Kolpinghuis Nijmegen BV

European Law

Kolpinghuis Nijmegen BV
Image: ’21st Century Still Life’ by Jose A Hinojos

The definition of a Directive relies upon its effect upon a Member State as opposed to individuals unless so designed, and yet on this occasion, the criminal acts of a café were punished under the powers of an as yet transposed Directive, thus prompting the District Court to seek a preliminary ruling.

In July 1980, the European Council passed Directive 80/777/EEC in relation to the sourcing and sale of mineral water, which explained that:

“[O]nly waters extracted from the ground of a Member State and recognized by the responsible authority of that Member State as natural mineral waters satisfying the provisions of Annex I, Section I, of the Directive may be marketed as natural mineral waters.”

While the transposition period was four years from the date of the Directive implementation, the Member State in question failed to adopt it into their national laws.

On 7 August of 1984, the defendant Kolpinghuis Nijmegen BV was found stocking and selling mineral water that in fact consisted of nothing more than tap water and carbon dioxide. Indicted by the Keuringsdienst van Waren (Goods Inspectorate) the defendant was charged under art.2 of the Keuringsverodening (Inspection Regulation) for the sale of goods of unsound composition, and levied a fine of HFL 501.

With consideration of the fact that the Directive was not implemented into national law until 8 August 1985, the Officer van Justitie was of the opinion that the Directive was already legally enforceable, however the District Court sought a preliminary ruling under art.177 of the EC Treaty in order to establish whether:

(i) A Member State could rely upon the powers of a Directive as yet unadopted into national law.

(ii) Where a Directive has not yet been transposed, a national court could give direct effect to its provisions despite the individual standing to gain no benefit from such an act.

(iii) Where a national court has the option to follow national law, it should follow instead, the powers of an applicable Directive.

(iv) Any weight needed to be given to the first three points when the adoption threshold for the Directive was still open.

Referring to a number of similar cases such as Marshall v Southampton and South West Hampshire Area Health Authority and Von Colson and Kamann v Land Nordrhein-Westfalen, the Court relied upon Pretore di Salo v X to illustrate how:

“[A] Directive cannot, of itself and independently of a national law adopted by a Member State for its implementation, have the effect of determining or aggra­vating the liability in criminal law of persons who act in contravention of the provisions of that Directive.”

This translated that while the powers contained within a Directive can indirectly assist in the enforcement of both national and local laws, it could not serve as direct source of adjudication when determining individual liability, while the Court also noted that the date upon which hearing had occurred bore no relevance to the issues in questions 1-3, as the transposition window had yet to close.

Faccini Dori v Recreb Srl

European Law

Faccini v Recreb Srl
Image: ‘Snake Oil Salesman’ by Morgan Weistling

Private contracts between individuals are often overlooked in terms of actual rights, so when an Italian consumer entered into an agreement to purchase an English language course while visiting a railway terminal, the vendor looked to enforce the contract when notified that her order was to be cancelled.

Relying upon Doorstep Selling Directive (85/577/EEC), the applicant issued proceedings against the vendor and contended to the Giudice Concilliatore (Judge-Concillaitor) that arts.1(1), 2 and 5 conferred protective measures that allowed for rescindable notice within a period of seven days between consumers and private companies; which on this occasion was undertaken through written instruction to the contracting parties.

While the Directive had been in force for a number of years, the Italian government had failed to transpose it within the time allowed, therefore no domestic legislation existed concerning the facts of the case. As was common knowledge to Member States, a failure to adopt Directives in the prescribed period results in a loss of profit to the Member State when defending against direct effect claims by their citizens. In this instance however, the terms of the Directive, while both clear and precise, were related to dealings between individuals and so not subject to the benefit of protection, unless transposed under the guidance of Community law, and within the adoption window.

This presented the national court with a dilemma, inasmuch as they were unable to determine exactly what rights the claimant had when seeking cancellation of the contract, and if consideration was ultimately due to the vendor as per the terms of their agreement. For this reason, the court sought a preliminary ruling under art.177 and requested that the European Court of Justice clarify (i) if the terms of the Directive were clear and precise enough to provide direct effect, and (ii) whether despite a failure to adopt the measures in accordance with the Treaty, the claimant could rely upon them to enforce her individual right to cancel.

Having examined the arguments around horizontal effect between parties and the power of Directives, it was agreed that for reasons of legal certainty, future consideration must be given to broaden the scope of those entitlements when applying them to private and not public matters. That aside, it was still held that although the terms of the Directive were that of horizontal dealings, it was not possible for the claimant to rely upon them when seeking to terminate her agreement with the vendor.

However, because the Italian government had failed to adopt the Directive, and in light of the fact that there existed no domestic legislation to settle the matter, it was now possible for the national courts to transpose the effects of the Doorstep Selling Directive in order that a remedy could be provided in favour of the consumer, while conclusively holding that:

“Where damage has been suffered and that damage is due to a breach by the State of its obligation, it is for the national court to uphold the right of aggrieved consumers to obtain reparation in accordance with national law on liability.”

R v Secretary of State for Transport ex parte Factortame Ltd (No.2)

English Constitutional Law

R v Secretary of State for Transport Ex parte Factortame Ltd
Image: ‘NERIED, Cannery Tender’ by Steve Mayo

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Direct effect compatibility, and the obligation owed by Member States to transpose Directives and Treaties as binding upon national laws, was a ruling that would soon unearth conflicts of interest. On this occasion, the contention was brought about by aggressive amendment to statute in favour of the UK fishing industry.

Until 1988, those parties involved in domestic commercial fishing were required to register under the Merchant Shipping Act 1894; an Act that allowed overseas companies to operate outside British waters, but still have their fleets registered under UK incorporation. As a means of preventing ‘quota hopping’ (over-fishing), it was enacted by Parliament to include Part II of the Merchant Shipping Act 1988 and Merchant Shipping (Registration of Fishing Vessels) Regulations 1988, to the effect that all those trading were to re-register under new conditions.

These terms required that in order to qualify for registration, the company must have a minimum of seventy-five percent British ownership, and where ownership fell outside the United Kingdom, there needed to be a seventy-five percent share hold by British citizens. This translated that the appellants, who had been previously registered for over almost twenty years, were now unable to re-register, as the owners were Spanish and therefore exempt from the new legislation.

Having appreciated the United Kingdom’s position as a Member State, and subsequent membership to EU Community law, the firm sought proceedings under the principle that the choice taken to exclude other EU members from registration had displayed an overt refusal to comply with art.177 of the EEC Treaty. Furthermore, it was claimed that where Community rights were held to have ‘direct effect’, it was the onus of the national courts to suspend challenged legislation, with the granting of interim relief where proven necessary.

When heard in the Divisional Courts, the claim was supported and provisions made to allow the unfettered trading of the claimants, until such time that clarification was found in the challenge against the amended Act. However, when appealed by the Secretary of State, Court of Appeal Court set aside the previous finding, while granting leave of appeal to the House of Lords.

In this instance, the House agreed that should the claimants’ fail in their argument, the financial damage would be sufficient enough to cause irretrievable damage to the firm, but that without a preliminary ruling by the European Court of Justice (COJ), it was impossible to determine (i) if the courts were empowered to suspend legislative effect, and (ii) how best to determine what form the interim relief should take.

Upon deliberate consideration by the COJ, it was unanimously agreed that when the objectives of direct effect were designed, they were done so in a way that intended literal application with immediate purpose, and that unless under exceptional circumstances, it was the duty of the national courts to hold the powers of Community law above those of domestic interest, and that when matters required it, they were to construe that any relevance for interim relief would by extension, be both applied and agreed by the Member States themselves.