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1187 results in Private International Law

Page 20 of 60

  • Chapter 5 - Case Law on Direct Horizontal Effect of Articles 45, 49 and 56 TFEU

  • from Part II - Direct Horizontal Effect: Internal Market
  • Roel van Leuken
  • Book:
    Private Law and the Internal Market
    Published by:
    Intersentia
    Published online:
    27 September 2018
    Print publication:
    23 May 2017, pp 63-114

  • Summary

    INTRODUCTION

    Although within the general scheme of the Treaty the provisions on free movement of workers, freedom of establishment and freedom to provide and receive services were intended as prohibitions addressed to the Member States, there is now no longer any doubt that Articles 45, 49 and 56 TFEU are also binding on individuals. It is not clear, however, how far their so-called ‘direct horizontal effect’ extends or may come to extend. This chapter seeks to bring clarification.

    Sections 5.2. and 5.3. will discuss, in chronological order, the judgments in which the Court of Justice has ruled on direct horizontal effect of the prohibitions on discrimination and restrictions laid down in Articles 45, 49 and 56 TFEU. This is followed in section 5.4. by an analysis of the arguments underlying this case law. The results of this analysis form the basis for a discussion in section 5.5. of the direction in which the case law regarding direct horizontal effect of Articles 45, 49 and 56 TFEU can be expected to develop.

    CASE LAW ON DIRECT HORIZONTAL EFFECT OF THE PROHIBITIONS ON DISCRIMINATION IN ARTICLES 45, 49 AND 56 TFEU

    WALRAVE AND KOCH (1974)

    Bruno Walrave and Norbert Koch were two Dutch nationals who participated as professional pacers in motor-paced track cycling competitions. A characteristic feature of such competitions was that a cyclist followed a derny rider (the pacer), who created a slipstream and thus enabled the cyclist to reach very high speeds. Official races were organised by national cycling associations under the auspices of the coordinating international cycling union (Union Cycliste Internationale, UCI).

    Towards the end of 1970 the UCI decided to change the regulations for the world championships in track cycling: henceforth, pacer and cyclist were required to have the same nationality. Because Walrave and Koch considered this new rule to be ‘a threat to their livelihood or in any case a serious reduction in the size of the market in which they [could] sell their skills’, they applied for a declaratory judgment that the new UCI rule was null and void because it infringed EU law, specifi cally the Treaty provisions on free movement of workers (Article 45 TFEU, ex Article 48 EEC) and free movement of services (Article 56 TFEU, ex Article 59 EEC).

  • Chapter 3 - Direct Horizontal Effect of Articles 101(1) and 102 TFEU: Private Law Consequences

  • from Part I - Direct Horizontal Effect: Concept and Application in Competition Law
  • Roel van Leuken
  • Book:
    Private Law and the Internal Market
    Published by:
    Intersentia
    Published online:
    27 September 2018
    Print publication:
    23 May 2017, pp 27-36

  • Summary

    INTRODUCTION

    The prohibition of anti-competitive agreements (Article 101(1) TFEU) and the prohibition of abuse of dominance (Article 102 TFEU) can be invoked by individuals against undertakings whose conduct violates these prohibitions (see paragraph 15). The consequences which the so-called direct horizontal effect of these Treaty provisions has for private law relationships are varied. This chapter will successively discuss the nullity of legal acts that are contrary to Article 101 or 102 TFEU (section 3.2.), liability for wrongful act arising from infringement of the prohibition of anti-competitive agreements (section 3.3.), and actions for undue payment (section 3.4.) and unjust enrichment (section 3.5.) that are based on violation of the same prohibition.

    NULLITY OF LEGAL ACTS

    Article 101(1) TFEU prohibits ‘all agreements between undertakings … 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.’ Article 101(2) TFEU provides that agreements affected by the prohibition are null and void by operation of law. The case law of the Court of Justice shows that such nullity is absolute, and that the national courts must establish the nullity of their own motion. Furthermore, the Court has specified the meaning of this nullity sanction by ruling that it only applies to the parts of the agreement that are affected by the prohibition of Article 101(1) TFEU. If these parts are non-severable from the other parts of the agreement, the entire agreement is null and void; if they are severable, then the consequences for the other parts of the agreement are determined in accordance with the national law.

    From the above it can be inferred that it is EU law (and therefore ultimately the Court of Justice) which determines to what extent national private law applies to the legal consequences of the nullity of the agreement struck by Article 101(1) TFEU. In view of the purport of this Treaty prohibition, it is plausible to assume that the Court considers the element of prevention so important that it will not easily find modification or mitigation of the nullity permissible.

    The consequences of nullity for other agreements (between the same parties or with third parties) are governed by national private law.

  • Chapter 9 - Justifications in Private Law Relationships

  • from Part III - Justifications
  • Roel van Leuken
  • Book:
    Private Law and the Internal Market
    Published by:
    Intersentia
    Published online:
    27 September 2018
    Print publication:
    23 May 2017, pp 151-184

  • Summary

    INTRODUCTION

    Whether it is a trade union that has called a strike and is being sued for damages by an employer or employers’ organisation for alleged infringement of Article 34, 49 or 56 TFEU (see paragraphs 6, 80 and 83 above), or a private law association that is confronted with an action for annulment of a rule or regulation that is contrary to Article 45 or 63 TFEU (see for example paragraphs 57 and 69), an individual sued for having infringed a free movement provision that has direct horizontal effect should be able to rely on an appropriate ground of justification. Although in this context many will look to the principle of party autonomy, reliance on this principle alone will not do (section 9.2.). But then, what does? Research of the private law potential of the exceptions provided for in the Treaty (section 9.3.), the rule of reason exceptions (section 9.4.) and the justification on the ground of protecting fundamental rights (section 9.5.) should produce an answer to this important question (section 9.6.).

    FREE MOVEMENT PROVISIONS AND PARTY AUTONOMY

    The EEC Treaty, signed in Rome on 25 March 1957, marked the starting point of a long-term process of (economic) integration between European states. Its main objective was the creation of a common market, a concept that referred to ‘the elimination of all obstacles to intra-Community trade in order to merge the national markets into a single market bringing about conditions as close as possible to those of a genuine internal market.’ The Court's reference to ‘internal market’ predated the introduction of the concept in the Treaty; it was not until 1 July 1987 – when the Single European Act entered into force – that the concept made its appearance in the EEC Treaty along with the ‘common market’. Since 1 December 2009, the date on which the Lisbon Treaty entered into force, ‘internal market’ has been the only term used to give expression to the market integration objective of EU law.

    The internal market comprises an area without internal frontiers in which there is full mobility of production factors. It thus enables individuals to work, deploy capital, buy and sell goods and receive or perform services across borders. The required convergence of national markets into one European market takes place by two complementary means.

  • Chapter 7 - Case Law on Direct Horizontal Effect of Article 63 TFEU

  • from Part II - Direct Horizontal Effect: Internal Market
  • Roel van Leuken
  • Book:
    Private Law and the Internal Market
    Published by:
    Intersentia
    Published online:
    27 September 2018
    Print publication:
    23 May 2017, pp 133-138

  • Summary

    INTRODUCTION

    To date, the Court of Justice has not yet given a ruling on the question whether Article 63 TFEU has direct horizontal effect, which is why section 7.2. merely contains a brief discussion of two judgments in which the issue was mentioned only indirectly. In section 7.3., however, a process of combination and deduction leads to the conclusion that the Court will most likely come to accord direct horizontal effect to Article 63 TFEU, too.

    CASE LAW

    COMMISSION V BELGIUM (EUROBOND) (2000)

    The central issue in this procedure was a Belgian measure (Royal Decree of 4 October 1994) authorising the Finance Minister to contract a public Eurobond loan to the amount of one billion German marks. Article 3, paragraph 1 of the Decree stated:

    Withholding tax on interest payable on the loan is hereby waived.

    Subscription by Belgian residents other than banks, financial intermediaries and institutional investors referred to in the agreements mentioned in Article 2 [which were to be concluded with the financial institutions concerned] and the conditions laid down therein is not permitted.

    The definitive certificates will be delivered to the holders only on production of a certificate certifying that they are non-resident or that they fulfil the conditions referred to in the preceding paragraph.

    The second paragraph of Article 3 of the Royal Decree was reflected in the agreements concluded with the financial institutions concerned. It stated:

    The Bonds may not be offered or sold, directly or indirectly, to residents of, or corporations or other legal entities having their domicile in, the Kingdom of Belgium except, provided that the offer or sale does not constitute an offer to the public of the Kingdom of Belgium, to (i) a bank which is so resident or domiciled, (ii) a broker, similar intermediary or institution of international standing whose business involves dealing in securities or managing customers ‘ funds, which is so resident or domiciled and (iii) an insurance company which is so resident or domiciled.

    The European Commission took the position that the second paragraph of Article 3 of the Royal Decree constituted a discriminatory barrier to the free movement of capital that was contrary to Article 63(1) TFEU, because it prohibited Belgian citizens from subscribing to a public loan issued abroad.

  • Preface

  • Roel van Leuken
  • Book:
    Private Law and the Internal Market
    Published by:
    Intersentia
    Published online:
    27 September 2018
    Print publication:
    23 May 2017, pp v-vi

  • Summary

    Private law and private law relationships are increasingly influenced by the law of the European Union. Sometimes, the consequences are foreseeable, for instance because EU law provides expressly that violation of its rules shall produce a specific private law effect. Well-known examples are the nullity provided for by Article 101(2) TFEU for agreements that prevent, restrict or distort competition within the internal market, and the Union's obligation under Article 340 TFEU, in the case of non-contractual liability, to make good any damage in accordance with the general principles common to the laws of the Member States.

    More surprising are the consequences that are generated when the Court of Justice interprets provisions of EU law ostensibly addressed to the Member States, as creating, modifying or extinguishing rights and obligations in legal relationships between individuals (direct horizontal effect). Starting in 1974 the Court has used cases submitted to it as an opportunity to express its views on the possible direct horizontal effect of the TFEU provisions pertaining to the functioning of the internal market, known as the fundamental freedoms (or free movement provisions): Articles 34 and 35 TFEU (free movement of goods), Article 45 TFEU (free movement of workers), Article 49 TFEU (freedom of establishment), Article 56 TFEU (freedom to provide and receive services) and Article 63 TFEU (free movement of capital).

    This book was triggered by the fact that the Court of Justice has interpreted a number of free movement provisions of primary EU law as having direct influence on private law relationships. It seeks out the links between the Court's rulings on the issue and examines, by analysing them against the background of the various mechanisms used by EU law to influence national private law, whether the approach taken by the Court to one free movement provision can be predictive for other free movement provisions and if so, to what extent. The research thus gives a clear picture of the possible reach of the influence of the free movement provisions on private law relationships. The attention to the impact which accepting direct horizontal effect has on the kind of justifications that must be available to individuals as a defence to alleged infringement of a free movement provision is a direct corollary of this research.

Private Law and the Internal Market
  • Direct Horizontal Effect of the Treaty Provisions on Free Movement
  • Roel van Leuken
  • Published by:
    Intersentia
    Published online:
    27 September 2018
    Print publication:
    23 May 2017
  • Private law and private law relationships in Member States of the European Union are increasingly influenced by EU law. Sometimes, this influence is predictable, for instance because EU law provides expressly that violation of a rule shall produce a specific private law effect (Article 101(2) TFEU). Less predictable are the consequences where the Court of Justice interprets provisions of EU law ostensibly addressed to the Member States such as creating, modifying or extinguishing rights and obligations in legal relationships between individuals. Since 1974 the Court has given interpretations to such direct horizontal effect to some of the TFEU provisions on free movement.Private Law and the Internal Market seeks to establish the links between the relevant judgments and, by analysing them in the context of the various mechanisms used by EU law to influence national private law, considers whether the Court's approach to one free movement provision can be predictive of other free movement provisions and if so, to what extent. It also discusses the impact which accepting direct horizontal effect has on the grounds that must be available to individuals as a defence to alleged infringement of a free movement provision.Dr Roel van Leuken is Assistant Professor of Civil Law specialising in European private law at Radboud University, Nijmegen.Intersentia

  • Chapter 1 - Introduction

  • Roel van Leuken
  • Book:
    Private Law and the Internal Market
    Published by:
    Intersentia
    Published online:
    27 September 2018
    Print publication:
    23 May 2017, pp 1-8

  • Summary

    ‘Dernys ready!’: so the loud-speakers at the Olympic Stadium in Amsterdam would bellow, back in the twentieth century. Immediately, one could feel the public excitement as the motor-paced cycling race was about to begin. On the concrete racetrack, cyclists made ready to follow behind the motorcycles ridden by (stout) men in black leathers: the pacers. In their slipstream, cyclists could reach speeds of over 40 miles an hour. ‘A skilled pacer has an instinct for racing, composure and patience. He leads, the cyclist indicates whether he has to go faster or slower’, explained Bruno Walrave, who in his professional career piloted no fewer than 15 cyclists to the world title in motor-paced cycling. Another of the world's best pacers was Norbert Koch, who died in 2010. Ten cyclists won a world championship behind his motorcycle. In addition to their individual successes Walrave and Koch also won a joint victory. In court, that is to say, where they relied on the European Treaty provisions of (currently) Articles 45 and 56 TFEU on freedom of movement for workers and freedom to provide and receive services to dispute the validity of a rule of the international cycling union (Union Cycliste Internationale : UCI) that required cyclist and pacer to have the same nationality. The Dutchmen's argument was original and progressive, as in those days it was generally assumed that the free movement provisions, including those mentioned above, were binding on the Member States only. Walrave and Koch, however, found the Court of Justice in Luxembourg on their side. In its judgment of 12 December 1974 the Court ruled that the prohibitions on discrimination laid down in Articles 45 and 56 TFEU also applied to ‘collective regulations’ of individuals, with the result that the rules of the international cycling union (a private body) could be reviewed against these treaty provisions.

  • Chapter 8 - The System of Written and Unwritten Justifications

  • from Part III - Justifications
  • Roel van Leuken
  • Book:
    Private Law and the Internal Market
    Published by:
    Intersentia
    Published online:
    27 September 2018
    Print publication:
    23 May 2017, pp 141-150

  • Summary

    INTRODUCTION

    This chapter contains an overview of the current system of written and unwritten justifications. It successively addresses the Treaty exceptions (section 8.2.), the rule of reason exceptions (section 8.3.) and the justification on grounds of protecting fundamental rights (section 8.4.). In addition, it briefly considers the important role played by the principle of proportionality in the substantive assessment of a party's reliance on one of these exceptions (section 8.5.). The chapter ends with a brief conclusion (section 8.6.).

    TREATY EXCEPTIONS

    The free moment provisions do not amount to absolute prohibitions; the Treaty provides for exceptions. Article 36 TFEU, for instance, states that the rules on free movement of goods (Articles 34 and 35 TFEU)

    shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property.

    The list of Article 36 TFEU is exhaustive: it contains all written grounds that may justify distinctly and indistinctly applicable measures. Less extensive, but likewise exhaustive is the list of exceptions to the prohibitions of Article 45 TFEU. Under Article 45(3), discriminatory and non-discriminatory restrictions on the free movement of workers may be justified ‘on grounds of public policy, public security or public health’.

    This trio returns in Article 52(1) TFEU, which provides as follows in regard to the freedom of establishment (Article 49 TFEU) and the freedom to provide and receive services (Article 56 TFEU):

    The provisions of this Chapter and measures taken in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action providing for special treatment for foreign nationals on grounds of public policy, public security or public health.

  • Chapter 10 - Summary and Conclusions

  • from Part III - Justifications
  • Roel van Leuken
  • Book:
    Private Law and the Internal Market
    Published by:
    Intersentia
    Published online:
    27 September 2018
    Print publication:
    23 May 2017, pp 185-196

  • Summary

    INTRODUCTION

    The European Union is pursuing the creation of an internal market, ie an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured. In order to achieve this goal, the Treaty on the Functioning of the European Union (TFEU) contains a number of fundamental prohibitions that were originally assumed to be binding only on the Member States (ie public bodies and private establishments whose structure or business are publicly controlled): Articles 34 and 35 TFEU (free movement of goods), Article 45 TFEU (free movement of workers), Article 49 TFEU (freedom of establishment), Article 56 TFEU (freedom to provide and receive services), and Article 63 TFEU (free movement of capital). All these provisions are capable of producing so-called direct vertical effect: by conferring enforceable rights on individuals against the Member States, they can directly influence the substance of ‘vertical’ legal relationships (ie legal relationships between individuals and public authorities). The classic example is that of an individual who, in legal proceedings against a Member State, takes the position that a rule of law laid down by this state is contrary to one of the Treaty provisions on free movement and must therefore, by virtue of the principle of primacy of European law, be disapplied.

    Notwithstanding the above, it follows from the case law of the Court of Justice that at least some of the Treaty provisions on free movement also apply directly to ‘horizontal’ legal relationships, in the sense that they result in the creation, modification or extinguishing of rights and obligations between individuals (direct horizontal effect). Impelled by the incompleteness of and the inconsistencies in the existing case law on the matter, I have searched for the links between the different rulings of the Court, and examined whether its approach to one fundamental freedom can be predictive for other free movement provisions and if so, to what extent. Picturing the possible reach of the influence of free movement provisions on private law relationships allowed me to formulate a private law response aimed at establishing the following propositions:

  • (i) that private law becomes integrated into free movement law by adjusting to the latter's aims and principles;

  • (ii) that arguments related to private law should form part of the process of development, refinement, and sophistication of free movement law;

  • Chapter 4 - Fundamental Freedoms: Content of the Prohibitions

  • from Part II - Direct Horizontal Effect: Internal Market
  • Roel van Leuken
  • Book:
    Private Law and the Internal Market
    Published by:
    Intersentia
    Published online:
    27 September 2018
    Print publication:
    23 May 2017, pp 39-62

  • Summary

    INTRODUCTION

    This chapter outlines, in sections 4.2. – 4.4., the substance of the Treaty provisions on free movement of goods (Articles 34 and 35 TFEU), free movement of workers (Article 45 TFEU), freedom of establishment (Article 49 TFEU), freedom to provide and receive services (Article 56 TFEU) and free movement of capital (Article 63 TFEU). Aft er that, in section 4.5. I will briefly discuss whether reliance on one free movement provision can concur with reliance on one or more other ones.

    TREATY PROVISIONS ON FREE MOVEMENT OF GOODS

    Part Three of the TFEU devotes a separate Title (Title II) to the free movement of goods. Of the prohibitions that are intended to guarantee this freedom, I will discuss two: the prohibition on quantitative restrictions on imports and all measures having equivalent effect (Article 34 TFEU), and the prohibition on quantitative restrictions on exports, and all measures having equivalent effect (Article 35 TFEU).

    ARTICLE 34 TFEU: PROHIBITION OF QUANTITATIVE RESTRICTIONS ON IMPORTS AND ALL MEASURES HAVING EQUIVALENT EFFECT

    Article 34 TFEU provides succinctly that ‘quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States’. With regard to the term ‘quantitative restrictions on imports’ I will be brief: this ‘covers measures which amount to a total or partial restraint of … imports … or goods in transit’. Examples are a prohibition on imports (‘the most extreme form of restriction’) or a quota which restricts the import of goods according to quantity or value. The term ‘measure having equivalent effect’ is far more important, and will indeed take central stage now.

    The Judgments in Dassonville and Cassis de Dijon: Broad Definition

    Since the Treaty contains no definition, we must turn to the case law of the Court of Justice for a description of the notion of ‘measure of equivalent effect’, and to the Dassonville judgment in particular. First a brief statement of the facts. A Belgian decree required a certificate of authenticity issued by the country of origin for the import of goods with designation of origin.

  • Chapter 2 - Direct and Indirect Effects of the TFEU on Legal Relationships between Individuals

  • from Part I - Direct Horizontal Effect: Concept and Application in Competition Law
  • Roel van Leuken
  • Book:
    Private Law and the Internal Market
    Published by:
    Intersentia
    Published online:
    27 September 2018
    Print publication:
    23 May 2017, pp 11-26

  • Summary

    INTRODUCTION

    This chapter presents a general introduction to two legal concepts which, either each on their own or in concerted action, serve to ensure the effectiveness of EU law, namely direct effect (section 2.2.) and primacy (section 2.3.). To properly grasp the direct and indirect effects of the TFEU on legal relationships between individuals and to distinguish the different mechanisms by which such effects are produced, it is essential to have a good understanding of both concepts and of how they interact (section 2.4.).

    DIRECT EFFECT

    On 9 September 1960 a Dutch transport company, Van Gend & Loos, imported a quantity of urea formaldehyde from Germany and with respect to this importation paid the Netherlands Inland Revenue Administration statutory import duty, at a rate which several months earlier had been increased from 3 per cent to 8 per cent. Van Gend & Loos believed that this increase infringed Article 12 EEC, which read as follows:

    Member States shall refrain from introducing, as between themselves, any new customs duties on importation and exportation or charges with equivalent eff ect and from increasing such duties or charges as they apply in their commercial relations with each other.

    A Member State that infringed Article 12 EEC could be held liable by the European Commission or another Member State for its failure to respect what then was still Community law via the procedures of Articles 169 and 170 EEC (now Articles 258 and 259 TFEU). In spite of the fact that it was unclear at the time whether the EEC Treaty also off ered individuals the opportunity to enforce observance by the Member States of this negative obligation, Van Gend & Loos relied on Article 12 EEC before the national courts to obtain repayment by the Netherlands Inland Revenue Administration of the additional amount it had paid in import duties. Th e Administrative Court for Customs and Excise (Tariefcommissie) then requested the Court of Justice to give a preliminary ruling under Article 177 EEC (now Article 267 TFEU) on the question

    whether Article 12 of the EEC Treaty has direct application within the territory of a Member State, in other words, whether nationals of such a State can, on the basis of the Article in question, lay claim to individual rights which the courts must protect.

  • Chapter 6 - Case Law on Direct Horizontal Effect of Articles 34 and 35 TFEU

  • from Part II - Direct Horizontal Effect: Internal Market
  • Roel van Leuken
  • Book:
    Private Law and the Internal Market
    Published by:
    Intersentia
    Published online:
    27 September 2018
    Print publication:
    23 May 2017, pp 115-132

  • Summary

    INTRODUCTION

    Chapter 4 has made clear that acts of Member States can be reviewed directly against the Treaty provisions on the free movement of goods, which have direct vertical effect. This chapter examines whether Articles 34 and 35 TFEU also apply, or will at some stage apply, directly to acts of individuals. Section 6.2. will analyse the judgments of the Court of Justice in which it addressed the issue of their direct horizontal effect. The results of the analysis are summarised in section 6.3. and supplemented by observations on the expected evolution of the Court's case law.

    CASE LAW: CHRONOLOGICAL OVERVIEW

    This section will identify and discuss the judgments in which the Court of Justice expressed or is said to have expressed a view on the issue whether the Treaty provisions on free movement of goods have direct horizontal effect.

    CASE LAW REGARDING INTELLECTUAL PROPERTY RIGHTS

    Intellectual property rights can frustrate the free movement of goods. The Deutsche Grammophon judgment is a striking example. 1 In its home market, a German gramophone record producer (DG) exclusively supplied retailers and wholesalers that had committed to observe the consumer prices set by DG. Metro – a German wholesaler – circumvented this obligation by obtaining supplies via the French company Polydor (a DG subsidiary). DG filed an application for an injunction prohibiting the importation, invoking an exclusive right to distribute the protected goods that was recognised by law (Verbreitungsrecht ; a right related to copyright). The national court hearing the application allowed the claim. On appeal, the question arose whether the national legislation which allowed DG to invoke its intellectual property rights was compatible with Article 34 TFEU. The Court of Justice brought clarity:

    11 Amongst the prohibitions or restrictions on the free movement of goods which it concedes Article 36 refers to industrial and commercial property.

    On the assumption that those provisions may be relevant to a right related to copyright, it is nevertheless clear from that Article that, although the Treaty does not affect the existence of rights recognized by the legislation of a Member State with regard to industrial and commercial property, the exercise of such rights may nevertheless fall within the prohibitions laid down by the Treaty.

Page 20 of 60