Commission of the European Communities v United Kingdom of Great Britain and Northern Ireland.

• Jurisdiction: European Union
• Celex Number: 61998CJ0466
• ECLI: ECLI:EU:C:2002:624
• Docket Number: C-466/98
• Date: 05 November 2002
• Court: Court of Justice (European Union)
• Procedure Type: Recurso por incumplimiento – fundado

Avis juridique important

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61998J0466

Judgment of the Court of 5 November 2002. - Commission of the European Communities v United Kingdom of Great Britain and Northern Ireland. - Failure by a Member State to fulfil its obligations - Conclusion and application by a Member State of a bilateral agreement with the United States of America - Agreement authorising the United States of America to revoke, suspend or limit the traffic rights of air carriers designated by the United Kingdom which are not owned by the latter or its nationals - Article 52 of the EC Treaty (now, after amendment, Article 43 EC). - Case C-466/98.

European Court reports 2002 Page I-09427

Parties
Grounds
Decision on costs
Operative part

Parties

In Case C-466/98,

Commission of the European Communities, represented by F. Benyon, acting as Agent, with an address for service in Luxembourg,

applicant,

v

United Kingdom of Great Britain and Northern Ireland, represented by J.E. Collins, acting as Agent, assisted by D. Anderson QC, with an address for service in Luxembourg,

defendant,

supported by

Kingdom of the Netherlands, represented by M.A. Fierstra and J. van Bakel, acting as Agents,

intervener,

APPLICATION for a declaration that, by concluding and applying an Air Services Agreement signed on 23 July 1977 with the United States of America which provides for the revocation, suspension or limitation of traffic rights in cases where air carriers designated by the United Kingdom of Great Britain and Northern Ireland are not owned by the United Kingdom or United Kingdom nationals, the United Kingdom of Great Britain and Northern Ireland has failed to fulfil its obligations under Article 52 of the EC Treaty (now, after amendment, Article 43 EC),

THE COURT,

composed of: J.-P. Puissochet, President of the Sixth Chamber, acting for the President, R. Schintgen (President of Chamber), C. Gulmann, D.A.O. Edward, A. La Pergola, P. Jann, V. Skouris (Rapporteur), F. Macken, N. Colneric, S. von Bahr and J.N. Cunha Rodrigues, Judges,

Advocate General: A. Tizzano,

Registrar: H. von Holstein, Deputy Registrar, and D. Louterman-Hubeau, Head of Division,

having regard to the Report for the Hearing,

after hearing oral argument from the parties at the hearing on 8 May 2001, during which the Commission was represented by F. Benyon, the United Kingdom by J.E. Collins, assisted by D. Anderson, and the Kingdom of the Netherlands by J. van Bakel, H.G. Sevenster and J. van Haersolte, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 31 January 2002,

gives the following

Judgment

Grounds

1 By application lodged at the Court Registry on 18 December 1998, the Commission of the European Communities brought an action under Article 169 of the EC Treaty (now Article 226 EC) for a declaration that, by concluding and applying an Air Services Agreement signed on 23 July 1977 with the United States of America which provides for the revocation, suspension or limitation of traffic rights in cases where air carriers designated by the United Kingdom of Great Britain and Northern Ireland are not owned by the United Kingdom or United Kingdom nationals, the United Kingdom of Great Britain and Northern Ireland has failed to fulfil its obligations under Article 52 of the EC Treaty (now, after amendment, Article 43 EC).

2 By order of the President of the Court of 8 July 1999, the Kingdom of the Netherlands was granted leave to intervene in support of the form of order sought by the United Kingdom.

Background to the dispute

3 Towards the end of the Second World War or shortly thereafter, several States which subsequently became Members of the Community, including the United Kingdom, concluded bilateral agreements on air transport with the United States of America.

4 One such bilateral agreement, the first of the Bermuda Agreements (hereinafter `the Bermuda I Agreement'), was concluded between the United Kingdom and the United States in 1946. Under Article 6 of that agreement, `[e]ach Contracting Party reserves the right to withhold or revoke the exercise of the rights specified in the Annex to this Agreement by a carrier designated by the other Contracting Party in the event that it is not satisfied that substantial ownership and effective control of such carrier are vested in nationals of either Contracting Party ...'.

5 Subsequently, another agreement, the second of the Bermuda Agreements (hereinafter `the Bermuda II Agreement'), replaced the Bermuda I Agreement with effect from 23 July 1977, the date upon which it was signed and entered into force. Article 5 of the Bermuda II Agreement provides:

`(1) Each Contracting Party shall have the right to revoke, suspend, limit or impose conditions on the operating authorisations or technical permissions of an airline designated by the other Contracting Party where:

(a) substantial ownership and effective control of that airline are not vested in the Contracting Party designating the airline or in nationals of such Contracting Party;

...

(2) ... such rights shall be exercised only after consultation with the other Contracting Party.'

6 Furthermore, according to Article 3(6) of the Bermuda II Agreement, each Contracting Party is required to grant the appropriate operating authorisations and technical permissions to an airline when certain conditions are satisfied, including the condition that substantial ownership and effective control of that airline be vested in the Contracting Party designating the airline or in its nationals.

7 The documents before the Court show that, in 1992, the United States of America took the initiative of offering to individual European States the possibility of concluding a bilateral `open skies' agreement. In 1993 and 1994, the United States of America strengthened its efforts to conclude such agreements with the largest possible number of European States.

8 In a letter of 17 November 1994, addressed to the Member States, the Commission drew their attention to the negative effects that such bilateral agreements could have on the Community and stated its position to the effect that that type of agreement was likely to affect internal Community legislation. It added that negotiation of such agreements could be carried out effectively, and in a legally valid manner, only at Community level.

9 In the light of that correspondence, by letter of 20 April 1995, the Commission sought an assurance from the Government of the United Kingdom that it would not negotiate, initial, conclude or ratify a bilateral agreement with the United States of America. However, the United Kingdom continued to negotiate an agreement with the United States and concluded that agreement on 5 June 1995.

Facts and pre-litigation procedure

10 On 17 July 1995, the Commission sent a letter of formal notice to the United Kingdom, stating inter alia that, as far as it was aware, the traffic rights accorded to the United Kingdom by the United States of America under their agreement were to be granted solely on the basis of the nationality of the carrier. According to the Commission, that constituted an infringement of Article 52 of the EC Treaty because, under the terms of that agreement, amongst the air carriers which had obtained a licence from the United Kingdom in accordance with Council Regulation (EEC) No 2407/92 on licensing of air carriers (OJ 1992 L 240, p. 1), those established in the United Kingdom which were owned and controlled by nationals of another Member...