C-364/92

2. Referring to the Report for the Hearing for a fuller account of the relevant provisions Among the tasks at present performed by and the facts of the case, I shall here confine Eurocontrol to be especially borne in mind myself to the aspects most directly relevant are the establishment and collection of to our purposes. charges levied on the users of air navigation services, in accordance with the Multilateral Agreement relating to the Collection of Eurocontrol, which was assigned in particu­ Route Charges, on behalf of the contracting lar the task of attending to the common parties and the non-member States parties to organization of air navigation services within that Agreement (Article 2(1 )(l) of the Con­ the air space of the contracting parties, 1 has vention). The Member States of Eurocontrol, actually performed that task only with and also Austria and Spain, are parties to the respect to the Benelux countries and North­ Multilateral Agreement, which was signed in ern Germany. The other Member States, Brussels on the same date as the Protocol unwilling to give up the exercise of such and which came into force on 1 January authority, have continued to control their 1986.

* Original language: Italian. The purpose of that Agreement was pre­ 1 — The original Contracting States were Belgium, Germany, France, Luxembourg, the Netherlands and Great Britain. At cisely to create a common system for estab­ present Eurocontrol has 14 members: of the countries of the Community only Denmark, Spam and Italy do not belong lishing and collecting route charges for to the organization. flights within the air space of the Member

States (Article 1(2)). The formula currently That argument, rejected by the courts at first used to calculate those charges, established and second instance, moved the Cour de by the Permanent Commission of Cassation to stay the proceedings and to Eurocontrol (Article 3), is equal to the prod­ refer to this Court a question concerning the uct of a rate per unit, set yearly by each interpretation of Articles 86 and 90 of the Member State for the use of its own air EEC Treaty. space, for the number of service units corre­ sponding to the part of the flight within the air space of the State concerned and is set by means of an algebraic formula taking account of the distance covered and the weight of the aircraft. To the charges thus calculated is 4. As a preliminary point, and on the basis then added an administrative rate, that is for of the opinion of Professor Seidl- a sum equivalent to the costs incurred in Hohenveldern, an international lawyer, levying the charges. Eurocontrol raises the objection that the Court lacks jurisdiction. It points out that it is an international organization subject to a legal order which is different from that of the European Community; relations between the Finally, it must be borne in mind that two organizations are therefore governed by Eurocontrol settles for each flight the international law. amount of route charges payable for jour­ neys made and levies the total amount as a single charge (Articles 7 and 8), which, after deduction of the administrative rate, is then paid in its entirety to the States in question (Article 20). To enforce the collection of its Eurocontrol relies, therefore, on the general debts, Eurocontrol may avail itself of the principle 'par in parem non habet imperium' legal remedies available to each Contracting (equals have no authority over one another), State. as applying to international organizations as well as to States, and it claims that any dis­ putes arising between two international organizations should consequently be 3. This dispute arises from the refusal of the resolved, in accordance with general interna­ air navigation company SAT Fluggesellschaft tional law, by recourse to arbitration. mbH (hereinafter referred to as 'SAT') to pay Eurocontrol the route charges for flights made between September 1981 and Decem­ ber 1985.

it falls to the Court to establish whether its 6. Eurocontrol claims moreover that, since it operations are incompatible with the relevant operates within the ambit of a legal order system. different from that created by the EEC Treaty, it cannot in any case be subject to Community rules on competition. In that way the question of the organization's immunity is raised anew, from a different angle. For its part, the Commission main­ 5. The first argument is not relevant. The tains — also in the light of the Court's deci­ non-contentious nature of the Court's juris­ sions — that, if Eurocontrol is to be diction in proceedings for a preliminary rul­ regarded as an undertaking by virtue of its ing must be borne in mind. A reference made operations, there is no reason why Article under Article 177 opens a parenthesis in the 85 et seq. of the Treaty should not apply to it main proceedings, giving rise to a procedure merely because it is an international organi­ 'from one court to another', as was correctly zation. pointed out by the Commission at the hear­ ing, a procedure that affects the situation before the Court of the parties to the main proceedings. Whilst the parties are heard in the written and oral stages in order to ensure that the rights of the defence are fully pro­ tected, they may not take any initiative or challenge the question that the national court has considered it necessary to put before the 2 Court.

I-47

OPINION OF MR TESAURO — CASE C-364/92

because they are carried on by a public has the character of an international organi­ entity was therefore disregarded in the case zation is not sufficient to prevent it from fall­ in point. ing within the scope of the rules on compe­ tition. To say that is not to ignore different views as to the scope, as well as the basis, of the immunity from jurisdiction of interna­ The judgment in question on the other hand tional organizations, 5but to point out the represents the culmination of a line of deci­ inadequacy of the proposition that ascribes sions which is distinguished by the fact that absolute immunity to such organizations — it does not attribute importance to legal form even wider than the immunity of States, now in determining whether Articles 85 to 90 of generally confined to the typical features of the Treaty apply to a public entity. Equally State power, with the exception of so-called significant in that regard is the judgment in acts jure gestionis 6— taking account, more­ 4 Commission v Italy, in which the Court over, of the need not to deprive individuals was called on to rule on the concept of an of the protection afforded to subjective undertaking within the meaning of Commis­ rights that might be impaired by the activi­ sion Directive 80/723 of 25 June 1980 on the ties of international organizations, also in transparency of financial relations between view of the growing number of organiza­ Member States and their public undertak­ tions carrying on economic activities. 7

fore, it seems to me that the fact that a body 7 — Amongst those who have expressed such misgivings, see Lalive, 'L'immunité de juridiction des États et des Organisa­ tions internationales', in R.C.A.D.I., 1953, III, p. 14 et seq., especially p. 301; and Professor Seidl-Hohcnveldern, 'L'Immunité de juridiction et d'exécution des États et des Organisations internationales', in I.H.E.I. Droit 4 — Case 118/85 Commission v Italy [1987] ECR 2599, especially International-I, Paris 1979/80, p . 109 et seq., particularly p. at paragraphs 6-10. 166.

I-48

SAT FLUGGESELLSCHAFT V EUROCONTROL

8. Eurocontrol claims further that the ques­ Finally, the judgment of the Court is a judi­ tion submitted should in any case be cial act that fits into the framework of the declared inadmissible, as being vitiated by a proceedings pending before the national material error concerning the tasks actually court, which is bound therefore to abide by assigned to the organization by the Conven­ the interpretation of the Court. The judg­ tion currently in force. Moreover — it adds ment is not addressed to Eurocontrol: its — a judgment of the Court could not be possible repercussions on the fulfilment of applied by Eurocontrol, since any amend­ the obligations imposed, under the Conven­ ments to the rules which it might require tion and Multilateral Agreement, on the would have to be adopted unanimously by Member State to which the court making the the States belonging to the organization, and reference belongs, are on a completely differ­ clearly those Contracting States which are ent plane from that under consideration here.

I - 49

OPINION OF MR TESAURO — CASE C-364/92

The pursuit of an activity that involves the exercise of official powers is, on the other hand, incompatible with that classification, with the result that a body acting as a public authority is not subject to the Treaty rules on competition. 8In that connection it must 10. The problem at the heart of this case is be observed that, whilst the Court has pre­ therefore to establish the economic nature of ferred not to define that concept in abstract the activity carried on by Eurocontrol. terms, the judgments that refer to it, 9in the various areas of Community law in which that concept is relevant, follow the path marked out by Advocate General Mayras in 10 his Opinion in the Reyners case, according to whom Official authority is that which arises from the sovereignty and majesty of the State; for him who exercises it, it implies Although the action pending before the Bel­ the power of enjoying the prerogatives out­ gian Cour de Cassation concerns exclusively side the general law, privileges of official Eurocontrol's collection of route charges and power and powers of coercion over citizens'. not the supervision of air navigation to which those charges relate, the general scope of the question asked by the court making 8 — See, for the same interpretation, the judgments in Case the reference also extends to the nature of 118/85 Commission v Italy [1987] ECR 2599, in particular at such supervision; moreover, the salient fea­ ParaGraphs 6 and 7, and Case 30/87 Bodson v Pompes funèbres des régions libérées SA [1988] ECR 2479, in particu­ tures of that activity provide useful informa­ lar at paragraph 18. That principle could, moreover, already have been deduced from the judgment in Case tion for the purpose of defining the nature of 94/74 Industria Gomma Articoli Vari v Ente Nazionale per 12 la Cellulosa e per la Carta [1975] ECR 699, in particular at the collection of charges. paragraph 35. 9 — Sec, for example, on the right of establishment, the judgment in Case 2/74 Reyners v Belgian State [1974] ECR 631; on freedom of movement for workers, the judgments in Case 149/79 Commission v Belgium [1980] ECR 3881; Case 11 — See, in this connection, the judgment in Case WIT) Commission v Belgium [1982] ECR 1845; Case 107/84 Commission v Germany [1985] ECR 2655, espe­ 307/84 Commission v France [1986] ECR 1725; on the sub­ cially at paragraphs 14 and 15. ject of VAT, the judgment in Joined Cases 231/87 and 12 — The activities carried on by Eurocontrol with a view to 129/88 Ufficio distrettuale delle imposte dirette di coordinating the navigation policies of the Member States, Fiorenzuola d'Arda [1989] ECR 3233. the non-economic nature of which is beyond dispute, are 10 — Judgment cited above in the preceding footnote. not relevant here.

11. In a case concerning the interpretation of themselves sufficient to prevent an activity the Convention of 27 September 1968 on from being of an economic nature or subject Jurisdiction and the Enforcement of Judg­ to the rules of competition; if that were the ments in Civil and Commercial Matters, the case, public postal and telecommunications Court effectively ruled out the idea that 'civil services, for instance, would have to be and commercial matters' might include pro­ regarded as not being of an economic nature ceedings between Eurocontrol and an air either. As we know, however, that is not 14 company for the recovery of sums payable so. by the latter as route charges. 13On that occasion, the Court was able to rule on the nature of the activities carried on by Eurocontrol and it considered in particular that: 'Although certain judgments given in actions between a public authority and a per­ son governed by private law may fall within 12. Eurocontrol's control of air navigation the area of application of the Convention, within the limits of the air space of the this is not so where the public authority acts Benelux countries and Northern Germany, in the exercise of its powers. Such is the case 15 under the terms of a specific agreement in a dispute which... concerns the recovery of concluded in accordance with the provisions charges payable by a person governed by of Article 2(2) of the Convention as private law to a national or international amended, does not imply a transfer of pow­ body governed by public law for the use of ers to the international organization by the equipment and services provided by such four signatory States; their intention was to body, in particular where such use is obliga­ entrust purely executive tasks to it. tory and exclusive' and 'in particular where the rate of charges, the methods of calcula­ tion and the procedures for collection are fixed unilaterally in relation to the users [and]... the body in question unilaterally fixed the place of performance of the obliga­ tion at its registered office (...)'. Under the terms of Article 1 of that agree­ ment, the contracting parties are to retain their powers and obligations in the field of aeronautic legislation with regard to the regulation and organization of air space, and in relations with other international organi­ zations and the users of the services pro­ While this judgment provides some impor­ vided. The States concerned therefore deter­ tant criteria for the purposes of my analysis, mine the general scope of the tasks delegated it is not decisive, as the Commission has cor­ by them and continue to supervise the pro­ rectly pointed out. The obligatory and exclu­ cedures for carrying these out. sive use of a body's facilities and services or the unilateral laying down of procedures for collection in relation to users are not of 14 — See the judgments in Case 41/83 Italy v Commission [1985] ECR 873. and 107/84 Commission v Germany [1985] ECR 2655. 15 — The 'Agreement relating to the provision and operation of 13 — Judgment in Case 29/76 LTU v Eurocontrol [1976] ECR air traffic facilities and services by Eurocontrol at the 1541. especially at paragraph 4. Maastricht control centre' of 25 November 1986.

On the other hand, the essential require­ in cases of 'force majeure', and the possibil­ ments of air navigation control, carried out ity of establishing whether the regulations on by Eurocontrol in ways and by means not air navigation have been infringed. dissimilar to those normally applied by the States concerned, are to guarantee the safety of passengers as well as of the populations of the territories flown over and, from the same point of view, to ensure the necessary coor­ dination with the specific requirements of national defence. Such control, which is in If it is true that the performance of duties various respects connected with the exercise involving the exercise of public authority by of State sovereignty, thus constitutes a true a body may prevent the range of activities function of air space supervision, which can carried on by it from being subject to the only be pursued by a public authority, irre­ rules of competition only where those duties spective of the form chosen for its organiza­ form an inseparable part of the activity in tion and management. Even where the provi­ question, it seems to me that in the case in sion of services relating to air navigation has point the services provided (radar control, been entrusted to a company governed by meteorological information, warning ser­ private law (as is the case in Germany) or has vices) form an indissociable whole. been organized according to forms typical of the private sector (as in the Netherlands, tak­ ing account of the tasks assigned in this case to Eurocontrol), the States in question, as is apparent from the research carried out by the relevant departments of the Court, retain This leads me to the conclusion that air con­ absolute control of the company formed for trol constitutes a natural monopoly in the air that purpose, any transfer, even in part, of space where it is carried out, and in that the company's capital being absolutely for­ respect, competition between two bodies not bidden, or else they rule out in any case the only is not desirable but would not even be total privatization of air safety operations, possible in practice. In the final analysis it is since it remains an essential duty of the State a public service to which any idea of com­ to perform them. mercial exploitation with a view to profit is alien: which may not be incompatible, where appropriate and given equal efficiency, with economic management of the activity in question.

While therefore, as has already been stated, the formula for calculating the charges is determined by the Permanent Commission of the organization, the yearly amount of the charge is then in fact fixed by the Member States — even where they have entrusted to Eurocontrol the task of carrying out air con­ From the foregoing considerations it is clear trol operations — since it is they who fix one that with regard to the collection of charges, of the essential elements of the formula, that Eurocontrol is not able to take any decisions is to say the national rate per unit. The dif­ independent of the will of the Contracting ference between the rates applied is not States and confines itself to fixing for every therefore the result of independent action by single flight the charge actually payable by, Eurocontrol, but the consequence of the and to collecting it as a single debt from, the various policies pursued by the States in debtors. Since it acts therefore simply as col­ question — albeit on the basis of uniform lector for or agent of the Contracting States, principles — inasmuch as some of them may it cannot, in carrying on that activity, be decide not to recover the whole of the costs regarded as an undertaking within the mean­ incurred for facilities and services through ing of the Community rules on competi­ 7 the charges in question. Moreover, those tion. 1 charges undoubtedly constitute a tax burden, since they are a sort of financial contribution to the costs incurred by the States, payable 16 — The amount of the so-called administrative rate — which is by the individual for the benefit he has moreover very small in comparison with the amount of the charge — has not been challenged in any way in the course received, as a result of a specific administra­ of the main proceedings. tive activity carried on chiefly in the interest 17 — See in this connection the judgments in Case 127/73 BRT [1974J ECR 313. and Joined Cases C-159/91 and of the community. C-160/91 Poncet et Piltre [1993] ECR 1-637.