Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
1 . COMPETITION - AGREEMENTS BETWEEN UNDERTAKINGS - EFFECT ON COMPETITION - CONTRACTS FOR THE SALE OF GOODS RESTRICTING THE BUYER ' S FREEDOM TO USE THE GOODS SUPPLIED - EFFECT ON TRADE BETWEEN MEMBER STATES - CRITERIA
( EEC TREATY , ART . 85 ( 1 ))
2 . COMPETITION - AGREEMENTS BETWEEN UNDERTAKINGS - AUTOMATIC NULLITY - CONSEQUENCES FOR PARTS OF THE AGREEMENT NOT CONTRARY TO ARTICLE 85 ( 1 ) - APPRAISAL BY THE NATIONAL COURT - APPLICATION OF NATIONAL LAW
( EEC TREATY , ART . 85 ( 2 ))
Summary
1 . PROVISIONS IN A CONTRACT CONCLUDED BETWEEN A FRENCH EXPORTER AND AN IMPORTER ESTABLISHED IN THE FEDERAL REPUBLIC OF GERMANY IMPOSING ON THE BUYER , DESCRIBED IN THE CONTRACT AS SOLE IMPORTER , AN OBLIGATION TO USE THE GOODS SUPPLIED FOR HIS OWN NEEDS , NOT TO RESELL THE GOODS IN A SPECIFIED AREA AND TO CONSULT THE SELLER BEFORE SOLICITING BUSINESS IN ANOTHER SPECIFIED AREA , BOTH AREAS BEING IN THE FEDERAL REPUBLIC OF GERMANY , HAVE AS THEIR OBJECT THE PREVENTION , RESTRICTION OR DISTORTION OF COMPETITION WITHIN THE COMMON MARKET . THEY ARE THEREFORE CONTRARY TO ARTICLE 85 ( 1 ) OF THE EEC TREATY AND VOID WHEN THE CONTRACT IS CAPABLE OF AFFECTING TRADE BETWEEN MEMBER STATES . WHERE SUCH A CONTRACT RELATES TO SOME 10% OF EXPORTS OF THE GOODS IN QUESTION TO THE FEDERAL REPUBLIC OF GERMANY FROM FRANCE , IT IS CAPABLE OF AFFECTING TRADE BETWEEN MEMBER STATES APPRECIABLY .
2 . THE AUTOMATIC NULLITY DECREED BY ARTICLE 85 ( 2 ) OF THE EEC TREATY APPLIES ONLY TO THOSE CONTRACTUAL PRO VISIONS WHICH ARE INCOMPATIBLE WITH ARTICLE 85 ( 1 ). THE CONSEQUENCES OF SUCH NULLITY FOR OTHER PARTS OF THE AGREEMENT , AND FOR ANY ORDERS AND DELIVERIES MADE ON THE BASIS OF THE AGREEMENT , AND THE RESULTING FINANCIAL OBLIGATIONS ARE NOT A MATTER FOR COMMUNITY LAW . SUCH CONSEQUENCES ARE TO BE DETERMINED BY THE NATIONAL COURT ACCORDING TO ITS OWN LAW .
Parties
IN CASE 319/82
REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE OBERLANDESGERICHT ( HIGHER REGIONAL COURT ) SAARBRUCKEN FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN
SOCIETE DE VENTE DE CIMENTS ET BETONS DE L ' EST SA
AND
KERPEN & KERPEN GMBH & CO . KG
Subject of the case
ON THE INTERPRETATION OF ARTICLE 85 OF THE EEC TREATY ,
Grounds
1 BY ORDER OF 1 DECEMBER 1982 , WHICH WAS RECEIVED AT THE COURT REGISTRY ON 15 DECEMBER 1982 , THE OBERLANDESGERICHT ( HIGHER REGIONAL COURT ) SAARBRUCKEN REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY THREE QUESTIONS ON THE INTERPRETATION OF ARTICLE 85 OF THE TREATY , IN ORDER TO ENABLE IT TO ASSESS THE COMPATIBILITY WITH THAT PROVISION OF A CONTRACT OF SALE AND THE CONSEQUENCES IF THAT CONTRACT SHOULD BE VOID .
2 THOSE QUESTIONS AROSE IN THE COURSE OF A DISPUTE BETWEEN THE SOCIETE DE VENTE DE CIMENTS ET BETONS DE L ' EST , SA , THE PLAINTIFF IN THE MAIN ACTION , A COMPANY ESTABLISHED IN FRANCE WHICH SELLS CEMENT , AND KERPEN & KERPEN GMBH & CO . KG , THE DEFENDANT IN THE MAIN ACTION , WHICH IS ESTABLISHED IN THE FEDERAL REPUBLIC OF GERMANY , CONCERNING A CONTRACT CONCLUDED ON 30 MARCH 1978 FOR THE ANNUAL DELIVERY OF APPROXIMATELY 40 000 TONNES OF CEMENT FOR A PERIOD OF FIVE YEARS .
3 UNDER THE TERMS OF THAT CONTRACT , THE DEFENDANT IN THE MAIN ACTION , WHICH WAS DESCRIBED AS SOLE IMPORTER INTO THE FEDERAL REPUBLIC OF GERMANY , AGREED :
TO USE THE CEMENT SUPPLIED PRINCIPALLY TO COVER ITS OWN REQUIREMENTS ;
NOT TO SELL THE CEMENT OBTAINED FROM THE PLAINTIFF IN THE SAARLAND ; AND
IN THE EVENT OF DELIVERIES IN THE KARLSRUHE AREA , TO HAVE REGARD TO THE INTERESTS OF THE WORKS IN WOSSINGEN ( GERMANY ), PARTLY OWNED BY THE PLAINTIFF , AND TO CONSULT THE PLAINTIFF BEFORE SOLICITING BUSINESS THERE .
4 AFTER THE DEFENDANT HAD TAKEN DELIVERY OF AND PAID FOR PART OF THE QUANTITY AGREED FOR 1978 , IT RECEIVED , BUT FAILED TO PAY FOR , A FURTHER 6 051.29 TONNES OF CEMENT , TO THE VALUE OF DM 392 224.42 , BETWEEN AUGUST AND OCTOBER 1978 . ON 31 OCTOBER 1978 , THE PLAINTIFF TERMINATED THE CONTRACT OF 30 MARCH 1978 AND CLAIMED THE ABOVE-MENTIONED SUM OF DM 392 244.42 . IN ADDITION TO PLEADING A SET OFF IN RESPECT OF CERTAIN CLAIMS ARISING FROM THE TERMINATION OF THE CONTRACT , THE DEFENDANT CONTENDED THAT THE CONTRACT WAS VOID FOR INFRINGEMENT OF ARTICLE 85 OF THE TREATY .
5 THE LANDGERICHT ( REGIONAL COURT ) SAARBRUCKEN GAVE JUDGMENT IN FAVOUR OF THE PLAINTIFF AND THE DEFENDANT LODGED AN APPEAL . CONSIDERING THAT THE OUTCOME DEPENDED UPON THE INTERPRETATION OF COMMUNITY LAW , THE OBERLANDESGERICHT SAARBRUCKEN REFERRED THE FOLLOWING QUESTIONS TO THE COURT FOR A PRELIMINARY RULING :
' ' 1 . IS ARTICLE 85 OF THE EEC TREATY TO BE INTERPRETED AS MEANING THAT A FIVE-YEAR AGREEMENT FOR ANNUAL DELIVERIES OF APPROXIMATELY 40 000 TONNES OF CEMENT MUST BE CONSIDERED VOID WHERE AN UNDERTAKING ESTABLISHED IN THE FEDERAL REPUBLIC OF GERMANY AGREES WITH AN UNDERTAKING ESTABLISHED IN FRANCE AND ENGAGED IN THE SALE OF CEMENT NOT TO DELIVER THE CEMENT WHICH IT RECEIVES TO THE SAARLAND , AND IN THE CASE OF DELIVERIES IN THE KARLSRUHE AREA TO HAVE REGARD TO THE FRENCH UNDERTAKING ' S PART-OWNERSHIP OF WORKS IN WOSSINGEN ( GERMANY ) AND ON EACH OCCASION TO CONSULT THE FRENCH UNDERTAKING BEFORE SOLICITING BUSINESS THERE?
2.IF THE ABOVE-MENTIONED AGREEMENT IS TO BE REGARDED AS A BASIC CONTRACT AND IF IT IS VOID UNDER ARTICLE 85 ( 2 ) OF THE EEC TREATY , ARE INDIVIDUAL CONTRACTS OF SALE MADE IN PERFORMANCE OF THAT CONTRACT LIKEWISE TO BE REGARDED AS VOID?
3.IF QUESTION 1 IS ANSWERED IN THE AFFIRMATIVE : IS ARTICLE 85 ( 2 ) OF THE EEC TREATY TO BE INTERPRETED AS MEANING THAT THE NULLITY WHICH IT STIPULATES IS SUCH AS TO AFFECT PHYSICAL TRANSACTIONS MADE IN PERFORMANCE OF OBLIGATIONS UNDER THE CONTRACT OF SALE , SO THAT A SUPPLIER IS NOT TO BE PERMITTED , IN SO FAR AS HE HAS MADE DELIVERIES , TO CLAIM RECOVERY OF HIS ASSETS ( ON THE BASIS OF THE RULES GOVERNING UNJUST ENRICHMENT IN THE FEDERAL REPUBLIC OF GERMANY ) UNDER THE VOID CONTRACT OF SALE?
' '
FIRST QUESTION
6 IT IS CLEAR FROM PREVIOUS JUDGMENTS OF THE COURT THAT CLAUSES IN CONTRACTS OF SALE RESTRICTING THE BUYER ' S FREEDOM TO USE THE GOODS SUPPLIED IN ACCORDANCE WITH HIS OWN ECONOMIC INTERESTS ARE RESTRICTIONS ON COMPETITION WITHIN THE MEANING OF ARTICLE 85 OF THE TREATY . A CONTRACT WHICH IMPOSES UPON THE BUYER AN OBLIGATION TO USE THE GOODS SUPPLIED FOR HIS OWN NEEDS , NOT TO RESELL THE GOODS IN A SPECIFIED AREA AND TO CONSULT THE SELLER BEFORE SOLICITING BUSINESS IN ANOTHER SPECIFIED AREA HAS AS ITS OBJECT THE PREVENTION OF COMPETITION WITHIN THE COMMON MARKET .
7 SUCH CONTRACT IS THEREFORE PROHIBITED BY ARTICLE 85 ( 1 ) IF IT IS CAPABLE OF AFFECTING TRADE BETWEEN MEMBER STATES .
8 THE PLAINTIFF IN THE MAIN ACTION CLAIMS THAT , IN THIS CASE , THE CONTRACT DOES NOT FALL WITHIN THE PROHIBITION IMPOSED BY ARTICLE 85 BY REASON OF THE WEAK POSITION OF THE PARTIES ON THE MARKET IN THE PRODUCTS IN QUESTION . IN THAT REGARD , IT WAS STATED IN THE COURSE OF THE PROCEEDINGS , WITHOUT CONTRADICTION , THAT FRENCH EXPORTS OF CEMENT TO THE FEDERAL REPUBLIC OF GERMANY AT THE MATERIAL TIME AMOUNTED TO ABOUT 350 000 TONNES PER YEAR . THE QUANTITY COVERED BY THE CONTRACT AT ISSUE THEREFORE REPRESENTED MORE THAN 10% OF FRENCH EXPORTS TO GERMANY . UNDER THOSE CIRCUMSTANCES , IT IS IMPOSSIBLE TO TAKE THE VIEW THAT SUCH A CONTRACT COULD NOT APPRECIABLY AFFECT TRADE BETWEEN MEMBER STATES .
9 THE ANSWER TO THE FIRST QUESTION MUST THEREFORE BE THAT PROVISIONS IN A CONTRACT MADE BETWEEN A FRENCH EXPORTER AND AN IMPORTER ESTABLISHED IN THE FEDERAL REPUBLIC OF GERMANY IMPOSING ON THE BUYER , DESCRIBED IN THE CONTRACT AS SOLE IMPORTER , AN OBLIGATION TO USE THE GOODS SUPPLIED FOR HIS OWN NEEDS , NOT TO RESELL THE GOODS IN A SPECIFIED AREA , AND TO CONSULT THE SELLER BEFORE SOLICITING BUSINESS IN ANOTHER SPECIFIED AREA , BOTH AREAS BEING IN THE FEDERAL REPUBLIC OF GERMANY , HAVE AS THEIR OBJECT THE PREVENTION , RESTRICTION OR DISTORTION OF TRADE WITHIN THE COMMON MARKET . THEY ARE THEREFORE CONTRARY TO ARTICLE 85 ( 1 ) OF THE TREATY AND ARE VOID WHEN THE CONTRACT IS CAPABLE OF AFFECTING TRADE BETWEEN MEMBER STATES . WHERE SUCH A CONTRACT RELATES TO SOME 10% OF EXPORTS OF THE GOODS IN QUESTION TO THE FEDERAL REPUBLIC OF GERMANY FROM FRANCE , IT IS CAPABLE OF AFFECTING TRADE BETWEEN MEMBER STATES APPRECIABLY .
SECOND AND THIRD QUESTIONS
10 IN THE SECOND AND THIRD QUESTIONS THE NATIONAL COURT ASKS WHAT ARE THE CONSEQUENCES OF THE NULLITY OF SUCH A CONTRACT UNDER ARTICLE 85 ( 2 ) OF THE TREATY , IN PARTICULAR IN RELATION TO ORDERS AND DELIVERIES MADE ON THE BASIS OF THE CONTRACT .
11 IN ITS JUDGMENT OF 25 NOVEMBER 1971 IN CASE 22/71 ( BEGUELIN IMPORT COMPANY AND OTHERS V SAGL IMPORT-EXPORT AND OTHERS ( 1971 ) ECR 949 ), THE COURT RULED THAT AN AGREEMENT FALLING UNDER THE PROHIBITION IMPOSED BY ARTICLE 85 ( 1 ) OF THE TREATY IS VOID AND THAT , SINCE THE NULLITY IS ABSOLUTE , THE AGREEMENT HAS NO EFFECT AS BETWEEN THE CONTRACTING PARTIES . IT ALSO FOLLOWS FROM PREVIOUS JUDGMENTS OF THE COURT , AND IN PARTICULAR FROM THE JUDGMENT OF 30 JUNE 1966 IN CASE 56/65 ( SOCIETE TECHNIQUE MINIERE V MASCHINENBAU ULM ( 1966 ) ECR 235 ), THAT THE AUTOMATIC NULLITY DECREED BY ARTICLE 85 ( 2 ) APPLIES ONLY TO THOSE CONTRACTUAL PROVISIONS WHICH ARE INCOMPATIBLE WITH ARTICLE 85 ( 1 ). THE CONSEQUENCES OF SUCH NULLITY FOR OTHER PARTS OF THE AGREEMENT ARE NOT A MATTER FOR COMMUNITY LAW . THE SAME APPLIES TO ANY ORDERS AND DELIVERIES MADE ON THE BASIS OF SUCH AN AGREEMENT AND TO THE RESULTING FINANCIAL OBLIGATIONS .
12 THE ANSWER TO THE SECOND AND THIRD QUESTIONS MUST THEREFORE BE THAT THE AUTOMATIC NULLITY DECREED BY ARTICLE 85 ( 2 ) OF THE TREATY APPLIES ONLY TO THOSE CONTRACTUAL PROVISIONS WHICH ARE INCOMPATIBLE WITH ARTICLE 85 ( 1 ). THE CONSEQUENCES OF SUCH NULLITY FOR OTHER PARTS OF THE AGREEMENT , AND FOR ANY ORDERS AND DELIVERIES MADE ON THE BASIS OF THE AGREEMENT , AND THE RESULTING FINANCIAL OBLIGATIONS ARE NOT A MATTER FOR COMMUNITY LAW . THOSE CONSEQUENCES ARE TO BE DETERMINED BY THE NATIONAL COURT ACCORDING TO ITS OWN LAW .
Decision on costs
COSTS
13 THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAS 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 BEFORE THE NATIONAL COURT , COSTS ARE A MATTER FOR THAT COURT .
Operative part
ON THOSE GROUNDS ,
THE COURT ( FOURTH CHAMBER ),
IN ANSWER TO THE QUESTIONS SUBMITTED TO IT BY THE OBERLANDESGERICHT SAARBRUCKEN BY ORDER OF 1 DECEMBER 1982 , HEREBY RULES :
1 . PROVISIONS IN A CONTRACT CONCLUDED BETWEEN A FRENCH EXPORTER AND AN IMPORTER ESTABLISHED IN THE FEDERAL REPUBLIC OF GERMANY IMPOSING ON THE BUYER , DESCRIBED IN THE CONTRACT AS SOLE IMPORTER , AN OBLIGATION TO USE THE GOODS SUPPLIED FOR HIS OWN NEEDS , NOT TO RESELL THE GOODS IN A SPECIFIED AREA AND TO CONSULT THE SELLER BEFORE SOLICITING BUSINESS IN ANOTHER SPECIFIED AREA , BOTH AREAS BEING IN THE FEDERAL REPUBLIC OF GERMANY , HAVE AS THEIR OBJECT THE PREVENTION , RESTRICTION OR DISTORTION OF COMPETITION WITHIN THE COMMON MARKET . THEY ARE THEREFORE CONTRARY TO ARTICLE 85 ( 1 ) OF THE TREATY AND VOID WHEN THE CONTRACT IS CAPABLE OF AFFECTING TRADE BETWEEN MEMBER STATES . WHERE SUCH A CONTRACT RELATES TO SOME 10% OF EXPORTS OF THE GOODS IN QUESTION TO THE FEDERAL REPUBLIC OF GERMANY FROM FRANCE , IT IS CAPABLE OF AFFECTING TRADE BETWEEN MEMBER STATES APPRECIABLY .
2.THE AUTOMATIC NULLITY DECREED BY ARTICLE 85 ( 2 ) OF THE TREATY APPLIES ONLY TO THOSE CONTRACTUAL PROVISIONS WHICH ARE INCOMPATIBLE WITH ARTICLE 85 ( 1 ). THE CONSEQUENCES OF SUCH NULLITY FOR OTHER PARTS OF THE AGREEMENT , AND FOR ANY ORDERS AND DELIVERIES MADE ON THE BASIS OF THE AGREEMENT , AND THE RESULTING FINANCIAL OBLIGATIONS ARE NOT A MATTER FOR COMMUNITY LAW . SUCH CONSEQUENCES ARE TO BE DETERMINED BY THE NATIONAL COURT ACCORDING TO ITS OWN LAW .
Full & Egal Universal Law Academy