General EU law

Question 1

What is private law in the EU?

Answer 1

Private law: substantive law.
In the EU, there is no political union, their purpose when creating rules (like consumers law) is the economic interests of market union.

EU is not concerned to produce private law. Its not named. Its not determined what is Private Law form EU prospective. It is well determined in national law, but in the EU all law is policy driven.

There is no European Private Code.

The EU is policy driven with a purpose to unify an internal market (banks for example), otherwise internal market would fail. For example, Austrian licensed banks can do business in every EU states. However, the national bank law is applied in that state. So private law intervenes to those transactions, to the freedom of operating across EU.

Purpose of the common market: Breaking all the administrative obstacles such as bank licenses, rules about alcohol, etc. to open the market. e.g. Greece to have a law that forbids foreign alcohol over a specific amount of alcohol. That is not allowed.

Question 2

Definition of European Private law

Answer 2

There is no general definition in Union law.

Definitions in context:
art. 272 TFEU «contract … governed by … private laws »
The Court of Justice of the European Union shall have jurisdiction to give judgment pursuant to any arbitration clause contained in a contract concluded by or on behalf of the Union, whether that contract be governed by public or private law.

art. 1 (1) Regulation (EU) No. 1215/2012 (Brussels I): «civil and commercial matters»

Question 3

What is Brussels I reg

Answer 3

Through this regulation a judgment in a civil or commercial matter given in any member state will be enforceable in all the other member states.

Question 4

What does “civil and commercial matters” mean?

Answer 4

There is no definition of what “civil and commercial matters” are: the court is under pressure to develop what is private law.

ECJ Case 29/76 of 14 October 1976, LTU ./. Eurocontrol: “reference must not be made to the law of one of the states concerned but, first, to the OBJECTIVES AND SCHEME OF THE CONVENTION and, secondly, to THE GENERAL PRINCIPLES which stem from the corpus of the national legal systems”
–> This means German law should give the answer and there is no EU duty to enforce the Belgian judgement in this case.

ECJ Case C-167/00 of 1 October 2002, VKI ./. Henkel: unfair consumer contract violation the Directive on Unfair Terms.
According to Henkel, this is not a consumer or civil law matter because VKI an organization run with public money.
Court: this is a tort law issue, VKI is not exercising public powers –> private law matter

Question 5

LTU / Eurocontrol

Answer 5

ECJ Case 29/76 of 14 October 1976, LTU ./. Eurocontrol (charges of Eurocontrol) on the question of the enforceability of a Belgian judgement in front of a German court.

“The answer to be given to the question referred must therefore be that in the interpretation of the concept ‘ civil and commercial matters ‘ for the purposes of the application of the convention and in particular of title iii thereof, reference must not be made to the law of one of the states concerned but, first, to the OBJECTIVES AND SCHEME OF THE CONVENTION and, secondly, to THE GENERAL PRINCIPLES which stem from the corpus of the national legal systems”

Question 6

How does private law interact with EU private law?

Answer 6

Cassis de Dijon - free movement of goods: products sold lawfully in a MS cannot be prohibited from sale in another MS

Dassonville defining an obstacle for free movement of goods: All trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intraCommunity trade are to be considered as measures having an effect equivalent to quantitative restrictions

So the differences between members states must be removed unless justified

Question 7

How do you justify a restriction for free movement of goods?

Answer 7

Cassis de Dijon: Obstacles to movement within the Community resulting from disparities between the national laws relating to the marketing of the products in question must be accepted in so far as those provisions may be recognized as being necessary in order to satisfy mandatory requirements relating in particular to the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the consumer.

Criteria:

• necessary
• adequate = reaches the objective set
• proportional = are there less restrictive means?
• non-discriminatory = it cannot be more detrimental for foreign providers

Question 8

Application of EU law to contract law?

Answer 8

ECJ Case C-339/89 of 24 January 1991, «Alsthom Atlantique»: stricter product liability in another MS is NOT an obstacle for free movement of goods, because the stricter product liability applied to both domestic / foreign sellers and the parties can always choose the applicable law as per Rome I Art. 3

Question 9

What is the problem with Alsthom Atlantique judgment?

Answer 9

The judgment says that stricter product liability in another MS is NOT an obstacle for free movement of goods, because the stricter product liability applied to domestic / foreign sellers and the parties can always choose the applicable law as per Rome I Art. 3.

However, this is only true in commercial contracts, since in industries like insurance, you cannot choose the applicable law.
This means that the this vision is only truth in commercial contract (where total freedom exists).

SO the point made by the ECJ in the Atlantique case is not true because private law could be an obstacle to the free movement (negative harmonization by saying that obstacle have to be removed). However, they may be justified. => obstacle remains

Question 10

EU law application to corporate law

Answer 10

überseering: This was a breakthrough in Company Law and showed that obstacles of a private law nature can exist and could be a restriction to the free movements rights.
“ where a company incorporated in another Member State exercises its freedom of establishment in another Member State, that other Member State is required to recognise the company’s legal capacity “

Denial of legal capacity by host country restricts right of establishment – can the host state do that?
possible justifications by general interests
• protection of creditors
• protection of minority shareholders:
they must be protected and we have
very strict rules on that => if we
recognize NL companies this
disappear…
• protection of employees
• protection of fiscal interests: it is
easier to tax a company when it is a
domestic company

However, full denial of legal capacity is disproportional to safeguard protection of general interests

Question 11

Main instruments of harmonisation of private law

Answer 11

Regulation (art. 288 (2) TFEU)
«A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.»

Directive (art. 288 (3) TFEU)
«A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods.»

HERE WE HAVE POSITIVE HARMONIZATION (OPPOSED TO NEGATIVE HARMONIZATION where you remove problematic national measures).

Optional Instruments: “second regime” that would only apply if the parties agree to use the optional instruments.

Question 12

Standards of harmonisation

Answer 12

Minimum harmonisation:
Art. 8 Directive 93/13 (Unfair Contract Terms): a rather early regulation
«Member States may adopt or retain the most stringent provisions compatible with the Treaty in the area covered by this Directive, to ensure a maximum degree of protection for the consumer.»
–> removes the ability of the national legislator to pursue a lower level.

Maximum harmonisation:
Art. 4 Directive 2011/83/EU (Consumer Rights):
«Member States shall not maintain or introduce, in their national law, provisions diverging from those laid down in this Directive, including more or less stringent provisions to ensure a different level of consumer protection, unless otherwise provided for in this Directive.»
= neither go beyond nor go below unless otherwise provided for in this directive

Question 13

What is the “second regime”

Answer 13

It is an optional instrument for harmonisign EU law: An instrument that would only apply if the parties agree to use EU law instead of national law.

e.g.
Corporate law: the Statute for a European company (SE)
Civil Procedure: Art. 1 (2) Regulation (EC) No 1896/2006 creating a European order for payment procedure
Contract law: Art. 3 Draft Common European Sales Law (COM(2011) 635 final)
[meanwhile withdrawn] = Commission proposal to have one type of contract
Art. 1:102 PEICL («Model Optional Instrument )

Question 14

Interpretation of EU law

Answer 14

preliminary rulings (art. 267 TFEU)
When national courts deals with EU law, and there is doubt about the interpretation of EU law, the jurisdictions can ask to the ECJ what interpretation to give to EU law.

Mohamed Aziz ./. Catalunyacaixa:
«clear separation of functions between the national courts and the Court of Justice»
–> Monopoly of ECJ
«the national court alone has jurisdiction to find and assess the facts in the case before it and to interpret and apply national law»

Once the preliminary ruling reaches the national court who asked the question, the national court will be bound by the interpretation given AND any court of any other MS of the EU will be bound to apply the EU law in the same way in a similar case.

Question 15

Acte clair

Answer 15

“Acte clair”: about the relevance of the question raised in front of ECJ - The act in question is soooo clear that it wouldn’t make sense to ask how to interpret this act to the ECJ.

It is the role of national court to determine wheter we have an act clair or not. Parties can’t ask to go in front of ECJ.

Ex: Case in Germany in Competition law: Federal Court said it is an Acte Clair
But some other national courts referred to the ECJ and the ECJ said something different > this leads to a bad application of the EU law in Germany

Question 16

What are the roles of ECJ and national courts in preliminary ruling?

Answer 16

ECJ Case C-415/11 of 14 March 2013, Mohamed Aziz ./. Catalunyacaixa

role of the ECJ: «according to settled case-law, the relevant jurisdiction of the Court extends to the interpretation of the concept of unfair practice in Article 3(1) of the directive and in the annex thereto, and to the criteria which the national court may or must apply when examining a contractual term in the light of the provisions of the directive» (no. 66)

role of the national court: «is for that court to determine, in the light of those criteria, whether a particular contractual term is actually unfair in the circumstances of the case» (no. 66)

The ECJ will tell how to interpret the words. But the ECJ will not interpret the circumstances of the case in the light of all the context of the national. This is left to national court to decide.
= a separation of the jurisdictions between narional courts and the ECJ.

Question 17

Remedies in EU private law?

Answer 17

usually, rights granted by EU law are enforced by remedies provided by national law.

e.g. key information for investors is not enclosed –> left to MS to decide damages.

ECJ Case C-488/11 of 30 May 2013, Dirk Frederik Asbeek Brusse,
Katarina de Man Garabito ./. Jahani BV
fall within the internal legal order of the Member States by virtue of THE PRINCIPLE OF PROCEDURAL AUTONOMY of those Member States.

However, EU law still requires that the national procedural rules fulfill qualitative criteria.

• principle of equivalence
• principle of effectiveness

Question 18

what is principle of equivalence

Answer 18

principle of equivalence is an applicable principle in national procedural law when enforcing remedies.
The court has to examine cases of its own motion to enforce EU law. National courts have to enforce EU law as national law. Treat the directive same way as your national law.
EX: ECJ Case C-488/11 of 30 May 2013, Dirk Frederik Asbeek Brusse, Katarina de Man Garabito ./. Jahani BV
« where the national court has the power … to examine of its own motion the validity of a legal measure in the light of national rules of public policy, … , it must also exercise that power for the purposes of assessing of its own motion, …, whether a contractual term coming within the scope of that directive [Directive 93/13 – Unfair Terms] may be unfair» (no. 45)

« where the national court has the power … to annul of its own motion a term which is contrary to public policy or to a mandatory statutory provision the scope of which warrants such a sanction, it must, as a rule, …, annul of its own motion a contractual term which it has found to be unfair in the light of the criteria laid down by that directive» (no. 51)

=>TREAT THE DIRECTIVE IN THE SAME WAY AS YOU TREAT YOUR OWN LAW (national law)

Question 19

principle of effectiveness

Answer 19

principle of effectiveness is an applicable principle in national procedural law when enforcing remedies.
The national court has to make sure that the EU right is respected in practice.

Example with unfair terms: member states should ensure that there is adequate and effective means, to provide effectiveness of the rights of consumers.
–> Don’t treat EU right less favorable than your own national rights

It doesn’t make sense to have EU right, if in practice, these are not enforced.

Art. 7 (1) Directive 93/13 – Unfair Terms
«Member States shall ensure that, in the interests of consumers and of competitors, adequate and effective means exist to prevent the continued use of unfair terms in contracts concluded with consumers by sellers or suppliers.»

ECJ Cases C-295/04 – 298/04 of 13 July 2006, Manfredi
Example of a limitation rule. Case about insurance companies that had a commercial agreement-> anti-competitive agreement.

«in the absence of Community rules governing the matter, it is for the domestic legal system of each Member State to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive directly from Community law, provided that such rules observe the principles of equivalence and effectiveness.» (no. 77)

«A national rule under which the limitation period begins to run from the day on which the agreement or concerted practice was adopted could make it practically impossible to exercise the right to seek compensation for the harm caused by that prohibited agreement or practice, particularly if that national rule also imposes a short limitation period which is not capable of being suspended.» (no. 78)

• SO, here we had Italian insurances that found an agreement to make sure other actors, foreign insurance companies could not enter the market.
• This is anti-competitive.

There must be a right for damages, for the time the companies that couldn’t have entered the market and have clients and for the loss they encountered.

Question 20

Impact of EU law in Switzerland

Answer 20

1. Bilateral treaties: e.g. Air Transport
2. Multilateral treaties e.g. Lugano Convention
3. Autonomous transposition e.g. Cassis de Dijon principle

+ extraterritorial effect e.g. competition law

Question 21

ECJ Case C-541/08 of 11 February 2010, Fokusinvest

Answer 21

Case showing the impact of EU law in third countries.

Austrian company trying to acquire piece of land in Austria, majority of the shareholders were Swiss. In Austria, it’s considered as a foreign company (so here a Swiss company. Therefore, there is no right to acquire the land for the national court. But the company says it’s violating the right of free movement, of establishment, guaranteed under the law (bilateral countries). => free movement of persons
Question that came up : Have only natural persons right to establishment or also swiss companies / legal entities?
The national court referred to the bilateral treaties and concluded that it was only applicable to natural persons coming from CH.

Question 22

How does Lugano Convention affect the influence of EU law in Swiss law?

Answer 22

Lugano is a multilateral treaty.
This has an influence on the interpretation of certain texts adopted at the CH level that are a copy paste of EU law the federal supreme court is simply referring to the interpretation given by the ECJ of the EU regulation in question.

Question 23

Cassis de Dijon in Switzerland

Answer 23

Autonomous transposition of EU law in Switzerland: because CH is considering EU law as advantageous in certain areas, for example consumer protection law. If they don’t have the same law, it’s more costs.
They simply adopt the EU law = seen as great solution

Example with the case Cassis de Dijon: the same principle was adopted in the Federal Act on Technical Barriers to Trade, because it doesn’t make sense not to do it, it will be too costly. It would make it more costly.
SO why not say that if something is entering the market it also has to respect EU standards.

Question 24

examples of extraterritorial effect of EU law

Answer 24

GDPR: Art. 3 (2) “This Regulation applies to the processing of personal data of data subjects who are in the Union by a controller or processor NOT established in the Union, ….”
It is clear that here from the moment EU data is being processed, then the processor or controller has to respect the EU regulation (even if located outside the EU).

Competition law: ECJ Case 89/85 of 27 September 1988, A. Ahlström Osakeyhtiö and others ./. Commission of the European Communities
«where producers established outside the Community sell directly to purchasers established in the Community and engage in price competition in order to win orders from those customers, that constitutes competition within the common market» (no. 12)

Question 25

ECJ Case 89/85 of 27 September 1988, A. Ahlström Osakeyhtiö and others ./. Commission

Answer 25

EU competition law (now art. 101 TFEU) follows principle of territoriality (no. 18) = a specific market.

What makes it anti-competitive:

decisive factor: where anti-competitive agreement or behaviour is implemented (no. 16)

«where producers established outside the Community sell directly to purchasers established in the Community and engage in price competition in order to win orders from those customers, that constitutes competition within the common market» (no. 12)
So even though they are established outside the EU, they had to respect the competition rules. They could not simply act in a way which is anti-competitive and saying we don’t have to respect EU law because we are outside.
SO subject of EU competition located outside. (extraterritorial effect). If connecting factor with EU is found, then EU competition is found.