Supremacy of EU Law

General principle of EU Law

The European Court of Justice (ECJ) is relatively creative, as compared to English Courts, by using the purposive approach in ensuring the effectiveness of the EU Law. 

There are a number of general principles developed by the European Court of Justice, which are important and crucial to understand the application of EU Law in practice. 

In this post I will briefly discuss the principle of supremacy of EU Law. 

You can download EU Treaties here: https://europa.eu/european-union/law/treaties_en

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Supremacy

The doctrine of supremacy is one of the creations of ECJ. The Treaties do not expressly provide for the supremacy of EU law.

It answers the question of what happens in a situation of conflict between national law and EU law.

In Case 6/64 Costa v ENEL (1964), Italy has nationalised its electric power industries into one single entity ENEL in 1962. Costa, a shareholder in one of the companies, protested his loss of dividends by refusing to pay his electric bill. In his defence he argued that the nationalisation of the electricity industry violated the Treaty of Rome. The case was referred first to the Italian Constitutional Court, and then to the ECJ.  

The Italian Constitutional Court applied the principle of lex-posterior. The national law which nationalised the electricity industry, was enacted after the incorporation of the EEC Treaty, thus the Treaty of Rome which was incorporated into Italian in 1958 could not prevail over the electricity nationalisation law which was enacted in 1962.

The ECJ held that EEC Treaty is not a usual agreement between the Member States. It has created its own legal system which, on the entry into force of the Treaty, became an integral part of the legal systems of the Member States and which their courts are bound to apply. By entering into the EEC Treaty, Member States had limited their sovereign rights and that Community law ‘could not…be overridden by domestic legal provisions’.   

In Case 11/70 Internationale Handelsgesellschaft mbH v EVGF (1970), there was a conflict between EC Regulation and national constitution. The claimant argued that the Regulation infringed, inter alia, the principle of proportionality enshrined in the German constitution. The ECJ held that the Community law took precedence over fundamental rule in the German national constitution. The validity of EC measures cannot be challenged on grounds of national law rules or concepts.

In Case 106/77 Simmenthal SpA (No.2) (1978), Italy imposed a public health inspection fee for the meat crossing the frontier under an Italian law, which was conflicted with the EC Regulations. The ECJ held that the national court, even a lowly court of first instance, have a duty to set aside provisions of national law which are incompatible with EC law. There was no need to wait for the national law to be amended in line with national constitutional procedures. The national rule had to be set aside immediately if it conflicted with an EC law that is directly effective and applicable.

In Case C-118/00 Larsy v INASTI (2001), it was held the obligation to set aside conflicting national rules not only apply to national courts, even an administrative agency dealing with a national social insurance scheme was held to be required to do so.

In Case 167/73 Commission v France (French Shipping Crews) (1974), although a national law which conflicted with the EC law is rendered ‘inapplicable’, in the interests of legal certainty, the Member States still nevertheless has the duty to repeal the offending national rule.                                   

In Case C-213/89 Factortame (1990), the Spanish fishermen was claiming that the English Merchant Shipping Act 1988 was contrary to the EU law. The Merchant Shipping Act 1988 requires that a vessel can only be registered in the UK if the vessel is belongs by British citizen, the vessel is managed and its operation is directed and controlled from the UK and the shares must be belonged by UK citizen for at least 75%. There was a clear provision under the Crown Proceedings Act 1947, which states that no national court had the power to grant an injunction ‘against the Crown’. As such, the Court of Appeal held that they could not suspend the operation of an Act of Parliament and therefore they upheld the validity of Merchant Shipping Act 1988.

The ECJ disagreed with the Court of Appeal and stated that if the domestic law is conflicted the EU law, the court ought to set aside the domestic law. The European Court of Justice granted an interim injunction to the Spanish fishermen and set aside the Crown Proceedings Act 1947. As a result, the Merchant Shipping Act 1988 was held in abeyance.

The supremacy of Union law over national law is now stated in a Declaration attached to the Treaty of Lisbon. This reiterates the doctrine as stated by the Court as follows,

‘The Conference recalls that, in accordance with well settled case law of the Court of Justice of the European Union, the Treaties and the law adopted by the Union on the basis of the Treaties have primacy over the law of Member States, under the conditions laid down by the said case law.’

There is also attached the Opinion of the Council Legal Service of 22 June 2007 which states,

‘It results from the case-law of the Court of Justice that primacy of EC law is a cornerstone principle of Community law. According to the Court, this principle is inherent to the specific nature of the European Community. AT the time of the first judgment of this established case (Costa/ENEL) there was no mention of primacy in the treaty. It is still the case today. The fact that the principle of primacy will not be included in the future treaty shall not in any way change the existence of the principle and the existing case-law of the Court of Justice.’

Thus, it is clear that the supremacy of Union law is firmly established by the decisions of the Court of Justice and the deliberations of national courts.

Monist and dualist state

The way Union law applies in a domestic legal system depends, from a constitutional point of view, on whether the Member States is monist or dualist states.

In monist states, the constitution provides for international law to enter into domestic law without the need for further national measures of incorporation or transposition. International law can be directly applied by a national judge, and can be directly invoked by citizens, just as if it were national law. France is an example of a monist state.

In dualist states, such as the UK, international law does not become part of domestic law until it is incorporated by a domestic statute. So when the UK joined the EEC, the ECA 1972 had to be adopted to give effect to directly effective provisions of Community law within the UK. It has been amended, following the adoption of the SEA and all the subsequent treaties by the relevant European Communities (Union) (Amendment) Acts.

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Supremacy of Union law in the UK

The English judiciary has traditionally based its application of Union law on the rules laid down in the English statute, expressing the will of Parliament, rather than on any abstract notion of supremacy stemming from the Union Treaties. However, recent cases law suggested that UK has travelled the road from hostility to acceptance.

In Blackburn v Attorney General (1971), the English Court rejected the supremacy of Community Law. According to Lord Denning MR, Member States had not limited their sovereignty by joining the EC, and the Treaty was merely an ordinary international agreement. It was for the UK Parliament to decide at the appropriate time and until such time the Court would follow the instructions of Parliament but not the CJEU. The argument was repeated by Lord Denning MR himself again in Case 129/79 Macarthys Ltd v Smith (1980), which he emphasised the point that the duty to interpret domestic law in light of Union law is conferred by the Parliament.

In Bulmer v Bollinger (1974), the House of Lords held that the EU Law remains separate to English law and that EU Treaty had equal force to English statute. Direct applicability was accepted so that Treaty rights and obligations were immediately effective in the UK but English judges reserved the final word on application. The ECJ was acknowledged as the ‘supreme tribunal’ on EU law, not due to its merit, but rather, because the Parliament had decreed this in Section 3 of the ECA 1972.   

In Case C-12/81 Garland v British Rail Engineering Ltd (1982), Lord Diplock stated that it is a principle of construction of UK statute, to construe the statutes, which were passed after the Treaty was signed, to carry out the obligation and not be inconsistent with it.

In Stoke-on-Trent City Council v B & Q plc (1984), Hoffman J stated that,

‘The EC Treaty is the supreme law of the UK taking precedence over Acts of Parliament. Entry into the Community was in itself a high act of social and economic policy, but which the partial surrender of sovereignty was seen as more than compensated by the advantages of membership.’

In Pickstone v Freeman plc (1989), The House of Lords stated that English Courts must apply a purposive construction to legislation affecting obligations under the EC Treaty, and in doing so could rely upon Parliamentary debates as recorded in Hansard (the official record of Parliamentary debate) on the relevant national legislation. Horspool and Humphreys explains that in interpreting UK law in accordance with Union law, where a UK rule is capable of different interpretation, the judges should use the interpretation that best reflects the Union law aim.

In Lister v Forth Dry Dock and Engineering Co Ltd (1990), Lord Templeman in the House of Lords stated that ‘courts of the UK are under a duty to follow the practice of the ECJ by giving a purposive construction to Directives and to Regulations issue for the purpose of complying with Directive…’

In Case C-221/89 Factortame (No. 2) (1994), when the case back to the House of Lords, Lord Bridge states that under the European Communities Act 1972, the courts have the duty to override the national law which was found to be in conflict with the EU law. However, Lord Bridge states that this does not affect the doctrine of parliamentary supremacy because the Parliament was entirely voluntarily to enact the ECA 1972.

This case demonstrated the rule that the supremacy of EU laws over the national laws. The European Court of Justice has stated that the courts have the power to set aside the domestic law if the domestic law is conflicted with the EU law. It could be said that the UK Parliament is no longer supreme since the Act of Parliament can be questions by the court and the status of the EU laws is higher than domestic law.

In Thoburn v Sunderland Country Council (2003), Sir John Laws reiterated the traditional view about the basis of the supremacy of EU law in the UK, decided that the case based on UK constitutional law rather than on principles of EU law. He stated that ECA 1972 is a constitutional statute which means that it cannot be impliedly repealed by a later ordinary statute. Hence, it would prevail over later statutes which were inconsistent. However, he went on to comment that:

‘in the event, which no doubt would never happen in the real world, that European measure was seen to be repugnant to a fundamental or constitutional right guaranteed by the law of England, a question would arise whether the general words of the ECA were sufficient to incorporate the measure and give it overriding effect in domestic law.’

Supremacy of Union law in Germany

Article 25 ‘Primacy of international law’ of the Basic Law for the Federal Republic of Germany provides that:

‘The general rules of international law shall be an integral part of federal law. They shall take precedence over the laws and directly create rights and duties for the inhabitants of the federal territory.’

The German constitution contains strong fundamental rights provisions and the German Federal Constitutional Court (FCC) sees itself as the custodian of these human rights protections.

Article 24 of the German Constitution allows for the transfer of legislative power to international organizations, but there have been questions as to whether this Article permitted the transfer to the EC of a power to contravene certain basic principles protected under the Constitution itself.

In Case 11/70 Internationale Handelsgesellschaft mbH v EVGF (1970), the ECJ had stated that the validity of Community measures could only be judged according to Community criteria, not according to principles enshrined in the German constitution.

However, ECJ recognised the existence of fundamental rights, but concluded that there was no violation of fundamental rights. Although the Community did not have a codified catalogue of human rights, the respect of fundamental rights forms an integral part of general principles of law protected by the ECJ. The Community measures are then subject to the fundamental human rights contained in the respective national constitution.

The ECJ ruling was not accepted by the FCC. In the Solange I, the FCC ruled that, in the hypothetical case of a conflict between Community law and the guarantee of fundamental rights under the German constitution, German constitutional rights prevailed over any conflicting norm of EC law. The FCC thus impliedly rejected the position of the primacy of Community law, which has first been laid down by the ECJ in Case 6/64 Costa v ENEL (1964), and then extended in Case 11/70 Internationale Handelsgesellschaft mbH v EVGF (1970) to cover even the fundamental constitutional principles of the Member States.

In Wünsche Handelsgesellschaft GmbH v Germany (1987), which was known as Solange II, the FCC acknowledged that the Community law now had its own equivalent standard of human rights protection. It rules that as long as the Community ensures an effective protection of fundamental rights required unconditionally by the German constitution, the FCC would no longer exercise its jurisdiction to decide on the application of secondary Community legislation. The FCC nevertheless emphasised that the court did not surrender jurisdiction over fundamental rights, but only stated that it would not exercise that jurisdiction as long as the present conditions as to the protection of fundamental rights by the ECJ prevailed.

While Solange I and Solange II were concerned the interaction between Union legal provisions with fundamental rights guaranteed by the German constitution, the following cases concerned with the adoption of new EU treaties, particularly which institution has the authority to determine the competence of Union law. The issue these cases revealed has been termed that of Kompetenz-Kompetenz.

In Brunner v The European Union Treaty (1994), which was a suit claiming that the approval of Maastricht Treaty on European Union would violate the principle that all state power emanates from the people and would infringe on basic rights in German constitution. FCC reaffirmed the sovereignty of German constitutional and its right to review the scope of Community competence. In other words, FCC established its reserve power declare EU measures ultra vires. In this case itself FCC held that TEU was in compliance with the German constitution.

In Gauweiler v Treaty of Lisbon (2008), which was a case concerning the constitutionality of the Lisbon Treaty with the German constitution, FCC reiterated that the power of Kompetenz-Kompetenz remains with the German Courts and not with the EU. In the ECJ’s view, it has sole authority to decide whether national constitutional law infringes Union law. 

In the Honeywell case (2010), the claimant argued that the fixed-term clause in question, which was done on the strength of the German national employment laws, was in breach of the Union Directives. The claim was successful. FCC dis-applied the fixed-term clause, ruling that EU law took precedence where there was a conflict between national law and EU law. The defendant’s argument was that FCC, rather than EU, was supreme as the FCC was the arbiters of the exact extent of Union law in German law (in with these judgments of Brunner v The European Union Treaty and Gauweiler v Treaty of Lisbon). However, it was held that EU law here trumped national law as the EU had not gone beyond the competences conferred upon it by the Treaties.

It appears that the FCC was trying to avoid the potential conflict between EU law and national law, but at the same time, emphasising that they have the ultimate say on the competence of Union law.

Supremacy of Union law in France

France’s legal order has two court systems: the judicial and the administrative courts. The judicial courts deal with the civil and criminal matters while administrative courts under a separate system review the legality of administrative action. Administrative court may annul legislative measures enacted by the executive.

Article 25 of the Constitution of 4 October 1958 of the French Republic provides that,

‘Treaties or agreements duly ratified or approved possess, from the moment of their publication, a superior authority to those of laws under the condition, for each treaty or agreement, of its application by the other party.’

In Vabre and Weigel (1975), the Cour de Cassation (highest court in the judicial order) accepted the supremacy of Community Law on the basis on Article 55, which implies that the constitutive Treaties prevail over national law without further enactment, as well as on the specific nature of Community law.

Although the French Constitution provided for the primacy of certain international treaties over domestic law, the Conseil d’Etat (CE, the supreme administrative court) was of the view that decisions on the constitutionality of legislation were matters for the Conseil Constitutionnel to make before the legislation was promulgated. In Minister of the Interior v Cohn-Bendit (1980), the CE has showed its reluctance to accept the primacy of Union law, and in particular the Directives do not direct effect, unless there is a French implementing measure giving effect to it.

However in the Nicolo case (1990), the CE took the view that Article 55 of itself necessarily enabled the courts, by implications, to review the compatibility of statutes with treaties, and that, therefore, treaties should be given precedence over later statues.  

In Boisdet (1991), the CE recognised the priority of both Community Regulations and Directives over French statutes, without discussing the theoretical basis for that supremacy.

In Rothmans and Arizona Tabacco (1993), the CE awarded damages under the Factortame principle, for loss caused by a Ministerial order which conflicted with an EC Directive.

Conseil Constitutionnel has also made it clear that there are limits to France’s acceptance of supremacy of Union law.

In the Maastricht I decision (1992), Conseil Constitutionnel confirmed that France could transfer competence to an international organisation, provided that it did not thereby violate the essential conditions for the exercise of national sovereignty, and provided that the international agreement did not contain clause contradictory to the constitution. If the government does wish to transfer power not allowed by the existing constitutional norms it will therefore have to modify the Constitution.

In the Maastricht II decision (1992), Conseil Constitutionnel made reference to Article 89 of the French Constitution which stipulates that the republican form of government shall not be the object of an amendment. Together with the arguments above, Conseil Constitutionnel emphasised the point that the supremacy of Union law is dependent on the French constitution.

While, in practice, the French courts accept the primacy of directly effective Union law, their reasoning is frequently based on the French constitution, rather than on the European Court’s doctrine of supremacy. This is a similar view to that expressed in UK and German courts that it is the national constitution which is at the head of the legal order and that Union law supremacy exists only in so far as it is provided for under national law.

Supremacy of Union law in Italy

Italy is a dualist state and Article 11 of the Constitution of the Italian Republic has expressly accepted the limitations of sovereignty for the reasons of necessity. However, the acceptance is conditional.

In Frontini v Ministero delle Finanze (1974), the Italian constitutional court decided that Article 11 cannot give the organs of the EEC an unacceptable power to violate the fundamental principles of the constitutional order or the inalienable rights of man. It reserved the right to ensure that the fundamental principles of the Italian constitution were not infringed by EC law.

In Granital SpA v Amministrazione delle Finanze dello Stato (1984), the court accepted the supremacy of EC law. However it refused to rule that a national law conflicting with the EC law would be invalidated; rather, the law would simply be ‘dis-applied’. The Italian constitutional court reserved its power to adjudicate upon the basic issue of competence between EC law and national law.

Similarly, in SpA Fragd v Amministrazione delle Finanze (1989), it was stated that if it found a Community measure infringed fundamental rights of the Italian constitution, it would declare EC measure inapplicable. In such exceptional instances, Italian constitution is giving precedence.

In short, Italy generally accepted the supremacy of Union law, provided that they respect the fundamental values of the constitutional system as a whole. However, the Italian constitutional court asserted that it has the competence to decide on the division of competence between national law and Community law.

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