C-149/81

In Case 149/81

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by its Legal Adviser, Anthony McClellan, acting as Agent, assisted by Jacques Delmoly, a member of its Legal Department, with an address for service in Luxembourg at the office of Oreste Montako, a member of its Legal Department, Jean Monnet Building, Kirchberg,

applicant,

v

GRAND DUCHY OF LUXEMBOURG, represented by Eugene Müller, First Counsellor at the Ministry of Justice, acting as Agent, with an address for service in Luxembourg at the Ministry of Justice, 16 Boulevard Royal, defendant,

1 — Language of the Case: French.

JUDGMENT

Facts and Issues

The facts of the case, the course of the devolving upon them regarding the right procedure, the conclusions and the of establishment, in particular by coordi­ submissions and arguments of the parties nating to the necessary extent the safe­ may be summarized as follows: guards which, for the protection of the interests of members and others, are required by Member States of companies I — Summary of the facts or firms within the meaning of the second paragraph of Article 58 (companies or firms constituted under Article 54 (3) (g) of the EEC Treaty civil or commercial law, including provides that the Council and the cooperative societies, and other legal Commission are to carry out the duties persons governed by public or private

COMMISSION v LUXEMBOURG

By a letter of 8 February the Permanent To give effect to those provisions, the Representation of the Grand Duchy of Council, after issuing a first directive, Luxembourg to the Communities Directive 68/151 of 9 March 1968, notified the Commission that a bill for adopted a second directive on 13 the amendment of the Law of 10 December 1976, Directive 77/91, on October 1915 on commercial companies coordination of safeguards which, for to bring it into line with Directive 77/91 the protection of the interests of had been approved by the cabinet on members and others, are required by 1 February 1979 and transmitted on Member States of companies within the 9 February for the opinion of the Conseil meaning of the second paragraph of d'État [State Council]; in July 1979 the Article 58 of the Treaty, in respect of the Commission's Directorate General for formation of public limited liability the Internal Market and Industrial companies and the maintenance and Affairs had delivered its opinion on the alteration of their capital, with a view to bill; the opinion had been transmitted, making such safeguards equivalent together with comments by the (Official Journal 1977, L 26, p. 1). Commission d'Études Législatives [Committee for the Examination of Directive 77/91 was notified to the Legislation], to the Conseil d'État; the Member States on 16 December 1976. In latter had been reminded of the urgency accordance with Article 43 thereof, the of the matter. Member States were required to bring into force the laws, regulations and administrative provisions needed in order The Commission, pursuant to the first to comply with the directive within two paragraph of Article 169 of the EEC years of its notification, that is to say by Treaty, issued a reasoned opinion on 16 December 1978, and forthwith to 29 September 1980, which was notified inform the Commission that they had on 8 October 1980, recording the failure done so. of the Grand Duchy of Luxembourg to fulfil its obligations and inviting it to Since it appeared that the Grand Duchy adopt within a period of two months of Luxembourg had not, within the pre­ from notification of the opinion, the

II — Written procedure IV — Submissions and arguments of the parties during the By application lodged on 12 June 1981, written procedure the Commission, pursuant to the second paragraph of Article 169 of the EEC Treaty, brought before the Court the matter of the alleged failure of the The Commission observes that according Grand Duchy of Luxembourg to fulfil to the third paragraph of Article 189 of one of its obligations by not giving effect the EEC Treaty directives are binding, as to Directive 77/91. to the results to be achieved, upon the Member States to which they are addressed, whilst leaving to the national The written procedure followed the authorities the choice of form and normal course; the Commission waived methods. The mandatory nature of its right to submit a reply. directives imposes upon Member States the obligation to observe the periods On hearing the report of the Judge- which they prescribe for the adoption of Rapporteur and the views of the national implementing provisions. Advocate General, the Court decided to open the oral procedure without any preparatory inquiry. However, it invited Infringement of the Treaty by a Member the Luxembourg Government to state, in State exists no matter which organ of the writing, the exact date on which it had State it is whose act or omission is commenced the legislative procedure responsible for the failure. The Member with a view to implementation of the State in question may not plead directive; that invitation was complied provisions or practices existing in its with within the prescribed period. internal legal system or special circum-

stances at national level in order to equently amended, to bring it into line justify its failure to fulfil an obligation. with Directive 77/91 was approved on 19 December 1980 in an opinion of the Those principles are well established in Conseil d'État, subject to certain the case-law of the Court. amendments suggested in the course of By failing to adopt within the prescribed examination of its provisions; the periods the measures needed for government laid the bill before the implementation of Directive 77/91, the Chamber of Deputies on 21 January Grand Duchy of Luxembourg has 1981; the Commission Juridique [Legal incontestably failed to fulfil one of its Affairs Committee] of the Chamber obligations under the Treaty. appointed its rapporteur on 11 March 1981; on 25 June the Minister for Justice The Government of the Grand Duchy of requested the President of the Chamber Luxembourg states that it does not of Deputies to give priority to a vote on challenge the facts set out by the the bill; on 17 September 1981 the Commission and that it is not in a Commission Juridique of the Chamber of position to put forward valid legal Deputies concluded its inquiry regarding arguments to refute those set out by the the bill and the representative of the Commission: it has in fact not yet been government emphasized on that occasion possible to take the measures for intro­ the need to dispose of the matter without ducing the provisions of Directive 77/91 delay. into national law in the Grand Duchy. The Luxembourg Government is That situation must not, however, be continuing its endeavours so that within interpreted as arising from lack of good a short time the Grand Duchy may fulfil will, or negligence on the part of the its obligations in this matter under the competent Luxembourg authorities. The Treaty. complexity of the subject-matter and the difficulties of harmonizing draft provisions for partial reform with even more extensive amendments to be V — Oral procedure foreseen for the future has appreciably delayed the draftsmen in the per­ At the sitting on 28 April 1982 brief oral formance of their task; the need to take argument was presented by Mr Delmoly the steps prescribed as regards the for the Commission and by Mr Müller legislative procedure constitutes another for the Government of the Grand Duchy factor in the delay. of Luxembourg. The bill amending the Law of 10 August The Advocate General delivered his 1915 on commercial companies, as subs­ opinion at the sitting on 22 June 1982.

4 Those circumstances cannot expunge the failure to fulfil one of its obligations with which the Grand Duchy of Luxembourg is charged. According to well-established case-law of the Court, a Member State may not plead provisions, practices or circumstances existing in its internal legal system in order to justify a failure to comply with obligations and time-limits resulting from Community directives.

5 Attention should also be drawn to the fact that the governments of the Member States participate in the preparatory work for directives and must therefore be in a position to prepare, within the period prescribed, the draft legislative provisions necessary for their implementation. It appears, however, from information produced in the course of the proceedings that no draft law had yet been placed before the Luxembourg legislature within the period prescribed for implementation of the directive.

COMMISSION v LUXEMBOURG

6 It must therefore be declared that by failing to adopt within the prescribed period the provisions needed in order to comply with Council Directive 77/91 of 13 December 1976, the Grand Duchy of Luxembourg has failed to fulfil one of its obligations under the Treaty.

Costs

7 Under Article 69 (2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the defendant has failed in its submissions, it must be ordered to pay the costs.

Chloros Pescatore Mackenzie Stuart Koopmans

Delivered in open court in Luxembourg on 12 October 1982.

P. Heim J. Mertens de Wilmars Registrar President