C-319/93

Friesland (Frico Domo) Coöperatie BA

and between

Cornells van Roessel and Others (C-40/94)

and

De coöperatieve vereniging Zuivelcoöperatie Campina Melkunie BA

* Language of the case: Dutch.

on the interpretation of Article 2(1) of Regulation N o 26 of the Council of 4 April 1962 applying certain rules of competition to production of and trade in agricul- tural products (OJ, English Special Edition 1959-1962, p . 129),

T H E COURT,

composed of: G. C. Rodríguez Iglesias, President, C. N . Kakouris, D . A. O . Edward, J.-P. Puissochet and G. Hirsch (Presidents of Chambers), J. C. Moitinho de Almeida (Rapporteur), P. J. G. Kapteyn, C. Gulmann, J. L. Murray, P. Jann and L. Sevón, Judges,

Advocate General: G. Tesauro, Registrar: H . A. Rühl, Principal Administrator,

after considering the written observations submitted on behalf of:

— Mr Dijkstra (C-319/93), by P. E. Mazel, of the Leeuwarden Bar, I - 4498

— the Danish Government (C-40/94), by P. Biering, Principal Director in the Ministry of Foreign Affairs, acting as Agent,

— the Commission of the European Communities (C-319/93, C-40/94 and C-224/94), by B. J. Drijber, of its Legal Service, acting as Agent,

having regard to the Reports for the Hearing in Cases C-319/93 and C-40/94 and the Report of the Judge-Rapporteur in Case C-224/94,

after hearing the oral observations of H . E. Dijkstra (C-319/93), represented by P. E. Mazel, C. van Roessel and others (C-40/94), represented by P. J. L. J.

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3 Upon leaving or being excluded from the cooperative to which they belonged, the farmers were required to pay a fee amounting, depending on the circumstances, to 10% of the average annual milk revenue received by them from the cooperative during the previous five financial years or 4% of the milk revenue they received during the financial year prior to the cessation of their membership.

4 The applicants in the main actions maintained in the proceedings before the national courts that the fee is incompatible, in particular, with Articles 85 and 86 of the EEC Treaty. Some of them contended, in particular, that the fee required by the cooperatives in fact creates an exclusive supply obligation for an indeterminate period which restricts the economic freedom of their members and therefore con- stitutes an obstacle for the cooperative's competitors.

5 They also referred to the proceeding initiated by the Commission under Article 85 of the E E C Treaty against Zuivelcoöperatie Campina BA. That proceeding cul- minated in the acceptance of an undertaking on the part of the cooperative to amend the clauses in its statutes governing the conditions applying to the depar- ture of its members, in such a way as to allow them to leave on three dates within the course of a financial year, having given two years' prior notice of their inten- tion so to do, without having to pay a fee, or on the 1st of April, after giving three months' notice, subject to an obligation to pay a fee of 4% (21st Report on Com- petition Policy, 1991, paragraphs 83 and 84).

3. The Commission shall undertake such determination either on its own initiative or at the request of a competent authority of a Member State or of an interested undertaking or association of undertakings.

...'

7 They observe in that regard, first, that the requirements set out in the first sentence of Article 2(1) have not been fulfilled and, second, that the second sentence of that provision does not have any independent meaning, in that agricultural cooperatives must be subject to the same requirements as those governing the application of the exemption pursuant to the first sentence.

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8 The national courts observe that the application of the second sentence of Article 2(1) of Regulation N o 26 has always given rise to doubts and has resulted in two different interpretations.

10 According to the second interpretation, which is based on the genesis of Regu- lation N o 26 and which was followed by the Commission in its initial decisions and in some of its more recent decisions, the second sentence of Article 2(1) of Regulation N o 26 has an autonomous meaning. In view of the importance of cooperatives in the agricultural sphere, it lays down an exception which is distinct from the cases of non-application of Article 85 provided for in the first sentence. Indeed, that second sentence introduces a reversal of the onus of proof in favour of agricultural cooperatives, since, as regards agreements such as those described in the second sentence, it is for the Commission to prove that competition is excluded by such agreements or that the objectives of the Treaty are thereby jeop- ardized. Since the object of the provision is to establish a more flexible system in relation to agricultural cooperatives, any different interpretation would result in a heavier burden being imposed on those cooperatives, inasmuch as the conditions laid down in both the first and the second sentences would have to be fulfilled.

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1 1 In those circumstances, the national courts, considering that the actions raised problems as to the interpretation of Community law, decided to stay the proceed- ings and to refer the following questions to the Court of Justice for a preliminary ruling:

— In Cases C-319/93, C-40/94 and C-224/94:

'(1) Does the second sentence of Article 2(1) of Regulation N o 26 applying certain rules of competition to production of and trade in agricultural products, which relates to agreements, decisions and practices of farmers, farmers' asso- ciations or associations of such associations belonging to a single Member State, have an independent meaning, so that national courts must presume that such agreements, decisions and practices are valid so long as the Commission has not found that they exclude competition or jeopardize the aims of Article 39 of the EEC Treaty?

has not determined by decision pursuant to Article 2(2) that an agreement fulfils the positive requirements for exemption laid down in Article 2(1), Article 85(1) of the EEC Treaty is directly applicable as a result of Article 1 of Regulation N o 26?

(II) Would the answer to Question (I) be different as regards a finding by the Commission pursuant to the last part of the second sentence of Article 2(1) of Regulation N o 26 that competition is excluded or that the objectives of Article 39 of the EEC Treaty are jeopardized?

(III) If Questions (I) and (II) must be answered in the negative, is the national court nevertheless entitled to declare on its own initiative that the derogating rules set out in Article 2(1) of Regulation N o 26 are inapplicable because the Commission has intimated, albeit in a manner otherwise than by decision, that Article 2(1) of Regulation N o 26 is not applicable, or should it request the Commission to take a formal decision and stay the proceedings until such time as the Commission has ruled on the matter by means of a decision?'

12 By order of 1 December 1994 the Court joined Cases C-319/93 and C-40/94, pur- suant to Article 43 of the Rules of Procedure, for the purposes of the oral pro- cedure and the judgment.

1 3 By order of 14 July 1995 the Court joined Cases C-319/93, C-40/94 and C-224/94, pursuant to Article 43 of the Rules of Procedure, for the purposes of the judgment.

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18 It is apparent, first of all, from the genesis of that regulation that, by adding that second sentence — which did not appear in the Commission's original proposal for a regulation — at the behest of the European Parliament, the legislature sought to introduce an exception applying in favour of agreements, decisions and practices

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of farmers where they fulfil the criteria laid down in it, unless the Commission finds that competition is thereby excluded or that the objectives of Article 39 of the Treaty are jeopardized.

19 Next, that desire to protect agricultural cooperatives is apparent from the reasons given for the regulation, and in particular from the fourth recital in the preamble to Regulation N o 26, which states that special attention is warranted in the case of farmers' organizations.

20 To interpret the second sentence as having no independent meaning would run squarely counter to the wishes of the legislature, inasmuch as it would result in more stringent conditions being applied to agreements which are to be made more flexible, since they would have to fulfil the conditions laid down in both the first and second sentences. Moreover, the Commission could scarcely find that an agreement jeopardized the objectives of Article 39 of the Treaty if, by virtue of the derogation set out in the first sentence, it had already been established that that agreement or decision was necessary for the attainment of those objectives.

24 In the light of all of the foregoing considerations, the answer to be given to the first question must be that the inapplicability of Article 85 of the Treaty to agree- ments, decisions and practices of farmers, farmers' associations or associations of such associations is exclusively subject to the conditions laid down in the second sentence of Article 2(1) of Regulation N o 26. If an agreement or decision falls within the scope of Article 85(1) of the Treaty and the criteria for exemption referred to in the second sentence of Article 2(1) of Regulation N o 26 are not ful- filled, and it does not qualify for exemption pursuant to Article 85(3), it is auto- matically void and such nullity has retroactive effect.

The power to apply Article 2(1) of Regulation N o 26

25 As regards the division of powers between the Commission and the national courts for the purposes of applying Article 2(1) of Regulation N o 26, it should first of all be pointed out that, by virtue of Article 2(2) and (3), the Commission has exclusive competence, subject to review by the Court, to determine whether an agreement fulfils the conditions specified in Article 2(1).

26 O n the other hand, the Commission does not have exclusive competence to apply Article 85(1). As the Court previously noted in its judgment in Case C-234/89 Delimitis [1991] ECR I-935, paragraph 45, the Commission shares that

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30 If the criteria for applying Article 85(1) are clearly not fulfilled, the national court may follow the normal procedure for the purposes of ruling on the contested agreement.

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31 If, on the other hand, the national court considers that the agreement fulfils the criteria for the application of Article 85(1), it must determine whether, in accord- ance with the second sentence of Article 2(1) of Regulation N o 26, the agreement in question constitutes an agreement between farmers, farmers' associations or associations of such associations belonging to a single Member State which con- cerns the production or sale of agricultural products or the use of joint facilities for the storage, treatment or processing of agricultural products and under which there is no obligation to charge identical prices.

32 If the national court finds that the agreement fulfils those conditions and it is clear, taking into account the criteria established by the case-law of the Court and the practice of the Commission, which is apparent not only from the decisions adopted by it but also, in particular, from its reports on competition policy and its communications, that the agreement excludes competition or jeopardizes the objectives of Article 39, it may declare that agreement void pursuant to Article 85(2) of the Treaty if it is incapable under any circumstances of qualifying for an exemption decision under Article 85(3).

33 It should be recalled in that regard that an agreement can only qualify for such a decision if it has been notified or is exempt from the requirement of notification. Under Article 4(2) of Regulation N o 17, an agreement is exempt from the require- ment of notification where the only parties thereto are undertakings from one Member State and it does not relate to imports or exports between Member States. The dairy cooperatives' statutes may fulfil those conditions.

36 C o n s e q u e n t l y , t h e a n s w e r to b e given t o the t h i r d q u e s t i o n m u s t be t h a t a national c o u r t before w h i c h a p a r t y pleads the nullity of a clause in the statutes of an agri- cultural cooperative o n t h e g r o u n d that it infringes Article 85(1) of the Treaty, and before w h i c h t h e cooperative seeks t o rely o n Article 2(1) of Regulation N o 26, m a y c o n t i n u e the p r o c e e d i n g s and adjudicate o n t h e d i s p u t e if it is clear that the criteria for t h e application of Article 85(1) are n o t fulfilled, o r m a y declare the clause v o i d u n d e r Article 85(2) if it is certain that t h a t p r o v i s i o n does n o t fulfil the c o n d i t i o n s for application of the exception laid d o w n in Article 2(1) of Regulation N o 26 a n d d o e s n o t qualify for e x e m p t i o n u n d e r Article 85(3). W h e r e t h e r e is a n y doubt, the national court may, if it is appropriate and consistent with the national rules of procedure, obtain additional information from the Commission or allow the parties to seek a decision from the Commission.

37 In view of the answers given to the first and third questions, there is no need to answer the other questions.

Costs

38 The costs incurred by the Netherlands, the French and Danish Governments and the Commission of the European Communities, which have submitted

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85(1) are not fulfilled, or may declare the clause void under Article 85(2) if it is certain that that provision does not fulfil the conditions for application of the exception laid down in Article 2(1) of Regulation N o 26 and does not qualify for exemption under Article 85(3). Where there is any doubt, the national court may, if it is appropriate and consistent with the national rules of procedure, obtain additional information from the Commission or allow the parties to seek a decision from the Commission.

Rodríguez Iglesias Kakouris Edward Puissochet

Hirsch Moitinho de Almeida Kapteyn

Gulmann Murray Jann Sevón