Annulment Procedure

Question 1

Which Article contains the Annulment Procedure?

Answer 1

Article 263 TFEU provides for the Annulment Procedure.

Question 2

What is the basic idea underlying the Annulment Procedure?

Answer 2

The Annulment Procedure allows the Court of Justice of the European Union to review the legality of legislative acts of;
- the Council
- the Commission
- the European Central Bank
- the European Parliament and Council that are intended to produce legal effects vis-à-vis third parties
- bodies, offices or agencies of the Union intended to produce legal effects vis-à-vis third parties
Note that it does not allow for reviews of recommendations and opinions (applicable to the first three).

Question 3

What is the jurisdiction of the Court of Justice of the European Union in relation to actions for Annulment?

Answer 3

The court has jurisdiction in actions brought by;
- a Member State
- the European Parliament
- the Council
- the Commission
on grounds of;
- lack of competence
- infringement of an essential procedural requirement
- infringement of the Treaties or of any rule of law relating to their application
- misuse of powers.

The court also have jurisdiction in actions brought by;
-	the court of auditors
-	the european central bank
-	the committee of the regions
for the purpose of;
-	protecting their prerogatives

Question 4

Who may launch an action for annulment?

Answer 4

Any natural or legal person (subject to the jurisdiction of the court) may bring proceedings against an act implemented by a given authority, provided;

• the act is of direct and individual concern to them – can be demonstrated through addressee
• the act is a regulatory act (of direct concern) and not entailing further implementing measures

Question 5

Are there any time/procedural restrictions on the actions for annulment?

Answer 5

The proceedings provided for in this Article shall be instituted within two months of the publication of the measure, or of its notification to the plaintiff, or, in the absence thereof, of the day on which it came to the knowledge of the latter, as the case may be.

Question 6

What is the relationship between the EU legal order and the Rule of Law?

Answer 6

The EU legal order adheres to the rule of law. This means that it is possible for Member States, organisations, business and individuals to challenge the legality or the validity of EU law. The main procedure for doing so is Article 263 TFEU – the so-called “action for annulment”.

Question 7

What is the aim of the action for annulment procedure?

Answer 7

To provide a mechanism whereby a particular provision or instrument of EU law can be declared invalid and be annulled by the Court of Justice.

Question 8

How do actions brought directly by member states or eu institutions differ from those brought by individuals?

Answer 8

As a general rule, direct actions for annulment brought by the Member States or by one of the EU institutions are brought before the Court of Justice. Actions for annulment brought by companies or individuals go to the General Court.

Question 9

What is the relationship between the Court of Justice of the European Union and the various national courts?

Answer 9

To protect the effective and uniform application of EU law, the Court of Justice is the only court which can actually annul provisions of EU law.

Question 10

What are the various conditions claimants seeking to bring a direct action for annulment have to fulfil?

Answer 10

(1) The act of EU law that is challenged by the claimant has to be a reviewable act
(2) There must be a substantive ground of annulment which is included in Article 263 TFEU
(3) The claimant must have legal standing to bring an action for annulment
(4) The claim must have been brought within the time-limit

Question 11

Why are the criteria/thresholds (particularly for standing) so strict?

Answer 11

One of the reasons for this high threshold is that an alternative route has been developed through the national courts through the preliminary reference procedure in Article 267 TFEU.

Question 12

What, according to Article 263(1) TFEU, constitutes a ‘reviewable act’?

Answer 12

First of all, legislative acts can be reviewed. Secondly, acts of the EU institutions intended to produce legal effects vis-à-vis third parties. Thirdly, the Court can also review the validity of acts from other EU bodies which are intended to produce legal effects vis-à-vis third parties.

Question 13

Why can’t recommendations and opinions be challenged as ‘reviewable acts’?

Answer 13

For an act to be reviewable it must be legally binding – it must directly create legal effects for third parties, thus purely advisory instruments like opinions and recommendations are not challengeable under Article 263 TFEU.

Question 14

Does the precise type of act or name of the instrument matter when determining whether the act in question is reviewable?

Answer 14

The precise type of the act or the name of the instrument does not matter – the label of the measure is irrelevant. The Court will assess whether the measure in substance is a legal act which is binding on third parties. If this is the case, the act can be reviewed under Article 263 TFEU. See Case C-22/70, ERTA.

Question 15

What are the substantive grounds for annulment included under Article 263 TFEU?

Answer 15

• Lack of competence
• Infringement of an essential procedural requirement
• Infringement of the Treaties or any rule related to their application
• Misuse of powers

Question 16

What is a lack of competence as a ground for annulment?

Answer 16

This means that the EU did not actually have the competence to adopt the act.

Question 17

What principle underpins the annulment ground – lack of competence?

Answer 17

The principle of conferral, the EU can only act in those areas where the Member States have conferred powers to it – acting beyond these conferred powers will lead to actions grounded by a lack of competence.

Question 18

Who are likely to bring actions based upon a lack of competence?

Answer 18

Member States, after all, they could be said to be the guardians of the principle of conferral – they want to preserve the powers which they have not conferred to the EU. The most famous case brought on this ground was the Tobacco Advertising case (Case C-376/98).

Question 19

What is an infringement of an essential procedural requirement as a ground for annulment?

Answer 19

An essential procedural requirement is the procedural dimension of the adoption of EU acts. A procedural requirement could be, for example, the requirement that one of the EU institutions has to be consulted before the act can be adopted. If this consultation does not occur, this would be an infringement of an essential procedural requirement.

Question 20

Can any infringement of a procedural requirement ground an action for annulment?

Answer 20

No, not every breach of a procedural requirement is a ground for annulment – it has to be an essential procedural requirement.

Question 21

What is an infringement of the Treaties or any rule related to their application as a ground for annulment?

Answer 21

This is the broadest ground of review. It does not only include review for compliance with the Treaties. Compliance with general principles of law and fundamental rights – you will remember that the Charter of Fundamental Rights has been given the same status as the Treaties – is included in this category.

Question 22

What is a misuse of powers as a ground or annulment?

Answer 22

This is an exceptional category and there are not many cases in which this ground of review was relied on. To be able to establish that the EU has misused its powers, claimants have to establish that an EU act has been adopted for another purpose that what it was meant for – in other words, that there was an ulterior motive for the EU to adopt the act, which constituted a misuse – or abuse – of powers.

Question 23

What is the requirement of standing?

Answer 23

Claimants who would like to bring an action for annulment under Article 263 TFEU have to establish that they belong to one of the categories of applicants who are entitled to bring an action under Article 263 TFEU, this is the requirement of standing – if they do not belong to one of the categories, they do not have standing and their case will be held inadmissible.

Question 24

What are the three categories of person who have sufficient standing to launch an action for annulment?

Answer 24

(1) privileged applicants
(2) semi-privileged applicants
(3) non-privileged applicants

Question 25

What requirements do privileged applicants have to satisfy to demonstrate standing?

Answer 25

Privileged applicants do not have to show anything to show that they have standing to bring an action for annulment. In other words, they can always start an Article 263 TFEU procedure and their standing is not dependent on the fulfilment of any conditions.

Question 26

Who are privileged applicants?

Answer 26

The Member States, the European Parliament, Commission and Council are privileged applicants. Actions for annulment brought by any of these claimants will usually go to the Court of Justice.

Question 27

What requirements do semi-privileged applicants have to satisfy to demonstrate standing?

Answer 27

Semi-privileged applicants have to establish that they are protecting their prerogatives by bringing an action for annulment. This is not a very difficult test to satisfy – all they have to do is to show that the EU act has affected their prerogatives under EU law.

Question 28

What requirements do non-privileged applicants have to satisfy to demonstrate standing?

Answer 28

They have to show that they fall within one of three categories;

(1) the EU act has to be addressed to them
(2) the EU act has to be of direct concern to them
(3) they are directly concerned by an EU act which is a regulatory act that does not entail implementing measures.

Question 29

Who are non-privileged applicants?

Answer 29

They are all other natural and legal persons, thus not those who hold privilege or semi-privilege.

Question 30

What was the significance of the Treaty of Rome in regard to the standing of non-privileged applicants?

Answer 30

The choice made by the Member States by the adoption of the Treaty of Rome was to allow private parties to challenge administrative acts (such as decisions) addressed to them, but to make it very difficult for them to challenge legislative acts adopted by the EU.

Question 31

What is the slight controversy surrounding the ‘direct and individual concern’ requirement?

Answer 31

The Treaty has never contained a definition of direct and individual concern. The Court has adopted a very narrow definition. This has been criticised on the basis that it is against the principle of effective judicial protection, as it makes it very difficult for private parties to challenge the validity of EU law under Article 263 TFEU.

Question 32

How do the Court seek to justify the strict requirement of standing imposed by the direct and individual concern requirement?

Answer 32

The Court has always taken the position that Article 263 TFEU operates in combination with Article 267 TFEU, which provides an indirect way to challenge the validity of EU law through the preliminary reference procedure. The acceptability of the strict definition of direct and individual concern depends to an important extent on how effective Article 267 TFEU is as an alternative to Article 263 TFEU for private parties.

Question 33

What are the chances an individual who is the addressee of an EU act will satisfy standing requirements?

Answer 33

Private parties who are the addressees of an EU act will not have any problems to establish standing under Article 263 TFEU.

Question 34

What does it mean to be the addressee of an EU act?

Answer 34

To be an addressee of an EU act, the act must be specifically addressed to the natural or legal person.

Question 35

What are the most common examples of EU acts being addressed to a particular person?

Answer 35

The most common example are decisions taken by the Commission in the field of competition law. These decisions will be addressed to certain companies who are alleged to have acted in breach of the competition provisions. They will always be able to challenge these decisions under Article 263 TFEU, because the decisions are addressed to them.

Question 36

Are private parties able to challenge decisions which are of general application (rather than specifically addressed to them)?

Answer 36

The only way for them to do so is by showing that they are directly and individually concerned by the EU act. But what do direct and individual concern mean?

Question 37

What does the term ‘direct concern’ mean in regards to non-privileged standing?

Answer 37

Direct concern means that the EU act must have had a direct impact on the legal position of the applicant. The EU act itself immediately and automatically leads to a change in the legal position of the applicant.

Question 38

How does the presence of further implementing measure affect the ‘direct concern’ requirement?

Answer 38

The EU act itself immediately and automatically leads to a change in the legal position of the applicant. As such, if an EU act requires a further implementing measure either by another EU institution or by the Member States, the EU act is not of direct concern to the applicant.

Question 39

How do further implementing measures impact upon Directives?

Answer 39

Many commentators have argued that directives can never by of direct concern to individuals. After all, they always require an implementing act by the Member State. However, if the EU act leaves absolutely no discretion to the EU body or Member State that is supposed to implement it, then the measure will still be of direct concern. See International Fruit (Case C-41-44/70).

Question 40

What does the term ‘individual concern’ mean in regards to non-privileged standing?

Answer 40

The definition of individual concern was laid down in the famous case of Plaumann (Case C-25/62). The Court of Justice defined individual concern as follows:
Persons other than those to whom a decision is addressed may only claim to be individually concerned if that decision affects them by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and by virtue of these factors distinguishes them individually just as in the case of the person addressed

Question 41

How have the courts enabled private parties to demonstrate individual concern?

Answer 41

The Court has made it extremely difficult for non-privileged applicants to show that they are individually concerned. There are basically two ways for them to do so, either;

(a) the applicant must have certain attributes which are peculiar to them, or;
(b) they must be in circumstances in which they are differentiated from all other persons in such a way that the measure is effectively addressed to them.

Question 42

How strict is the individual concern requirement?

Answer 42

The way in which this test has been applied by the Court makes it almost impossible for claimants to establish individual concern.

Question 43

What is the only way, in practice, an individual can establish individual concern?

Answer 43

In practice, the only way in which an individual can establish individual concern is if they can show that the EU knew precisely which parties would be affected by a certain EU act. These parties would have to be part of a closed group – see Piraiki Patraiki (Case C-11/82).

Question 44

How has the interpretation of the court restricted the closed group condition laid down in Piraiki as a means of establishing individual concern?

Answer 44

The closed group condition has been interpreted extremely strictly – see Plaumann itself. If you are in a business which is in principle open to everyone – such as the profession of clementine exporter in Plaumann –, you are part of an open category and you cannot establish individual concern.

Question 45

Can non-privileged applicants show standing in practice by showing certain attributes which are peculiar to them?

Answer 45

Another possibility would be for a non-privileged applicant to show that they had certain “attributes” which made them different from everyone else. This was successfully relied on in Codorniu (Case C-309/89), which concerned a registered trade mark for sparkling wine. However, the general consensus is that this was an exceptional case which has not been followed in later cases.

Question 46

How has the current approach to establishing individual concern been met by academics and practitioners?

Answer 46

The very strict application of the individual concern test has consistently been criticised by academics and practitioners alike. The most serious criticism came from Advocate General Jacobs in Union de Pequenos Agricultores (Case C-50/00P).

Question 47

What was the crux of Advocate General Jacobs’ criticism of the strict approach to establishing individual concern?

Answer 47

The main focus of criticism was the Court’s reliance on the preliminary reference procedure in Article 267 TFEU as an effective alternative to Article 263 TFEU. According to AG Jacobs, there were various reasons why the preliminary reference procedure would not necessarily provide effective judicial protection to applicants who wanted to challenge the validity of EU law.

Question 48

On what grounds did Advocate General Jacobs suggest that the Preliminary Reference Procedure was not a suitable alternative/substitute to Article 263 TFEU?

Answer 48

(1) First of all, it would often mean that individuals would first have to breach the law to be able to get to the national court.
(2) Secondly, there is no individual right to have get a preliminary reference procedure to Luxembourg. This is always a decision for the Court to make, and national courts may refuse to make a preliminary reference for a number of reasons.
(3) Thirdly, the preliminary reference procedure takes very long. Although the Court of Justice has become much more efficient in recent years, it still takes at least a year-and-a-half before the preliminary reference returns to the national court.
Thus, Jacobs argued this cannot be considered to be effective judicial protection.

Question 49

What change did Jacobs propose following his criticism of the current system?

Answer 49

He proposed to change the test to assess whether the EU act had a substantial adverse impact on the interests of the applicants. In such cases, non-privileged applicants should have standing under Article 263 TFEU.

Question 50

How did the Court of Justice respond to Jacobs criticisms and proposed change?

Answer 50

The Court of Justice disagreed with AG Jacobs’ criticism in UPA. It also held that if it accepted the proposed new test, it would effectively re-write the Treaty. This would be something for the Member States to do. As such, the Court in a way called for the admissibility criteria to be relaxed by the Member States through a Treaty amendment.

Question 51

What pressure regarding Jacobs proposed change did the Court of Justice withstand?

Answer 51

The Court also resisted criticism from the General Court, which had proposed to follow AG Jacobs’ test in Jégo-Quéré (Case C-263/02P).

Question 52

What was made clear following the proposed changes made by Jacobs?

Answer 52

It was clear that if anything had to change in the admissibility criteria, this would have to be done by the Member States.

Question 53

How did the Member States eventually alter the admissibility criteria?

Answer 53

They finally did so in the Treaty of Lisbon. It introduced a new category of “regulatory acts” in Article 263(4). For these acts, applicants do not have to show individual concern. They only have to show direct concern, and also that the measure did not entail implementing measures.

Question 54

Where was the requirement that the regulatory act did not entail implementing measures laid down?

Answer 54

Article 263(4) still requires applicants to show that the regulatory act did not entail implementing measures. The concept of implementing measures is interpreted broadly – see Telefonica (Case C-274/12) and Federcoopesca (Case T-312/14). Again, the Court’s broad definition can be explained by its reliance on Article 267 TFEU.

Question 55

What uncertainty arose following the adoption of the Lisbon Treaty?

Answer 55

After the adoption of the Treaty of Lisbon, it was unclear how broadly the scope of the principle of “regulatory act” should be interpreted. Did it include all acts of general application? In particular, did it include legislative acts?

Question 56

How did the Court resolve the uncertainty arising from the Lisbon Treaty?

Answer 56

The Court of Justice clarified this is Inuit (Case C-583/11P). It held that regulatory acts are acts of general application which are not legislative acts. As a result, for acts which have been adopted under a legislative procedure, applicants still have to establish direct and individual concern.

Question 57

What is the overall impact of the alterations made by the Treaty of Lisbon?

Answer 57

The Treaty of Lisbon has not changed the admissibility criteria to challenge legislative acts. However, for any act of general application which is not a legislative act (such as implementing or delegated measures), applicants only have to show that they are directly concerned by the EU act.

Question 58

What time-limit restrictions are there upon actions for annulment?

Answer 58

The final condition to bring an action for annulment under Article 263 TFEU is that applicants must start the procedure within two months of the publication of the EU act. If the EU act has not been published, the date starts to run from the moment that the applicant became aware of the adoption of the EU act.

Question 59

Why is the timeframe for actions for annulment so short – just 2 months?

Answer 59

The justification for this is legal certainty – the EU, the Member States and private parties should know as soon as possible whether EU law is valid. If any party has a problem with the potential validity of an EU act, they should challenge it within two months.

Question 60

Does the 2-month time-limit apply to actions made under Article 267 TFEU?

Answer 60

Generally, no, the time-limit does not apply to indirect challenges under Article 267 TFEU, however, an exception this is if a party could certainly have challenged an EU act under the annulment procedure, it cannot wait until the time-limit has expired and then try to challenge the validity through the preliminary reference procedure – see TWD Textilwerke Deggendorf (Case C-188/92).

Question 61

How likely is it that an individual will be denied the right to make an action under Article 267 on the grounds of the 2-month time-limit?

Answer 61

The exception, laid down in TWD Textilwerke Deggendorf, only applies if it is obvious that the applicant would have had standing under Article 263 TFEU. This is probably only the case if an EU act was addressed to the applicant.

Question 62

What is the significance of the relationship between Article’s 263 TFEU and 267 TFEU?

Answer 62

The strict interpretation of the admissibility criteria under Article 263 TFEU has always been justified by the Court of Justice on the basis that the preliminary reference procedure under Article 267 TFEU constitutes an effective alternative to a direct action for annulment.

Question 63

What ability do national courts have, through the Preliminary Reference Procedure (Article 267) to declare EU Law valid/invalid?

Answer 63

National courts cannot declare EU law invalid. If the national court has doubts about the validity of EU law, it has to make a preliminary reference to the Court of Justice: see Foto Frost (Case C-314/85). However, if it is obvious to the national court that EU law is valid, it does not have to make a preliminary reference. So national courts cannot declare EU invalid, but they can declare EU valid.

Question 64

What was the criticism levelled at the PRP (Article 267 TFEU) by Jacobs?

Answer 64

It is not always easy for applicants to get before their national courts in the first place. It often means that they will first have to breach a provision of EU law or the national implementing measure, before they are able to claim the invalidity of the EU act on which it is based. As such, they are effectively forced to act illegally!