INTRODUCTION

Chile is usually recognised as a mining country, the development of this old and established industry being one of the most important sources of work and economic development. From a legal perspective, the importance of this industry has even resulted in a constitutional clause guaranteeing the protection of property over mining concessions. The main regulation devoted to the exploitation of minerals is the current Mining Code. Despite the risks involved in mining, none of the Mining Code's provisions refer to the concept of risk, nor does it set out a coherent treatment of risk. However, several other sources – such as complementary or general statutes, administrative, labour and environmental regulations, and case law – flesh out how risk is treated in the mining industry.

Mining is certainly a very attractive case study, as multiple key aspects of risk are inherent in this activity. The importance of risk is recognised from start to finish, before mines start their activity, during their operating life, and long after mine sites are closed. The risks involved can be classified by looking prospectively at the subject or object which is damaged as a result of the realisation of the risks arising – thus showing the lack or failure of preventive measures – from the mining activity, namely the environment, private property, and the life and health of miners, as well as the surrounding community. Moreover, mining is a particularly useful economic sector to examine from a risk perspective for two further reasons. First, it is pervaded by a relentless tension between socio-political and legal forces. The struggle between these forces can be seen in parliament, the administrative authorities, courts, trade unions, employers, the environment itself, and the community at large. Secondly, mining provides a neat illustration of the interaction between preventive measures and ex post remedies throughout the different stages of a given operation. In particular, extracontractual liability for harms ensuing from risks wrongfully and/or inefficiently dealt with stands out amongst a number of ex post responses provided by the Chilean legal system.

As will be explained, the goal of minimising the risks involved in the development of mining activities is established in legal and administrative regulations of several kinds.

INTRODUCTION

The free movement of goods and services are central to the functioning of the internal market of the European Union (EU). The provisions of the Treaty on the Functioning of the European Union (TFEU) governing the free movement of goods (Article 28 et seq TFEU) and services (Article 56 et seq TFEU) principally address Member States, though may under certain circumstances also extend to private actors. While many scholars have devoted their attention to analysing those circumstances and the way in which they have been articulated in the case law of the European Court of Justice (‘Court of Justice’), considerably less attention has been paid to the exact consequences in private law of the application of the free movement of goods and services. Does such application to private law relationships create, modify or extinguish rights and obligations, does it affect existing private law remedies, and if so, how? Not surprisingly, EU lawyers do not regard these consequences as part of their core business, yet scholars of private law, and national courts dealing with civil matters in particular, grapple with the questions that follow from the application of the free movement of goods and services to private law disputes.

It is argued in this chapter that the impact of the free movement of goods and services on private law rights and remedies, and the underlying relationships that are governed by them, is pervasive and multi-faceted, yet not well understood in legal scholarship and practice. EU lawyers conceptualise – and do so rightly – the cases brought before the Court of Justice on free movement of goods and services, as cases of internal market law. However, if we remember that trade in goods and services typically takes place based on private law arrangements, namely contracts, we must admit that the decisions rendered by the Court will also have an impact on underlying contracts and related private law rights and obligations of individuals. Even if a contractual relationship is absent in the context, it was at least the potential of a private party to engage in a contractual relationship with a party based in another Member State that was at stake, and thus led to the decision by the Court.

The EC Treaty, so the European Court of Justice found in its judgment in Costa v ENEL, created its own legal order which has been integrated into the legal systems of the Member States and which their courts are bound to apply. This legal system is binding on both the Member States and their citizens. In Van Gend en Loos the Court of Justice expressly took the ground that EU law can have direct effect. Independently of the legislation of Member States it not only imposes obligations on individuals but is also intended to confer upon them rights which become part of their legal heritage. These rights arise not only where they are expressly granted by the Treaty, but also by reason of obligations which the Treaty imposes in a clearly defined way on individuals as well as upon the Member States and upon the institutions of the Community. In subsequent judgments the Court made it clear that this includes rights and obligations of a private law nature.

This volume has for its theme the interplay and influence exerted on approaches and legal concepts of private law, including property rights law, by primary EU law, particularly internal market law. The starting hypothesis is that the Court of Justice (also, the Court) has developed concepts in private law cases which are different in substance from the concepts which exist in the private law systems of the Member States. The project aims to present developments in current law of which EU lawyers and private lawyers generally are unaware. This book offers ground-breaking analyses of the main private law concepts (the person, property, contract and tort, and remedies) as they are used, created or adjusted by the Court. Each analysis results from insights obtained into the substantive meaning of the concepts deployed in the Court's case law, disconnected from national meanings of such concepts. The direction of this analysis is from the cases to the concepts, not the other way around: the cases and the facts behind the cases are the starting point. In this ways the analyses aim to avoid preconceptions based on national private law systems.

INTRODUCTION

Competition law and contract law have been traditionally regarded as independent areas, with limited interactions. While sharing some common objectives and functions such as promoting economic freedom, the two areas fulfil different roles in regulating commercial activity and the behaviour of market actors. However, in practice EU competition law seems to have an increasingly major impact on private law, as a number of key cases of the European Court of Justice (‘Court of Justice’) have indicated. This influence may sometimes conflict with national principles, creating tensions which are in turn stimulating new legal developments.

This chapter analyses the intersections between EU competition law and contract law, focusing mainly on Article 101 of the Treaty on the Functioning of the European Union (TFEU), which has a private law dimension and can directly affect the validity of anti-competitive agreements. A number of key competition law cases will be assessed to explore how recent court rulings have influenced and shaped private law concepts, such as nullity of unlawful contracts, damages and the protection of the weaker contractual party.

This chapter first examines cases where the court clarified the notion of contractual nullity in competition law disputes. While nullity is an important remedy in competition law, a comprehensive analysis of its influence on national law, which takes into account the intricate relationship between effective competition and contractual freedom, is still lacking. This chapter aims to shed some light on this issue, assessing the concept of nullity developed by the Court of Justice and its effects on national law.

A second topic treated in this chapter is the right to claim damages and the principle of effective protection in EU case law. Particular attention will be given to the multi-party dimension in the seminal Courage and Manfredi cases and the impact of these cases on national law, assessing new legislative developments.

The chapter concludes by arguing that the Court of Justice has actively shaped the concepts of nullity and damages in competition law disputes, leaving it to Member States to determine the consequences of unlawful contracts within the realm of Article 101 TFEU. As a result, the effects of invalid contracts differ considerably depending on the jurisdiction and the particular circumstances of the case.

INTRODUCTION

Article 101(2) is the only provision of the Treaty on the Functioning of the European Union (TFEU) dealing with the private law consequences of conduct by individuals. Article 101(2) TFEU provides that agreements and decisions infringing Article 101(1) and not being exempted under Article 101(3) TFEU are automatically void. Article 101(1) TFEU prohibits ‘all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market’. The voidness or nullity referred to in Article 101(2) is an autonomous concept of EU law. However, the TFEU does not give any further information on the characteristics or the consequences of the automatic voidness under Article 101(2) TFEU.

The present chapter aims to analyse the case law of the European Court of Justice (‘Court of Justice’) in order to learn more about the nature, the scope of application, the characteristics and the consequences of the Article 101(2) nullity and its impact on the national law of the Member States. Attention will also be paid to the application of Article 101(2) nullity by national courts and to the analysis of the said article in legal scholarship, as well as to the similarities and differences with national concepts of nullity and the concept of non-bindingness that is used in the Unfair Contract Terms Directive (UCTD). No attention will be paid to the so-called theory of provisional validity which applied before the entry into force of Regulation 1/2003, when Article 101(3) was not directly applicable by national courts. Equally, the issue of the impact of the nullity of an agreement or clause for infringement of Article 101(1) TFEU on related contracts will not be addressed.

First, the character of Article 101(2) nullity as an EU private law sanction will be highlighted. Subsequently, the scope of application of Article 101(2) nullity will be investigated. Then the typical characteristics of Article 101(2) nullity will be further examined: its automatic and absolute character and its retroactive effect. After this, attention will be paid to the impact of the nullity of a clause of an agreement or decision on the remainder of that legal act and to the possibility for national courts to modify void agreements in order to render them valid.

INTRODUCTION

The present chapter provides an explanation of the field of research, its background, the approaches to studying it and its aspirations. On the basis of discussions, exchanges and collaboration with the chapter authors, meetings with the authors, commentators and the editors and past, current and future research of the editors we add observations presented around four important concepts of private law: (i) the person (section 4); (ii) property (section 5); (iii) contract and tort (section 6); and (iv) remedies (section 7). In section 8 we shed light on lines of development and reasoning within current EU private law which to our understanding build an explanatory framework and determine the direction of the debate in the near future. The (no longer surprising) finding is that in issues governed by primary internal market law, internal market interests tend to prevail over other interests. Primary internal market law transforms private law and horizontal legal relationships. This, however, is not the full story. At the same time expectedly and unexpectedly, room is created for further transformation. Once market freedoms become integrated, they open the door to the introduction of fundamental rights issues. In their turn, fundamental rights related interests may be relied upon to open up the market. In intellectual property law, the fundamental right to information of third parties is introduced in order to grant access to the market while it limits the property rights of the intellectual property right-holder. Also for other parts of internal market law, the European Court of Justice (‘Court of Justice’) covers in its reasoning a broad spectrum of interests. The result is, for example, an interaction between the freedom of speech and the freedom of establishment.

It is crucial to stress the double consequence of the instrumentalisation of private law. The introduction of internal market law in horizontal relationships provides for a chance to introduce fundamental rights issues. The relation to the open market enables judges and parties to review a horizontal relationship against a broad spectrum of interests. Therefore it is possible that interests derived from human rights, including the social, will be (re-)embedded. State aid law provides for another example. EU law requires restoration of state aid illegally granted. It does not require more than restoration.

INTRODUCTION

Although the free movement of capital is a relatively young fundamental freedom compared to the other existing freedoms laid down in the Treaty on the Functioning of the European Union (TFEU), it has already proven to have had a remarkable impact on national company law. With regard to the relevance of the open corporation in the EU, this is no surprise: the vast majority of European company law harmonisation measures have been dedicated to this type of company: almost all of the, up to now, 14 company law Directives address the open corporation (some of them even exclusively the public open corporation), for whose functioning the free tradability of shares at a regulated stock market is the essential precondition. Additionally, it is the open corporation that was established as an optional model rule for the internal market, the Societas Europea (SE). The SE has proven to be the most successful European company, whereas the European Economic Interest Grouping (EEIG) never gained particular importance, and the project of the Societas Europea Privata (SPE) Statute (an optional model for a closed company on an EU level) has even been abandoned by the Commission. There is no doubt that capital market freedom is of fundamental importance for those companies whose shares are traded on the stock market. As the ‘big players’ of the economy, the companies that operate on a European and international level are typically organised in that form; it seems to be a logical consequence that the focus of the EU law-making effort has been directed primarily towards the open corporation.

The development of capital market freedom through the European Court of Justice (‘Court of Justice’) is well in line with this secondary law approach (ie because the free movement of capital is of special interest to those companies that are able to raise capital on capital markets). In contrast to this, the freedom of establishment applies to the company in general, irrespective of the particular form in which it is organised. Article 49 TFEU thus protects (in accordance with Article 54 II TFEU) all companies or firms constituted under civil or commercial law, including cooperative societies and other legal persons governed by public or private law.

INTRODUCTION

Articles 107 and 108 of the Treaty on the Functioning of the European Union (TFEU) govern the relationship between the European Commission (‘the Commission’) and EU Member States regarding the award of subsidies and other measures having an equivalent effect. Strictly speaking, EU state aid law is not concerned with relationships between individuals. The recipient of aid, which is oft en a private firm, is not the subject of the obligations stemming from Articles 107 and 108 TFEU. In proceedings before the Commission, the recipient is an ‘interested party’ alongside its rivals and other third parties.

Pursuant to Article 108(3) TFEU, it is for the Member State to inform the Commission about its plans to implement any measure falling under the scope of Article 107(1) TFEU. By the same token, it is for the Member State to take the necessary measures to recover the aid that has been granted unlawfully, that is, in breach of the notification (or ‘stand-still’) obligation.

In spite of the above, there are several reasons why EU state aid law has an impact on contractual and non-contractual relationships. The first and most obvious one is economic in nature. One of the objectives of Articles 107 and 108 TFEU is to prevent the distortions of competition that typically result from the award of subsidies and similar measures. At least to some extent, EU state aid law is a complement to Articles 101 and 102 TFEU, which deal with rivalry between firms. The competitors of aid recipients are likely to become involved in proceedings before the Commission, sometimes as complainants, 5 or to seek relief before national courts. For instance, it is possible for competitors to claim damages for a breach of the principles set out in Articles 107 and 108 TFEU. From this perspective, EU state aid law can be seen as a potential source of noncontractual obligations.

The second reason, of particular relevance for the purposes of this chapter, is that state aid may be awarded by means of a contract or a similar mechanism. An agreement between a public body and a firm may be caught by Article 107(1) TFEU and as such be subject to the principle of incompatibility set out in that provision.

Chapter 1 (Primary EU Law and Private Law Concepts), written by the editors, provides an explanation of the field of research, the approaches to its study and its backgrounds and aspirations. It adds observations which are to be presented around four important concepts of private law: (i) the person, (ii) property, (iii) contract and tort, and (iv) remedies. We shed light on lines of development and reasoning within current EU private law, which to our understanding build an explanatory framework and determine the direction of the debate in the near future. The no longer surprising finding is that in issues governed by primary internal market law, internal market interests tend to prevail over other interests. Primary internal market law transforms private law and horizontal legal relationships. This, however, is not the full story. At the same time, both expectedly and unexpectedly, room is created for further transformation. Once market freedoms are integrated, they open the door to fundamental rights issues. In their turn fundamental rights-related interests may be relied upon to open up the market. It is crucial to stress the double consequence of the instrumentalisation of private law. The introduction of internal market law in horizontal relationships provides for a chance to introduce fundamental rights issues. The relation to the open market enables judges and parties to review a horizontal relationship against a broad spectrum of interests. Therefore it is possible that interests derived from human rights, including the social, will be (re-)embedded.

The foundational result is that primary EU law reshapes key concepts of private law. The notion of the person is broken down into identities, remains fragmented and serves to build the internal market. Property is interpreted broadly. The logical consequence is that property cannot be taken as absolute as it used to be. Second, the Court moves away from property and instead assesses cases from an (extra-)contractual perspective. The observations concerning the concept of contract and the concept of extra-contractual liability are detailed and diverse. The Court relies on two different techniques regarding both contract and extra-contractual liability. In the first place the concepts are determined by primary EU law in order to express precisely the aims of the internal market.

INTRODUCTION

When I was studying in the United Kingdom, one of my favourite television series was the BBC series ‘Silent Witness’. Since I did not have a television, I would usually watch the latest episode on BBC iPlayer, the website on which the BBC broadcasts its television programmes on the Internet, the day after it had been broadcasted on television. When I moved to Italy to start my PhD research, it became impossible to watch ‘Silent Witness’ online, because the programmes on BBC iPlayer can only be watched from within the United Kingdom. As a result, the only solution for me was to buy the DVD after the series had finished. This year I discovered, to my surprise, that the episodes were made available on YouTube. This was obviously not done by the BBC itself and the episodes would usually be taken off YouTube a few days after they had been uploaded. However, this was enough for me to be able to watch the most recent episode. Therefore, I did not have to buy the DVD this year.

This short personal story perfectly illustrates the tension between the protection of intellectual property rights and the Internet. The Internet provides a platform which can be used by entrepreneurs for commercial exploitation. At the same time, there is so much information on the Internet that it has become very difficult – if not impossible – for them to control the flow of information. This causes particular problems for holders of intellectual property rights, who might find that their films, songs or other works of art, on which they have oft en spent a significant amount of time and resources, are freely available on the Internet. The complicated technology behind the Internet and the constant technological developments make it practically very difficult for intellectual property rights holders to take adequate action against parties who breach their rights on the Internet. If we return to my personal example, there would be a number of things the BBC could do if it wanted to take action against the uploading of ‘Silent Witness’ episodes on YouTube.