Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
1 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - MEMBER STATES - INTERVENTION - ADMISSIBILITY - CONDITIONS
( EEC TREATY , ARTICLE 40 )
2 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - CEREALS - PRICE - FORMATION - MEMBER STATES - INTERVENTION - PROHIBITION
( REGULATION NO 120/67 OF THE COUNCIL , ARTICLE 2 )
3 . QUESTIONS REFERRED FOR PRELIMINARY RULING - JURISDICTION OF THE COURT - LIMITS
( EEC TREATY , ARTICLE 177 )
4 . QUESTIONS REFERRED FOR PRELIMINARY RULING - JUDGMENT - PURPOSE - EFFECTS
( EEC TREATY , ARTICLE 177 )
Summary
1 . INTERVENTIONS BY A MEMBER STATE TO ARREST AT CONSUMER LEVEL THE PRICE OF CERTAIN FOODSTUFFS MADE FROM CEREALS ARE NOT INCOMPATIBLE WITH THE COMMON ORGANIZATION OF THE MARKET IN SO FAR AS THEY DO NOT JEOPARDIZE THE OBJECTIVES OR THE OPERATION OF THAT ORGANIZATION .
2 . THE ACTION OF A MEMBER STATE IN PURCHASING WHEAT ON THE WORLD MARKET AND SUBSEQUENTLY RESELLING IT ON THE COMMUNITY MARKET AT A PRICE LOWER THAN THE TARGET PRICE IS INCOMPATIBLE WITH THE COMMON ORGANIZATION OF THE MARKETS .
3 . HAVING TO LIMIT ITSELF TO GIVING AN INTERPRETATION OF THE PROVISIONS OF COMMUNITY LAW , THE COURT CANNOT ITSELF ASSESS OR CLASSIFY THOSE ACTIVITIES OR THE PROVISIONS OF NATIONAL LAW RELATING THERETO . WITHIN THE FRAMEWORK OF PROCEEDINGS UNDER ARTICLE 177 , IT IS NOT FOR THE COURT OF JUSTICE TO INTERPRET NATIONAL LAW AND ASSESS ITS EFFECTS . THEREFORE , WITHIN THAT FRAMEWORK , IT CANNOT MAKE A COMPARISON OF ANY KIND WHATSOEVER BETWEEN THE EFFECTS OF THE DECISIONS OF THE NATIONAL COURTS AND THE EFFECTS OF ITS OWN DECISIONS .
4 . THE PURPOSE OF A PRELIMINARY RULING IS TO DECIDE A QUESTION OF LAW AND THAT RULING IS BINDING ON THE NATIONAL COURT AS TO THE INTERPRETATION OF THE COMMUNITY PROVISIONS AND ACTS IN QUESTION .
Parties
IN CASE 52/76
REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE PRETURA DI CITTADELLA FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN
LUIGI BENEDETTI
AND
MUNARI F.LLI S.A.S .
Subject of the case
ON THE INTERPRETATION OF THE PROVISIONS OF REGULATIONS NO 120/67/EEC OF THE COUNCIL OF 13 JUNE 1967 ON THE COMMON ORGANIZATION OF THE MARKET IN CEREALS ( OJ ENGLISH SPECIAL EDITION 1967 , P . 33 ), NO 132/67/EEC OF THE COUNCIL OF 13 JUNE 1967 LAYING DOWN GENERAL RULES FOR INTERVENTION ON THE MARKET IN CEREALS ( OJ ENGLISH SPECIAL EDITION 1967 , P . 73 ) AND NO 376/70/EEC OF THE COMMISSION OF 27 FEBRUARY 1970 LAYING DOWN THE PROCEDURE AND CONDITIONS FOR THE DISPOSAL OF CEREALS HELD BY INTERVENTION AGENCIES ( OJ ENGLISH SPECIAL EDITION 1970 ( I ), P . 126 ).
Grounds
1 BY AN ORDER OF 27 APRIL 1976 , LODGED AT THE REGISTRY OF THE COURT ON 25 JUNE 1976 , THE PRETURA DI CITTADELLA REFERRED TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY A SERIES OF QUESTIONS ESSENTIALLY CONCERNING THE CONDUCT OF THE AZIENDA DI STATO PER GLI INTERVENTI SUL MERCATO AGRICOLO ( AIMA ) ( STATE COOPERATIVE FOR INTERVENTION ON THE AGRICULTURAL MARKET ) IN RELATION TO VARIOUS PROVISIONS OF COMMUNITY LAW .
2/3 THESE QUESTIONS ARE RAISED WITHIN THE FRAMEWORK OF AN ACTION BETWEEN THE FLOUR-MILLING UNDERTAKING LUIGI BENEDETTI , THE PLAINTIFF IN THE MAIN ACTION , AND THE UNDERTAKING MUNARI F.LLI , FOR DAMAGES IN RESPECT OF LOSS WHICH IS SAID TO HAVE BEEN SUFFERED BY THE FORMER AS A RESULT OF UNFAIR COMPETITION ON THE PART OF THE LATTER UNDERTAKING IN SELLING CERTAIN QUANTITIES OF FLOUR AT A PRICE BELOW THE MARKET PRICE . THE DEFENDANT IN THE MAIN ACTION DID NOT DISPUTE THESE SALES , BUT IMPUTED ALL LIABILITY FOR ANY LOSS TO THE AIMA ON THE GROUND THAT THE AIMA SOLD THE DEFENDANT COMMON WHEAT AT PRICES BELOW THE MARKET PRICE .
4 BY THE BEFOREMENTIONED ORDER OF 27 APRIL 1976 , THE PRETURA AUTHORIZED THE INSTITUTION OF PROCEEDINGS AGAINST THE AIMA , AND AT THE SAME TIME , THUS WITHOUT WAITING FOR THE EXPLANATIONS OF THE AIMA , REFERRED THE ABOVEMENTIONED QUESTIONS TO THE COURT OF JUSTICE FOR A PRELIMINARY RULING .
5 THE FIRST AND SECOND QUESTIONS ASK WHETHER THE COMMUNITY LEGISLATION ON THE MARKET IN CEREALS AUTHORIZES INTERVENTION AGENCIES , AND IN PARTICULAR THE AIMA , TO TAKE THE UNILATERAL DECISIONS WHICH ACCORDING TO THE QUESTIONS ARE SAID TO HAVE BEEN TAKEN , AND WHETHER SUCH CONDUCT CONSTITUTES A BREACH OF THE PROHIBITION OF DISCRIMINATION CONTAINED IN THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE TREATY .
6 THE THIRD QUESTION ASKS WHETHER THE ALLEGED CONDUCT OF THE AIMA CONSTITUTES A STATE AID WITHIN THE MEANING OF ARTICLES 92 TO 94 OF THE TREATY AND ARTICLE 22 OF REGULATION NO 120/67/EEC OF THE COUNCIL OF 13 JUNE 1967 , ON THE COMMON ORGANIZATION OF THE MARKET IN CEREALS ( OJ ENGLISH SPECIAL EDITION 1967 , P . 33 ).
7 THE FOURTH AND FIFTH QUESTIONS ASK WHETHER AN UNDERTAKING ENDOWED WITH SUBSTANTIAL FINANCIAL RESOURCES , WHICH ENABLE IT TO OPERATE ON THE MARKET WITHOUT TAKING ACCOUNT OF THE ACTIONS AND REACTIONS OF COMPETITORS , CONSTITUTES AN UNDERTAKING IN A DOMINANT POSITION WITHIN THE MEANING OF ARTICLES 86 AND 90 OF THE TREATY AND OF REGULATION NO 26/62/EEC , OF 4 APRIL 1962 ( OJ ENGLISH SPECIAL EDITION 1959-1962 , P . 129 ) - EVEN IF THAT UNDERTAKING IS AN INTERVENTION AGENCY - AND WHETHER CERTAIN CONDUCT ON THE PART OF SUCH AN UNDERTAKING CONSTITUTES ABUSE OF A DOMINANT POSITION .
8 THE SIXTH QUESTION IS SUBJECT TO QUESTIONS ONE AND TWO BEING ANSWERED IN THE NEGATIVE AND QUESTIONS THREE , FOUR AND FIVE IN THE AFFIRMATIVE AND IT ASKS WHETHER THE INTERVENTION AGENCY IS OBLIGED TO COMPENSATE FOR DAMAGE RESULTING FROM ITS CONDUCT .
9 FINALLY , THE SEVENTH QUESTION CONCERNS THE FORCE OF THE INTERPRETATION GIVEN BY THE COURT OF JUSTICE .
10 IN THE ABSENCE OF ACCURATE INFORMATION RELATING TO THE NATURE OF THE ALLEGED ACTIVITIES OF THE AIMA AND THE WAY IN WHICH THEY WERE CARRIED OUT , IT MUST BE STATED THAT , HAVING TO LIMIT ITSELF IN THE EXERCISE OF THE POWERS CONFERRED BY ARTICLE 177 TO GIVING AN INTERPRETATION OF THE PROVISIONS OF COMMUNITY LAW , THE COURT CANNOT ITSELF ASSESS OR CLASSIFY THOSE ACTIVITIES OR THE PROVISIONS OF NATIONAL LAW RELATING THERETO .
11 MOREOVER , ALTHOUGH THE ADDITIONAL INFORMATION WHICH THE COURT REQUESTED FROM THE ITALIAN GOVERNMENT , THE AIMA AND THE COMMISSION IN ORDER THE BETTER TO UNDERSTAND THE TERMS OF THE QUESTIONS REFERRED TO IT DOES NOT REMOVE ALL DOUBT AS TO THE COMPATIBILITY WITH COMMUNITY LAW OF THE AIMA ' S CONDUCT , NONE THE LESS THAT INFORMATION DOES NOT CONFIRM IN CERTAIN ESSENTIALS THE PRESENTATION OF THAT CONDUCT WHICH , AS APPEARS FROM THE DOCUMENTS ON THE CASE , WAS ADOPTED BY THE NATIONAL COURT FROM THE ALLEGATIONS OF PARTIES TO THE MAIN ACTION .
12 FINALLY , IN VIEW OF THE FACT THAT IT IS NOT FOR THE COURT TO ASSESS THE RELEVANCE OF THE QUESTIONS REFERRED UNDER ARTICLE 177 TO THE REACHING OF A DECISION IN THE MAIN ACTION , IT IS ALL THE MORE NECESSARY TO ADHERE TO THE RESERVATION REFERRED TO ABOVE AS THOSE QUESTIONS CONCERN THE CONDUCT OF A NATURAL OR LEGAL PERSON WHO WAS NOT YET A PARTY TO THE ACTION AND WHO WAS NOT GIVEN AN OPPORTUNITY TO STATE HIS CASE .
THE FIRST AND SECOND QUESTIONS
13 UNDER THESE CIRCUMSTANCES , THE FIRST AND SECOND QUESTIONS SHOULD BE ANSWERED BY RECALLING AN EARLIER DECISION OF THE COURT . IN THE JUDGMENT OF 22 JANUARY 1976 , GIVEN IN CASE 60/75 RUSSO V AIMA ( 1976 ) ECR 45 , IT WAS HELD THAT ' THE PROVISIONS OF REGULATION NO 120/67 OF 13 JUNE 1967 ON THE COMMON ORGANIZATION OF THE MARKET IN CEREALS MUST BE INTERPRETED TO MEAN THAT :
( A ) THE ACTION OF A MEMBER STATE IN PURCHASING DURUM WHEAT ON THE WORLD MARKET AND SUBSEQUENTLY RESELLING IT ON THE COMMUNITY MARKET AT A PRICE LOWER THAN THE TARGET PRICE IS INCOMPATIBLE WITH THE COMMON ORGANIZATION OF THE MARKETS ;
( B ) UNDER COMMUNITY RULES AN INDIVIDUAL PRODUCER MAY CLAIM THAT HE SHOULD NOT BE PREVENTED FROM OBTAINING A PRICE APPROXIMATING TO THE TARGET PRICE AND IN ANY EVENT NOT LOWER THAN THE INTERVENTION PRICE ;
( C ) IF AN INDIVIDUAL PRODUCER HAS SUFFERED DAMAGE AS A RESULT OF THE INTERVENTION OF A MEMBER STATE IN VIOLATION OF COMMUNITY LAW IT WILL BE FOR THE STATE , AS REGARDS THE INJURED PARTY , TO TAKE THE CONSEQUENCES UPON ITSELF IN THE CONTEXT OF THE PROVISIONS OF NATIONAL LAW RELATING TO THE LIABILITY OF THE STATE . '
14 IN CONNEXION WITH RECALLING THIS DECISION , THE ATTENTION OF THE NATIONAL COURT SHOULD FIRST OF ALL BE DRAWN TO THE FACT THAT THE ORDER FOR REFERENCE AND THE DOCUMENTS ON THE CASE DO NOT PROVIDE DETAILS WHICH ENABLE THE QUESTION TO BE DECIDED WHETHER THE CONDUCT OF THE AIMA WHICH IS IN QUESTION MUST BE CLASSIFIED AS ' SELLING ON THE COMMUNITY MARKET ' . IN PARTICULAR , THE CONCEPT CITED MIGHT NOT APPLY IF IT WERE PROVED THAT IN THE EVENT WHAT WAS CONCERNED WAS THE DISTRIBUTION OF CEREALS , AUTHORIZED IN SOME WAY BY THE COMMUNITY AUTHORITIES , TO A LIMITED CIRCLE OF FLOUR MILLERS .
15 SECONDLY , IT SHOULD BE RECALLED , AS WAS STATED IN THE JUDGMENT CITED , THAT SINCE REGULATION NO 120/67 WAS INTENDED TO SHIELD THE DEVELOPMENT OF AGRICULTURAL PRODUCTION ( A CONCEPT WHICH DOES NOT NECESSARILY INCLUDE SUBSEQUENT STAGES , FROM BREAD-MAKING TO CONSUMPTION ) FROM FLUCTUATIONS IN WORLD PRICES AND THEREBY TO ENSURE A FAIR STANDARD OF LIVING FOR THE AGRICULTURAL COMMUNITY , INTERVENTIONS BY A MEMBER STATE TO ARREST THE RISE IN PRICES OF CERTAIN FOODSTUFFS MADE FROM CEREALS ( AT CONSUMER LEVEL ) ARE NOT INCOMPATIBLE WITH THE COMMON ORGANIZATION OF THE MARKET IN SO FAR AS THEY DO NOT JEOPARDIZE THE OBJECTIVES OR THE OPERATION OF THAT ORGANIZATION .
16 HAVING REGARD TO THE ABSENCE OF DETAILS AND OF DETAILED FINDINGS ON MATTERS OF FACT , THE FIRST AND SECOND QUESTIONS SHOULD BE ANSWERED BY REPEATING THE FIRST PART OF THE SECTION OF THE JUDGMENT OF 22 JANUARY 1976 QUOTED ABOVE DOWN TO THE LETTER ( B ).
THE THIRD QUESTION
17 THIS QUESTION ASKS WHETHER THE CONDUCT OF AN INTERVENTION AGENCY ' IN AVAILING ITSELF OF FINANCE FROM INSTITUTIONS OF THE STATE ' TO PURCHASE CEREALS ON CONDITIONS OTHER THAN THOSE PROVIDED FOR BY COMMUNITY LEGISLATION AND IN SUBSEQUENTLY RESELLING THEM AT PRICES LOWER THAN THE MINIMA LAID DOWN CONSTITUTES A STATE AID TO UNDERTAKINGS WITHIN THE MEANING OF ARTICLES 92 TO 94 OF THE TREATY AND ARTICLE 22 OF REGULATION NO 120/67/EEC .
18 UNDER ARTICLE 92 OF THE TREATY , ANY STATE AID WHICH DISTORTS OR THREATENS TO DISTORT COMPETITION BY FAVOURING CERTAIN UNDERTAKINGS IS INCOMPATIBLE WITH THE COMMON MARKET , ' IN SO FAR AS IT AFFECTS TRADE BETWEEN MEMBER STATES ' .
19 IN THE ABSENCE OF DETAILS ON THE EFFECTS TO THE CONDUCT REFERRED TO IN THE QUESTION , IT SHOULD THEREFORE BE ANSWERED BY RECALLING THE QUOTED RESTRICTION UPON THE PROHIBITION LAID DOWN BY ARTICLE 92 ( 1 ) AND THE DEROGATION FROM THAT PROHIBITION PROVIDED IN ARTICLE 92 ( 2 ).
THE FOURTH AND FIFTH QUESTIONS
20 AS TO THESE QUESTIONS , WHICH ARE SUMMARIZED ABOVE , NEITHER THE QUESTIONS THEMSELVES NOR THE DOCUMENTS ON THE CASE ENABLE IT TO BE ASCERTAINED WHETHER THE UNDERTAKING REFERRED TO IN THESE QUESTIONS IS A PUBLIC UNDERTAKING , WITHIN THE MEANING OF ARTICLE 90 ( 1 ) OF THE TREATY , OR AN UNDERTAKING ENTRUSTED WITH THE OPERATION OF SERVICES OF GENERAL ECONOMIC INTEREST , WITHIN THE MEANING OF ARTICLE 90 ( 2 ).
21 HOWEVER , THIS DISTINCTION IS ESSENTIAL FOR THE PURPOSE OF ASSESSING THE EXTENT TO WHICH THE RULES OF THE TREATY ON COMPETITION ARE APPLICABLE .
22 OWING TO THIS LACK OF PRECISION , THESE QUESTIONS CANNOT EFFECTIVELY BE ANSWERED .
THE SIXTH QUESTION
23 SINCE THIS QUESTION IS SUBJECT TO QUESTIONS ONE AND TWO BEING ANSWERED IN THE NEGATIVE AND QUESTIONS THREE , FOUR AND FIVE IN THE AFFIRMATIVE , IT HAS BY REASON OF THE FOREGOING CONSIDERATIONS LOST ITS PURPOSE .
THE SEVENTH QUESTION
24 THIS QUESTION ASKS WHAT FORCE THE INTERPRETATION PLACED BY THE COURT OF JUSTICE ON COMMUNITY LAW HAS FOR THE COURT DEALING WITH THE SUBSTANCE OF THE CASE , AND WHETHER THE ' RULING ' OF THE COURT OF JUSTICE IS BINDING ON THAT COURT IN THE SAME WAY AS THAT COURT IS BOUND BY A ' POINT OF LAW ' LAID DOWN BY THE CORTE DI CASSAZIONE .
25 WITHIN THE FRAMEWORK OF PROCEEDINGS UNDER ARTICLE 177 , IT IS NOT FOR THE COURT OF JUSTICE TO INTERPRET NATIONAL LAW AND ASSESS ITS EFFECTS . THEREFORE , WITHIN THAT FRAMEWORK , IT CANNOT MAKE A COMPARISON OF ANY KIND WHATSOEVER BETWEEN THE EFFECTS OF THE DECISIONS OF THE NATIONAL COURTS AND THE EFFECTS OF ITS OWN DECISIONS .
26 UNDER ARTICLE 177 THE COURT OF JUSTICE HAS JURISDICTION TO ' GIVE (. . .) RULINGS ' CONCERNING THE INTERPRETATION ' OF THIS TREATY ' AND THAT ' OF ACTS OF THE INSTITUTIONS OF THE COMMUNITY ' . IT FOLLOWS THAT THE PURPOSE OF A PRELIMINARY RULING IS TO DECIDE A QUESTION OF LAW AND THAT THAT RULING IS BINDING ON THE NATIONAL COURT AS TO THE INTERPRETATION OF THE COMMUNITY PROVISIONS AND ACTS IN QUESTION .
27 THEREFORE THE QUESTION REFERRED SHOULD BE ANSWERED IN THOSE TERMS .
Decision on costs
COSTS
28 THE COSTS INCURRED BY THE GOVERNMENT OF THE ITALIAN REPUBLIC AND BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE .
AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT , COSTS ARE A MATTER FOR THAT COURT .
Operative part
ON THOSE GROUNDS ,
THE COURT
IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE PRETURA DI CITTADELLA BY AN ORDER OF 27 APRIL 1976 , HEREBY RULES :
1 . THE PROVISIONS OF REGULATION NO 120/67 OF 13 JUNE 1967 ON THE COMMON ORGANIZATION OF THE MARKET IN CEREALS MUST BE INTERPRETED AS MEANING THAT THE ACTION OF A MEMBER STATE IN PURCHASING WHEAT ON THE WORLD MARKET AND SUBSEQUENTLY RESELLING IT ON THE COMMUNITY MARKET AT A LOWER PRICE THAN THE TARGET PRICE IS INCOMPATIBLE WITH THE COMMON ORGANIZATION OF THE MARKET .
2 . IN PROVIDING THAT ANY AID GRANTED BY A MEMBER STATE OR THROUGH STATE RESOURCES SHALL BE INCOMPATIBLE WITH THE COMMON MARKET , ARTICLE 92 ( 1 ) SPECIFIES THAT THIS PROHIBITION APPLIES ONLY ' IN SO FAR AS IT ( THE AID ) AFFECTS TRADE BETWEEN MEMBER STATES ' AND SAVE AS OTHERWISE PROVIDED IN THE TREATY , IN PARTICULAR IN THE EXCEPTIONS LAID DOWN BY ARTICLE 92 ( 2 ).
3 . THE PURPOSE OF A PRELIMINARY RULING BY THE COURT IS TO DECIDE A QUESTION OF LAW , AND THAT RULING IS BINDING ON THE NATIONAL COURT AS TO THE INTERPRETATION OF THE COMMUNITY PROVISIONS AND ACTS IN QUESTION .
Full & Egal Universal Law Academy