EU State Liability - Assignment Example

Before going into the question, the law relating to the Directives needs to be explored. First of all, the party Botox-co is challenging the validity of an unimplemented directive on procedural grounds. Directive is a secondary legislation validity of which can be adjudicated by the European Court of Justice (ECJ). If correct procedures are not followed, it can be a ground for rendering the legislation invalid. As per the EC treaty, the ECJ has jurisdiction over the various actions of the EU institutions. The Court can entertain direct actions brought by the European Commission against the Member States for their failure to carry out community obligations and also actions brought by the institutions and individuals proposing to challenge the validity of Community Legislation. Apart from the direct actions as mentioned above, the ECJ is empowered to give preliminary rulings on application from national courts for interpretation of EC Law, rule or validity of a secondary legislation. Article 253 of EC states that any directive, regulation or decision must contain in the preamble a statement for the legal basis on which the directive or as the may be, is made.1 Article 249 of the EC defines a directive of the European Union Council addressed to a Member State, several Member States or all the Member State which shall be binding on them as the case may be. The form and manner in which it should be incorporated into the national law of the Member State is left to the Member State. While regulations are mandatory, directives are persuasive in nature as regards the form in which they are implemented. Because there should be cooperation between Community and the Member States as they want to respect the autonomy of the Member State’s systems and procedures as per article 10 of the EC. The directives are very precisely worded that there can be no way the Member State can avoid its implementation.2 In Enka of case o 38/77, the ECJ held that the States’ discretion was limited to the result that EC envisages to achieve.3 Further, directives are to be implemented within a time frame stipulated in the directives themselves. In the instant case, although the State has failed to transpose the directive, since the affected Botox-Box Co claims that the Directive itself is invalid on procedural grounds, the company can apply to the national court for a preliminary ruling of the ECJ on the validity of the directive in question.4 In Costa v Enel5, validity of an Italian law nationalizing the electricity industry in 1962 was questioned by an affected consumer who refused to pay his electricity bill less than £ 2 on the ground that the nationalization infringed the provisions of the EEC Treaty. Based on this, Italian court approached the ECJ for a preliminary ruling on the relevant community law provisions. Although the Italian Government opposed the move for preliminary ruling as the nationalization had no connection with EC law, it was held by the ECJ still it could be approached for a preliminary ruling since the legal system of the EEC was an integral part of the legal systems of the Member States. In yet another case Kledingverkoopbedrijf De Geus en Uitdenbogerd v Robert Bosch GmbH 6 , ECJ was moved as regards the procedure.7 In a recent decision involving Arcelor SA v Parliament and Council8 , the Arcelor’s action for annulment was dismissed as inadmissible and the application for damage was also dismissed as unfounded. This involved adoption of The Emissions Trading Directive9 which resulted in loss for Arcelor and hence application for damages. It argued that the directive infringed several principles of community law especially right of property. This court decision is not helpful for the present case since it dismissed as inapplicable since applicant was neither a legal person nor an individual and as regards the right of property, the court held that Arcelor failed to substantiate the breach of community breach in respect of right of property among other issues.10 However, since the EC treaty states that if correct procedures are not followed, a directive can be held invalid, the present directive which the Botox-box is challenging can be assumed to be invalid. However, much depends on the preliminary ruling of the ECJ to whom the council may submit justification even if procedures were not strictly followed. Assuming that Directive is valid on procedural grounds, it shall now be examined how the Member State is liable for non-implementation of the directive. Though it is Federal State and that the Constituent State alone had the duty to transpose, it is an internal arrangement between the Federal State and its States. Hence, as a legal person Botox-Co can proceed against the Transylvania as well as the concerned constituent state under whose jurisdiction it falls, by invoking vertical direct effect before the ECJ to order for necessary damages from the member State and its constituent state. State can be held liable for loss suffered as a result of non-application or non transposition of an EU law. 11 It has been observed that this is a public law remedy for a private problem and that it is a very expensive and complex. The case which established this right was Francovich12 and Mr Francovich was unsuccessful in obtaining damages. Subsequently, In Brasserie du Pecheur SA v Germany13, the ECJ prescribed the following tests. 1) That the rule of law breached had the intention of conferring rights over individuals. 2) The violation must be actually serious; and 3) A direct casual connection between the violation and damage must be established. Hence, the Botox-Co has the burden of proof to satisfy the above tests before the ECJ for claiming damages from Transylvania and its constituent state. References Arcelor SA v Parliament and Council, Case no T-16/04 Brasserie du Pecheur SA v Germany, [1997] 1 C.M.L.R. 971 Costa v Enel case 6/64 Davies Karen, Understanding European Union Law, 2 ed, Routledge, P37-38 electricity company ENEL Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC (OJ 2003 L 275, p. 32). Enka [1977] ECR 2203 Francovich and Bonifaci v Republic of Italy (Cases C-6 and 9/90) [1991] ECR I-5375, [ Kaczorowska Alina, 2008, European Union Law, Taylor & Francis,, p221-222 Kledingverkoopbedrijf De Geus en Uitdenbogerd v Robert Bosch GmbH case no 13/61 Marson, 2008, Chapter 6 Enforcement Mechanisms, Business Law, Oxford Higher Education, Oxford University Press. Wolf Susan, 1999, Brief Case on European Community Law, 2 Ed Routledge. Read More