C-28/95

LEUR-BLOEM v INSPECTEUR DER BELASTINGDIENST/ONDERNEMINGEN AMSTERDAM 2

OPINION OF ADVOCATE GENERAL JACOBS delivered on 17 September 1996

1. In Case C-28/95 Leur-Bloem v Inspecteur The background to the cases and the der Belastingdienst/Ondernemingen Amster- national courts' questions dam the Gerechtshof, Amsterdam, seeks a preliminary ruling from the Court on the interpretation of Council Directive 90/434/EEC of 23 July 1990 on the common system of taxation applicable to mergers, divisions, transfers of assets, and exchanges Case C-28/95 Leur-Bloem of shares concerning companies of different Member States (hereafter the 'Tax Directive' or 'the Directive'). 1In Case C-130/95 Bernd Giloy v Hauptzollamt Frankfurt am Main- Ost the Hessisches Finanzgericht seeks a rul­ ing on Council Regulation (EEC) 2. The Gerechtshof, Amsterdam, has asked No 2913/92 of 12 October 1992 establishing the Court to give its first ruling on the inter­ the Community Customs Code (hereafter 2 pretation of the Tax Directive, in particular 'the Customs Code' or simply 'the Code'). the term 'exchange of shares' in Article 2(d) I shall examine both cases in this Opinion of the Directive. because they both raise the issue of the Court's jurisdiction to give preliminary rul­ ings under Article 177 of the Treaty in the context of disputes which fall outside the scope of Community law but to which Community law is rendered applicable by provisions of national law. 3. The purpose of the Directive is to remove tax obstacles to intra-Community mergers, divisions, transfers of assets and share exchanges. Under most tax systems disposals of shareholdings and transfers of assets from one company to another give rise to taxable gains for the transferring shareholder or company. In a domestic context relief from tax is often granted where the transaction is connected with a grouping or restructuring operation. However, the relief available var­ ies between Member States and, prior to the adoption of the Directive, sometimes did not * Original language: English. 1 — OJ 1990 L 225, p. 1 extend at all to intra-Community transac­ 2 — OJ 1992 L 302, p. 1. tions.

5. The preamble goes on to explain that that objective could be achieved only by intro­ 8. The transaction in issue in the main pro­ ducing a common system of taxation. That ceedings does not involve companies from system should 'avoid the imposition of tax in different Member States but is purely inter­ connection with mergers, divisions, transfers nal to the Netherlands. Mrs Leur-Bloem is of assets or exchanges of shares, while at the the sole shareholder and director of Phoenix same time safeguarding the financial interests Uitzendorganisatie BV ('Uitzendorganisatie') of the State of the transferring or acquired and Phoenix Industrial BV ('Industrial'). company'. 4 Both companies are licensed to operate tem­ porary recruitment agencies, the licences having a commercial value. Mrs Leur-Bloem intends to acquire the shares of an existing private limited company, Phoenix Holding BV ('Holding'), which has an issued and paid up share capital of HFL 35 000. The com­ 6. Those dual aims are achieved essentially pany had no assets and short-term debts of by requiring Member States to defer taxation HFL 2 779 at 31 December 1991 and neither of gains arising on the disposal of assets or assets nor debts at 31 December 1992. shares in connection with such transactions, Mrs Leur-Bloem proposes to exchange her shares in Uitzendorganisatie and Industrial for shares in Holding, which would then become sole owner of the shares in Uitzen­ 3 — First recital. 4 — Fourth recital. dorganisatie and Industrial.

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12. The tax authorities take the view that the proposed transaction does not fulfil the requirements of Article 14b(2)(a) because the '(a) a company established in the Nether­ purpose of the acquisition of the putative lands acquires, in return for the transfer subsidiaries' shares by the putative holding of a number of its shares together in company is not to merge the subsidiaries some cases with an additional payment, into a larger unit from a financial and econ­ possession of a number of shares of omic point of view. Such a unit already exists another company established in the because both companies have the same direc­ Netherlands permitting it to exercise tor and sole shareholder. more than half the voting rights in the latter company, with a view to combin­ ing in a single unit, on a permanent basis from an economic and financial view­ point, the undertaking of the acquiring company and that of another person'.

the same for domestic and intra-Community same manner as a situation to which the transactions, and their legislative history, in directive does apply? particular the second paragraph of point 3.5 of the Explanatory Memorandum of the State Secretary for Finance (Kamerstukken II, 1991-1992, 22 338, No 3). There the State Secretary, after explaining the modifications to be made to the Netherlands legislation in order to comply with the Directive, states Can there be an exchange of shares within that, although Community law does not for­ the meaning of Article 2(d) of Council mally require domestic share mergers to ben­ Directive 90/434/EEC of 23 July 1990 if the efit from the same (advantageous) conditions acquiring company within the meaning of as intra-Community mergers, it is desirable Article 2(h) does not itself carry on a busi­ with a view to the achievement of the single ness? market that the treatment of the two catego­ ries of transaction should be the same.

Is an exchange of shares within the meaning of Article 2(d) precluded by the fact that the same natural person who was the sole share­ holder in, and director of, the acquired com­ pany before the exchange is the director of, 14. The national court concludes that the and sole shareholder in, the acquiring com­ question whether in the present case there is pany after the exchange? a share merger within the meaning of Article 14b(2)(a) of the Law must be assessed by reference to the provisions and scope of the Directive. It has therefore put the follow­ ing questions to the Court:

15. It may be noted that the Netherlands Government disputes the national court's conclusion that subparagraphs (a) and (b) of Where the disputed decision has the effect of Article 14b(2) of the 1964 Law must be given causing import duties or export duties to be the same interpretation. It considers that the charged, suspension of implementation of national court has placed too much emphasis that decision shall be subject to the existence on the State Secretary's statement. or lodging of a security. However, such secu­ rity need not be required where such a requirement would be likely, owing to the debtor's circumstances, to cause serious economic or social difficulties.'

Case C-130/95 Giloy

17. The case before the national court is not however concerned with import duties but with VAT, to which the Code is made appli­ cable by provisions of German law. On 16. In this case the Hessisches Finanzgericht 28 March 1990 the German customs authori­ seeks a ruling from the Court on the ties issued a decision requiring Mr Giloy to

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pay DM293 870.76 by way of VAT on moment be unsuccessful. Further measures imported goods. Mr Giloy's action for the could be taken only if Mr Giloy resumed annulment of that decision is still pending. employment and then only within strict lim­ its in view of the German provisions relating to exemption from attachment; consequently, even if he resumed work he would not suffer irreparable damage.

or

19. The German authorities reply that there are no grounds for believing the disputed decision to be unlawful. Moreover, there is no risk of irreparable damage since the inquiries made to date indicate that further — irreparable damage for the person con­ attempts to enforce the debt would for the cerned,

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completely independent of each other, with 4. In the event that suspension of the imple­ the result that suspension of the implementa­ mentation of the decision is granted, is secu­ tion of a decision is also to be granted where rity still to be lodged to the extent of the there is no good reason to believe that the amount of the duty or does the possibility payment order whose implementation is exist of limiting it to a partial amount having sought to be suspended is unlawful but regard to the applicant's overall economic irreparable damage is to be feared for the situation?' person concerned?

21. The questions are put on the assumption that Article 244 of the Customs Code applies If question 1 is answered in the affirmative: to the VAT debt in issue in the main pro­ ceedings. However, the national court wrongly assumes that import VAT is an import duty within the meaning of the Code. By virtue of Article 4(10) of the Code the term 'import duties' is restricted to customs duties and charges having equivalent effect and agricultural levies and other import charges introduced under the common agri­ cultural policy or certain other agricultural 2. Does the presence of the condition men­ provisions. It does not include VAT. tioned in the second indent inevitably pre­ clude a requirement to lodge security or is this subject to further conditions and, if so, which?

Code, differs somewhat from that of Relevant case-law Article 244 of the Code and ought to have been amended in order to reflect the terms of that provision; it adds however that German case-law and literature recognizes that the customs authorities are obliged to apply Article 244 of the Code. In its replies to the 24. The issue was first considered by the two written questions put by the Court the Court in 1985 in Thomasdünger, 5 where the German Government observes that Court was asked to give a ruling on the Article 69(3) of the Finanzgerichtsordnung interpretation of the Common Customs Tar­ refers, for the purposes of proceedings iff in proceedings concerning the importation before the finance courts, to the rules appli­ of goods into Germany from France, a situ­ cable to the tax authorities; Article 21(2) of ation falling outside the scope of the Tariff. the German Turnover Tax Law lays down a In his Opinion Advocate General Mancini general rule that the provisions on customs explained that Thomasdünger's interest in duties are to apply mutatis mutandis to VAT seeking a tariff ruling was that certain Ger­ on imports. man authorities, such as the German rail­ ways, made use of the tariff classification in fixing charges. He concluded that the Court should not reply to the national court's questions because 'the Court would in appearance be interpreting the provisions mentioned therein but would in reality be expressing an opinion on the internal rules in which those provisions had been absorbed and by which process they had lost their binding force'.

26. The Court addressed the issue more 28. Advocate General Darmon, adhering to squarely in 1990 in Dzodzi 6 and Advocate General Mancini's view in Tho- Gmurzynska-Bscher. Mrs Dzodzi, a Togo­ masdünger, concluded that the Court did not lese national, married a Belgian national have jurisdiction to reply to the national shortly before his death. Following the death court's questions in either case. 8He consid­ of her husband Mrs Dzodzi sought the grant ered that the aim of the preliminary ruling of a residence permit in Belgium in her procedure, namely to ensure that Commu­ capacity as a spouse of a national of a Com­ nity law was uniform in its effects, applied munity Member State. It was clear that the only within the field of application of Com­ situation was a purely internal one and that munity law, as defined by Community law there was no factor connecting it with Com­ and Community law alone; a renvoi made to munity law. However, under a rule of Bel­ Community law could not extend the scope gian law the foreign spouse of a Belgian of Community law and, with it, the jurisdic­ national was to be treated as if he or she tion of the Court. It would be unacceptable were a Community national. It seems that for the Court's role to be reduced to one of the national court interpreted that rule as delivering opinions or giving advice of the extending to aliens married to Belgian kind which a legal expert is sometimes called nationals the benefit of Community rules upon to give in a domestic court when it is applicable to the spouses of nationals of required to apply foreign law. other Member States residing in Belgium. Accordingly, in order to assist it in resolving the dispute the national court asked whether Mrs Dzodzi would have had the right to reside and remain in Belgium if her husband had been a national of a Member State other than Belgium. 29. However, the Court for the second time departed from the view of its Advocate Gen­ eral and in both Dzodzi and Gmurzynska- Bscher replied to the national courts' requests. In Dzodzi the Court observed:

On the contrary, it is manifestly in the inter­ est of the Community legal order that, in Where Community law is made applicable order to forestall future differences of inter­ by national provisions, it is for the national pretation, every Community provision court alone to assess the precise scope of that should be given a uniform interpretation reference to Community law. If it takes the irrespective of the circumstances in which it view that the content of a provision of Com­ 9 is to be applied.' munity law is applicable, by virtue of that reference, to the purely internal situation underlying the dispute brought before it, the national court is entitled to request the Court for a preliminary ruling on the terms laid down by the provisions of Article 177 as a whole, as they have been interpreted in the 30. The Court noted that its role was con­ fined to deducing the meaning of Commu­ case-law of the Court of Justice. nity provisions from their letter and spirit and that it was for the national courts alone to apply the Community provisions thus interpreted in the light of the factual and legal circumstances of the case. The Court was in principle not obliged to look into the circumstances in which national courts were Nevertheless, the jurisdiction of the Court is prompted to submit questions to it and confined to considering provisions of Com­ envisaged applying the Community provi­ munity law only. In its reply to the national sion whose interpretation was sought. The court, the Court of Justice cannot take Court added: account of the general scheme of the provi­ sions of domestic law which, while referring to Community law, define the extent of that reference. Consideration of the limits which the national legislature may have placed on the application of Community law to purely internal situations, to which it is applicable 'The matter would be different only if it only through the operation of the national were apparent either that the procedure pro­ legislation, is a matter for domestic law and vided for in Article 177 had been diverted hence falls within the exclusive jurisdiction from its true purpose and sought in fact to of the courts of the Member State.'

31. The Dzodzi and Gmurzynska-Bscher in accordance with the principle laid down in judgments were followed shortly afterwards Dzodzi. Although that principle would not in Tomatis and Fulchiron, 11 where the necessarily extend to all cases which turned national court sought a ruling on the Com­ on the construction of a private contract mon Customs Tariff in order to determine incorporating concepts of Community law, the rate of VAT applicable to certain goods here the agreement in question was an essen­ under national law. They were also applied tial element in the system set up by Directive in rather different circumstances in 72/166. The conclusion of the agreement not 1 13 Fournier 2 and Feàerconsorzi. In Fournier only was contemplated by the Directive but the Court was asked to interpret a Commu­ also was a condition precedent to the entry nity directive to which — somewhat unusu­ 15 into force of many of its provisions. ally — effect was given by private-law agree­ ments. The national court had the task of deciding which of a number of national insurance bureaux bore ultimate liability to the Fourniers in respect of a road accident in France. Article 2(2) of Council Directive 14 72/166 provided for the conclusion between the six national insurers' bureaux of 33. In its judgment the Court replied to the an agreement under which each bureau guar­ national court's question without specifically anteed, in accordance with its own national addressing the jurisdiction point. However, law, settlement of claims in respect of acci­ in response to an argument concerning the dents within its territory caused by vehicles interpretation of the Directive, the Court did normally based in the territory of another emphasize that it was 'for the national court, Member State. Most of the provisions of the as the only court with jurisdiction to inter­ Directive took effect only upon conclusion pret the agreement, to give to the terms used of the agreement. The national court sought in that agreement the meaning which it con­ a ruling on the meaning of the term 'terri­ siders appropriate, without being bound in tory in which a vehicle is normally based' in that regard by the meaning which must be Article 1 (4) of the Directive in order to assist attributed to the same expression as used in it in interpreting that term in the agreement the Directive'. 16

with intervention operations in the olive oil question was designed to help it apply not sector, regarding the extent of Federcon- the Convention itself but Schedule 4 to the sorzi's liability to the agency in respect of a Civil Jurisdiction and Judgments Act 1982, quantity of olive oil which was stolen from which contained rules modelled closely on one of Federconcorzi's warehouses. The the Convention allocating jurisdiction contract between the parties provided that between the courts of the various parts of the contractor was to be liable 'for any losses the United Kingdom. However, the provi­ for which he is responsible to the amount sions of Schedule 4 were not always identical stipulated by the Community legislation in to those of the Convention in the version in force'. force at any given moment. That was true of Article 5(3) of Schedule 4 (although it did include the term 'matters relating to tort, delict or quasi-delict' appearing in Article 5(3) of the Convention, of which an interpretation was sought). Section 47(1) and (3) of the Act made provision for amend­ ments to Schedule 4, including 'modifica­ 35. The Court, following the Opinion of tions designed to produce divergence Advocate General Van Gerven, held that the between any provisions of Schedule 4 ... and principle laid down in Dzodzi applied; the a corresponding provision of Title II of the contractual provision in issue referred to the 1968 Convention'. The Act also laid down content of rules of Community law in order different rules on the interpretation of the to determine the extent of the liability of one Convention and Schedule 4. Section 3(1) of of the parties. the Act provided that 'any question as to the meaning or effect of any provision of the Convention shall, if not referred to the European Court in accordance with the 1971 Protocol, be determined in accordance with the principles laid down by and any relevant decision of the European Court'. By con­ trast, section 16(3)(a) of the Act provided that , in determining any question as to the 36. In its most recent pronouncement on 17 meaning or effect of any provision contained this issue in Kleinwort Benson, a case in Schedule 4, 'regard shall be had to any rel­ referred to the Court not under Article 177 evant principles laid down by the European of the Treaty but under the Protocol on the Court in connection with Title II of the 1968 interpretation by the Court of the Brussels 18 Convention and to any relevant decision of Convention, the Court took a narrower view of the limits of its jurisdiction. The that court as to the meaning or effect of any English Court of Appeal sought an interpre­ provision of that Title'. tation of the terms 'matters relating to a con­ tract' in Article 5(1) of the Convention and 'matters relating to tort, delict or quasi- delict' in Article 5(3). The Court of Appeal's

38. Although not taking up the Advocate General's invitation to reconsider its previ­ ous decisions, the Court held that it did not The arguments put forward in the present have jurisdiction to reply to the Court of cases Appeal's questions. The Court noted that the United Kingdom provisions did not contain a direct and unconditional renvoi to provi­ sions of Community law so as to incorporate them into the domestic legal order but Leur-Bloem merely took them as a model and did not wholly reproduce their terms. Moreover, express provision was made for modifica­ tions designed to produce divergence between the domestic provisions and corre­ sponding provisions of the Convention. Accordingly, the provisions of the Conven­ 40. Written observations have been submit­ tion had not been rendered applicable as ted in this case by Mrs Leur-Bloem, by the such, in cases outwith the scope of the Con­ German and Netherlands Governments and vention, by the law of the Contracting State by the Commission. concerned.

41. Mrs Leur-Bloem considers that the request is admissible. Since the purpose 39. The 1982 Act did not require the United of the Directive is 'to create within the Kingdom courts to decide disputes before Community conditions analogous to those them by applying absolutely and uncondi­ of a single market', it is not possible in tionally the interpretation of the Convention Mrs Leur-Bloem's view to accord less provided by the Court; where the Conven­ favourable treatment to internal transactions tion was not applicable, those courts were free to decide whether the Court's interpre­ tation was equally valid for the purposes of the national law modelled on the Conven­ 19 — [1991] ECR I-6079.

42. The German and Netherlands Govern­ ments and the Commission consider that the 44. The Commission considers the counter­ Court has no jurisdiction to reply to the argument based on the need to ensure uni­ questions. The Netherlands Government form application of Community law con­ contends that, although the national provi­ vincing neither in theory nor in practice. The sions in question also cover internal transac­ limits of the Court's jurisdiction necessarily tions, the State Secretary's Explanatory coincide with the limits of Community law. Memorandum merely indicates that it was There are serious institutional objections to considered desirable that internal transac­ the contrary view. The Court's jurisdiction tions should benefit from the same treatment would be determined by the legislative as intra-Community transactions. Neither choice of a Member State. Moreover, since that memorandum nor the provision itself the Netherlands legislation uses the same provides explicitly for the application of the definition of share exchange for transactions provisions of the Directive to internal trans­ involving companies established outside the actions. It therefore considers that the Court Community, the Court's jurisdiction would should decline jurisdiction for the reasons extend to share exchanges involving one or which it gave in Kleinwort Benson. more companies from non-member coun­ tries. The Commission adds finally that it would hardly be possible for the Commis­ sion to institute proceedings against the Netherlands under Article 169 of the Treaty simply because of a choice of the Nether­ lands legislature.

Leur-Bloem, the Commission considers that, Treaty is to 'ensure that in the interpretation notwithstanding the absence of an express and application of [the] Treaty the law is reference to Article 244 of the Customs observed' (Article 164), should have assumed Code in the German legislation, it is clear jurisdiction in cases in which Community that Article 244 of the Code is applicable in law does not apply. Like other legal systems, the German legal order. The Community Community law defines its own field of rule is therefore absolutely and uncondition­ application, and it might seem reasonable to ally incorporated into German law, as assume that all Community law, including required by the Court's judgment in Klein- Article 177, is intended to apply solely wort Benson. within that field. The purpose of Article 177, within the scheme of the Treaty, is to ensure that Community law is uniformly applied in all the Member States. It is not immediately clear how it would serve that purpose for the Court to rule in disputes in which a Com­ 46. In its replies to the Court's written ques­ munity rule is borrowed by a Member State tions, the German Government also takes a and transposed to a non-Community con­ different view from that which it takes in text. In such disputes the rules which Leur-Bloem. It distinguishes the German national courts are called upon to apply are legislation from the Netherlands legislation rules of national law rather than Community in issue in Leur-Bloem on the ground that law; there can therefore be no immediate the Customs Code is a dynamic component threat to the uniform application of Com­ of German law by virtue of Article 21(2) of munity law. the German Turnover Tax Law. The German legislature has opted for the application of the Code and recognized the competence of the Court, because import VAT and customs duties are often levied according to a single procedure and by a single decision. It is therefore essential that the provisions on customs duties and VAT should be inter­ preted in the same way.

law in the future. At first sight there is some 50. Moreover it is not easy to see how any force in that argument. If a national court legal rule can be interpreted out of its con­ considers it necessary to interpret a Commu­ text or, to use the phrase employed in nity rule in order to give judgment, it will be Dzodzi, 'irrespective of the circumstances in obliged to try to interpret the rule itself in which it is to be applied'. The Court's ruling the absence of authoritative guidance from in Dzodzi can perhaps be partly explained the Court. If it were to place an incorrect by the tolerant approach which the Court interpretation on the Community rule, the adopted at that time to national courts' proper application of Community law might requests in general. The Court would ques­ be threatened indirectly: although adopted in tion the necessity of the ruling sought by a a non-Community context, that interpreta­ national court only very exceptionally, in tion might well be followed in the Member particular where it seemed apparent that the State concerned by other courts and by ruling was being sought improperly by administrative authorities when the rule in means of a contrived dispute or that the pro­ question was applied in a Community con­ vision whose interpretation was sought was text. manifestly incapable of applying to the dis­ pute.

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Court provides a national court with a reply misgivings about seeking to interpret terms that is relevant to the dispute before it but used in the Tax Directive — particularly for also because it is often difficult or even the first time — against the background of impossible to interpret a rule in the abstract. such a transaction, which appears to have little to do with the type of transaction con­ templated by the Directive, namely cross- border mergers and share exchanges designed to promote cross-border grouping of undertakings. In answering the national court's questions it would be necessary, in The different contexts of the Community and order to place the relevant provisions of the national rules Directive in their proper context, to consider the extent to which the conditions imposed by the Netherlands rules might impede the creation of cross-border corporate structures which might be adopted in the event of undertakings grouping together for commer­ cial reasons. The factual situation in Leur- 52. The ruling in Dzodzi is irreconcilable Bloem has hardly provided a focus for argu­ with the abovementioned case-law. Where ment on such issues, as is apparent from the the factual situation underlying a reference written and oral argument presented to the does not even fall within the contemplation Court. of a Community rule, the Court is ex hypothesi being asked to interpret the rule outside its proper context. In consequence the Court runs the risk not only of failing to consider all relevant issues but also of being misled by extraneous factors.

exchange itself but from the resulting corpo­ being misled by extraneous factors. For rate structure. For example, one might imag­ example, as I shall explain below, even in the ine a situation in which, as part of a cross- apparently closely related contexts of import border grouping operation undertaken for duties and VAT different considerations may commercial reasons, a holding company was apply. Moreover, it will often be necessary to established in a Member State partly for tax allow the procedure before the Court to run reasons, for example in order to average the its course before the Court is able to estab­ rate of tax incurred on the profits of subsid­ lish with a sufficient degree of certainty that iaries in various countries or to gain the ben­ it is able to rule. efit of a tax treaty entered into by the Mem­ ber State concerned. Again it is apparent that the factual situation in Leur-Bloem has scarcely provided a focus for debate on all the issues that might be relevant to the inter­ pretation of the concept of tax avoidance in The relevance of the Court's ruling to the Article 11, a concept whose scope has impor­ interpretation of a national rule tant consequences for the application of the Directive.

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comparably, similarly or even identically to another area not harmonized at Commu­ worded provision of an agreement concluded nity level. For example, in Giloy the German by the Community with a non-member legislation establishes a close link between country depends, inter alia, on the aim pur­ import duties and VAT on imports. Even sued by each provision in its particular con­ there, however, as the Court's recent judg­ 24 text and that a comparison between the ment in Pezzullo shows, different consid­ objectives and context of the agreement and erations may nevertheless apply. In that case those of the Treaty is of considerable impor­ the Court held that the relevant Community 25 tance in that regard.' directive allowed the Member States to provide that, in the case of release for home use in the Community of goods previously subject to inward processing arrangements, the agricultural levy payable on importation was to bear default interest for the period between temporary importation and defini­ 57. It seems to me that the same applies a tive importation; by contrast, under the Sixth fortiori to similarly or identically worded VAT Directive interest could begin to accrue rules of Community and national law. Con­ only from the moment when the goods siderations relevant to the interpretation of a ceased to be subject to inward processing Community rule, such as its purpose and its arrangements and were declared for home place within the scheme and aims of the use. In my Opinion I suggested that the Treaty, may be of no relevance to the inter­ rationale for the distinction might lie in the pretation of the national rule. The difference deduction mechanism that applies in the case in the contexts in which Community and of VAT but does not apply to import levies. national rules apply may therefore dictate The judgment also demonstrates that the dif­ different interpretations of those rules. ference in context may become apparent only once the Court has interpreted the pro­ vision in question.

gard it on the ground that the contexts of the 62. Moreover, the absence of any guarantee Community and national rules differ was a that the Court's ruling will be relevant to the factor which influenced the Court in Klein- dispute, together with the fact that there is wort Benson. There the Court noted that, no immediate threat to the uniform applica­ since the United Kingdom legislation had tion of Community law, substantially weak­ not rendered the provisions of the Brussels ens the case for extending the Article 177 Convention applicable as such in internal procedure — with the attendant delay in the situations, the United Kingdom courts resolution of the dispute and costs for the would be free to decide whether the Court's parties, for the Commission and Member interpretation was equally valid for the pur­ States and for the Court — to the potentially poses of the domestic provisions. The Court large number of cases in which Member referred in that regard to the following pas­ States may decide to borrow Community sage in Opinion 1/91: rules.

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Further conceptual and practical difficulties in Tesauro concerning the potential volume the application of Article 177 of cases in which a national court might identify a link between national and Com­ munity rules and decide to seek a ruling. As he points out, it is increasingly common for domestic rules or conventions with non- member countries to be based on, or inspired by, Community law.

66. Finally, on a practical level I share the 26 — Sec paragraph 26 of his Opinion in Kleinwort Benson, cited concerns expressed by Advocate General in note 17.

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distinct categories. Where the authors of the different interpretations. As already noted, Treaty or of Community legislation choose even two identically worded provisions of not to extend Community law to a particular Community law may require different inter­ area, Member States may take different views pretations by reason of their different con­ on the need to do so unilaterally in their texts. domestic legislation. A Community rule which, for one Member State, dictates the content of related national rules may be seen by another Member State as no more than a potentially interesting model with a con­ venient body of case-law.

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or convention, a Member State wishing to it will be possible to resolve only after the transpose the rules contained in a directive to procedure before the Court has run its full a non-Community context may simply course. Moreover there will be further uncer­ extend the scope of its national implement­ tainty, if the Court does exercise jurisdiction, ing legislation. As in Leur-Bloem, the link as to whether the national court should with the Community rule may be inferred apply the ruling, having regard to the differ­ by the national court from the wording and ent contexts. purpose of the national provisions, possibly by reference to the travaux préparatoires. That Article 14b(2)(a) of the Netherlands Law of 1964 does not, as the Commission points out, reproduce word for word the text of the Tax Directive is hardly surprising — The limits of the Court's jurisdiction under neither does Article 14b(2)(b), which pur­ Article 177 ports to implement the Directive.

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OPINION OF MR JACOBS — CASE C-28/95 AND CASE C-130/95

77. As far as previous cases are concerned, in which a Member State has exercised a dis­ I share Advocate General Tesauro's view cretion reserved to it by a directive to that the Court should no longer rule in impose stricter requirements than those cases such as Thomasdünger, Dzodzi, stipulated by that directive, but the national Gmurzynska-Bscher and Tomatis and Tulchi- implementing legislation entitles the compe­ ron. On the other hand, it seems to me that tent authority of the Member State only to the Tournier and Federconsorzi cases were adopt the provisions which are absolutely correctly decided. In those cases there was necessary as a matter of Community law for the fundamental difference that the contrac­ the implementation of the directive (a situa­ tual arrangements in question were entered tion which is similar to that in the case I into in pursuance of the Community rules. of RT 27).In such a situation the national The facts of both cases therefore fell squarely court may wish to ascertain the minimum within the contemplation of the Community requirements imposed by the directive, and rules, and it was consistent with both the refer a question to the Court to that effect, in purpose of Article 177 and the requirement order to address an argument that the Mem­ that the Court should rule in a relevant con­ ber State acted beyond the powers conferred text for the Court to reply to the national upon it by the national legislation. In such courts' questions. circumstances, I consider that the Court should assume jurisdiction since the national law has not transposed the Community rules into a different context; there is thus no dan­ ger of the Court answering a question out of context.

it was not intended to apply; such extension meaning of the same Community provision may be effected by means of an express as that in issue in Federconsorzi. extension or mirroring of the Community rules, or by means of some general provision of national law prohibiting reverse discrimi­ nation or unfair competition. On the other hand, when Community law is implemented only to the extent envisaged by the Commu­ 81. By using the expression 'within the con­ nity legislation, effects that flow foreseeably templation of Community law', I do not down through national law from that imple­ mean to limit the category of justiciable ref­ mentation, even if remote, can be said to be erences to situations specifically envisaged within the contemplation of Community by the drafters of Community legislation: I law. These might be regarded as 'vertical' suspect that they may not, for example, have effects. In my view, for example, the Court envisaged the need as a result of the theft of would have jurisdiction in a case such as olive oil in the case of Federconsorzi to inter­ Federconsorzi even if the litigation were one pret a contractual term referring to the Com­ step further down the chain of events in the munity provision. I simply mean to refer to sense that a company in similar circum­ situations which can be said to have resulted stances had paid up without dispute but its naturally from the implementation of Com­ insurers had contested the sum paid when it munity law and not from Community law sought to claim under its insurance contract, being shifted sideways into a situation in resulting in a reference to the Court on the which its application was never intended.