C-166/73

Preliminary ruling — Reference to the Court — Jurisdiction of national courts — Extent

(EEC Treaty, Article 177)

Power of the national judge to refer to rule of national law whereby a judge is the Court of Justice, either of his own bound on points of law by the rulings of motion or at the request of the parties, superior courts. It would be otherwise if questions relating to the interpretation the questions put by the inferior court or the validity of provisions of were substantially the same as questions Community law in a pending action is already put by the superior court. very wide. It cannot be taken away by a

In Case 166/73

Reference to the Court under Article 177 of the EEC Treaty by the Bundes­ finanzhof for a preliminary ruling in the action pending before that court between

RHEINMÜHLEN-DUSSELDORF, Düsseldorf-Holthausen,

composed of: R. Lecourt, President, A. M. Donner (Rapporteur) and M. Sø­ rensen (Presidents of Chambers), R. Monaco, J. Mertens de Wilmars, P. Pesca­ tore, H. Kutscher, C. Ó Dálaigh and Lord Mackenzie Stuart, Judges,

Advocate-General: J. P. Warner Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

The facts of the case, the subject matter plaintiff appealed on a point of law to of the request and the views of the the Bundesfinanzhof, which, by parties may be summarized as follows: judgment dated 8 November 1972 — VII R 98/68, annulled the judgment of the Finanzgericht and sent the case back to it for reconsideration. The Bundesfinanz­ I — Facts and procedure hof considered that the decision to make a refund could only be rekoved to the extent that the refund for 'third During the period from 30 December countries' exceeded the refund for 1964 to 16 December 1965, the plaintiff in the main action exported pearl barley 'Member States'. According to Paragraph from the Federal Republic of Germany. 126 (5) of the Finanzgerichtsordnung As a result of the particulars given by (Rules of Procedure for the the plaintiff to the effect that the goods Finanzgerichte) of 6 October 1965 were being delivered to third countries, (BGBl. I — 1477) the court to which the the defendant in the main action granted case is sent back is bound by the it the refunds for exports for third judgment of the court which has sent the countries. Subsequently the defendant case back. However, the Hessisches Finanzgericht considered that the view of withdrew these refunds on the grounds that the deliveries had not been made to the Bundesfinanzhof was not consistent third countries but to other Member with the system of refunds provided for States. After an unsuccessful administra­ by Regulation No 19/62 and by order tive appeal the plaintiff brought the dated 7 May 1973 referred the matter to matter before the Hessisches Finanzge­ the Court for a preliminary ruling. richt. This action was dismissed and the The plaintiff then appealed to the

Bundesfinanzhof against the order for a Finanzgerichtsordnung according to preliminary ruling issued by the which inferior courts are bound by the Finanzgericht. By order dated 14 August judgment of the superior court which 1973 the Bundesfinanzhof stayed the sends a case back for reconsideration. proceedings and referred the following Paragraph 126 (5) of the Finanzgerichts­ question to the Court for a preliminary ordnung does not stand in the way of a ruling: reference for a preliminary ruling. Even 'Does the second paragraph of the if another meaning had to be given to the contents of this provision, the above-named Treaty give to a court or tribunal against whose decisions there is reasoning of the Bundesfinanzhof in its a judicial remedy under national law a order for a preliminary ruling could not completely unfettered right to refer be adopted, according to which it is questions to the Court of Justice, or does necessary to distinguish between the it leave unaffected rules of domestic law theoretical possibility of putting a case to the contrary whereby a court is to the Court and the power of making bound on points of law by the use of this possibility in a concrete case. judgments of the court superior to it?' If this argument were accepted, the national legislature could to a large The order for a preliminary ruling was extent render inoperative the provision filed at the Court Registry on 4 of the second paragraph of Article 177 September 1973. by enacting provisions which would limit its effect. Such a limitation on the The plaintiff, represented by Mr useful effect of Article 177 by the Rauschning and Mr Modest, of the national legislature would infringe the Hamburg Bar, and the Commission of EEC Treaty and would lead to the the European Communities, represented initiation of procedure under Articles by its legal advisers Mr Gilsdorf and Mr 169 et seq. of the EEC Treaty. Zur Hausen, submitted their written observations in accordance with the In the same way it is impossible to limit provisions of Article 20 of the Protocol the power of referring a case for a on the Statute of the Court of Justice of preliminary ruling by invoking the the EEC. binding nature of judgments of superior courts, which in practice would exclude After hearing the report of the the power to submit cases to the Court. Judge-Rapporteur, and the opinion of the Advocate-General, the Court decided What holds good for the national to proceed without a preparatory legislature holds equally well for the inquiry. national courts, since the latter are bound, in the same way as the legislature, to conform to Community law.

regarded as limited as compared with circumstances, it is unjustified to say that the power of res judicata, the question of Article 177 gives rights to individuals. priority could be solved simply and The plaintiff denies that the organs of correctly in favour of Community law: the EEC can initiate proceedings against so long as the proceedings are still a Member State, where a final court has pending before the national court, the omitted to refer a case to the court for a possibility of referring a case for a preliminary ruling. Member States preliminary ruling as provided for by the cannot be held responsible for the second paragraph of Article 177 must be omissions of independent courts. kept open. Paragraph 126 (5) of the Finanzgerichts­ This legal construction would prevent, ordnung gives to the decisions of final as far as possible, judgments of national courts a binding effect similar to the courts from infringing Community law. force of res judicata. The court to which In the Commission's view the question the matter is sent back for referred for a preliminary ruling could reconsideration is bound, just as are the be replied to in the following manner: parties, by the decisions on appeal of the Bundesfinanzhof. 'The second paragraph of Article 177 of the EEC Treaty gives to the courts or Consequently it is not open to the tribunals of Member States, against Finanzgericht to refer a case to the Court whose decisions there is a judicial of Justice when it is required to give a remedy under national law, a completely judgment based on a judgment of the Bundesfinanzhof. unfettered right. The provisions or principles of national law cannot The Court of Justice itself should inquire preclude a national court or tribunal whether national courts are entitled to

RHEINMÜHLEN v EINFUHR- UND VORRATSSTELLE GETREIDE

national court or tribunal, against Finanzgerichtsordnung — is in whose decision there is a judicial essence a question of national law. remedy under national law, a The superior court sitting on appeal completely unfettered right to refer on a point of law is entitled to questions to the Court of Justice. On enquire whether the conditions laid the contrary, Article 177 of the EEC down in the second paragraph of Treaty cannot avoid the provisions of Article 177 are complied with by the national law under which courts are inferior court bound under Paragraph bound by the ruling of a superior 126 (5) of the Finanzgerichtsordnung national court. by the ruling of the superior court. Where it considers that the conditions have not been complied with, the 2. Alternatively preliminary ruling of the Court has not binding effect. The question whether, in the event of a ruling conflicting with that of the The oral hearing took place on 4 Court, the national decision of the December 1973.

supreme court retains its binding The Advocate-General delivered his effect — as provided for by opinion at the hearing on 12 December Paragraph 126 (5) of the 1973.

Grounds of judgment

1 By order dated 14 August 1973, filed at the Registry on 4 September 1973, the Bundesfinanzhof referred to the Court under Article 177 of the EEC Treaty the question whether the second paragraph of Article 177 gives 'to a court or tribunal against whose decisions there is a judicial remedy under national law a completely unfettered right to refer questions to the Court of Justice' or 'does it leave unaffected rules of domestic law to the contrary whereby a court is bound on points of law by the judgments of the courts superior to it'?

Consequently any gap in the system so organized could undermine the effectiveness of the provisions of the Treaty and of the secondary Community law.

The provisions of Article 177, which enable every national court or tribunal without distinction to refer a case to the Court for a preliminary ruling when it considers that a decision on the question is necessary to enable it to give judgment, must be seen in this light.

3 The provisions of Article 177 are absolutely binding on the national judge and, in so far as the second paragraph is concerned, enable him to refer a case to the Court of Justice for a preliminary ruling on interpretation or validity.

This Article given national courts the power and, where appropriate, imposes on them the obligation to refer a case for a preliminary ruling, as soon as the judge perceives either of his own motion or at the request of the parties that the litigation depends on a point referred to in the first paragraph of Ar­ ticle 177.

4 It follows that national courts have the widest discretion in referring matters to the Court of Justice if they consider that a case pending before them raises questions involving interpretation, or consideration of the validity, of pro­ visions of Community law, necessitating a decision on their part.

It follows from these factors that a rule of national law whereby a court is bound on points of law by the rulings of a superior court cannot deprive the

Costs

6 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable.

Since the proceedings are, in so far as the parties to the main action are concerned, a step in the action pending before a national court, the decision on costs is a matter for that court.

On those grounds,

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the observations of the Commission of the European Com­ munities and the plaintiff in the main action; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Article 177;

OPINION OF MR WARNER — CASE 166/73

Delivered in open court in Luxembourg on 16 January 1974.

A. Van Houtte R. Lecourt

Registrar President

OPINION OF MR ADVOCATE-GENERAL WARNER

DELIVERED ON 12 DECEMBER 1973

My Lords, plaintiff, a German exporter of cereal products, and the defendant, the German These two references (Cases 146 and intervention agency for cereals and 166/73) to the Court for preliminary feedingstuffs. That battle was originally rulings raise a most important question about claims by the plaintiff for refunds of interpretation of Article 177 of the on certain exportations of wheat meal EEC Treaty. and of pearl barley which the plaintiff The references themselves are incidents effected between December 1964 and in a long legal battle between the December 1965. The claims relating to