C-66/81

JUDGMENT OF 29. 4. 1982 — JOINED CASES 66 AND 99/81

provided for are not complied with, refer to the first order, even if they particularly as regards the final were made orally, and that it is intended use. guaranteed that the penalties may also It is sufficient for the requirements of be imposed in the same or subsequent Community law for only the first orders. order to have been made in writing The other conditions of those provided that the other subsequent contracts and their legal effects are contracts of sale may be presumed to governed by national law.

In Joined Cases 66 and 99/81

REFERENCE to the Court under Article 177 of the EEC Treaty by the Vlllth Civil Senate of the Bundesgerichtshof [Federal Court of Justice] for a preliminary ruling in the action pending before that court between

ARNOLD POMMEREHNKE (Case 66/81)

and

THE COURT

composed of: A. Touffait, President of Chamber, Lord Mackenzie Stuart and U. Everling, Judges,

Advocate General: P. VerLoren van Themaat Resistrar: P. Heim

gives the following

POMMEREHNKE v BALM

JUDGMENT

I — Facts and procedure aware of the penalties imposed by the Member State in question for breaches of the aforesaid obli­ The Commission adopted Regulation No gations." 349/73 of 31 January 1973 on the sale at reduced prices of intervention butter for direct consumption as concentrated Pursuant to Regulation No 2561/72 of 6 butter (Official Journal, L 40, p. 1) December 1972 (Official Journal, mainly to dispose of stocks of butter English Special Edition 1965-1972, p. arising as a result of intervention on the 61), replaced by Regulation No 349/73, butter market under Article 6 of Regu­ the Commission, by decision of 22 lation No 804/68 of the Council of 27 December 1972, authorized the Federal June 1968 on the common organization Republic of Germany to sell 6 000 of the market in milk and milk products tonnes of concentrated butter at a (Official Journal, English Special Edition reduced price. By decision of 8 February 1968 (I), p. 176). To that end the 1973 the Commission reduced that Commission provided an opportunity to amount to 4 000 tonnes. sell butter in the form of concentrated butter at a reduced price; this was to be The Einfuhr- und Vorratsstelle für Fette, done "at the request of a Member State which has been succeeded by the which considers itself in a position to respondent to the appeal in the main lead it to a successful conclusion", that is action, the Bundesanstalt für landwirt­ c to say er u ring that the concentrated schaftliche Marktordnung (hereinafter butter was put to its intended use and referred to as "the Bundesanstalt"), did not disturb the market. Article 6 (1) made itself responsible, as intervention and (2) of the regulation is worded as agency, for the sale of the concentrated follows: butter and to that end adopted on 13 February 1973 directives requiring pur­ chasers from it not to sell the "(1) Any person who holds the butter or concentrated butter save on the basis of a the concentrated butter must keep written contract which must contain an records showing for each delivery undertaking in respect of a penalty for the name and address of buyers of non-compliance, to be imposed in turn the butter or the concentrated on subsequent purchasers. butter and the quantities purchased. It was in that context that, as regards (2) Where the butter is resold, the Case 66 / 81 , Mr Pommerehnke, at the obligations concerning processing, time proprietor of the undertaking putting up and the final intended Albrecht, Schütze & Co., acquired use of the butter shall be mentioned 71 740 kg of concentrated butter from in the contract of sale. several companies. In 12 out of 17 cases the representatives of the company had Such contract must be made in signed documents headed "Contract of writing and specif)· that the buyer is sale and undertaking", each of which

stated the quantity purchased but not the interpretation of Article 6 (2) of Regu- sale price; in two other cases the lation No 349/79 is necessary. document did not state the quantity purchased; finally in the remaining three cases there was no written undertaking. In its view that provision also applies to In the written undertakings the company cencentrated butter and "as sales of undertook to observe the provisions in butter at a reduced price take place on the directives of the Einfuhr- und each occasion within the territory of a Vorratsstelle and to pay it, in the event single Member State" it considers that of infringement, the difference between the requirement of writing merely states the intervention price and the sale price the principle, but that on the other hand fixed by the Commission. The butter so the detailed arrangements and the acquired was sold to third parties, consequences bound up with that without the transaction's being recorded obligation are a matter for the law of the in writing, and used in their businesses. Member States. Only after stating its point of view does it conclude that since the third paragraph of Article 177 In Case 99/81 the undertaking Franzen, prevents it from giving its own interpret- of which Mr Hans-Harald Witt is the ation, it is right to bring the matter member personally liable, bought from before the Court. Butter- und Eierzentrale Nordmark GmbH 6 560 kg of concentrated butter. Only on the first order did the repres- entative of Franzen sign the document In consequence the national court referred to above: the quantity and the decided to stay the proceedings and by price of the goods were not stated but on two orders dated 11 March and 8 April the other hand it was stated that the 1981 referred the following questions to undertaking would apply to all other the Court: deliveries ordered by telephone. 2 900 kg of the concentrated butter so acquired was sold without a written contract of sale and without a written undertaking "1. Does Article 6 (2) of Regulation from the purchaser being subsequently (EEC) No 349/73 of the sought. After resale by the latter the Commission of 31 January 1973 concentrated butter sold was used (Official Journal, L 40, 13 February contrary to the purpose intended. 1973, p. 1) apply only to the resale of butter in its natural state, or does it also apply to the resale of The two appellants maintained before concentrated butter? the Bundesgerichtshof that they were not liable to the penalties demanded because they had not signed a written contract of 2. If that provision covers concentrated sale with their suppliers, and the court butter: therefore considers that a decision in the two actions depends on "whether the promise to pay a penalty for non- compliance was made in the requisite (a) what are the conditions to be written form". imposed as to the observance of the requirement of writing under Community law? In particular, if In order to resolve that question the only the buyer's declaration, Bundesgerichtshof considers that an containing no details as to price or

Pursuant to Article 20 of the Protocol on It appears from the three sets of obser­ the Statute of the Court of Justice of the vations that such interpretation follows EEC written observations were lodged both from the wording and the purpose by Mr Pommerehnke, the appellant in of the regulation. the main action in Case 66 / 81 , represented by Mr Dotzauer, Rechts­ anwalt, Hamburg, Firma Franzen and It is true that whilst Article 6 (1) Mr Witt, appellants in the main action in mentions expressly both butter and Case 99 / 81 , represented by Mr Festge, concentrated butter Article 6 (2) Rechtsanwalt, Hamburg, the Bundes­ mentions only butter, but to conclude anstalt, the respondent to the appeal on a that the provisions of paragraph 2 cover

JUDGMENT OF 29. 4. 1982 — JOINED CASES 66 AND 99/81

The Bundesanstalt adds moreover that pursuant to Article 12 of the regulation the Federal Republic of Germany has Finally according to Regulation No made the necessary provisions to ensure 349/73 concentrated butter is a specific the proper use of the concentrated butter form of butter whereas the term "butter" and assuming that a contract of purchase is a generic concept as appears not only is really necessary such a contract was in from the title of the regulation but also fact made between the Bundesanstalt and from the sixth recital in the preamble the buyers from it.

POMMEREHNKE v BALM

B — Second question respondent's predecessor did not observe the rules of national law is irrelevant.

are the actual conditions for a contract empowered to give a precise definition of in writing or the legal consequences of the formal requirements and to prescribe their breach. the legal effects in the event of infringement of the provisions. Thus according to Pommerehnke recourse to the general principles of the The Commission therefore proposes that law of the Member States of the the second question of the Bund Community does not come into question esgerichtshof should be answered as especially as such principles would be follows: difficult to establish. " To satisfy the requirement in the second subparagraph of Article 6 (2) of On the other hand Pommerehnke Regulation (EEC) No 349/73 that the considers that the argument of the Bund contract of sale must be in writing it esgerichtshof to the effect that "sales of suffices to set out in writing in the butter at a reduced price take place on contract of sale the obligations which a each occasion within the territory of buyer of butter or concentrated butter a single Member State" is not has undertaken and for him to sign in "convincing". He states in that respect confirmation of his awareness of those that he has knowledge of "cases in which obligations.

storage". As a result parties to the sale The appellant in the main action, Franzen, ought to assume that the formalities proposes that the second question put regarding writing are governed by by the Bundesgerichtshof should be national law. The fact that the answered point for point.

Franzen then gives a summary of the laws of the Member States on the In Franzen's view "it is logical to requirement of writing; it infers first consider a contract not made in the "that a number of Member States written form prescribed by law to be provide that in the event of writing void" which is the position under required by law or agreement the two German and Greek law. parties should sign a document containing the contract or two identical documents" and secondly that Further, in the present case writing was "according to the law of all the Member prescribed not solely in the interests of States even where a written contract of the parties to the contract but also in the sale is necessary and a written offer interests of the public, for writing was tacitly accepted by delivery is sufficient, intended to ensure also "that the sale of a contract of sale must cover at least the butter at reduced prices took place quantity and price, if not the other properly". As there was no provision in conditions of delivery as well". Regulation No 349/73 that the obligations which the buyer was intended to assume "could be imposed on him As to the question put by the Bund­ even in the absence of writing" and as esgerichtshof at (b) Franzen considers EEC law is characterized by strict rules that it calls for answer only if the Court of evidence — in which respect Franzen decides to answer the question at (a) to refers to the consequences for the holder

POMMEREHNKE v BALM

of the loss of marketing certificates in in the second subparagraph of relation to goods — disregard of the Article 6 (2) of Regulation No requirement of writing for a contract for 349/73 which applies also to the sale of concentrated butter "has contracts for the sale of made it impossible to impose on the concentrated butter, the contract of buyer a valid obligation relating to the sale including the promise therein use of the goods bought or a penalty for by the buyer to pay a penalty for disregard of those obligations". non-compliance is null and void according to Community law."

JUDGMENT OF 29. 4. 1982 — JOINED CASES 66 AND 99/81

Finally the Bundesanstalt considers that Rechtsanwalt, Hamburg, for Mr the problem of the consequences of any Pommerehnke, likewise an appellant in disregard of the requisite formalities of proceedings before the Bundesgerichts­ writing does not arise because the hof; Professor Nirk, Rechtsanwalt at the formalities of writing imposed by Bundesgerichtshof, Karlsruhe, for the Community law were observed. In the Bundesanstalt and by Mr Stockburger, present case since it is a question "of Rechtsanwalt, Frankfurt am Main, policy measures taken by the State in assisted by Mr Hilf, a member of the respect of which only the undertaking by Commission's Legal Department, for the the buyer who makes himself liable must Commission of the European be in writing, the strict requirements Communities. imposed by private law must not be applied". The appellant, Arnold Pommerehnke, stated that as regards the last question put by the Bundesgerichtshof he could III — Oral procedure allow his written observations to stand only by way of an alternative argument At the sitting on 4 February 1982 oral and that on this point he espoused the argument was presented by the follow­ conclusions of the other appellant, ing: Mr Festge, Rechtsanwalt, Hamburg, Wilhelm Franzen. for Wilhelm Franzen and Hans-Harald Witt, appellants in proceedings before The Advocate General delivered his the Bundesgerichtshof; Mr Dotzauer, opinion at the sitting on 18 March 1982.

Decision

1 By orders of 11 March and 8 April 1981 which were received at the Court on 31 March and 24 April 1981 respectively the Bundesgerichtshof [Federal Court of Justice] referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Article 6 of Regulation No 349/73 of the Commission of 31 January 1973 and on the sale at reduced prices of intervention butter for direct consumption as concentrated butter (Official Journal, L 40, p. 1).

(2) Where the butter is resold, the obligations concerning processing, putting up and the final intended use of the butter shall be mentioned in the contract of sale.

Such contract must be mentioned in writing and specify that the buyer is aware of the penalties imposed by the Member State in question for breaches of the aforesaid obligations."

5 By decision of 8 February 1973 the Commission authorized the Federal Republic of Germany to sell 4 000 tonnes of concentrated butter at a reduced price. The Einfuhr- und Vorratsstelle für Fette, which has been succeeded by the Bundesanstalt, made itself responsible for the sale of the concentrated butter as intervention agency and to that end adopted on 13 February 1973 directives requiring buyers not to sell the concentrated butter save on the basis of a written contract of sale which had to contain an undertaking in respect of a penalty for non-compliance, to be imposed in turn on subsequent buyers.

JUDGMENT OF 29. 4. 1982 — JOINED CASES 66 AND 99/81

6 It was in that context that the appellants in the main proceedings acquired a certain quantity of concentrated butter from various companies. Some of those purchases were made without the documents headed "Contract of sale and undertaking" being signed and the supplier's written declaration of sale was missing in every case. Some of those documents stated the quantity purchased but not the price whilst others stated neither, but each written undertaking contained a clause by which the buyer undertook to observe the provisions contained in the directives of the Einfuhr- und Vorratsstelle and to pay it, and afterwards the Bundesanstalt, in the event of infringement the difference between the intervention price and the sale price fixing by the Commission.

POMMEREHNKE v BALM

(b) If Community law regards an order which is signed only by the buyer as sufficient to meet the requirement of writing, is it adequate for only the first order to be set out in writing whilst subsequent contracts of sale are made orally by reference to the first order?

(c) If the requirement of writing has not been met under Community law, is the contract of sale, including the buyer's undertaking therein to pay a penalty for non-compliance, void under Community law or are the legal consequences left to be determined according to the laws of the Member States?"

The Bundesgerichtshof has submitted the same questions in Case 99/81 except that in Question 2 (a) it describes the buyer's declaration as "containing no details as to price and quantity".

The first question

10 According to the Bundesgerichtshof Article 6 (2) of Regulation No 349/73 also applies to concentrated butter because the aim of the regulation must be to prevent unequal treatment as regards the sale of butter and concentrated butter and that the term "butter" must be considered to be a general term covering its state both before and after processing.

The second question

16 It should be pointed out in the first place that the third recital in the preamble to the regulation in question states that provision should be made for "this measure to be taken at the request of a Member State which considers itself in a position to lead it to a successful conclusion" and that Article 12 of the regulation provides that:

"The Member States shall adopt all necessary provisions for the amount of the price reduction or the amount of aid to be reflected at the retail stage . . .".

17 However, the Commission made a point of imposing on each of the Member States concerned by that operation the obligation, quite separate from the measures which those States might consider it necessary to adopt, to require a contract of sale to be made in writing and to state that the buyer is aware of the penalties fixed by the Member State in question for which he is liable should he fail to observe the restrictions laid down with regard in particular to the final intended use of the butter.

18 The Bundesgerichtshof considers that since sales of butter at a reduced price always take place on the territory of a single Member State the provision concerning the written form must be considered as embodying rules of

POMMEREHNKE v BALM

23 In regard to Regulation No 349/73 it is therefore sufficient for the purpose of satisfying the necessity for a written contract for the buyer to have undertaken in writing to comply with the obligations laid down by the national directives and for that written document to mention the penalties for which the buyer is liable for breach of those obligations.

JUDGMENT OF 29. 4. 1982 — JOINED CASES 66 AND 99/81

24 Consequently, if a first order leads to a written contract signed by the buyer and containing the particulars described above, even though later orders are made orally, all the orders satisfy the requirement as to writing laid down in Article 6 (2) if the penalties applicable may also be imposed if the obligations provided for are not complied with in the case of the subsequent orders.

25 Consequently, it is sufficient for the buyer unilaterally to undertake in writing to comply with the obligations as to the final intended use imposed by the Community rules in question.

26 The answer to the second question should therefore be as follows:

(a) In order to satisfy the requirement as to writing laid down in Article 6 (2) of Regulation No 349/73 only the buyer's undertaking must be made in writing — even if it contains no details as to price or quantity — provided that the written undertaking mentions the penalties for which the buyer is liable if the obligations provided for are not complied with, particularly as regards the final intended use;

THE COURT (Third Chamber)

in answer to the questions submitted to it by the Bundesgerichtshof by orders dated 11 March and 8 April 1982 hereby rules:

1. Article 6 (2) of Regulation No 349/73 of the Commission of 31 January 1973 on the sale at reduced prices of intervention butter for direct consumption as concentrated butter (Official Journal, L 40, p. 1) also applies to the resale of concentrated butter.

2. (a) In order to satisfy the requirement as to writing laid down in Article 6 (2) of Regulation No 349/73 only the buyer's under­ taking must be made in writing — even if it contains no details as to price or quantity — provided that the written undertaking mentions the penalties for which the buyer is liable if the obligations provided for are not complied with, particularly as regards the final intended use;

(b) It is sufficient for the requirements of Community law for only the first order to have been made in writing provided that the other subsequent contracts of sale may be presumed to refer to the first order, even if they were made orally, and, that it is guaranteed that the penalties may also be imposed in the same or subsequent orders;

(c) The other conditions of those contracts and their legal effects are governed by national law.