C-338/89

OPINION OF MR MISCHO —CASE C-338/89

O P I N I O N O F MR ADVOCATE GENERAL M I S C H O delivered on 22 January 1991 *

Mr President, of the facts of the main proceedings and of Members of the Court, the written observations submitted to the Court, which I shall set out only in so far as is necessary for my reasoning.

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ORGANISATIONEN DANSKE SLAGTERIER

and unforeseeable and of which the conse- 7. There can be no doubt that a strike quences could not have been avoided taking place in undertakings other than the undertaking pleading force majeure may be despite the exercise of all due care'. considered to be a circumstance beyond the control of that undertaking. Indeed, it may be argued that any non-performance by the other party to a contract which is not due to 5. It should be noted at the outset that that the conduct of the holder of an export definition, by not confining the concept of licence constitutes a circumstance beyond torce majeure to that of absolute impossi- the latter's control. That is what follows, in bility and by taking into account the any event, from the judgment in Theo- conduct of the economic operators dorakis, paragraph 8, as confirmed in concerned, implies, in the very words of the paragraph 34 of the judgment of 10 July Court, 1990 in Case C-334/87 Greece v Commission [1990] ECR 1-2849.

*a sufficient flexibility regarding not only the nature of the occurrence relied upon but 8. It therefore remains to be determined also the care which the exporter should whether non-performance by the other have exercised in order to meet it and the party to a contract constitutes an abnormal extent of the sacrifices which he should have and unforeseeable circumstance, the conse- accepted to that end' (see the judgment of quences of which could not have been 17 December 1970 in Case 11/70 Interna- avoided despite the exercise of all due care. tionale Handelsgesellschaft[1970] ECR 1125, If one were to confine oneself to the words cited by the O D S 2 ) . of the same paragraphs of the same judgments, it might appear that that question should receive a negative reply. The Court, in fact, ruled that

other party to the contract. In the Theo- circumstances to be regarded as being cases dorakis case, the Community operator could of force majeure (see point (f)). not carry out the exportation and had to cancel the sales contract because the other party to the contract, a Polish undertaking, did not take delivery of the goods which it 13. Just like Commission Regulation had purchased. In Case C-334/87 the No 102/64/EEC of 28 July 1964 bearing exportation did not take place within the the same title (Journal Officiel L 126, prescribed period because the Community p. 2125), that regulation foreshadowed, for operator, following a 'breach of contract' by the agricultural products in question, the the Sudanese Government, had not obtained regulations laying down common detailed the opening of a commercial credit. rules for the application of the system of import and export licences and advance- fixing certificates for agricultural products as a whole, such as Regulation 10. In the instant case, however, the issue is No 3183/80, applicable in the case in point, not whether non-performance by the other as well as the earlier regulations (EEC) party to the contract constitutes in itself a No 1373/70 of 10 July 1970 (Journal 'an ordinary commercial risk': if there must Officiel L 158, p. 1) and (EEC) have been force majeure, it will be found at No 193/75 of 17 January 1975 (Journal the stage of the circumstances which gave Officiel L 25, p. 10). The last two, rise to that non-performance. The question however, did not contain a detailed list of is therefore whether those circumstances are cases of force majeure. In an annex to its such 'an ordinary commercial risk' or written observations, however, the applicant whether, on the contrary, they were so in the main proceedings has produced a abnormal and unforeseeable that their working document of the Commission consequences could not be avoided despite drawn up pursuant to Article 20(3) of Regu- the exercise of all due care,' not by the party lation No 193/75, which has its corollary in who failed to perform his contractual obli- Article 37(5) of Regulation No 3183/80, gations, but by the one relying on those from which it follows that the competent circumstances. authorities of almost all the Member States have already accepted that strikes, whether by dockers, the postal services, railways, or even the exporter's own employees, 11. In that respect, it cannot be ruled out a constitute a case of force majeure justifying priori that a strike may constitute an either the cancellation of the certificate in abnormal and unforeseeable circumstance. question or the extension of its period of validity.

were not entered until 3 June instead of advance-fixing certificate in question, two 1 June), the Greek Government pleaded a strike notices had already been issued, on 13 general strike of bank employees which and 21 February respectively. It is also took place on 1 and 2 June. The Court apparent that the strikes thus announced for considered, in paragraph 9 of its judgment, 4 March 1985 were nationwide and that that the conditions of a case of force majeure they affected specifically named sectors were not satisfied in the case in point, given which were the subject of collective that the strike in question was foreseeable agreements to which the great majority of and that the delay in entering the financial the occupational federations belonging to contributions in question could therefore the principal Danish union organization have been avoided. The Court had which had issued the notices were party. I previously stated that, consider that, in such circumstances, the fact that the strike would finally break out and affect sectors, such as transport, which were capable of affecting Jaka's activities was not unforeseeable. Even if the O D S was 'at least since 25 May the press had warned right in contending that, because of the of strikes affecting several occupations, Danish system of collective agreements and including bank employees, for 26 and the way it operates in practice, a strike is 27 M a / neither certain nor even distinctly probable at the time the notices are issued, and that it is impossible to foresee which undertakings will be affected, or even the date of commencement and the duration of the and that strike (see the end of the first paragraph of page 14 of the roneotyped version of the Report for the Hearing), that is not sufficient to make the strike an unfore- seeable event. When it is a question of 'on 29 May, the press warned of further determining the existence of a case of force industrial action and stated that the unions majeure, it is not sufficient for the person had called a strike for 1 and 2 June'. relying on it to show that it was not certain that the event which finally came about was going to take place, on the contrary, it is necessary for him to prove that, while it was not certain, it was at least distinctly 15. It follows from the foregoing that the probable that the event was not going to question whether a strike which has taken occur (or that for it to occur was abnormal). place in an undertaking other that the one pleading it constitutes a case of force majeure requires an assessment of its degree of fore- seeability and of the possibilities which the party pleading it had of avoiding the conse- quences arising from it. 17. Similarly, the mere fact that, despite the issuing of a strike notice indicating that the strike was going to commence during the period of validity of the advance-fixing 16. In the instant case, it is apparent from certificate, 'it was possible that the strike the order making the reference (as well as would not affect the undertaking [in from the observations submitted) that when question]' (see the wording of the first on 25 February 1985 Jaka applied for the question) does not allow the conclusion to

21. On 21 February 1985 the union organ- 18. The ODS objects that mere awareness ization had already issued the second and of the possibility that a strike may break out final notice of a strike. Moreover, it is is not sufficient to rule out the application common ground that during previous years of the provisions concerning force majeure. the issuing of a second notice had been If that were so, Danish exporters of agri- followed by a strike in three cases out of cultural products would find it impossible to thirteen. In those conditions, the risk that a benefit from advance fixing during a period strike would occur could not be considered which could last from the month of as negligible; it was no longer unfore- December of the year preceding the expiry seeable. of the collective agreements until 1 March or, depending upon the circumstances, until June of the following year. 22. It was for Jaka, therefore, to take all the steps capable of protecting it against the consequences of the strike. 19. In my opinion, however, the circum- stances of the instant case show that the advance fixing mechanism is not rendered inapplicable for such a long period. 23. If it was not possible for Jaka to include appropriate clauses in the contracts concluded by it with its suppliers or with its customers, nor to take out insurance against 20. In fact, the applicant in the main the possible loss of the security lodged or proceedings has itself pointed out that Jaka against the loss of benefits arising from the was in the habit of applying for a certificate advance fixing, it should have withdrawn its at the beginning of each month and that on application for advance fixing of the refunds 5 February 1985 it had received a certificate regarding the additional quantity of 700 000 referring to 1 400 000 kg of preserved meat. kg and possibly also regarding the quantity It has not claimed that Jaka found it in respect of which it had applied for impossible to export that large quantity of advance fixing at the beginning of March. meat during the period of validity of that

'Are there, in respect of Articles 36 and 37, limits in time as to how long a strike that has been discontinued can be regarded as 25. In the light of the foregoing, I consider having the effect of force majeure, where an that it is necessary to reply to the first undertaking's capacity at the time when the question in the way suggested by the Danish strike began and subsequently thereafter is Government and the Commission: fully utilized, when it is not possible to make either covering purchases for the needs of the undertaking's production during the strike period or covering purchases in the form of finished goods 'Articles 36 and 37 of Regulation during the strike period and in the period N o 3183/80 must be interpreted as thereafter?' meaning that there is no force majeure when supplies of raw materials to an undertaking which has obtained an advance-fixing certificate are halted owing to a lawful 28. In order fully to understand that strike in other undertakings, if, in circum- question, it seems to me that it is necessary stances such as those of the main to recall to mind certain facts of the main proceedings, a strike notice already issued at action as they appear from the order the time of the submission of the application making the reference. for the certificate indicated that it would commence during the period of validity of the certificate, even if there were possi- bilities that in this case the strike would not 29. First, it is not disputed that the take place or that it would not affect the competent Danish authorities had agreed to undertaking in question.' extend the period of validity of most of the advance-fixing certificates due to expire at the end of March 1985, as well as of certain certificates due to expire at the end of April, but refused Jaka's application for 26. In view of that answer, the three an extension of the certificate in question subsequent questions become, in my until 12 July 1985 on the ground that opinion, devoid of purpose. Accordingly, I shall examine them only as a subsidiary issue.

and that, 'that would have meant by and large a completely normal utilization of Jaka's production capacity". 'in any event, a strike of such short duration cannot be regarded as amounting to a case of force majeure for a period of almost four months, from 1 April until 26 July 1985' The expert's report indicates, moreover, that (see pages 5 and 7 of the order making the after the strike, and taking into account reference). Jaka's entire sales commitments as well as the fact that it was impossible for Jaka to obtain raw materials or finished products from third parties, 30. Secondly, the national court expressly states, in the order making the reference (page 4), that, following the strike which was lawfully terminated on 1 April 1985, 'The full utilization of its production Jaka, which had had to suspend production capacity would have allowed Jaka to as from the same date, was able to resume complete the production of the quantity of production only gradually from 15 April preserved meat to which the advance-fixing 1985, as and when work was resumed in the certificate (in question) related by 5 July abattoirs. Jaka, which had operated at full 1985' (see pages 4 and 5 of the order capacity until raw materials ceased to be making the reference). available, could not make up for that delay and produce the quantities necessary to fulfil its export obligations in respect of the certificate in question within the time 32. In view of that factual background and available, namely by 31 May, and so also the observations made in the context of applied for its period of validity to be the examination of the first question, I extended, in the first place until 12 July, believe that the reply to the second and subsequently until 26 July. preliminary question can be relatively brief.

of validity of the certificate or its cancel- strike, or to buy finished goods from third lation. The criteria to be observed when parties during the period of the strike and choosing between those two solutions are up to the expiry of the certificate, it relates, the subject of the third and fourth in reality, to the very existence of a case of questions. However, once the competent force majeure. In fact, even supposing the body of the Member State issuing the strike to have been unforeseeable, the certificate has decided to extend the period existence of a case of force majeure could of validity of the certificate, it does so, in only be recognized if the economic operator accordance with what is laid down in did not find it possible to avoid the conse- Article 37(1), for 'such period as may be quences of the strike by making such considered necessary in view of the circum- purchases. stances invoked'. It follows, as the Commission has rightly noted, that 36. That is why I shall not deal with that aspect of the question in the reply 'decisions to extend the validity of an suggested, which is the following: advance-fixing certificate taken by the national authorities must have the effect of putting the operator in a situation comparable with that which would have 'Articles 36 and 37 of Regulation existed if the case of force majeure had not No 3183/80 must be interpreted as arisen', meaning that the effects of a strike which may be regarded as having the effect of force majeure may be taken into consideration only for a period corre- which, in the event of a strike, means that sponding to that of the strike, increased where necessary to take account of the delays in resuming production which the strike may have caused, provided that the 'the extension could have a duration corre- undertaking's capacity was fully utilized sponding to that of the strike, increased both at the time the strike began and where necessary to take account of the afterwards.' delays in resuming production to which the strike has led' (see paragraph 7 of the Commission's written observations as well as page 26 of the roneotyped version of the 37. By its third and fourth preliminary Report for the Hearing). questions, the national court essentially seeks to ascertain the criteria which must guide the competent authority of the Member 34. It is in that sense that I propose that the State in which the certificate was issued Court should reply to the second question when it has to choose, in application of should it not consider that that question has Article 37 of Regulation N o 3183/80, become devoid of purpose. between cancelling an advance-fixing certificate and extending its period of validity.

""Where the circumstances relied upon account and if the decision requested by constitute force majeure, the competent him did not have to form one of the authority of the Member State in which the principal factors to be taken into licence or certificate was issued shall decide consideration, that statement would have either that the obligation to import or been superfluous. export be cancelled, the security being released, or that the period of validity of the licence or certificate be extended for such period as may be considered necessary in 40. In the second place, it is necessary to view of the circumstances invoked . . . ', take account of the fact that, if the option of extension is chosen, the purpose of this is, as the Court ruled in its judgment of 16 December 1982 in Case 71/82 (Bruggen without, however, defining the criteria [1982] ECR 4647, at paragraph 14), to which must govern the choice of the enable the titular holder competent authority. The necessity for a uniform application by the competent auth- orities of the various Member States, however, precludes the discretion which 'to effect the export transaction at the rate they undoubtedly have in this area from of refund fixed in advance in that licence in being entirely free. In the absence of express spite of the obstacles arising out of the factors of assessment, any possible events which have constituted force majeure', restrictions can only arise, in my view, from the regulatory context in which the national authorities are called upon to act and in which their discretion must be exercised. or, as the Commission acknowledged in its examination of the second preliminary question, that 39. On that point, it must first of all be stated that they must rule on an express application by the interested party, who must not only rely on and prove force 'decisions to extend the validity of an majeure but, according to Article 36(1) of advance-fixing certificate taken by the Regulation N o 3183/80, must also request national authorities must have the effect of either cancellation or extension: the putting the operator in a situation interested party must thus express his pref- comparable with that which would have erence and the competent authority must existed if the case of force majeure had not make its decision with reference to that arisen'. preference. I infer from this that the competent authority must ensure that the interests of the operator concerned are included among the factors taken into Because of this particular legal context, I consideration. I consider that the third consider that the competent authority called sentence of Article 37(1), according to upon to determine the fate of an advance- which 'the decision of the competent fixing certificate, must, when the titular authority can be other than that requested holder so requests, take, in so far as by the titular holder', tends to confirm the possible, a decision which will ensure that foregoing: if the interests of the titular the operation to which it relates is carried holder did not have to be taken into out at the rate fixed in advance.

42. I consider that it is essentially to enable the competent authority to proceed as I bave just described that Article 37(1) 'A request to extend the period of validity provides that it need not necessarily adopt of a licence or certificate must be received the decision requested by the titular holder. not more than 30 days after the expiry of The Commission, the author of Regulation such period of validity · N o 3183/80, seems to share that view when it states that

'are intended only to resolve difficulties which importers or exporters experience in meeting their obligation to import or to export within a fixed period, it would be contrary to this objective to allow the person concerned to benefit on the pretext of these difficulties by putting him in a 47. Finally, the competent authority may position more favourable than that of his also be led to refuse extension of the competitors who have not experienced certificate if, in order to allow the comparable difficulties'. exportation, the extension had to cover a relatively long period. Such may be the case when the circumstances constituting a case of force majeure or their effects are likely to persist and to prevent the exportation within a reasonable period. In Regulations Nos It is a matter, therefore, of comparing the 473/67 and 102/64 the distinction made situation of the interested party with that of between the cases in which either cancel­ his competitors who have not experienced lation or extension was the rule was based the same difficulties as he has, that is to say on such a criterion combined with the those who had obtained an advance-fixing nature of the circumstances invoked: thus, certificate upon the same conditions as that cancellation was, in principle, envisaged himself, but who, unlike him, have for cases of war or civil disturbance, succeeded in importing or exporting within government bans on exports or imports, the prescribed periods. It follows from this restrictions on navigation by acts of sover­ that, if the rate of refund has fallen since eignty, and shipwreck, while extension had the time of advance-fixing but has not fallen to apply in cases of damage to ship or further after the expiry of the initial period cargo, strikes, hold-up of navigation in of validity of the certificate of the person periods of icing-up or low water, and claiming force majeure, extension could be mechanical breakdown. Furthermore, granted, since it would allow him to benefit Article 37(1) of Regulation (EEC) only from the normal advantages inherent in No 3719/88 (Official Journal L 331, p. 1), the advance-fixing certificate which he had which has superseded Regulation obtained. Conversely, extension would put No 3183/80, at issue here, expressly him in a position more favourable than that provides that the extension of the period of of his competitors if the refunds were to fall validity of the licence or certificate cannot or continue to fall after that date, but before be for more than six months, that being 'in the date of actual exportation. That was not order to prevent possible disruption of the so, however, in the case in point: the rate of market' (see the first recital of the preamble refund, fixed at DKR 0.50 per kilogram of on page 3 of Official Journal L 331 of ham with žeffect from 14 May 1985, and 2 December 1988).

50. In the event that the Court should consider that that reply does not render the other questions submitted by the Østre Landsret nugatory, I propose that the Court should reply to them as follows:

'(2) Articles 36 and 37 of Regulation N o 3183/80 must be interpreted as meaning that the effects of a strike which can be regarded as having the effect of force

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majeure may be taken into consideration only for a period corresponding to that of the strike, increased where necessary to take account of the delays in resuming production to which the strike may have lead, provided that the undertaking's capacity was fully utilized both at the time when the strike began and afterwards.'

'(3) Articles 36 and 37 of Regulation No 3183/80 must be interpreted as meaning that, when considering the application by the titular holder of an export licence which includes advance fixing of the refunds, or of an advance fixing certificate, for either cancellation of the licence or certificate or extension of its period of validity, the competent authority which has issued the licence or certificate must endeavour to ensure, as far as possible, that the exportation can take place at the rate of refund initially fixed in advance, unless this is precluded by the necessity to avoid distortions of competition, or unless the opposite decision appears more appropriate in view of the need for predictable management of the market.'