C-59/77

In Case 59/77,

Reference to the Court under Article 177 of the EEC Treaty by the Cour d'Appel, Mons, for a preliminary ruling in the action pending before that court between

ÉTABLISSEMENTS A. DE BLOOS, S.P.R.L., Leuze (Belgium),

and

BOUYER, SOCIETE EN COMMANDITE PAR ACTIONS (partnership limited by shares), Tomblaine (France),

on the interpretation of Articles 173 and 177 of the EEC Treaty and of Regulation No 67/67/EEC of the Commission and on the validity of a communication from the Commission declaring, in application of Regulation No 67/67/EEC, exemption from the prohibition laid down in Article 85 (1) of the Treaty,

JUDGMENT

Facts and issues

The judgment making the reference and English Special Edition 1967, p. 10), the written observations submitted providing for the exemption of certain pursuant to Article 20 of the Protocol on categories of exclusive dealing the Statute of the Court of Justice of the agreements, the Commission had EEC, may be summarized as follows: decided on 17 July 1968 to take no action ['décidé ... de classer'] regarding the notification of exclusive dealing I — Facts and procedure agreements which did not, to its knowledge, provide for absolute 1. On 24 October 1959 Établissements territorial protection, and that it emerged Bouyer S.A. (hereinafter referred to as from the initial examination of the 'Bouyer') concluded a contract with notification of the agreement between Établissements De Bloos S.p.r.l. Bouyer and De Bloos that it fulfilled that (hereinafter referred to as 'De Bloos') condition.

granting De Bloos the exclusive right to sell products bearing the 'Bouyer' mark 2. An action between De Bloos and

not have jurisdiction to hear the case, the exclusive agreement in and in the alternative that, contrary to accordance with the Treaty the Commission's opinion, the establishing the European Economic agreement at issue, which was concluded Community and the regulations in 1959, did provide for absolute adopted in implementation thereof? territorial protection, so that it could not III. Can an exclusive agreement which be exempted from the prohibition in fulfils the conditions of Regulation Article 85 (1) and must be declared null No 67/67/EEC of the Commission and void. Pursuant to Article 177 of the of 22 March 1967 continue to EEC Treaty, the Cour d'Appel, Mons, by benefit after 31 December 1972 from a judgment of 9 December 1975 referred the declaration of inapplicability of to the Court of Justice a request for an Article 85 (1) of the Treaty of the interpretation of certain provisions of the European Economic Community? Brussels Convention. IV. Is it at all events possible to recognize as provisionally valid, so Following the judgment of the Court of long as the Commission has not Justice of 6 October 1976 (Case 14/76, adopted a decision with regard to it, De Bloos [1976] ECR 1497) the Cour an exclusive agreement which, as in d'Appel found that the Belgian courts the present case, was concluded did have jurisdiction ratione loci, and before 22 March 1967 but which was held that it should examine the validity notified before 1 February 1963? of the 1959 agreement in relation to Article 85 (1) of the EEC Treaty. Taking The order of 3 May 1977 making the into account the Commission's decision reference was registered at the Court to take no action regarding the Registry on 11 May 1977. notification made in January 1963, the Cour d'Appel held that it was necessary The Commission of the European to refer the following questions on Economic Communities and De Bloos interpretation and validity to the Court of submitted written observations pursuant Justice of the European Communities: to Article 20 of the Protocol on the 'I. Where a party to proceedings is out Statute of the Court of Justice of the of time pursuant to Article 173 of EEC.

the examination under Article 177 of the can be referred to the Court for a Treaty of the validity of individual acts of preliminary ruling concerning validity. Community institutions by a national In its view, such an application should court in proceedings before it, where the not be dismissed as inadmissible on act was addressed to the parties to those account of the fact that the parties to the proceedings who would have been proceedings before the national court are entitled to challenge it by an action for out of time for the purposes of annulment under Article 173 but who proceedings for annulment under Article have failed to do so within the prescribed 173, because that would amount to period. making the exercise of. a function which the Treaty intended expressly to reserve The essential legal argument for to the court dependent upon the answering the question in the affirmative procedural conduct of one of the parties, is based on the nature of proceedings and it would be excessively harsh to give under Article 177, which must be legal certainty precedence in all cases regarded as a matter of public policy. over the requirement of compliance with The matter is brought before the Court the rule of law. Therefore it would be of Justice by the national court not by unwise to exclude, a priori, the power or the parties, and its decision does not the duty to refer a matter to the Court of depend on the action or inaction of the Justice for a preliminary ruling on the parties. The interest which the national basis of criteria defined by the capacity of court purposes to protect by means of a the parties to the proceedings before the question on validity referred to the Court national court or by the nature of the of Justice for a preliminary ruling goes arguments which might be advanced. beyond individual interests as is However, such an affirmative answer emphasized by the power of the Member leaves open the question whether, in States and of the Commission to submit particular when the parties to the observations pursuant to Article 20 of the proceedings before the national court are Protocol on the Statute of the Court of out of time for the purposes of Justice of the EEC. proceedings for annulment, the Court of Justice can lay down limits to the extent On the other hand, the main argument or the effects of its examination as to

DE BLOOS v BOUYER

By impossible to prevent the persons to way of a communication or a regulation whom the act was addressed and who are granting collective exemption the out of time for the purposes of Commission can specify the conditions proceedings for annulment, from also under which an agreement is not caught being able to benefit from the effects of a by Article 85 (1), or benefits from a preliminary ruling establishing the collective exemption. In the normal invalidity of the act at issue where the course, where there has been such a nature and the seriousness of the defects communication or regulation granting vitiating such act patently and irreparably collective exemption, undertakings which entail its nullity. However, such is not have concluded an agreement fulfilling the case in this instance. the said conditions cease to have any interest in having their legal situation The Commission suggests that the first established by the Commission by way of question should be answered as follows: an individual decision of negative clearance or of exemption.

Therefore the agreement does not necessarily lead to decision to take no action does not affect the Commission's initiating any the right of the parties to institute procedure within the meaning of Article proceedings for annulment against any 9 (3) of Regulation No 17. A fortiori, decision which has been taken or

proceedings for failure to act against the agreement is caught by the prohibition Commission, if the Commission refrains laid down by Article 85 (1) of the Treaty. from adopting a decision. Moreover the It may among other things reach a letter at issue expressly requests the finding that the agreement does not have interested parties to state whether the any perceptible effect on competition or adoption of an individual decision by the trade between Member States. The Commission is considered desirable. Commission points out that, even if an exclusive sales contract provides for The third recital of Regulation No 67/67 absolute territorial protection, it may fall states that that regulation does not outside the scope of Article 85 where the conflict with the application of position of the parties on the market is Regulation No 17, and that consequently particularly weak (judgment of the Court it does not affect the right of of Justice of 9 July 1969, Case 5/69, undertakings to request the Commission, Völk v Vervaecke [1969] ECR 295). on an individual basis, for a declaration under Article 85 (3) of the Treaty. If, on the other hand, the national court finds that the agreement is caught by the The decision to take no action, of which prohibition in Article 85 (1), it must the parties were informed by the consider whether the agreement can Commission's letter of 29 April 1969, is benefit from the exemption by categories only an internal measure of the provided for by Regulation No 67/67, Commission and not a decision within and, if so, apply that regulation the meaning of Article 173 of the Treaty. (judgment in Roubaix-Wattrelos, Consequently, the question of the aforementioned). If in doubt, the national compatibility of such a decision with the court must have recourse to the provisions of the Treaty does not arise. procedure for a preliminary ruling provided for in Article 177 of the EEC However, the national court's second Treaty. It may also suspend proceedings question expresses its doubts regarding in order to allow the parties to obtain the the Commission's assessment of the Commission's standpoint. agreement in dispute, in particular as to whether the agreement brings about If the court finds that the agreement is absolute territorial protection. In these caught by Article 85 (1) and does not circumstances, the Court's answer should fulfil the conditions for exemption by indicate the courses which are open to categories, it has to distinguish, as national courts presented with an emerges from the judgment in Haecht, agreement which has been notified to between agreements existing before the the Commission but about which the implementation of Article 85 by Commission has not adopted any Regulation No 17 — 'old agreements' — decision, when the national courts and those concluded after that date. In

does not have any perceptible effect on considers it to be covered by an competition or trade between Member exemption by categories — that the States or that there is no doubt that the agreement does not fulfil the conditions agreement is incompatible with Article laid down by the regulation granting 85' (paragraph 12 of the Decision in such exemption, the national court may, Haecht). in the case of an agreement existing before the implementation of Article 85 In the present case, the agreement is an of the EEC Treaty by Regulation No 17, 'old agreement' which has been notified. declare it to be automatically void only If it had contained any provisions after the Commission has taken a creating absolute territorial protection, decision by virtue of Regulation No 17. the national court should have declared it to be automatically void only after the On the other hand, in the case of an Commission had taken a decision by agreement entered into after the virtue of Regulation No 17. However, implementation of Article 85 by examination of the wording of the Regulation No 17, it devolves on the agreement indicates that it does not court to judge, subject to the possible contain any factor from which it can be application of Article 177, whether there inferred that there is such territorial is cause to suspend proceedings in order protection. The Commission submits to allow the parties to obtain the that, in the present case, the doubts of Commission's standpoint, unless it the national court can only originate in establishes either that the agreement factors resulting neither from the does not have any perceptible effect on wording of the agreement nor from the competition or trade between Member information supplied in the notification. States or that there is no doubt that the If any factors of this kind were present, agreement is incompatible with Article the agreement in dispute should be 85.

exemption by categories on account of "The decision to take no action of which provisions of the agreement entered into the parties to the agreement were after notification, is to be considered as informed by the Commission's letter of an. agreement entered into after the date 29 April 1969 does not have any legal of the implementation of Article 85 by effects affecting the interests of the Regulation No 1.' undertakings concerned, and they are not bound to accept it. Consequently it is not The third question a decision within the meaning of Article 173 of the Treaty. Therefore the question The Commission argues that this whether a decision by the Commission is question proceeds from a material error: in accordance with the EEC Treaty has the period of validity of the exemption no purpose. Where it has been pleaded by categories granted by Regulation No before a national court that an agreement 67/67 was extended to 31 December between undertakings is automatically 1982 by Regulation (EEC) No 2591/72 of void, and the national court finds — in the Commission of 8 December 1972 spite of the fact that the Commission has amending Regulation No 67/67 (OJ, decided to take no action regarding the English Special Edition 1972 (9-28 notification of the agreement because it December), p. 7). Consequently the

JUDGMENT OF 14. 12. 1977 - CASE 59/77

Therefore it is submitted that the answer exclusive dealing agreements pursuant to Article 85 (3), an exclusive dealing to the fourth question should be the agreement which fulfils the conditions of following: the said Regulation No 67/67 may 'An agreement caught by the prohibition continue to benefit after 31 December laid down in Article 85 (2) and not 1972 and until 31 December 1982 from covered by an exemption by categories, the declaration of inapplicability of which existed at the date of the entry Article 85 (1) of the EEC Treaty.' into force of Regulation No 17 and which was notified within the period laid The fourth question down in Article 5 (1) of the said regulation, may benefit from the In substance, the fourth question asks Commission's power under Articles 6 (2) whether 'it is at all events possible to and 7 of the said regulation to limit the recognize as provisionally valid, so long period during which the prohibition as the Commission has not adopted a concerned applies by adopting a decision decision with regard to it', an old regarding the said agreement.

Therefore all the can only refer to a national court's duty grounds of illegality listed in Article 173 not to declare an old agreement which may be pleaded in a review of validity has been duly notified within the period pursuant to Article 177. The fact that the laid down by Article 5 (1) of Regulation parties to the main action were not No 17 to be void so long as the competent to challenge the act in dispute Commission has not adopted a decision directly by means of proceedings for under Regulation No 17. annulment does not prevent the Court of Justice from examining the validity of Such 'provisional validity' is to protect such act in proceedings for a preliminary the opportunity for the parties to benefit ruling.

At the hearing on 9 November 1977, the The third question plaintiff in the main action, represented by F. Moulart of the Tournai Bar, and the On the assumption that the effects of Commission, represented by its Agent, Regulation No 67/67 come to an end on A. Marchini Camia, expanded upon the 31 December 1972, as an open dealing arguments put forward in the written agreement the agreement in dispute may procedure. in any case benefit from an individual exemption decision. It is submitted that The defendant in the main action, such a decision can only be made to Bouyer, represented by D. Noel of the apply for a limited period, and Nancy Bar, points out in relation to the furthermore is revocable, but only in so first question that Article 177 is a far as actual circumstances change in provision of public policy, that it does relation to an essential factor of the not lay down any limitation period, and decision. that it is stated therein that the national court has sole jurisdiction to refer a The fourth question question concerning the interpretation or validity of a regulation to the Court of Referring to the judgments of 9 July Justice for a preliminary ruling. Bouyer 1969 (Case 10/69, Portelange [1969] ECR infers from this that the first question 309), 18 March 1970 (Case 43/69, Bilger should be answered in the affirmative. [1970] ECR 127) and 30 June 1970 (Case 1/70, Rochas [1970] ECR 515), De Bloos As regards the second question, Bouyer argues that when an agreement has been submits that the decision of 29 April 1969 to take no action constitutes a notified and the Commission has initiated a procedure, the national court provisional, not a definitive, decision. must regard the agreement as The third and fourth questions result provisionally valid and cannot terminate from a material error and there is its provisional validity, since under therefore no need to answer them. Article 9 (3) of Regulation No 17 it is no longer competent to apply Article 85 (1). The Advocate-General delivered his Any subsequent finding that an exclusive opinion at the hearing on 29 November dealing agreement is void cannot have 1977.

3 For this purpose, Bouyer is challenging the Commission's assessment of that contract in its letter of 29 April 1969, according to which the contract is an exclusive dealing agreement capable of benefiting from exemption by categories under Regulation No 67/67.

4 In substance, the first question is designed to ascertain whether the validity of an individual decision of a Community institution, the legality of which is disputed by a party who is out of time for instituting proceedings for annulment against that decision under Article 173, can be called in question before a national court by recourse to Article 177 of the Treaty. The second question is designed to ascertain, in the event of the Court's answering the first question in the affirmative, whether the Commission's decision to take no action with regard to the notification of the agreement now in dispute

DE BLOOS v BOUYER

between the parties to the main action is valid for the purposes of Article 177 of the Treaty.

5 The third question concerns the effects of Regulation No 67/67 after 31 December 1972.

6 In the fourth question, the national court, on the supposition that the Commission did make a mistake in 1969 in taking the view that the agreement in dispute could benefit from exemption by categories, asks whether it is possible to recognize such agreement as provisionally valid by virtue of the fact that it has been notified, and what the effects of such validity are.

11 The legal consequences stated above result from the indivisibility of the prohibition laid down in Article 85 (1) and the possibility of exemption provided for in Article 85 (3) as implemented by Regulation No 17.

12 These considerations are confirmed by the effects attributed to notification and to exemption from notification of old agreements under Articles 6 (2) and 7 of the said regulation.

13 Not only may such agreements benefit from an exemption extending retroactively even to the period before their notification, but such of their provisions as are incompatible with Article 85 (1) and not capable of benefiting from Article 85 (3) may also be regularized retroactively on condition that they are amended with respect to the future at the request of the Commission.

14 Such system is inconsistent with jurisdiction on the part of the courts to make a finding of nullity during the period between notification and the date on which the Commission takes a decision.

15 It follows that, during that period, courts before which proceedings are brought relating to an old agreement duly notified or exempted from notification must give such an agreement the legal effects attributed thereto under the law applicable to the contract, and those effects cannot be called in question by any objection which may be raised concerning its compatibility with Article 85 (1).

16 The fourth question should be answered accordingly.

19 For the reasons given above, the third question has also become purposeless.

20 However, it should be pointed out in any event that the effects of Regulation No 67/67 — namely the exemption by categories of agreements fulfilling the conditions laid down by that regulation — have been extended until 31 December 1982 by Regulation No 2591/72 of the Commission of 8 December 1972 (OJ, English Special Edition 1972 (9-28 December), p. 7).

Costs

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

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

On those grounds,

Donner Mertens de Wilmars Pescatore O'Keeffe

Delivered in open court in Luxembourg on 14 December 1977.

A. Van Houtte H. Kutscher

Registrar President

OPINION OF MR ADVOCATE-GENERAL MAYRAS DELIVERED ON 29 NOVEMBER 1977 1

Mr President, Article 5 (1) of the Convention, the Members of the Court, compensation provided for by Article 2 of the Belgian law of 27 July 1961 (as The dispute between Établissements De amended on 13 April 1971) on exclusive Bloos and Bouyer Société en sales concessions and, should the case Commandite par Actions which has arise, the additional compensation already been before the Court of Justice provided for by Article 3 of that Law on points concerning the application of should be considered as constituting the Convention of 27 September 1968 on independent obligations arising from the Jurisdiction and the Enforcement of unilateral revocation of an exclusive