C-22/80

BRIGITTE GERSTENMEIER, Euskirchen (Federal Republic of Germany),

on the interpretation of Article 7 of the EEC Treaty,

T H E COURT

composed of: H. Kutscher, President, P. Pescatore and T. Koopmans (Presidents of Chambers), J. Mertens de Wilmars, Lord Mackenzie Stuart, A. O'Keeffe and A. Touffait, Judges,

Advocate General: H. Mayras Registrar: A. Van Houtte

gives the following

I — Facts and written procedure claimants as being contrary to Article 7 of the Treaty establishing the European Economic Community, with the result The Boussac Saint-Frères company that they may continue to prosecute (hereinafter referred to as "Boussac") claims in a foreign currency against commenced summary proceedings for debtors established in the Federal recovery in the Amtsgericht Berlin- Republic of Germany by means of Schöneberg in respect of FF 1 934.52 summary proceedings for recovery". which it claimed to be owed by Mrs Brigitte Gerstenmeier, a private The order making the reference was individual resident in the Federal received at the Registry of the Court on Republic of Germany. 14 January 1980. The court before which the claim has Boussac, represented by H. Weil, of the been brought is prevented from allowing Frankfurt Bar, the Government of the it by Article 688 of the Zivilpro- Federal Republic of Germany, zeßordnung (the German Code of Civil represented by E. Bülow, acting as Procedure, hereinafter referred to as Agent, and the Commission of the "the ZPO") which, as a result of its European Communities, represented by being amended by a so-called simplifying its Legal Adviser, Peter Karpenstein, law of 3 December 1976, no longer acting as Agent, submitted written obser- permits summary proceedings for vations in accordance with Article 20 of recovery (Mahnverfahren) to be the Protocol on the Statute of the Court commenced for payment of a debt of Justice of the EEC. expressed in foreign currency as against a debtor established in the Federal After hearing the report of the Judge- Republic of Germany. However, that Rapporteur and the views of the article allows summary proceedings for Advocate General the Court decided to recovery if the claim expressed in foreign open the oral procedure without any currency is made against a debtor preparatory inquiry. established abroad. Since the court before which the action has been brought is of the opinion that such rules are in substance discriminatory, by an II — Written observations sub- order dated 24 November 1979 it stayed mitted pursuant to Article proceedings and requested the Court of 20 of the Protocol on the Justice to give a preliminary ruling on Statute of the Court of the question: Justice of the EEC "whether that amendment to the German Code of Civil Procedure in Boussac, having stressed the advantages relation to creditors from other Member of simplicity, speed and economy of the States of the European Economic Mahnverfahren (summary proceedings Community is a discriminatory measure for the recovery of a debt) as compared and thus ineffective in relation to such with ordinary legal proceedings, points

out that, until 1 July 1977, the date when which is party to the Brussels the Law of 3 December 1976 entered Convention of 1968. into force, a debt could be recovered by the former method without its being Although this different treatment is not necessary to take account either of the connected with nationality its effects are currency in which the debt was expressed however the same as those stemming or of the State in which the debtor was from discrimination based on nationality. resident, provided that the State in According to the case-law of the Court question was party to the Brussels there is covert discrimination whenever Convention of 27 September 1968 on national rules lead to nationals being Jurisdiction and Enforcement of placed in a better situation than the Judgments in Civil and Commercial nationals of the other Member States. Matters. This is exactly what the distinction drawn by Article 688 of the ZPO has achieved. The amendment to Article 688 of the ZPO is in breach not only of the prohibition of discrimination contained In fact the Mahnverfahren is available to in Article 7 of the EEC Treaty but also German undertakings which in intra- of the prohibition derived from the Community trade (the Member States system of the Treaty on the placing of have all acceded to the Brussels restrictions on an unrestricted system Convention of 1968) make out their which is already in existence. invoices in German currency, whereas it cannot be used by undertakings of the other Member States which make out their invoices in their own national That article falls within the field of currency. It is true that this summary application of the EEC Treaty, since the procedure cannot be used either by a restrictions for which it provides have a German creditor claiming payment from negative effect on the attainment of a German debtor of a debt expressed in a several objectives laid down in the foreign currency, but it must not be provisions of that Treaty, namely a forgotten that in such a case, which harmonious development of economic moreover is very rare in normal trade, activities throughout the Community the transaction is not international. On (Article 2), free movement of goods the other hand, a German creditor can (Articles 3 (a), 9 et seq.) the harmon- undoubtedly use the Mahnverfahren in ization of the conditions of competition' order to recover a debt expressed in (Article 3 (f), the liberalization of foreign currency from a debtor payment (Article 106) and equal established abroad. Consequently, in protection of rights for the benefit of all inter-State trade German undertakings Community nationals (Article 220). do not labour under any disadvantage whether they make out their invoices in German or in foreign currency, whereas undertakings in the other Member States It involves unequal treatment of creditors can make use of,the Mahnverfahren only according to whether their claims are if they make out their invoices in expressed in German or in foreign German currency. currency. There is further discrimination between persons whose claims are in foreign currency depending on whether With regard to the German the debtor is established in the Federal Government's explanation that the Republic of Germany or in another State restriction imposed by Article 688 of the

Finally, it is not without relevance that the English Court of Appeal in a The article which is criticized is judgment of 26 November 1974 moreover also incompatible with (Schorsch Meier GmbH Y Hennin, [1975] Community law because it represents an Q.B. 416, CA.) held, relying on the EEC unjustified regression in relation to the Treaty and in particular on Article 106 degree of liberalization previously thereof, that tne English courts must attained in this field. An examination of henceforth also allow claims for payment a number of provisions of the EEC of debts expressed in foreign currency. Treaty shows that the prohibition on the The principles developed by the English repudiation of measures of liberalization court in that judgment, reversing is a principle inherent in that Treaty, case-law of the United Kingdom which even if there is no general express clause has remained unchanged since the 17th to that effect. century, must also apply to this case. It should be stressed in this connexion that the breach of Community law represented by Article 688 of the ZPO is all the more serious as the restriction Furthermore, the provision in question is which it contains was introduced after at least indirectly in breach of the the entry into force of the EEC Treaty

JUDGMENT OF 19. 10. 1980 — CASE 22/80

The amendments made to Article 688 of Equal treatment as between Member the ZPO by the Law of 3 December States is guaranteed in this field by the 1976 were prompted by the fact that the corresponding instruments recommendations of a commission of based on the decision of a foreign court inquiry which considered whether the are declared to be enforceable in the Mahnverfahren could usefully be ration- Federal Republic and are then enforced alized by computerization. The inquiry there regardless of whether the amount showed that the inclusion in a data- involved is a specific amount expressed processing system of Mahnverfahren in national currency or in foreign claims for payment of debts expressed in currency.

BOUSSAC v GERSTENMEIER

Debtors established in the Federal Republic of Germany may be sued by "Provided that general legal remedies way of the Mahnverfahren only if the are available neither Article 7 of the EEC debt at issue is expressed in German Treaty nor any other Community law currency, no matter what their national- provisions preclude rules limiting ity is, whereas debtors established in recourse to a simplified legal procedure other Member States may always be sued for suing a debtor residing in the Federal by way of that procedure in respect of Republic of Germany for payment of a debts expressed in German and also in debt in cash to debts expressed in foreign currency. It is therefore clear national currency". that there can be no question of discrimi- nation based on nationality, since the latter concept plays no part in either case. III — Oral procedure

The Commission, for the sake of completeness, states that it is also Boussac, the Government of the Federal impossible to base an argument against Republic of Germany and the Article 688 of the ZPO on other Commission of the European provisions of the Treaty such as Article Communities presented oral argument at 106 or Article 67. the sitting on 18 June 1980.

It must first of all be stressed that the The Agent of the Commission rules which are attacked do not in any acknowledged on this occasion that in way prevent the transfer of the amounts Germany, in contrast to what he stated which the plaintiff claims from the in his written observations, recourse to

JUDGMENT OF 29. 10. 1980 — CASE 22/80

normal legal proceedings instead of to The Advocate General delivered his the Mahnverfahren entails additional opinion at the sitting on 17 September costs. 1980.

BOUSSAC v GERSTENMEIER

4 In those circumstances the national court has referred to the Court the question whether that amendment to German procedural law is a measure discriminating against creditors established in other Member States of the Community which is to be regarded as ineffective as far as they are concerned because it infringes Article 7 of the Treaty.

5 Although the Court may not express an opinion in the context of Article 177 of the Treaty on the validity of a national law, it is nevertheless competent, for the purposes of cooperation with the national courts, to extract from the question those aspects of Community law the interpretation of which will enable the national court to resolve the problems with which it is concerned.

established on the territory of a Member State the opportunity to sue for payment of a debt in whatever currency it is expressed by taking ordinary legal proceedings before the courts, provides for a simplified procedure for recovery which is not available to a creditor prosecuting a claim for payment of a debt expressed in a foreign currency against a debtor established on national territory.

9 Article 7 of the Treaty prohibits any discrimination on grounds of nationality within the field of application of the Treaty. That article forbids not only overt discrimination by reason of nationality but also all covert forms of discrimination which, by the application of other criteria of differentiation, lead in fact to the same result.

10 There is no doubt that a national law which subjects access to the courts to conditions relating to the currency in which debts are expressed might in fact place creditors established in the other Member States in a less favourable position than creditors established on national territory and thus constitute a barrier to trade in the common market which would principally affect the nationals of the other Member States.

1 1 The German Government, which has submitted written observations to the Court, has maintained that a law such as the one at issue in this case cannot be discriminatory, since the distinction based on the currency in which the debt is expressed is justified on objective grounds, the electronic processing provided for by the German legislation with a view to simplifying the "Mahnverfahren" being impossible in the case of debts expressed in foreign currency.

Costs

15 The costs incurred by the Government of the Federal Republic of Germany and by 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 national court, the decision as to costs is a matter for that court.

On those grounds,

THE COURT

in answer to the question referred to it by the Amstgericht Berlin-Schöneberg by order of 24 November 1979, hereby rules:

Article 7 of the EEC Treaty does not preclude a national rule of civil procedure which, whilst affording any creditor established in the territory

OPINION OF MR ADVOCATE GENERAL MAYRAS DELIVERED O N 17 SEPTEMBER 1980 1

Mr President, Schöneberg, the court having Members of the Court, jurisdiction, for an order to pay. The court before which those summary proceedings were brought was unable, as In the instant reference for a preliminary the plaintiff wished, to order Mrs Ger- ruling the main action arises out of the stenmeier to pay the outstanding sale by the Boussac Saint-Frères balance, that is, an amount expressed in company, the large French textile manu- foreign currency. In fact Article 688 (1) facturer, of its products to its customer of the Zivilprozessordnung (ZPO — Mrs Gerstenmeier, the owner of a retail Code of Civil Procedure) restricts the clothing business in Germany. Since Mrs admissibility of such proceedings to Gerstenmeier had not paid her bill, payment of a sum expressed in national which was made out in French francs, in currency, at least where the debtor is not full the creditor company commenced established in one of the Contracting summary proceedings [Mahnverfahren] States parties to the Brussels Convention in the Amtsgericht [Local Court] Berlin- of 27 September 1968 other than the I — Translated from the French.