C-29/76

2. Convention of 27 September 1968 — Area of application — Action between a public authority and a person governed by private law — Exercise of the powers of the public authority — Judgment — Exclusion. (Convention of 27 September 1968, Article 1)

1. In the interpretation of the concept may fall within the area of application 'civil and commercial matters' for the of the Convention, this is not so purposes of the application of the where the public authority acts in the Convention of 27 September 1968 on exercise of its powers. Such is the case jurisdiction and the enforcement of in a dispute which concerns the Judgments in Civil and Commercial recovery of charges payable by a Matters, in particular Tide III thereof, person governed by private law to a reference must be made not to the law national or international body of one of the States concerned but, governed by public law for the use of first, to the objectives and scheme of equipment and services provided by the Convention and, secondly, to the such body, in particular where such general principles which stem from use is obligatory and exclusive. This the corpus of the national legal applies in particular where the rate of. systems. charges, the methods of calculation 2. Although certain judgments given in and the procedures for collection are actions between a public authority fixed unilaterally in relation to the and a person governed by private law users.

In Case 29/76

Reference to the Court under Article 1 of the Protocol of 3 June 1971 on the interpretation by the Court of Justice of the Convention of 27 September

on the interpretation of the concept 'civil and commercial matters' within the meaning of the first paragraph of Article 1 of the Convention of 27 September 1968,

THE COURT

composed of: H. Kutscher, President, A. M. Donner and P. Pescatore, Presidents of Chambers, J. Mertens de Wilmars, M. Sørensen, Lord Mackenzie Stuart and A. O'Keefe, Judges, Advocate-General: G. Reischl

Registrar: A. Van Houtte

gives the following

JUDGMENT

maintained, in particular, that the November 1975, annulled the decision of charges claimed were governed by public the Oberlandesgericht Düsseldorf and law. In its judgment of 7 March 1974 the referred the case back to that court for a Tribunal de commerce of Brussels fresh decision to be taken. dismissed these arguments. It declared that it had material jurisdiction on the By order of 16 February 1976 the 19th ground that the payment of the charges Civil Chamber of the Oberlandesgericht in dispute arose out of an activity of the Düsseldorf stayed the proceedings and, defendant which was deemed to be in accordance with Article 2 (3) and commercial and it ordered LTU to pay Article 3 of the Protocol of 3 June 1971 the sum of US$42 756-01, plus interest. on the Interpretation of the Convention of 27 September 1968, requested the This judgment was served on LTU at the Court of Justice of the European request of the Procureur du Roi of Communities to give a preliminary Brussels on 24 June 1974 and a ruling on the question 'whether, in the certificate of service was drawn up by the interpretation of the concept "civil and competent official of the Amtsgericht commercial matters" within the meaning Düsseldorf on 26 June 1974. of the first paragraph of Article 1 of the Convention of 27 September 1968 on In a judgment of 16 December 1974 the jurisdiction and the enforcement of Cour d'Appel of Brussels dismissed the Judgments in Civil and Commercial appeal brought by LTU as inadmissible Matters the law to be applied is the law on' the ground that it had failed to of the State in which judgment was given observe the prescribed time-limit. The (in this instance Belgium) or the law of appeal in cassation against this judgment the State in which the order for was also unsuccessful. enforcement is to be issued.'

Eurocontrol then appealed to the Upon hearing the report of the Bundesgerichtshof which, by order of 26 Judge-Rapporteur and the views of the

JUDGMENT OF 14. 10. 1976 — CASE 29/76

Advocate-General the Court decided to the purposes of establishing the open the oral procedure without holding definition of this term within the any preparatory inquiry. meaning of the Convention.

Eurocontrol puts forward, first of all, II — Written observations sub­ certain doubts concerning the mitted to the Court admissiblity of the reference.

LTU maintains that in order to interpret Under Article 3 (2) and Article 2 (3) of the concept 'civil and commercial the Protocol, a reference for a matters' within the meaning of the first preliminary ruling is admissible 'in the part of the first paragraph of Article 1 of cases provided for in Article 37 of the the Convention, reference must be made Convention'. This article refers to the to the law of the State in which case in which a debtor contests before enforcement is sought. As it constitutes a the Oberlandesgericht a decision treaty governed by the law of nations the authorizing enforcement. In fact, for the Convention must, in cases of doubt, be purposes of this provision the appeal interpreted in the light of the public proceedings were brought to an end by international law principle of sovereignty, the judgment of the Oberlandesgericht of that is, restrictively, so as to encroach as 24 March 1975.

LTU v EUROCONTROL

case. The Oberlandesgericht is bound by a State must, in cases of doubt, be given a this. Any other result would mean an restrictive interpretation. unreasonable delay in the proceedings to enforce a foreign judgment which, by The Tribunal de commerce of Brussels their nature, must take place rapidly. has examined its jurisdiction ratione materiae and has classified the action as As regards the question referred, a commercial matter for the purposes of Eurocontrol submits that the Belgian law. The German courts are Bundesgerichtshof has rightly decided bound by this classification in that the law of the State in which proceedings for the authorization of judgment was given is alone applicable enforcement (Article 34 (3) of the in interpreting the concept 'civil and Convention; Grunsky JZ 1973, 641). commercial matters' within the meaning

application of the Convention. In this another Member State during pro respect the Oberlandesgericht Munich ceedings for the recognition and made the striking observation that a enforcement of that judgment. The different point of view would lead to an answer to the question raised in the order applicants 'falling between two stools'. making the reference must therefore be At all events, in a case in which the that in interpreting the concept 'civil and parties are on an equal footing the commercial matters' within the meaning condition set out in the first paragraph of of Article 1 of the Convention the law of Article 1 of the Convention, which must the State in which the judgment was be fulfilled in order to obtain given is applicable. authorization for the enforcement of a judgment given in another Contracting The Government of the Federal Republic State, is satisfied even where only one of of Germany observes that the concept the two States classifies the case as an 'civil and commercial matters' appearing action concerning 'civil and commercial in Article 1 of the Convention is matters'. important in relation not only to the enforcement of foreign judgments, but Moreover, this view corresponds to the also directly to those provisions of the opinion of most German writers. In Convention which concern jurisdiction.

jurisdiction by the court adjudicating on those relationships between the the substance of the case and in the parties which are governed by private recognition and declaration of law and those governed by public enforceability by the court of the State in law. Certain areas could immediately which recognition is sought. be excluded and the task of delimitation in an individual case The Federal Government proceeds from could be left to the courts and to the the premise that in one and the same Court of Justice of the European case the concept 'civil and commercial Communities. matters' must be understood in the same way as regards both questions of The Federal Government is inclined jurisdiction and those of recognition and towards the second solution, since in its therefore considers that in defining this view this is the only way in which it is concept two solutions are possible: possible to ensure the uniform ap­ (a) Evaluation of the concept solely on plication of the Convention throughout the basis of the law of the State in the whole of the Community. Matters which judgment was given, without which are excluded from the area of any review by the courts adjudicating application of the Convention (second upon recognition and enforcement. paragraph of Article 1) could then be However, at least where the interpreted without reference to any judgement of the court adjudicating national law. on the substance of the case does not show whether that court regarded the Such an international interpretation case as a civil and commercial action would prove to be advantageous above all according to its national law, the within the context of the accession to the court asked to recognize the Convention of the new Member States of judgment must undertake a review of the Community, since the Common Law the law of the State in which the does not draw such a sharp distinction judgment was given. According to between civil law and public law as do this solution the area of application the countries of the European continent. of the Convention would be determined on the basis of the If the solution proposed by the Federal legislation of each Member State. Government is accepted in principle the Logically, it would then be necessary question whether the claims formulated to remove from the law of the State in the main action are governed, in which judgment was given the according to an international inter­ question of the definition of the pretation, by civil or public law need not matters excluded from the area of be resolved, at least not now, provided application of the Convention that this solution is supplemented by an (second paragraph of Article 1). essential element of the first solution, (b) A uniform international inter­ namely that in so far as the court pretation of the concept 'civil and adjudicating on the substance of the case

has, for reasons which are at least reconciled with a uniform understanding defensible, classified the case as an action of the concept of civil and commercial involving civil and commercial matters, matters within the meaning of the first the court in which recognition is paragraph of Article 1 of the Convention requested should not review that on jurisdiction.' decision. Only where the latter court has serious reasons for doubting the The Government of the Italian Republic correctness of the decision from the observes first that the extreme brevity of point of view of a uniform interpretation the order making the reference makes it should a fresh examination — involving, impossible to grasp the real significance if appropriate, a reference to the Court of of the question raised.

The comprehensive Article 55 of the Convention. This view standardization of the interpretation of arises out of the basic requirement of the concept 'civil and commerical ensuring that the Convention is applied matters' would thus be complemented, as uniformly throughout the whole of the regards the entire area of material Community and that the obligations application of the Convention, by a undertaken by the Contracting States are uniform understanding of the concept equivalent. during the two specific stages of the proceedings, that is, in the State in which On the basis of this premise, air the judgment was given and in the State navigation (and sea navigation) must be in which enforcement is sought. excluded from the area of application of

Member States. However, a court which rulings on questions concerning the is required to recognize a judgment given interpretation of the Convention. in another Member State or to declare such a judgment enforceable is bound by If, nevertheless, doubts exist as to the interpretation of this concept applied admissibility, on the grounds that the by the court in the State in which the Bundesgerichtshof has already ruled on judgment was given, to the extent to the question of a reference in its which such interpretation may still be judgment of 26 November 1975 and that,

As regards the question raised, the On the other hand, having regard to the Commission states that considerations of terms of the Convention itself, it practicability and, in particular, the aims undoubtedly applies only to judgments of the Convention require the second in 'civil and commercial matters'. In the court to be in principle bound by the interests of an effective application of the substantive classification given by the Convention this concept must be given a first court. wide interpretation and, in addition to jurisdiction in non-contentious proceed­ The aim of the Convention is to bring ings, it is generally held to cover civil about the recognition of the greatest proceedings for compensation brought possible number of judicial decisions in before the criminal courts, proceedings the signatory States. The very liberal under civil law brought before the nature of the terms of the Convention on administrative courts and actions the recognition and enforcement of concerning labour law (cf. Jenard Report, Judgments in Civil and Commercial Chapter 3, under heading III). Matters is shown by the fact that its authors dispensed with any separate Nevertheless, in accordance with the procedure for recognition (first paragraph declared intention of its authors, the of Article 26). Furthermore, the Convention does not apply to disputes Convention contains an exhaustive list of concerning public law (cf. for example, the grounds on which the recognition of Jenard Report, Chapter 5, under heading a judgment given in a Member State may 7). As, even in relation to the be refused (Articles 27 and 28). The classification of a dispute from the point second paragraph of Article 34 provides of view of the rules governing the expressly that enforcement may only be substance of the action, the Convention refused for one of the reasons specified contains no express provision stipulating in these articles. Furthermore, under no that the courts of the State in which circumstances may a foreign judgment enforcement is sought are bound by the be reviewed as to its substance (Article 29 view of the law taken by the courts of the and the third paragraph of Article 34) State in which judgment was given, it is and, finally, under the third paragraph of understandable that a minority advocates Article 28 the test of public policy may the application of the principle of the lex

Furthermore, even if the unlawful nature of the foreign judgment cannot III — Oral Procedure

constitute a reason for refusing an order for its enforcement (Articles 29 and the At the hearing on 14 July 1976 LTU, third paragraph of Article 34), there are represented by Mr Krause-Ablass, good reasons for maintaining that mere Advocate of Hamburg, Eurocontrol, differences over the substantive represented by Mr Achtnich, Advocate of classification of an action should not a Stuttgart, and by Mr Czech, member of fortiori lead to a refusal of recognition. the Legal Department of Eurocontrol, the Government of the Federal Republic The view that the court of the State in of Germany, represented by Mr which enforcement is sought is bound by Holtgrave, and the Commission of the the classification made by the court in European Communities, represented by which' judgment was given is in Mr Karpenstein, presented oral accordance with the spirit and aim of the argument. Convention as well as with the need for it to be effective. As, however, if taken to The Commission stated, in particular, its logical extreme, unforeseen results that the most favourable and most may be produced by binding the courts correct solution was undoubtedly for the of the State in which enforcement is concept of 'civil and commercial matters' sought, it remains to be considered to be given a uniform interpretation whether — following the argument put throughout the Community. It would of forward by Bellet (L'elaboration d'une course be very difficult to draw up an Convention sur la reconnaissance des abstract and general definition but it jugements dans le cadre du marché should nevertheless be possible to find commun, Journal du droit international common criteria in the legal systems of

2 The file shows that the question arose within the context of proceedings under Title III, Section 2, of the Convention in which Eurocontrol asked the competent German courts to authorize the enforcement of an order by the Belgian courts that LTU pay to it certain sums by way of charges imposed by Eurocontrol for the use of its equipment and services.

3 Under Article 1, the Convention 'shall apply in civil and commercial matters whatever the nature of the court or tribunal'. The second paragraph of Article 1 states that it shall not apply to '(1) the status or legal capacity of natural persons, rights in property arising out of a matrimonial relationship, wills and succession; (2) bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings; (3) social security; (4) arbitration'.

Apart from providing that the Convention shall apply whatever the nature of the court or tribunal to which the matter is referred and excluding certain matters from its area of application, Article 1 gives no further details as to the meaning of the concept in question.

LTU v EUROCONTROL

As Article 1 serves to indicate the area of application of the Convention it is necessary, in order to ensure, as far as possible, that the rights and obligations which derive from it for the Contracting States and the persons to whom it applies are equal and uniform, that the terms of that provision should not be interpreted as a mere reference to the internal law of one or other of the States concerned.

JUDGMENT OF 14. 10. 1976 — CASE 29/76

5 The answer to be given to the question referred must therefore be that in the interpretation of the concept 'civil and commercial matters' for the purposes of the application of the Convention and in particular of Tide HI thereof, reference must not be made to the law of one of the States concerned but, first, to the objectives and scheme of the Convention and, secondly, to the general principles which stem from the corpus of the national legal systems.

On the basis of these criteria, a judgment given in an action between a public authority and a person governed by private law, in which a public authority has acted in the exercise of its powers, is excluded from the area of application of the Convention.

Costs

6 The costs incurred by the Government of the Federal Republic of Germany, the Government of the Italian Republic and 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 Oberlandesgericht Düsseldorf, the decision as to costs is a matter for that court.

Kutscher Donner Pescatore

Mertens de Wilmars Sørensen Mackenzie Stuart O'Keeffe

Delivered in open court in Luxembourg on 14 October 1976.

A. Van Houtte H. Kutscher

Registrar President

OPINION OF MR ADVOCATE-GENERAL REISCHL DELIVERED ON 15 SEPTEMBER 1976 1