to a plea of inadmissibility which the General Court upheld. That is possible where, first, the setting aside of the judgment under appeal necessarily brings about a definitive resolution of the substance of the action in question (Case C‑359/98 P Ca’ Pasta v Commission  ECR I‑3977, paragraphs 32 to 36 and 39) or, second, the examination of the substance of the application for annulment is based on arguments exchanged by the parties in the appeal proceedings following the reasoning adopted by the court at first instance (Case C‑389/98 P Gevaert v Commission  ECR I‑65, paragraphs 27 to 30, 34, 35 and 52 to 58, and Case C‑459/98 Martínez del Peral Cagigal v Commission  ECR I‑135, paragraphs 29, 34 and 48 to 54). But neither of those conditions were fulfilled in this case.
The Court of Justice also held that the Court of First Instance had breached the right of the parties to a fair hearing and the rights of the defence by ruling on the substance of the case without hearing any argument about it.
The Court recalled the importance of respecting the rights of defence and stated that those rights occupy a prominent position in the organization and conduct of a fair hearing (Case C‑462/98 P Mediocurso v Commission  ECR I‑7183, paragraph 36; Case C‑14/07 Weiss und Partner  ECR I‑3367, paragraph 47; and Case C‑394/07 Gambazzi  ECR I‑0000, paragraph 28). The rights of the defence include the right to a fair hearing (Case C‑413/06 P Bertelsmann and Sony Corporation of America v Impala ECR I‑4951, paragraph 61, and Case C‑89/08 P Commission v Ireland and Others  ECR I‑0000, paragraph 50) (For our post on that really dramatic case, see here). That principle applies to any procedure which may result in a decision by a EU institution perceptibly affecting a person’s interests (see Case C‑315/99 P Ismeri Europa v Court of Auditors  ECR I‑5281, paragraph 28, and Commission v Ireland and Others, paragraph 50). Consequently, the parties to proceedings have a right to comment on the facts and documents on which a judicial decision will be based and to discuss the evidence produced and the observations made to the court as well as the pleas in law raised by the court of its own motion on which it intends to base its decision (Commission v Ireland and Others, paragraphs 52 and 55). In order to satisfy the requirements associated with the right to a fair hearing, it is important for the parties to be able to debate and be heard on the matters of fact and of law which will determine the outcome of the proceedings (Commission v Ireland and Others, paragraph 56).
The Court repeated that the EU Courts must ensure that the rule that the parties should be heard is respected in proceedings before them and that they themselves respect that rule (see Commission v Ireland and Others, paragraphs 51 and 54). That rule must benefit all parties to proceedings before the Community judicature, irrespective of their legal status. The EU institutions may also, therefore, avail themselves of that principle when they are parties to such proceedings (Commission v Ireland and Others, paragraph 53).
The Court of Justice concluded that the failings of the Court of First Instance were so grave and fundamental to the EU legal order that the unity and consistency of EU law is necessarily affected by them.
So that is the second time in a short while that the Court of Justice has beaten up the Court of First Instance really badly for failing to give the parties a fair hearing. We