Court of Justice 09-07-1969 ECLI:EU:C:1969:36

A — Observations submitted by SA Portelange

1. SA Portelange recalled the various solutions put forward in legal literature and in case-law with regard to the concept of ‘provisional validity’ and subscribed to the view that agreements falling under Article 85(1) and duly notified are ‘completely valid’ so long as the Commission has made no decision on them.

   This solution is not based on expediency but on the need to avoid injustice. Its rejection would mean that any provisionally valid agreements could be infringed with impunity since the courts entrusted with enforcing it could not intervene so long as the Commission had made no decision on it.

   This would give rise to real legal uncertainty and in many cases it would be inevitable that injury, sometimes considerable, would be occasioned the persons concerned and in practice it would be impossible subsequently to make good those injuries.

2. SA Portelange then observes that the question before the Court was only put because the court making the reference wrongly considered that the contract in dispute came under Article 85(1) of the Treaty. Although this contract guarantees SA Portelange the exclusive right of supplies from the producer, it neither prohibits re-exports nor contains any provision intended to prevent parallel imports. It does not therefore result in the partitioning of the markets.

   Strictly speaking, doubts may arise over the clauses providing for payment of a commission by foreign concessionnaires who sold the products in question in the zone granted to SA Portelange. But, according to the case-law of the Court, even in that case the sanction of nullity which might be contemplated would not be imposed on the contract as a whole, but merely on the relevant provisions. These are in fact of secondary importance as they have remained virtually unimplemented and are not of the essence of the contract (Cf. judgment in Joined Cases 56 to 58/64).

   The Tribunal de Commerce appears to have adopted the principle whereby the exclusive character of an agreement is ipso facto synonymous with illegality within the meaning of Article 85(1) of the Treaty. It has thus failed to observe the judgment in Case 56/65, whereby the Court formally recognized that exclusive dealing agreements are not as such incompatible with the said article.

B — Observations submitted by the Commission of the European Communities

1. The Commission first of all considers the problem whether SA Portelange may in this case rely on the provisional validity of the agreement in dispute. In this connexion it recognizes that the contract of 1 July 1961 concerning the exclusive right granted to SA Portelange to sell the appliances of Marchant, Smith Corona and Hamann was notified to the Commission in accordance with Regulation No 17/62 and that it is consequently provisionally valid.

   Nevertheless the Commission states that the agreement concerning the sale of electrical copying machines, which was moreover verbal, was drawn up after the entry into force of the above-mentioned regulation and was never notified to the Commission.

   Article 4(1) of this regulation applies to the agreement in question since by limiting the opportunities for marketing the products in question and the choice of consumers it may have as its effect the restriction of competition.

   Furthermore it cannot be held that the agreement may be covered by the notification of the contract of 1 July 1961. In the first place the market for electrocopying machines constitutes a special market distinct from that of typewriters and calculating machines; moreover, it is clear from the contract itself, particularly from Part II thereof, that when the grantor laid down the exclusive dealership it did not automatically grant the concessionnaire an exclusive right to market the products which the former manufactured or distributed. More precisely, it seems from the legal point of view that the agreement extending the exclusive right of sale to products other than those referred to in the standard-form contract of 1 July 1961 constitutes a separate and independent agreement, even if it is also subject to the provisions of that contract.

   The independence or this agreement in relation to the contract is further confirmed by the very behaviour of the parties: the grantor has in fact only repudiated the agreement relating to the electrocopying machines, and SA Portelange only initiated proceedings before the Belgian court in respect of that repudiation, whilst the agreement of 1 July 1961 relating to the typewriters and calculating machines at present remains in force between the parties.

   It follows that in the present circumstances the procedure for the grant of the declaration provided for in Article 85(3) of the Treaty or of the negative clearance referred to in Article 2 of Regulation No 17/62 may only be initiated if the agreement in dispute is subsequently notified in accordance with the provisions of Regulation No 27/62.

   If it is assumed that the agreement falls within Article 85(1) but may be covered by Article 85(3), the date of the exemption cannot, under Article 6(1) of Regulation No 17/62, be earlier than the date of notification. Since this has not yet occurred, no decision may be taken granting exemption with retroactive effect from the repudiation of the agreement (6 October 1966).

   This is also the case if the agreement satisfies the conditions set out in Regulation No 67/67. An express decision in implementation of Article 85(3) would undoubtedly be futile, but since the agreement in question was already in existence at the time of the entry into force of this regulation (1 May 1967) it is governed by Article 4(2) thereof so that the exemption by which it is covered may only come into existence at the earliest from the date of its notification.

   If, on the other hand, it is presumed that the agreement does not fall within Article 85(1), thereby rendering superfluous a declaration pursuant to Article 85(3), negative clearance may be granted under Article 2 of Regulation No 17/62. But since the issue of this certificate presumes that an application therefor has been submitted by the party concerned the agreement in question must be notified in accordance with Article 4 of that regulation.

   The Commission thus deduces from this that so long as notification of the agreement has not taken place the preliminary factors required to initiate the procedure either for issuing the declaration provided for by Article 85(3) of the Treaty or a certificate of negative clearance pursuant to Article 2 of Regulation No 17/62 are not present.

   For those reasons the problem of the provisional validity of agreements duly notified is irrelevant to the present case. In fact, in the present circumstances as set out above, there are only two possibilities:

   • either the agreement in dispute falls within Article 85(1) of the Treaty and, since in this case a declaration pursuant to Article 85(3) cannot take effect before the date of notification, because the agreement was repudiated before notification was made it cannot provide a valid legal ground for a claim for damages based on its repudiation;

   • or the agreement in dispute does not fall within Article 85(1) and in that case, since it must be regarded as valid from the outset, its repudiation may provide grounds for an action for compensation under national law.

2. The Commission thus declares that it considers the said problem only in so far as is relevant. It disputes the view that the concept of provisional validity implies that the parties to the contract may proceed against each other with a view to enforcing the contract (or in the case of failure to do so to obtain compensation) and against third parties, enforcing their rights through the national courts.

   Such a view is incompatible with the system established by Article 85 of the Treaty and by Regulations Nos 17/62, 19/65 and 67/67, from which it is clear that the prohibition laid down in Article 85(1) continues, even when notification has been made, until the Commission has taken a decision with regard to the agreement in question.

   Taking into account this principle, it is therefore contrary to the Treaty to admit than an agreement may be regarded from the point of view of civil law as having unrestricted validity in the period before the said decision.

   Furthermore this view means that throughout the unavoidably long period until the Commission issues its decision the parties may indulge unhampered in restriction of competition although this is incompatible with Article 85(1) and is not covered by the exemption provided for by Article 85(3). This would be particularly pernicious in the case of such agreements as attain their objects quickly.

   The Commission concludes by stating that if during the said period prior to the decision there already exist between the parties certain connexions (such as the obligation to collaborate in order to obtain the exemption provided for by Article 85(3) and to refrain from any action which might result in the withholding of this exemption), nevertheless it cannot be admitted that they may base their position on an agreement which is only provisionally valid in order to rely on the right of implementation or to compensation against a party alleging that the agreement is void under Article 85 of the Treaty.

C — Oral observations submitted by SA Smith Corona Marchant International (Lausanne), Smith Corona Marchant GmbH (Frankfurt am Main) and Smith Corona Marchant Corporation (New York) at the hearing on 10 June 1969

The defendant companies in the main action expressed their anxiety lest the Court should be induced to give a ruling in the present case on the substance of the main dispute. SA Portelange and above all the Commission of the European Communities in fact introduced such matters into the oral proceedings chat if the Court were to follow in that direction it would exceed the limits which Article 177 of the Treaty lays down in respect of its jurisdiction and would trespass on a sphere reserved to the national court.

After giving this warning the said companies gave their view on the question put by the Tribunal de Commerce, Brussels, rejecting that of SA Portelange and concurring with that put forward by the Commission.