C-10/69

on the interpretation of Article 85 of the EEC Treaty and its implementing regulations,

THE COURT

composed of: R. Lecourt, President, A. Trabucchi and J. Mertens de Wilmars, Presidents of Chambers, A. M. Donner, W. Strauß, R. Monaco (Rapporteur) and P. Pescatore, Judges,

Advocate-General: K. Roemer Registrar: A. Van Houtte

gives the following

JUDGMENT

included in the contract, namely One school of thought held that an Marchant and Hamann calculating agreement notified must enjoy its full machines and Smith Corona typewriters. effect as long as the Commission had When Smith Corona subsequendy made not made any decision to the contrary, or distributed electric copying machines whilst another limited itself to re (Electrostatic), the parties by implica cognizing that an agreement of this kind tion included these machines in the said can only be the subject of provisional list without formally amending the con measures of execution.

merce, Brussels. This action was directed and the implementing regulations not only against Smith Corona but also adopted under it to be interpreted against three other companies whom the as regards the effects of the pro plaintiff considered to have taken part visional validity acknowledged in the in the performance of the contract and case of agreements which have been to have 'destroyed its exclusiveness'. notified in due time to the Commission The Court, however, considered that the of the European Communities, before action against SA, SCM Belgium on the commencement by the latter of the this point was unfounded. (procedure provided for in Article 9 of The defendants pleaded inter alia that Regulation No 17?' the agreement in question was void This judgment was received at the Court under Article 85(1) of the EEC Treaty.

SA cussion, neither the Treaty nor Regula Portelange, SA, SCM International tion No 17/62 laid down precisely the (Lausanne), SCM International GmbH effects, as a matter of private law, of (Frankfurt-on-Main), SCM Corporation agreements notified so long as the Com (New York) and the Commission of the mission had made no decision on them European Communities presented oral regarding the applicability of Article argument at the hearing on 10 June 85(3), and that different views existed 1969.

II — Observations submitted who sold the products in question in the under Article 20 of the zone granted to SA Portelange. But, Statute according to the case-law of the Court, even in that case the sanction of nullity The written and oral observations sub which might be contemplated would mitted to the Court may be summarized not be imposed on the contract as a as follows. whole, but merely on the relevant pro visions. These are in fact of secondary A — Observations submitted by SA importance as they have remained vir Portelange tually unimplemented and are not of the essence of the contract (Cf. judgment (a) SA Portelange recalled the various in Joined Cases 56 to 58/64). solutions put forward in legal literature The Tribunal de Commerce appears to and in case-law with regard to the con have adopted the principle whereby the cept of 'provisional validity' and sub exclusive character of an agreement is scribed to the view that agreements ipso facto synonymous with illegality falling under Article 85(1) and duly within the meaning of Article 85(1) of notified are 'completely valid' so long the Treaty. It has thus failed to observe as the Commission has made no decision the judgment in Case 56/65, whereby on them. the Court formally recognized that ex This solution is not based on expediency clusive dealing agreements are not as but on the need to avoid injustice. Its such incompatible with the said article. rejection would mean that any provi sionally valid agreements could be in B — Observations submitted by the fringed with impunity since the courts Commission of the European entrusted with enforcing it could not Communities intervene so long as the Commission had made no decision on it. (a) The Commission first of all con This would give rise to real legal un siders the problem whether SA Porte certainty and in many cases it would lange may in this case rely on the pro be inevitable that injury, sometimes con visional validity of the agreement in dis siderable, would be occasioned the pute. In this connexion it recognizes persons concerned and in practice it that the contract of 1 July 1961 con would be impossible subsequently to cerning the exclusive right granted to make good those injuries. SA Portelange to sell the appliances of (b) SA Portelange then observes that Marchant, Smith Corona and Hamann the question before the Court was only was notified to the Commission in

parallel imports. It does not therefore mentioned regulation and was never result in the partitioning of the notified to the Commission. markets. Article 4(1) of this regulation applies to Strictly speaking, doubts may arise over the agreement in question since by limit the clauses providing for payment of a ing the opportunities for marketing the commission by foreign concessionnaires products in question and the choice of

view that the agreement extending the If, on the other hand, it is presumed exclusive right of sale to products other that the agreement does not fall within than those referred to in the standard- Article 85(1), thereby rendering super­ form contract of 1 July 1961 constitutes fluous a declaration pursuant to Article a separate and independent agreement, 85(3), negative clearance may be granted even if it is also subject to the pro­ under Article 2 of Regulation No 17/62. visions of that contract. But since the issue of this certificate The independence or this agreement in presumes that an application therefor has relation to the contract is further con­ been submitted by the party concerned firmed by the very behaviour of the the agreement in question must be parties: the grantor has in fact only notified in accordance with Article 4 of repudiated the agreement relating to the that regulation. electrocopying machines, and SA Porte­ The Commission thus deduces from this lange only initiated proceedings before that so long as notification of the agree­ the Belgian court in respect of that ment has not taken place the preliminary repudiation, whilst the agreement of 1 factors required to initiate the procedure July 1961 relating to the typewriters either for issuing the declaration pro­ and calculating machines at present vided for by Article 85(3) of the Treaty remains in force between the parties. or a certificate of negative clearance It follows that in the present circum­ pursuant to Article 2 of Regulation No stances the procedure for the grant of 17/62 are not present. the declaration provided for in Article For those reasons the problem of the 85(3) of the Treaty or of the negative provisional validity of agreements duly clearance referred to in Article 2 of notified is irrelevant to the present case. Regulation No 17/62 may only be In fact, in the present circumstances as initiated if the agreement in dispute is set out above, there are only two possi­ subsequently notified in accordance with bilities: the provisions of Regulation No 27/62. — either the agreement in dispute falls If it is assumed that the agreement falls within Article 85(1) of the Treaty within Article 85(1) but may be covered and, since in this case a declaration by Article 85(3), the date of the exemp­ pursuant to Article 85(3) cannot take tion cannot, under Article 6(1) of effect before the date of notification, Regulation No 17/62, be earlier than because the agreement was repudiated the date of notification. Since this has before notification was made it cannot

provide a valid legal ground for a The Commission concludes by stating claim for damages based on its that if during the said period prior to repudiation; the decision there already exist between — or the agreement in dispute does not the parties certain connexions (such as fall within Article 85(1) and in that the obligation to collaborate in order to case, since it must be regarded as obtain the exemption provided for by valid from the outset, its repudiation Article 85(3) and to refrain from any may provide grounds for an action action which might result in the with­ for compensation under national law. holding of this exemption), nevertheless (b) The Commission thus declares that it cannot be admitted that they may it considers the said problem only in so base their position on an agreement far as is relevant. It disputes the view which is only provisionally valid in order that the concept of provisional validity to rely on the right of implementation implies that the parties to the contract or to compensation against a party may proceed against each other with a alleging that the agreement is void view to enforcing the contract (or in the under Article 85 of the Treaty. case of failure to do so to obtain com­ pensation) and against third parties, C — Oral observations submitted by SA enforcing their rights through the Smith Corona Marchant Inter­ national courts. national (Lausanne), Smith Corona Such a view is incompatible with the Marchant GmbH (Frankfurt am system established by Article 85 of the Main) and Smith Corona Marchant Treaty and by Regulations Nos 17/62, Corporation (New York) at the 19/65 and 67/67, from which it is hearing on 10 June 1969 clear that the prohibition laid down in Article 85(1) continues, even when The defendant companies in the main notification has been made, until the action expressed their anxiety lest the Commission has taken a decision with Court should be induced to give a ruling regard to the agreement in question. in the present case on the substance of Taking into account this principle, it is the main dispute. SA Portelange and therefore contrary to the Treaty to admit above all the Commission of the Euro­ than an agreement may be regarded pean Communities in fact introduced from the point of view of civil law as such matters into the oral proceedings having unrestricted validity in the period chat if the Court were to follow in that before the said decision. direction it would exceed the limits Furthermore this view means that which Article 177 of the Treaty lays throughout the unavoidably long period down in respect of its jurisdiction and until the Commission issues its decision would trespass on a sphere reserved to the parties may indulge unhampered in the national court. restriction of competition although this After giving this warning the said com­ is incompatible with Article 85(1) and panies gave their view on the question is not covered by the exemption pro­ put by the Tribunal de Commerce, vided for by Article 85(3). This would be Brussels, rejecting that of SA Porte­ particularly pernicious in the case of such lange and concurring with that put for­ agreements as attain their objects quickly. ward by the Commission.

4 As the supplementary agreement, entered into at a later date for the distribu­ tion and sale of electric copying machines, which forms an independent agree­ ment distinct from the prior contract, has not been notified, the Commission states that the question submitted to the Court by the Tribunal de Com­ merce, Brussels, does not arise in the present case, and is hence inadmissible.

5 Article 177 of the Treaty, which is based on a clear separation of functions between national courts and the Court of Justice, does not permit the latter either to take cognizance of the facts of the case, or to pass judgment on the reasons for requests for interpretation.

6 The question whether the provisions or concepts of Community law, whose interpretation is requested, are in fact applicable to the case in question lies outside the jurisdiction of the Court of Justice and falls within the juris­ diction of the national court.

7 When a court or tribunal requests the interpretation of a Community pro­ vision or of a legal concept connected with it, it must be assumed that that court considers such interpretation necessary to the solution of the dispute before it.

8 The objection raised by the Commission cannot, therefore, be sustained.

Substance

15 In view of the absence of any effective legal means enabling the persons con­ cerned to accelerate the adoption of a decision under Article 85(3) — the consequences of which are all the more serious the longer such a decision is delayed — it would be contrary to the general principle of legal certainty to conclude that, because agreements notified are not finally valid so long as the Commission has made no decision on them under Article 85(3) of the Treaty, they are not completely efficacious.

16 Although the fact that such agreements are fully valid may possibly give rise to practical disadvantages, the difficulties which might arise from uncertainty in legal relationships based on the agreements notified would be still more harmful.

17 If the Commission considers that the implementation of an agreement notified infringes the competition rules, it is open to it to adopt, within the appropriate time, a decision either under Article 85(3) of the Treaty or under Article 15(6) of Regulation No 17. 18 Where Article 15(6) abovementioned has been applied, the persons concerned are put on notice that the Commission considers that the conditions for the application of Article 85(1) are fulfilled and that the application of Article 85(3) is not justified.

19 Hence, any parties who proceed, from then on, with the implementation of the agreement do so at their own risk.

PORTELANGE v MARCHANT

20 It must therefore be concluded that the agreements mentioned in Article 85(1) of the Treaty, duly notified in accordance with Regulation No 17, are of full effect so long as the Commission has made no decision under Article 85(3) and the provisions of the said regulation.

in answer to the question referred to it for a preliminary ruling by the Tribunal de Commerce, Brussels, in accordance with its judgment dated 18 February 1969, hereby rules:

Agreements referred to in Article 85 (1) of the Treaty, which have been duly notified under Regulation No 17/62, are fully valid so long as the Commission has made no decision under Article 85(3) and the pro­ visions of the said regulation. Lecourt Trabucchi Mertens de Wilmars

Donner Strauß Monaco Pescatore

Delivered in open court in Luxembourg on 9 July 1969. A. Van Houtte R. Lecourt Registrar President