The Effects of the Preliminary Ruling

12

THE EFFECTS OF THE PRELIMINARY RULING


1. Introduction


When the Court of Justice gives a preliminary ruling, in principle it does not decide on the resolution of the actual case before the national court, but only gives a ruling on the validity or interpretation of one of the legal acts referred to in Article 267(1).1 Hence, the preliminary ruling constitutes merely an interim stage in the national proceedings which continue after the Court’s ruling having regard to the clarification of EU law that has now been established.2


There are no provisions of EU law governing the subsequent continuation of these proceedings. Depending on the preliminary ruling, the case may be withdrawn or settled out of court so that no judgment on substance is issued in the main proceedings. Indeed, this often happens due to the sometimes very conclusive and case-specific preliminary rulings.3


Where the case is not withdrawn, it is up to the national court, acting under national law, to decide whether the parties should be given an opportunity to address the referring court on the implications of the preliminary ruling for the main proceedings. Sometimes the Court’s preliminary ruling will in reality settle the main proceedings so that the subsequent proceedings may be quite brief. Often, however, the ruling will leave some questions open so that there will be a need for presenting more evidence.


In this chapter, section 2 deals with the effects of a preliminary ruling on the main proceedings. Section 3 then examines the effect of the ruling on cases other than the one that has given rise to the preliminary reference. Following this, section 4 briefly discusses the legal significance of the Advocate General’s Opinion. Section 5 analyses the temporal effect of a preliminary ruling. Finally, the question of the interpretation and revision of a preliminary ruling is dealt with in section 6.


2. The Effects of a Preliminary Ruling for the Main Proceedings


2.1. National Courts Dealing with the Case


The response that the Court of Justice gives to a preliminary question binds the referring court in its application of EU law.4 Hence, if the referring court fails to comply with a preliminary ruling it not only risks its decision being reversed on appeal, it also constitutes a breach of EU law so that the Commission may commence an infringement action under Article 258 TFEU against the State concerned. Moreover, failure to comply with a preliminary ruling can constitute such a serious infringement of EU law that it will trigger State liability. Indeed, the Court of Justice has ruled that there can be an infringement of EU law incurring liability if a national court does not make a reference for a preliminary ruling in a situation where it has a duty to do so, and on this basis renders a judgment which is not in accordance with EU law.5 A Member State may even more readily incur liability if a national court obtains a preliminary ruling from the Court of Justice and thereafter decides on the case in the main proceedings in a way which is obviously contrary to the preliminary ruling.


Not only the referring court, but also any appeal court which decides on the case in the main proceedings is bound by a preliminary ruling on the case in question.6 The same applies to any other national court dealing with the case at a later stage of the proceedings.7


The binding effect of a preliminary ruling applies not only to its operative part of the preliminary ruling, but must also be understood on the basis of the grounds for the preliminary ruling.


In Bosch, a German court referred a question to the Court of Justice about the correct interpretation of a Council regulation, and in particular on the interpretation of an earlier preliminary ruling in which the Court of Justice had interpreted the regulation. In its answer the Court of Justice repeated the central premise of the original ruling and added that the judgment’s operative part should be understood in the light of the grounds of the judgment.8


The binding effect of a preliminary ruling does not mean that the referring court is prevented from making a new preliminary reference.9 Indeed, national courts have sometimes found that the main proceedings gave rise to further questions concerning EU law and that a second preliminary ruling would be desirable or even necessary in order to answer these further questions. It has also happened that a renewed reference is made because the national court is in doubt about the correct meaning of a preliminary ruling that has been given previously. In comparison, a national court is barred from making a renewed reference in order to challenge the validity of an earlier preliminary ruling.10


Studies show that national courts only very rarely take issue with the result arrived at in the preliminary ruling. Examples of non-compliance are rare and so to the extent that there is a genuine enforcement problem related to the preliminary ruling procedure this does not lie in failure to comply with the Court’s preliminary ruling in those cases where a question has been referred; rather it stems from those cases where EU law is being ignored without the national court making a preliminary reference.11 This is hardly surprising as the willingness to make a preliminary reference normally also implies a readiness to give effect to the preliminary ruling. Indeed, under the parallel rules of the EEA Agreement the EFTA Court’s answer to a preliminary reference under Article 34 of the so-called Surveillance and Court Agreement does not bind the referring court, but merely has the effect of an advisory opinion.12 However, to our knowledge there has only been one instance up to now where the referring court has openly chosen not to follow the EFTA Court’s interpretation.13


Questions concerning the binding effect of a preliminary ruling have, however, arisen in cases where in its ruling the Court of Justice has gone beyond the issue referred to it and has answered a question that, strictly speaking, had not been put to it by the referring court.


In France, the Conseil d’État had previously taken the stand that a preliminary ruling from the Court of Justice only binds a referring French court to the extent that the preliminary ruling stays within the preliminary question as formulated by the referring court. In contrast, it was legitimate not to follow the Court’s ruling to the extent that it answered questions not raised in the reference. Thus, for example, if in a preliminary ruling the Court of Justice limited the temporal effect of that ruling, without the referring court having asked any question thereon, only the requested interpretation of the relevant EU rule would be binding on the referring court, whereas the temporal limitation of that interpretation would not.14 This approach by the French Conseil d’État was hardly compatible with the principle that the judgments of the Court of Justice are also binding on national courts which have not made a preliminary reference. And it was particularly unhelpful with regard to cases concerning the validity of EU acts.


Fortunately, in its ruling in Société De Groot concerning annulment proceedings against a ministerial provision regulating the marketing of shallots, the Conseil d’État has now reversed its position. On the view that the assessment of the lawfulness of the French provision depended on the interpretation of two Council directives, the Conseil d’État referred a preliminary question to the Court of Justice on the relationship between the provision and those directives. In its judgment in De Groot, the Court of Justice did not only rule on the aforementioned directives: noting that the plaintiffs in the main proceedings had also invoked what is now Article 34 TFEU, it also examined the relationship between the French rule and that provision regardless of the fact that the Conseil d’État had decided not to pose a preliminary question concerning the rules on free movement of goods. The Court of Justice concluded that the French rule in question did in fact violate the Treaty provision.15 Following this preliminary ruling, the Conseil d’État held that, although this interpretation of the Treaty had not been the object of the preliminary reference, it was indeed binding on the Conseil d’État.16


Similarly, questions concerning the binding effect of a preliminary ruling have sometimes arisen before the referring court when it has been argued that the Court of Justice has exceeded its competence under Article 267 because it has based its preliminary ruling on an understanding of the facts in the main proceedings not shared by the referring court.


In Arsenal, the English High Court had referred a preliminary question concerning the right of a trademark owner to prohibit the use of his mark by a third party. In its preliminary ruling the Court of Justice referred to the special circumstances in the main proceedings and stated that the character of the third party’s use of the trademark in the actual case was such that the trademark owner could object to it. Holding that it was only bound with regard to the Court of Justice’s findings as to the law applicable to the facts as established by the national court, and holding that the Court of Justice had made a finding of fact, namely that use of the trade mark was liable to affect the origin of the goods, the High Court concluded that the Court of Justice had acted ultra vires. The High Court therefore held that it was not bound by the preliminary ruling. The High Court thereupon reached the opposite result to that which the Court of Justice had reached. This decision was appealed to the English Court of Appeal. The Court of Appeal agreed that the ruling of the Court of Justice seemed to include conclusions on the facts of the case and that these conclusions were not binding on the national court. However, in contrast to the High Court, the Court of Appeal found that the Court of Justice’s finding of the facts was compatible with the assessment of the facts made by the national court, and it therefore came to the same conclusion as that reached by the Court of Justice.17


The Court of Justice accepts that a preliminary reference is sought before the facts are finally established, be that by the referring court or in a later appeal procedure.18 Therefore, where the answers given by the Court of Justice relate to a factual or legal situation that turns out not to be relevant for deciding the main proceedings before the national court, the question of a preliminary ruling’s binding effect does not arise vis-à-vis the main proceedings giving rise to the preliminary reference. Indeed, as stated by the Court itself, the preliminary ruling is binding on the national courts ‘as to the interpretation of the EU provision and acts in question’.19 It follows that both the facts and the national law applicable to the case do not come within the Court’s jurisdiction even if they have been integrated into the preliminary ruling in order to enable the Court to provide the referring court with an answer that is useful for the resolution of the main proceedings.


The national court may therefore, for example, end up deciding the main proceedings on the basis of a point of national procedural law without ever applying the interpretation of EU law provided for in the preliminary ruling.20 Similarly, there may well be situations where, for reasons which have not been subject to the preliminary ruling, the Court’s judgment proves not to be relevant for the resolution of the main proceedings.


In Data Delecta, the Swedish Högsta Domstolen (Supreme Court) had referred a preliminary question concerning whether EU law precluded a Member State from requiring plaintiffs from another Member State to lodge security for the costs of legal proceedings when no similar requirement applied to nationals of that State. The Court of Justice held that such a procedural rule constituted direct discrimination on grounds of nationality and was incompatible with EU law. The Swedish Supreme Court thereupon concluded that even if it were bound by the preliminary ruling, it was nevertheless for the Supreme Court itself to decide whether the circumstances of the particular case before it fell within the scope of the relevant EU provision. In the actual case the action in question was for payment for goods which had been delivered before Sweden’s accession to the European Union. Consequently, EU law, including the Court of Justice’s ruling, did not apply to the facts in the main proceedings, and the Supreme Court therefore concluded that the UK plaintiff should indeed lodge security for the costs of the legal proceedings.21


Where the Court of Justice builds its preliminary ruling on a set of facts that differs from the one described by the referring court, a procedural problem may arise if the referring court is not itself competent to establish the facts, for example because it is bound by the facts as established by a lower court. In this situation, the different assessment of the facts by the Court of Justice might even make it difficult for the national court to comply with the preliminary ruling without violating its own national rules of procedure.22


In Familiapress, the Handelsgericht Wien had made a preliminary reference concerning an Austrian law the effect of which was to prohibit the distribution of periodicals containing prize puzzles or competitions. The Court of Justice held that what is now Article 34 TFEU did not preclude the application of such legislation provided that the prohibition was proportionate to the objective pursued, especially as regards the maintenance of press diversity. The preliminary ruling assumed that the newspapers offering the chance of winning a prize in games, puzzles, or competitions were in competition with small newspaper publishers who were deemed to be unable to offer comparable prizes and that the prospect of winning was liable to bring about a shift in demand. The Court of Justice, however, left it to the national court to determine whether those conditions were satisfied on the basis of a study of the national press market concerned. After an interim appeal of the main proceedings was brought before the Austrian Oberster Gerichtshof, this court considered it impossible under Austrian law for it to call on experts to study the market conditions and consumer habits in question as part of such interim proceedings. On that basis, the Oberster Gerichtshof considered it sufficient if the plaintiff established the likelihood that these conditions had been met and otherwise left it to the lower court trying the substantive issue to determine whether in reality the conditions had been met.23


In Ten Kate, the Dutch Hoge Raad heard an appeal in cassation from the Dutch Court of Appeal. Since the case raised issues of EU law, the Hoge Raad made a preliminary reference. The Court of Justice noted that it appeared from the observations of the Netherlands government and the Commission that the factual situation differed from that assumed by the Hoge Raad in its reference and that it was therefore necessary to recast the preliminary question.24 In the opinion of the Hoge Raad, this new information and different reading of the facts could not be taken into consideration for the purpose of an appeal in cassation. On the other hand, in a re-examination of the case the Dutch Court of Appeal could not ignore the new facts on which the preliminary ruling was based. The Hoge Raad recalled that in exceptional cases Dutch law allows new facts to be taken into consideration during an appeal procedure and it found that in the situation at hand such exceptional circumstances were present. The Hoge Raad added that when a case is referred back to an appeal court following a preliminary ruling of the Court of Justice, and when that ruling is based on facts that cannot be found in the preliminary reference, the parties to the main proceedings must be allowed a right to comment on and dispute the Court’s understanding of the facts.25


It is the national court that applies the preliminary ruling to the facts in the main proceedings.26 In some cases it appears debatable whether in this regard the national court has been faithful to the preliminary ruling.


One of the more spectacular and, it is submitted, less fortunate, applications of a preliminary ruling is found in Brasserie du Pêcheur. The background to this case was that a French brewery had been excluded from the German beer market because French beer did not fulfil the German Reinheitsgebot (‘purity requirement’). Later the German Reinheitsgebot was found to be contrary to the EU rules on free movement, and the French brewery therefore claimed compensation from the German State for the loss it had suffered from its exclusion from the market. The referring German court (Bundesgerichtshof) thereupon asked what conditions apply for imposing liability on a State in such a situation. The Court of Justice replied in a manner that made it natural to assume that the German State had committed a sufficiently serious and manifest breach so as to incur liability, at least with regard to the losses incurred in the period following the date when the Court of Justice had delivered judgment in the infringement proceedings that had earlier been issued against Germany. However, in its judgment the Bundesgerichtshof concluded that to the extent that there was a direct causal connection between the infringement and the loss, this infringement could not be regarded as being sufficiently serious. In other words, the German State was not liable to pay compensation.27


In Santillo, the Court of Justice held that social danger resulting from the presence of a foreigner must be assessed by the competent national authority at the time when the decision ordering expulsion is made against him. This was so, since ‘a lapse of time amounting to several years between the recommendation for deportation and the decision of the administration is liable to deprive the recommendation of its function as an opinion’ within the meaning of the relevant Council directive. Nevertheless, upon receipt of the interpretation the referring English court found that a lapse of four and a half years between the recommendation for deportation and the issue of a deportation order did not deprive the recommendation of its force, as there was no evidence that the position had in any way changed or that the considerations which had caused the recommendation to be made had been altered in a sense favourable to the foreigner involved.28


Following the Court of Justice’s ruling in Ypourgos Ergasias, according to which the Greek legislation on tourist guides was incompatible with what is now Article 56 TFEU concerning the free provision of services, the Greek Council of State found that, in the main proceedings which had given rise to the preliminary question, there was no sufficient cross-border element for that provision to apply. Hence, the applicant could not rely on EU law.29


A preliminary ruling rejecting arguments that an EU act is invalid does not have the effect of concluding res judicata that the act in question is valid. Indeed, the Court never holds in positive terms that the examined EU act is valid, but merely concludes that its examination has disclosed nothing to affect the validity of the act.30 In this way the Court keeps the door open for a finding of invalidity in subsequent cases, including in a new preliminary proceeding originating from the same national court based on new arguments for the alleged illegality.


2.2. The Parties to the Main Proceedings


While both the referring court and any subsequent appeal court are bound directly by the preliminary ruling, the situation is different with regard to the parties to the main proceedings. These parties do not have the status of parties in the preliminary ruling procedure.31 They are thus no more bound by a preliminary ruling stemming from main proceedings to which they are parties than by any other decision of the Court of Justice. Whilst they can rely on the Court of Justice’s ruling in the proceedings before the national court in order to demonstrate the content of EU law, it is only the national court’s decisions which they can require to be enforced, for example through sheriff court proceedings. Moreover, if they act in a manner incompatible with the preliminary ruling they will, formally speaking, not be in violation of the preliminary ruling as such, but only of the relevant EU provision that was subject to the ruling.32


This does not, however, entail that the parties to the main proceedings giving rise to the preliminary ruling may legitimately ignore that ruling so long as the referring court has not rendered judgment on the matter. For instance, a preliminary ruling finding that a given national tax measure is incompatible with EU law may be so straightforward and unconditional that the relevant tax authorities on the basis of EU law will have an obligation to stop enforcing the national tax measure even before the national court has ruled on the matter. Indeed, the authorities of the Member State concerned have an independent obligation to take all measures necessary to ensure that EU law is complied with within that State. While they retain the choice of the measures to be taken, those authorities must in particular ensure that national law is changed so as to comply with EU law as soon as possible and that the rights which individuals derive from EU law are given full effect.33 If the Member State does not do this, the Commission may bring an infringement action and there may even be a basis for a claim for compensation under EU law.


3. The Effect of a Preliminary Ruling in Other Cases


3.1. Other National Courts