Viamex Agrar Handels GmbH v Hauptzollamt Hamburg-Jonas [2008]

European Law

Viamex Agrar Handels GmbH v Hauptzollamt Hamburg-Jonas [2008]
‘Cross Town Traffic’ by Debbie Beukema

Proportionality and the transport of live animals for sale beyond the borders of the EC  underpin a joint request for a preliminary ruling under art.234 EC, when on this occasion two claims were brought before the Finanzgericht (Fiscal Court) Hamburg by livestock exporters refused export refunds on grounds that the manner in which they were transported breached Community law. 

In the first claim it was found that while art.1 of Regulation 615/98/EC determines the criteria in which a business can claim export cost refunds, it was applied in conjunction with art.3(1) of Directive 91/628/EEC, which outlined animal travel-time limitations and further governance of their physical wellbeing through nutrition and hydration. 

Upon submission of their paperwork the Hauptzollamt Kiel (Customs Office) discovered that contrary to the prescribed rest periods set out under art.48(5) of Chapter VII of the Annexe to Directive 91/628/EEC the animals had been given insufficient treatment to meet the terms set, while the claimants contested they had been acting under instruction of the official veterinarian at the outset of the journey.

In the second claim it was found that while advanced reimbursement of export costs had been granted prior to the animals exportation, the subsequent paperwork revealed how the latter half of the drive had exceeded the fourteen-hour threshold found in the same Annexe of Directive 91/628/EEC and thereby rendered them void of any refund and the Customs Office seeking recovery of payment with interest.

When presented with the material facts the Finanzgericht asked the European Court of Justice:

1. Did the power of Regulation 615/98/EC enable jurisdiction over the terms of Directive 91/628/EEC?

2. If so, was it tantamount to a violation of the principle of proportionality inasmuch as the terms of a Directive must override any subsidiary limitations (i.e. refusal of export costs in lieu of a breach)?

Having examined the case history behind both concerns it was agreed by the Court that while Regulation 615/98/EC ran parallel to the Directive, its purpose was purely animal protection and the enforcement of Member State conformity, while it was also agreed that this caveat served legal certainty and so complimented the Directive’s objectives.

In relation to the matter of Community law ‘proportionality’ it was held that while the terms of Regulation 615/98/EC conferred a right to deny export cost refunds, it was executed with the express intention that national courts and legislature applied discretion when determining a claimant’s right to recover costs where no animal had been harmed, thus the Court urged the parties to remember that:

“[W]hen there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued.”

Van Gend en Loos v Nederlandse Administratie de Belastingen [1963]

European Law

Van Gend en Loos v Nederlandse Administratie de Belastingen [1963]
‘Dutch Windmills’ by Eugene Louis Boudin

When a Dutch importer of ureaformaldehyde fell victim to domestically manipulated customs tariffs, the question of both ‘direct effect’ and the individual right to challenge an abuse of EU Treaties became subject to a preliminary ruling under art.177 EC. 

Because of the supranational nature of the case it was first believed inapplicable when challenges to increased (or recategorised) tax rates were put into effect by national statutes, however the argument made was that at the time of the abuse the original Treaty taxation of the affected product was set at just three percent, and so when domestic reclassification set to increase the rate to eight percent the claimant challenged the adjustment by citing art.12 of the Treaty of Rome, which explains that:

“Member States shall refrain from intro­ducing between themselves any new customs duties or imports or exports or any charges having equivalent effect and from increasing those which they already apply in their trade with each other.”

While noting how in addition to the terms of art.12, art.95 EC states that:

“A Member State shall not impose, directly or indirectly, on the products of other Member States any internal charges of any kind in excess of those applied directly or indirectly to like domestic products.”

During the preliminary ruling hearing the European Court of Justice noted that if the protective principles of Community law were to remain excluded from violations of Member States it would defeat their very purpose, thus it was held that the inherent meaning and purpose of art.12 was to afford unequivocal rights to individuals, who when taking issue with such matters, would do so in the knowledge that they were protected by the national courts.

In closing it was held by the Court that all Member States would thereon refrain from increasing levies and customs duties conflicting with those put forward in the original Treaty of Rome, and that because the recategorisation of that specific tariff was now found to be illegal, the matter was referred back to the national courts in order to establish how best to reclassify the products, while the Court reminded the parties that:

“[A]ccording to the spirit, the general scheme and wording of the Treaty, Article 12 must be interpreted as providing direct effects and creating individual rights which national courts must protect.”

Simmenthal SpA v Italian Minister of Finance [1978]

European Law

Simmenthal SpA v Italian Minister of Finance [1978]
‘White Cow’ by Nic Dartnell

This brief yet pivotal case turned upon the unfair application of import fees regardless of existing Community law enabling the free movement of goods between Member States, when under guidance of art.32 of the Italian consolidated health laws, a Monza-based meat supplier was subjected to inspection fees for a beef consignment purchased in France despite operating within the framework of Community law. 

Having waited almost three years, the supplier sought action against the Italian government on grounds that it had acted beyond the limits of its Member State obligations, and so in the first instance the local court (Pretura di Susa) sought a preliminary ruling in the European Court of Justice under art.177 EC, whereupon it was held by the Court that importation charges levied against its citizens amounted to little more than quantitive restrictions within the scope of art.30 EC and were therefore illegal and repayable with interest.

In response the Amministrazione Delle Finanze Dello Stato (Finance Administration) appealed the judgment while citing incompatibility with Italian national law (no.1239/70), a challenge that resulted in the issue of ‘direct effect’ and the reluctance of Member States or their Constitutional courts to enforce Community laws when national laws obstructed the blanket protections afforded individual citizens. 

At the time of discussion the only options available to the judiciary were the immediate repeal of the relevant legislation or declaration of incompatibility by the Constitutional Court, and while the latter approach doubtless favoured the Italian government, it was later held by the European Court of Justice that the ‘principle of the precedence of Community law’ must be held in the highest regard, therefore in order for that doctrine to continue it was paramount that the lower courts were to be given powers to enforce Community law regardless of any jurisdictional contradictions presented, while further reminding the parties that:

“[D]irectly applicable Community provisions must, notwithstanding any internal rule or practice whatsoever of the Member States, have full, complete and uniform effect in their legal systems in order to protect subjective legal rights created in favour of individuals…”

Marleasing SA v La Comercial Internacional de Alimentación SA [1990]

European Law

Marleasing SA v La Comercial Internacional de Alimentación SA [1990]
‘Sunset Over Sagrada Familia’ by Ana Maria Edulescu

The composition and function of incorporated companies and the fraudulent and deceptive manner in which their assets are contained, becomes central to a contention between founders and creditors when nullity is sought before the national court.

When creditor and claimant (Marleasing SA) discovered that one of the three founders of La Comercial Internacional de Alimentación SA had used the firm to avoid third party recovery of assets, it took action against them in order to expose the company as an illegally created organisation as defined under arts.1261 and 1275 of the Spanish Civil Code.

In response the defendant founder sought the protection of art.11 of Directive 68/151/EEC (also known as the ‘First Directive’), which included an exhaustive list of qualifying conditions for company nullity, yet none of which included the grounds relied upon by the claimant, and so when debated by the Juzgado de Primera Instancia e Instrucción it was agreed that as transposition of the Directive had not been undertaken, the issue remained unsolved without reference to the European Court of Justice under art.177 EC, and so on this occasion the court asked:

1. Were the relevant terms contained in art.11(2) of Directive 68/151/EEC enforceable between individuals despite a failure to adopt them into national Spanish law?

After observing the disparities between existing domestic statute and the meaning of the Directive, the Court explained that no terms of a Directive could be used between individuals under Community law, however a failure to transpose a Directive could result in individual action against the Member State where clarity and specificity of the Directive was shown, on grounds that it remained the Member State’s obligation to align the principles of the Directive against existing statute in order that the Directive’s effect superceded domestic laws.

Going further still, the Court also held that in relation to the protection of nullity under art.11(2)(b) of Directive 68/151/EEC nullity may be provided for where the objects of the company are unlawful or contrary to public policy, or where the number of founding members is less than two, and so in conclusion the Court finally outlined how art.12 nullity entailed dissolution and thereby failed to affect the validity of the company or its dealings despite the presence of unlawful operation or intent, therefore it was down to the discretion of the national courts to determine how best to meet the needs of both the claimant and the defendant, while observing the meaning and effect of Directive 68/151/EEC, before clarifying to the parties that:

“[O]bligation on the part of the national courts to interpret their national law in conformity with a Directive, which has been reaffirmed on several occasions, does not mean that a provision in a Directive has direct effect in any way as between individuals.”

Internationale Handelsgesellschaft mbH v Einfuhr-und Vorratsstelle für Getreide und Futtermittel [1970]

European Law

Internationale Handelsgesellschaft mbH v Einfuhr-und Vorratsstelle für Getreide und Futtermittel
‘Wheat Field’ by Darko Topalski

In this instance the implementation of regulatory measures was questioned by the German courts when an import/export firm fell subject to forfeiture of a deposit under Community law. 

Under art.12(1) of Regulation 120/67/EEC the equilibrium of the European market is protected through the issuing of export and import licences, and so in order to allow for the stability of grains, cereals and rice values it was established by the European Council that traders wishing to operate in this specific field must obtain a time restricted licence clarifying the amounts and costs of those products.

The reason for this window was to enable the Commission to anticipate and adjust market prices in order to protect the Member States from over saturation of non-community products and to allow for the effects of art.40(3) and art.43 EC to be applied, while these principles followed the aims of art.39 EC inasmuch as it provided that Member States were to maintain and help stabilise agricultural markets in order to ensure fair living standards via reasonable pricing. 

In addition to this, art.40(3) EC further focussed on the need to apply certain measures where necessary, which on this occasion included the forfeiture of licence deposits where no planned exportation or importation had occurred during the licence period, and so after the claimant continued exporting maize beyond their licence expiration date a percentage of their deposit was forfeited by the Einfuhr-und Vorratsstelle für Getreide und Futtermittel under the terms of art.12(1) of Regulation 120/67/EEC. 

When later challenged in the national courts, uncertainty emerged when reconciling German law with the Treaty Regulations, therefore a preliminary ruling was sought under art.177 EC, whereupon two questions asked:

1. Whether the requirement to forfeit licence deposits subject to the terms of art.12(1) was legal?

2. Whether art.9 of Regulation 473/67/EEC (which had been adopted in conjunction with Regulation 120/67/EEC) was legal, in that it included the exclusion of forfeiture in matters subject to force majeure?

It was also argued that while the terms of Community law were inherent to the existence of a Member State, it was felt that the superiority of German constitutional law contradicted the presence of deposit forfeitures on grounds that such measures were considered penal as opposed to valuable to the aims of German freedom laws.

When evaluating the views of the court and the questions set down for clarification, it was first held by the European Court of Justice that under no circumstances did the forfeiture of deposits serve any other purpose than that of market stability, as outlined in art.40(3) EC, which translated that Regulation 120/67 was legal and thus did not interfere with the aims and objectives of arts.40 and 43 EC.

Secondly, with regard to the exemption of forfeiture under the presence of force majeure (frustrations beyond control of the licence holder) it was held that while the context of the exemption was subject to wider meaning, it was deliberate in that it allowed for a number of prevailing circumstances to determine whether in each instance the claimant had taken sufficient steps to apply for the licence before citing any inability to use it, which by extension allowed for full support of the aims prescribed in art.39 EC, while the Court further reminded the parties that:

“The legality of a Community measure can be judged only in the light of the ordinary law, whether written or unwritten, but never in the light of the national law, even if that is a constitutional law.”

Francovich and others v Italy [1991]

European Law

Francovich and others v Italy [1991]
‘Azov Steel Mill’ by Konstantin Shurupov

The adoption of EU Directives is a prerequisite for all Member States, and so an when ignorance of the duty to transpose those obligations into the fabric of national and Community law remained unaddressed, the perfect vehicle emerged with which to underline it.

The importance of employee rights is one frequently contested in all forms of commerce, and so when Italy failed to adopt Directive 80/987/EEC, it was the joint action of a group of factory workers that directed the European Community’s attention towards the heart of industry and the anger of those being abused within the market system.

After serving as a loyal employee for an electronics firm, the claimant found himself redundant through the process of liquidation and yet left unpaid for work undertaken and uncompensated for his loss of earnings, and so in a conjoined hearing, Danila Bonifaci and thirty-three other employees (case C-9/90) sought recompense within the same matter.

In the first instance the Pretore di Vicenza and Pretore di Bassano del Grappa both sought a preliminary hearing under art.177 EC, and so the first approach taken by the European Court of Justice was to determine if the respondent’s failure to adjust their domestic laws in line with Directive 80/987/EEC had rendered itself liable to individual enforcement of accountability for payment of lost earnings, or whether the pecuniary losses sustained by the claimants were sufficient enough to award damages based upon state avoidance.

Through an examination of the qualifying criteria for ‘direct effect’ claims, the Court established that this particular case satisfied those terms, and yet noted how the respondent’s non-adoption had failed to fulfil a key element of the Directive requiring proper identification of the companies subscribed to those duties, which left the Commission unable to determine who the two employers were, and how they would be obliged to provide payment or legally defer the onus to the Italian government. 

However the Court also noted how in Simmenthal SpA v Italian Minister of Finance they had held that:

“[D]irectly applicable Community provisions must, notwithstanding any internal rule or practice whatsoever of the Member States, have full, complete and uniform effect in their legal systems in order to protect subjective legal rights created in favour of individuals…”

Which showed that the inability to reflect EU laws will be used as an example when serving the interests of the Community, thus the Court unanimously held that all Member State national courts were held to a duty to redress the inequity of failed transposition, thus full state funded compensation was now due, while reminding the parties that:

“[W]herever the provisions of Directive appear, as far as their subject matter is concerned, to be unconditional and sufficiently precise, those provisions may, in the absence of implementing measures adopted within the prescribed period, be relied upon as against any national provision which is incompatible with the Directive or in so far as the provisions define rights which individuals are able to assert against the State.”

Foster v British Gas [1986]

European Law

Foster v British Gas [1986]
‘British Gas Works on the River Spree’ by Adolf Meckel von Hemsbach

In the same way that Marshall v Southampton and South West Area Health Authority [No.1] determined the rights of female employees under the protections of Directive 76/207/EEC, this class action matter extended its scope to allow damages for dismissal under the guise of retirement.

When six former workers were subjected to forced retirement at the age of sixty, they sought remedy through the industrial tribunals on grounds that the respondent had violated its obligation to observe the Directive’s principles of equality, and thus they were entitled to compensatory payment in lieu of their significant financial losses.

In the first instance the appellants claims were dismissed on the strength that since 1986 the British Gas Corporation had become a private entity, and therefore it fell beyond the scope of the Directive, while a subsequent appeal to both the Employment Appeal Tribunal and the Court of Appeal proved futile.

Undeterred, the appellants presented their case to the House of Lords, who sought a preliminary ruling from the European Court of Justice under art.177 EC, whereupon two questions asked: 

1. Whether the manifestation of British Gas Plc (at the time of the claim) was within the terms of the meaning “state”? 

2. And if so, what form the award might take? 

Having evaluated the facts, the House held that when Directive 76/207/EEC first came into force it was ignored by the United Kingdom and subsequently failed to become part of domestic legislation within the provided timeframe, therefore the respondents were state owned and thereby subject to the terms of the Gas Act 1972, while the state’s failure to transpose the terms of the Directive left it open to the Community law doctrine that ‘no state can profit from its own failure’.

This resulted in a judgment for the appellants on grounds that the terms of the Directive were fully applicable to the respondents as they qualified as an emanation of the state and were subject to the effects provided under it, while the Court reminded the parties that:

“[T]he State may not benefit from its default in respect of anything that lies within the sphere of responsibility which by its own free choice it has taken upon itself, irrespective of the person through whom that responsibility is exercised.”

Defrenne v SABENA [1976]

European Law

Defrenne v SABENA [1976]

The effects of art.119 EC and the stark inequality between men and women in the workplace were brought together in a case that showcased both the power of law and the equitability of the European Community.

Employed as an air hostess in 1963 by Belgian Société Anonyme Belge de Navigation Aérienne (SABENA), the appellant was re-contracted as a cabin steward and air hostess under the title of cabin attendant, however the contractual caveat was that unlike her male counterparts she was expected to retire from her duties at the age of forty, while termination of her employment entitled her to twelve months severance pay without pension rights.

Having been forced to retire as per the contract, the appellant initiated discrimination proceedings on a number of grounds including the assertion of her right to equal pay under the terms of art.119 EC which explains that:

“1. Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied.”

And yet despite her contentions the Tribunal du Travail of Brussels dismissed her claims outright before her appeal to the Cour du Travail of Brussels was further dismissed with the exception of inequality of salary, however despite the court’s ability to overrule its own legislation in favour of the Treaty article, it chose instead to seek a preliminary ruling from the European Court of Justice.

For clarity, in 1957 the Treaty of Rome included the express requirement that every Member State would ensure and maintain the application of the principle that men and women should receive equal pay for equal work, and while the initial adoption period was set at two years, Belgium never amended its own legislation to reflect the values of the Treaty Article until 1967, in which s.14 of Royal Decree 40 enabled women in such situations the rights to seek remedy within the national courts.

On this occasion the Belgian government’s defence was that while art.119 conferred powers to those women paid less than men in similar roles, the effect of that principle  fell solely within the limitations of public office and not private contracts, however the claimant countered that by all accounts the direct effect of art.119 EC had existed since 1957 and so provided her with retrospective rights of recovery. 

Once before the European Court of Justice, the Advocate General clarified that direct effect relied upon the clarity of the regulation, and so when addressing sexual inequality it was clear how the principle’s purpose relied upon the differences cited, thus the Court held that going forward the national courts were to refrain from reference to art.177 EC in order to seek preliminary rulings when there was sufficient cause within art.119 EC to overrule domestic legislation under the rule of Community law, while reminding the parties that:

“Article 119, despite the fact that it is restricted to imposing an obligation on the States, is primarily concerned with the relationship between individuals. The discrimination which the provision sets out to prohibit will, in the majority of cases, consist of discriminatory action by a private undertaking against women workers.”

CILFIT and Lanificio di Gavardo SpA v Ministry of Health [1982]

European Law

CILFIT
‘Lamb of God’ by Francisco de Zurburán

Member State compliance with Community law is brought into question after an Italian national court sought to address their Ministry for Health’s contention that domestic laws precluded a right to claim, and that no regulatory terms could provide a different outcome.

When a claim was made by a number of textile firms against the excessive taxation of imported wool, they relied upon the powers conferred by Regulation 827/68/EEC and not the discriminatory rules set down under the national powers of Law No.30, which had forced companies to pay levies ten times the amount intended prior to a later amendment under Law No.1239.

In the first instance the claimants were denied a right to recover in the Tribunal di Roma (District Court) on grounds that the adoption of Regulation 827/68/EEC had excluded wool, while the Corte d’Appello (Court of Appeal) also rejected the claim before they appealed to the Court of Cassation, whereupon the Ministry of Health cross-appealed in an attempt to persuade the Court to decide the outcome without seeking a preliminary ruling under art.177 EC.

Here the Court interpreted that by virtue of the fact that the Ministry of Health argued against a consultation with the European Court of Justice, there must be a degree of uncertainty as to the effect of Regulation 827/68/EEC, and that while national legislation failed to provide an immediate remedy such a duty nonetheless existed. 

Thus in accordance with its perceived obligations the Court of Cassation asked:

1. Whether under such circumstances para.3 of art.177 EC required the national courts (or courts of first instance) to seek a preliminary ruling where uncertainty or doubt as to the interpretation of a Regulation existed?

Having evaluated the intentions and possible variances of art.177 EC it was agreed by the European Court of Justice that while certain discretions were provided for when adopting and applying the terms of Community law, the obligation to seek a preliminary ruling was one designed to establish clarity. 

This translated that even if the questions arose from claimants, government or the courts themselves, it was important that the courts looked at the complexity of the doubt and sought (where relevant) the assistance of the European Court of Justice in order that the effect of the Regulation or Directive was properly established, while the Court further reminded the parties that:

A uniform interpretation of Community law by the Court is objectively in the public interest, which may not be subordinated to the existence or otherwise of agreement between the national courts in the previous stages of an action or to the assent or dissent of the parties.”

Von Colson and Kamann v Land Nordrhein-Westfalen [1984]

European Law

 

Von Colson and Kamann v Land Nordrhein-Westfalen
‘The Prisoner’ by Jean-Leon Gerome

Sexual discrimination and the right to enforce Directive 76/207/EEC when applying for a position was unprecedented within the European Community, and so when two well-qualified female social workers applied for similar posts at the Land Nordrhein-Westfalen (a male populated prison) and were refused employment on grounds of their gender, the Arbeitsgericht Hamm (German Labour Court) referred a number of questions to the European Court of Justice under art.177 EC. 

Having referred to the principles of Directive 76/207/EEC governing equal access to employment, training, promotion and working conditions, the claimants contended that denial of this particular post was tantamount to a breach of Member State obligations and that legal remedy should constitute either six months full pay or the creation of another position within the offer of employment. 

However German law had been amended to incorporate the Directive measures with a degree of discretion, inasmuch as proof of sexual discrimination within the recruitment process only provided resulting sanctions as one incurring travel costs and not those allowing compensatory damages or the employment provision sought. 

This led to the formulation of five interrelated questions, and which asked:

1. Whether under breach of the anti-discrimination Directive, was the employer liable to provide for, and offer, employment to those parties affected? 

2. If so, was it on grounds that the claimant could provide evidence of greater qualification than those required for the position applied for?

3. Was equal competence acceptable as grounds for the provision of additional employment, or was the claimant entitled to employment irrespective of qualifying ability? 

4. Did Directive 76/207/EEC provide clear instruction as to the form of remedy awarded where discrimination occurred, but no employment was required? 

5. Could the terms of the Directive be relied upon by an individual when the discrimination was between private individuals?

When examining the exactness of the Directive it was held by the European Court of Justice that while the effects of Community law and transposition of those Directives must observe and follow the principles expressed, where discriminatory acts are proven, the Commission did not intend that an employer was imposed with any obligation to create positions beyond those advertised. 

Thus in terms of legal clarity, the Court held that further national debate was needed in order to amend the legislation in line with a fair and balanced level of compensation, while it was also held that the terms of the Directive were too ambiguous as to offer individual powers to enforce against another party where such provisions were not already in place, before reminding the parties that:

“[D]irective No.76/207 does not require discrimination on grounds of sex regarding access to employment to be made the subject of a sanction by way of an obligation imposed upon the employer who is the author of the discrimination to conclude a contract of employment with the candidate discriminated against.”