Court of Justice 14-12-1977 ECLI:EU:C:1977:207

The first question

The Commission observes that the first question raises the difficult question of the examination under Article 177 of the Treaty of the validity of individual acts of Community institutions by a national court in proceedings before it, where the act was addressed to the parties to those proceedings who would have been entitled to challenge it by an action for annulment under Article 173 but who have failed to do so within the prescribed period.

The essential legal argument for answering the question in the affirmative is based on the nature of proceedings under Article 177, which must be regarded as a matter of public policy. The matter is brought before the Court of Justice by the national court not by the parties, and its decision does not depend on the action or inaction of the parties. The interest which the national court purposes to protect by means of a question on validity referred to the Court of Justice for a preliminary ruling goes beyond individual interests as is emphasized by the power of the Member States and of the Commission to submit observations pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC.

On the other hand, the main argument for answering the question in the negative lies in the fact that the inapplicability and the nullity of an individual act are almost identical. A request for a declaration of invalidity is so close to proceedings for annulment that it could be regarded as amounting to a right of action free from any limitation period.

The Commission submits that analysis of the legal systems of the Member States does not provide any decisive arguments making it possible to resolve the question, but makes it possible to conclude that those systems will allow of an answer which is not completely negative. Stating its position in the light of these considerations, the Commission observes that the first point to be determined is whether an individual act can be referred to the Court for a preliminary ruling concerning validity. In its view, such an application should not be dismissed as inadmissible on account of the fact that the parties to the proceedings before the national court are out of time for the purposes of proceedings for annulment under Article 173, because that would amount to making the exercise of. a function which the Treaty intended expressly to reserve to the court dependent upon the procedural conduct of one of the parties, and it would be excessively harsh to give legal certainty precedence in all cases over the requirement of compliance with the rule of law. Therefore it would be unwise to exclude, a priori, the power or the duty to refer a matter to the Court of Justice for a preliminary ruling on the basis of criteria defined by the capacity of the parties to the proceedings before the national court or by the nature of the arguments which might be advanced. However, such an affirmative answer leaves open the question whether, in particular when the parties to the proceedings before the national court are out of time for the purposes of proceedings for annulment, the Court of Justice can lay down limits to the extent or the effects of its examination as to validity. In so far as the invalidity of the act would benefit the persons to whom it is addressed or to whom it is of direct and individual concern, the fundamental requirement of compliance with the rule of law applies in different terms. If such persons do not make use of proceedings for annulment within the mandatory limitation period laid down by the Treaty, there is no difficulty in taking the view that concern to guarantee legal certainty should take precedence over the need to ensure observance of the rule of law. Since a declaration that the act at issue is invalid may have practical effects very close to those of annulment for the persons to whom the act was addressed, the question arises whether they should not be denied the use of all means enabling them to break the narrow framework within which Article 173 allows the act to be challenged and thus giving them a sort of perpetual “right of appeal”sui generis. However, even in such a case, the public policy aspect which characterizes proceedings for a preliminary ruling on validity makes it impossible to prevent the persons to whom the act was addressed and who are out of time for the purposes of proceedings for annulment, from also being able to benefit from the effects of a preliminary ruling establishing the invalidity of the act at issue where the nature and the seriousness of the defects vitiating such act patently and irreparably entail its nullity. However, such is not the case in this instance.

The Commission suggests that the first question should be answered as follows:

‘The special function peculiar to proceedings for assessment of validity under Article 177 of the EEC Treaty, which is to ensure that the rule of law is observed in the Community legal order, allows the national courts to request the Court of Justice to give a preliminary ruling on the validity of an act of a Community institution, even where the question of validity is raised before them by a party who is out of time for the purpose of instituting proceedings for annulment under Article 173 of the EEC Treaty, if those courts consider that a case pending before them raises questions which they have to settle involving an assessment of the validity of the act at issue.’

The second question

The Commission argues that, contrary to what the national court appears to accept, the decision to take no action regarding the notification, mentioned in the letter of 29 April 1969, is in no wise a ‘decision’ within the meaning of Article 173 of the Treaty. The notification of an agreement does not necessarily lead to the Commission's initiating any procedure within the meaning of Article 9 (3) of Regulation No 17. A fortiori, notification does not necessarily lead to a decision terminating such procedure by way of a decision finding that there is an infringement (Article 3 of Regulation No 17), of negative clearance (Article 2), or of individual exemption (Articles 6 to 8). By way of a communication or a regulation granting collective exemption the Commission can specify the conditions under which an agreement is not caught by Article 85 (1), or benefits from a collective exemption. In the normal course, where there has been such a communication or regulation granting collective exemption, undertakings which have concluded an agreement fulfilling the said conditions cease to have any interest in having their legal situation established by the Commission by way of an individual decision of negative clearance or of exemption. In such circumstances the Commission, by means of a letter of standard form, informs the parties to an agreement which they have notified that it intends to take no action regarding the matter.

The Commission submits that such a decision to take no action does not exhibit the characteristics of a ‘decision’ within the meaning of Article 173 of the EEC Treaty, as interpreted in particular by the judgment of 15 March 1967 (Joined Cases 8 to 11/66, Cimenteries [1967] ECR 75). The decision to take no action does not have any legal effects affecting the interests of the undertakings concerned, because the possibility of the grant of a negative clearance or a retroactive individual exemption remains unchanged. The legal effect of exemption arises directly from Regulation No 67/67 and not from the decision to take no action. Nor are the undertakings concerned bound to accept the decision to take no action because they can at any time request the Commission to take an individual decision relating to the agreement notified. Therefore the decision to take no action does not affect the right of the parties to institute proceedings for annulment against any decision which has been taken or proceedings for failure to act against the Commission, if the Commission refrains from adopting a decision. Moreover the letter at issue expressly requests the interested parties to state whether the adoption of an individual decision by the Commission is considered desirable.

The third recital of Regulation No 67/67 states that that regulation does not conflict with the application of Regulation No 17, and that consequently it does not affect the right of undertakings to request the Commission, on an individual basis, for a declaration under Article 85 (3) of the Treaty.

The decision to take no action, of which the parties were informed by the Commission's letter of 29 April 1969, is only an internal measure of the Commission and not a decision within the meaning of Article 173 of the Treaty. Consequently, the question of the compatibility of such a decision with the provisions of the Treaty does not arise.

However, the national court's second question expresses its doubts regarding the Commission's assessment of the agreement in dispute, in particular as to whether the agreement brings about absolute territorial protection. In these circumstances, the Court's answer should indicate the courses which are open to national courts presented with an agreement which has been notified to the Commission but about which the Commission has not adopted any decision, when the national courts consider that such agreement may be caught by the prohibition in Article 85.

The answer to these questions can be found in the judgments of 6 February 1973 (Case 48/72, Haecht [1973] ECR 77) and of 3 February 1976 (Case 63/75, Fonderies Roubaix-Wattrelos [1976] ECR 111).

It follows from the judgment in Haecht that the national court has jurisdiction to rule on the question whether or not an agreement is caught by the prohibition laid down by Article 85 (1) of the Treaty. It may among other things reach a finding that the agreement does not have any perceptible effect on competition or trade between Member States. The Commission points out that, even if an exclusive sales contract provides for absolute territorial protection, it may fall outside the scope of Article 85 where the position of the parties on the market is particularly weak (judgment of the Court of Justice of 9 July 1969, Case 5/69, Völk v Vervaecke [1969] ECR 295).

If, on the other hand, the national court finds that the agreement is caught by the prohibition in Article 85 (1), it must consider whether the agreement can benefit from the exemption by categories provided for by Regulation No 67/67, and, if so, apply that regulation (judgment in Roubaix-Wattrelos, aforementioned). If in doubt, the national court must have recourse to the procedure for a preliminary ruling provided for in Article 177 of the EEC Treaty. It may also suspend proceedings in order to allow the parties to obtain the Commission's standpoint.

If the court finds that the agreement is caught by Article 85 (1) and does not fulfil the conditions for exemption by categories, it has to distinguish, as emerges from the judgment in Haecht, between agreements existing before the implementation of Article 85 by Regulation No 17 — ‘old agreements’ — and those concluded after that date. In the case of the former, the court may only declare an agreement which has been notified to be automatically void after the Commission has taken a decision by virtue of that regulation (paragraph 9 of the Decision in Haecht). In the case of the latter, it devolves on the court to judge, subject to the possible application of Article 177, ‘whether there is cause to suspend proceedings in order to allow the parties to obtain the Commission's standpoint, unless it establishes either that the agreement does not have any perceptible effect on competition or trade between Member States or that there is no doubt that the agreement is incompatible with Article 85’ (paragraph 12 of the Decision in Haecht).

In the present case, the agreement is an ‘old agreement’ which has been notified. If it had contained any provisions creating absolute territorial protection, the national court should have declared it to be automatically void only after the Commission had taken a decision by virtue of Regulation No 17. However, examination of the wording of the agreement indicates that it does not contain any factor from which it can be inferred that there is such territorial protection. The Commission submits that, in the present case, the doubts of the national court can only originate in factors resulting neither from the wording of the agreement nor from the information supplied in the notification. If any factors of this kind were present, the agreement in dispute should be judged according to the different treatment laid down by the Court of Justice for old and for new agreements. In the absence of details on this point, it is submitted that the general answer to be given to the second question should be the following:

‘The decision to take no action of which the parties to the agreement were informed by the Commission's letter of 29 April 1969 does not have any legal effects affecting the interests of the undertakings concerned, and they are not bound to accept it. Consequently it is not a decision within the meaning of Article 173 of the Treaty. Therefore the question whether a decision by the Commission is in accordance with the EEC Treaty has no purpose. Where it has been pleaded before a national court that an agreement between undertakings is automatically void, and the national court finds — in spite of the fact that the Commission has decided to take no action regarding the notification of the agreement because it considers it to be covered by an exemption by categories — that the agreement does not fulfil the conditions laid down by the regulation granting such exemption, the national court may, in the case of an agreement existing before the implementation of Article 85 of the EEC Treaty by Regulation No 17, declare it to be automatically void only after the Commission has taken a decision by virtue of Regulation No 17.

On the other hand, in the case of an agreement entered into after the implementation of Article 85 by Regulation No 17, it devolves on the court to judge, subject to the possible application of Article 177, whether there is cause to suspend proceedings in order to allow the parties to obtain the Commission's standpoint, unless it establishes either that the agreement does not have any perceptible effect on competition or trade between Member States or that there is no doubt that the agreement is incompatible with Article 85.

An agreement concluded before the implementation of Article 85 by Regulation No 17 and notified within the period laid down by Article 5 (1) of that regulation, but which no longer fulfils the conditions to benefit from exemption by categories on account of provisions of the agreement entered into after notification, is to be considered as an. agreement entered into after the date of the implementation of Article 85 by Regulation No 1.’

The third question

The Commission argues that this question proceeds from a material error: the period of validity of the exemption by categories granted by Regulation No 67/67 was extended to 31 December 1982 by Regulation (EEC) No 2591/72 of the Commission of 8 December 1972 amending Regulation No 67/67 (OJ, English Special Edition 1972 (9-28 December), p. 7). Consequently the Commission proposes the following answer:

‘By virtue of the extension by Regulation (EEC) No 2591/72 of the Commission of 8 December 1972 of the period during which Regulation No 67/67 declared Article 85 (1) of the EEC Treaty inapplicable to certain categories of exclusive dealing agreements pursuant to Article 85 (3), an exclusive dealing agreement which fulfils the conditions of the said Regulation No 67/67 may continue to benefit after 31 December 1972 and until 31 December 1982 from the declaration of inapplicability of Article 85 (1) of the EEC Treaty.’

The fourth question

In substance, the fourth question asks whether ‘it is at all events possible to recognize as provisionally valid, so long as the Commission has not adopted a decision with regard to it’, an old agreement which was notified before 1 February 1963. The Commission argues that, in so far as the fourth question starts from the mistaken assumption that the collective exemption introduced by Regulation No 67/67 has no longer been in force since 31 December 1972, it becomes purposeless by reason of the fact that the exemption by categories was extended by Regulation No 2591/72. However, the question is still of interest if the agreement in dispute does not fulfil the conditions for an exemption by categories, because in such a case it is necessary to define what is meant by the expression ‘provisionally valid’ according to the judgment in Haecht. The Commission submits that the expression can only refer to a national court's duty not to declare an old agreement which has been duly notified within the period laid down by Article 5 (1) of Regulation No 17 to be void so long as the Commission has not adopted a decision under Regulation No 17.

Such ‘provisional validity’ is to protect the opportunity for the parties to benefit in respect of old agreements from a retroactive exemption or from an ex post facto legalization under Articles 6 or 7 of Regulation No 17. If, however, the Commission states, by way of decision, that the agreement cannot be exempted retroactively or legalized ex post facto, the agreement is void ab initio.

Therefore it is submitted that the answer to the fourth question should be the following:

‘An agreement caught by the prohibition laid down in Article 85 (2) and not covered by an exemption by categories, which existed at the date of the entry into force of Regulation No 17 and which was notified within the period laid down in Article 5 (1) of the said regulation, may benefit from the Commission's power under Articles 6 (2) and 7 of the said regulation to limit the period during which the prohibition concerned applies by adopting a decision regarding the said agreement. However, that power is inapplicable if the agreement is caught by the prohibition laid down in Article 85 (2) or cannot benefit from an exemption by categories because of provisions of the agreement which have not been notified whether they were entered into before or after the date of notification.’

The first question

De Bloos observes that the concept of the validity of an act merges with that of legality within the meaning of Article 173 of the EEC Treaty. Therefore all the grounds of illegality listed in Article 173 may be pleaded in a review of validity pursuant to Article 177. The fact that the parties to the main action were not competent to challenge the act in dispute directly by means of proceedings for annulment does not prevent the Court of Justice from examining the validity of such act in proceedings for a preliminary ruling.

The second question

The agreement concluded on 24 October 1959 between Bouyer and De Bloos fulfils the conditions laid down by Regulation No 67/67 and is an open exclusive dealing agreement, that is to say that the distributor is protected only against sales carried out by the grantor within the area under consideration.

The third question

On the assumption that the effects of Regulation No 67/67 come to an end on 31 December 1972, as an open dealing agreement the agreement in dispute may in any case benefit from an individual exemption decision. It is submitted that such a decision can only be made to apply for a limited period, and furthermore is revocable, but only in so far as actual circumstances change in relation to an essential factor of the decision.

The fourth question

Referring to the judgments of 9 July 1969 (Case 10/69, Portelange [1969] ECR 309), 18 March 1970 (Case 43/69, Bilger [1970] ECR 127) and 30 June 1970 (Case 1/70, Rochas [1970] ECR 515), De Bloos argues that when an agreement has been notified and the Commission has initiated a procedure, the national court must regard the agreement as provisionally valid and cannot terminate its provisional validity, since under Article 9 (3) of Regulation No 17 it is no longer competent to apply Article 85 (1). Any subsequent finding that an exclusive dealing agreement is void cannot have retroactive effect, whether the agreement has been notified or not.

De Bloos also goes on to analyse the Belgian legislation concerning the unilateral revocation of sales concessions, and deduces therefrom that open exclusive dealing agreements enjoy legal protection by the same right as closed exclusive dealing agreements.

At the hearing on 9 November 1977, the plaintiff in the main action, represented by F. Moulart of the Tournai Bar, and the Commission, represented by its Agent, A. Marchini Camia, expanded upon the arguments put forward in the written procedure.

The defendant in the main action, Bouyer, represented by D. Noel of the Nancy Bar, points out in relation to the first question that Article 177 is a provision of public policy, that it does not lay down any limitation period, and that it is stated therein that the national court has sole jurisdiction to refer a question concerning the interpretation or validity of a regulation to the Court of Justice for a preliminary ruling. Bouyer infers from this that the first question should be answered in the affirmative.

As regards the second question, Bouyer submits that the decision of 29 April 1969 to take no action constitutes a provisional, not a definitive, decision.

The third and fourth questions result from a material error and there is therefore no need to answer them.

The Advocate-General delivered his opinion at the hearing on 29 November 1977.