Re the Draft Treaty on a European Economic Area (No 1) (Opinion 1/91)

• Jurisdiction: European Union
• Date: 14 December 1992
• Court: European Court of Justice

Court of Justice of the European Communities.

(Due, President; Sir Gordon Slynn, Joliet, Schockweiler, Grévisse, Kapteyn, Presidents of Chamber; Mancini, Kakouris, Moitinho de Almeida, Rodríguez Iglesias, Díez de Velasco, Zuleeg and Murray, Judges; Tesauro, Darmon, Gulmann, Jacobs, Lenz and Van Gerven, Advocates-General2)

Re The Draft Treaty on a European Economic Area (No 1)

Treaties — Conclusion and operation — European Communities — Treaty-making powers — EEC Treaty, 1957, Article 238 — European Economic Area Agreement, 1991 — Agreement to be concluded between EEC and its Member States on the one hand and countries of the European Free Trade Association on the other hand — Compatibility of Agreement with EEC Treaty — Parties to Agreement — When Agreement concluded by EEC, when by Member States and when by EEC and Member States jointly

Treaties — Effect — EEC Treaty, 1957 — Nature of EEC Treaty — Treaty creating new legal order — Relationship with other international agreements — Proposal for agreement to be concluded between EEC and its Member States on the one hand and countries of the European Free Trade Association on the other hand — Effects of proposed treaty in European Community law — Institutions — Role of Court of Justice

Treaties — Interpretation — Approach to interpretation — Object and purpose of treaty — Context — Unique nature of EEC Treaty, 1957 — Effect on interpretation — Identical terms in EEC Treaty and other international agreement not necessarily to be given the same meaning — The law of the European Economic Community

Summary: The facts:—The European Commission sought the opinion of the Court of Justice of the European Communities pursuant to the second subparagraph of Article 228(1)3 of the Treaty establishing the European Economic Community (‘EEC’) on the compatibility with the EEC Treaty of the draft agreement relating to the creation of the European Economic Area (‘EEA’) between the EEC and its Member States on the one hand and the countries of the European Free Trade Area (‘efta’) on the other. In particular the Court's opinion was sought regarding the judicial machinery proposed under that agreement. Under the EEA Agreement, homogeneity in the interpretation and application of the law was to be secured through the use of provisions which were textually identical to corresponding provisions of Community law and through the establishment of a system of courts. The latter featured a new EEA Court which was to be composed of an appropriate balance of judges of the Court of Justice and efta judges, and whose jurisdiction would cover the settlement of disputes between the contracting parties, actions concerning the surveillance procedure regarding the efta States and appeals concerning decisions taken by the efta Surveillance Authority in the field of competition. The system of courts provided for the following mechanisms:

(1) The agreement was to be interpreted in conformity with rulings of the Court of Justice given prior to the date of signature of the EEA Agreement (Article 6).

(2) The courts of the European Communities and of the EEA were to take due account of the principles laid down in decisions delivered by each other (Article 104(1)).

(3) The efta States might authorize their courts and tribunals to ask the Court of Justice to express itself on the interpretation of the EEA Agreement (Protocol 34).

(4) efta States were to have the right to intervene in cases brought before the Court of Justice (Protocol 34).

The Commission requested the Court's opinion on the following points:

(1) The compatibility with Community law of the presence of judges of the Court of Justice of the European Communities on the proposed EEA Court.

(2) The compatibility with the EEC Treaty of extending to the efta countries the right to intervene in Community cases pending before the Court of Justice.

(3) Whether it was possible, without amending the EEC Treaty, to allow courts from efta countries to submit to the Court of Justice questions on the interpretation of the agreement.

(4) Whether the system of courts provided for in the EEA Agreement was permissible under Article 2384 of the EEC Treaty.

Held:—The system of judicial supervision which the agreement proposed to set up was incompatible with the EEC Treaty.

(1) The fact that provisions of the EEA Agreement and corresponding provisions of the EEC Treaty were identically worded did not mean that they necessarily had to be interpreted identically. An international treaty was to be interpreted not only on the basis of its wording, but also in the light of its objectives. Whereas the EEA Agreement was concerned with the application of rules on free trade and competition in economic and commercial relations between the Contracting Parties, as far as the Community was concerned, these rules formed part of the Community legal order, the objectives of which went beyond those of the EEA. Moreover, the context of each treaty also had to be taken into account. The EEC was to be established on the basis of an international treaty, which merely created rights and obligations as between the contracting parties and provided for no transfer of sovereign rights to the inter-governmental institutions which it set up. The EEC Treaty, by

contrast, was the constitutional charter of a new legal order for the benefit of which the Member States had limited their sovereign rights and the subjects of which comprised not only the States but also their citizens (pp. 186–7).

(2) Article 6 of the EEA Agreement could not secure the objective of ensuring homogeneity in the interpretation and application of the law in the EEA, because it referred only to decisions of the Court of Justice given prior to the signature of the EEA Agreement and did not ensure that essential elements of the Court's case-law, namely the principles of direct effect and supremacy, would be respected in the efta States (pp. 188–9).

(3) By conferring on the EEA Court the competence to interpret the term ‘Contracting Parties’ in the EEA Agreement, the Agreement purported to give that court the power to rule on whether it was the Community, its Member States or the Community and the Member States together which was the contracting party for the purposes of a particular provision. The EEC Treaty, however, reserved to the Court of Justice the responsibility for determining the respective competences in treaty-making of the Community and the Member States (pp. 189–90).

(4) In principle it was permissible for the Community to conclude an international agreement providing for its own system of courts, even if the decisions of those courts would bind the Court of Justice. However, in so far as it conditioned the future interpretation of Community law (as permitted by the wording of Article 6 of the EEA Agreement), the machinery of courts provided for in the EEA Agreement conflicted with Article 164 of the EEC Treaty as well as with the very foundations of the Community (pp. 191–2).

(5) The threat to the autonomy of the Community legal order was not reduced by the organic links between the EEA court and the Court of Justice. On the contrary, it would be difficult for the judges to maintain open minds when they had to interpret the same provisions in different courts using different approaches (pp. 192–3).

(6) It was unacceptable that the answers which the Court of Justice gave to courts and tribunals in the efta States were to be purely advisory and without binding effect. This would change the nature of the Court as conceived by the EEC Treaty and would give rise to legal uncertainty regarding the legal value of its answers for courts in Member States of the Community (pp. 193–5).

(7) It was not necessary to amend the EEC Treaty, using Article 236,5 in order to give efta countries the right to intervene in cases pending before the Court of Justice (pp. 195–6).

(8) Article 238 of the EEC Treaty did not provide a basis for setting up, under an international agreement, a system of courts which was incompatible with Community law, and no amendment of that Article could cure this incompatibility (p. 196).

The following is the text of the Opinion of the Court:

OPINION 1/91 OF THE COURT

14 December 1991

I—Description of the request for an opinion

By this request, the Commission seeks the Court's opinion on the compatibility with the provisions of the EEC Treaty of a draft agreement relating to the creation of the European Economic Area (hereinafter referred to as “the agreement” and “the EEA”, respectively) and more particularly of the judicial machinery which it is proposed to set up under that agreement. The agreement is an association agreement to be concluded by the Community on the basis of Article 238 of the Treaty.

The agreement has been the subject of negotiations between the Commission, which, pursuant to a mandate given by the Council on 18 March 1990, has acted on behalf of the Community in accordance with a Council decision, and the countries of the European Free Trade Association and the Principality of Liechtenstein, which officially submitted an application to join EFTA on 1 March 1991, (hereinafter referred to as “the EFTA countries” or “the EFTA States”).

The text of the agreement (the wording of which was not definitive) was enclosed with the request for an opinion.

The Court's Opinion is given on the basis of the English version of the agreement. By letter dated 30 October 1991, the Commission communicated this document in its form prior to initialling.

The Commission justified its request for an opinion by pointing out that the agreement provides for a system of judicial supervision for the settlement of disputes between the Contracting Parties and the settlement of conflicts within EFTA, and procedures designed to strengthen the uniformity of the law within the EEA. Although the Commission firmly believes that the system in question offers positive safeguards for the Community, it...