C-230/96

OPINION OF MR TESAURO — CASE C-230/96

OPINION OF ADVOCATE GENERAL TESAURO delivered on 16 December 1997

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dealer, from the prohibition laid down in (1) the parties Article 85(1) of the Treaty (Article 1).

In accordance with Article 3(3) of Regu- (a) agree that the supplier shall release lation N o 123/85, the exemption under the dealer from the obligations Article 85(3) of the Treaty also applies where referred to in Article 3, points 3 and the obligation described in Article 1 is linked 5 where the dealer shows that there to an obligation on the dealer 'neither to sell are objectively valid reasons for new motor vehicles which compete with doing so; contract goods nor to sell, at the premises used for the distribution of contract goods, new motor vehicles other than those offered for supply by the manufacturer'. According to Article 4 of that regulation, the exemption also covers any obligation imposed on the dealer to 'endeavour to sell, within the con- (b) agree that the supplier reserves the tract territory and within a specified period, right to conclude distribution and such minimum quantity of contract goods as servicing agreements for contract may be determined by agreement between goods with specified further under- the parties or, in the absence of such agree- takings operating within the contract ment, by the supplier on the basis of esti- territory or to alter the contract ter- mates of the dealer's potential sales' (Article ritory only where the supplier shows 4(1)(3)). that there are objectively valid rea- sons for doing so;

— the dealer is a new entrant to the dis- separate sales premises ..., in the form of a tribution system and the period of distinct legal entity and in a manner which the agreement, or the period of avoids confusion between makes'. Further- notice for regular termination of the more, Article 4(1)(3) of the same regulation agreement, is the first agreed by that provides that the exemption is to apply not- dealer. withstanding any obligation whereby the dealer undertakes to 'endeavour to sell, within the contract territory and during a specified period, a minimum quantity of contract goods, determined by the parties by common agreement or, in the event of dis- (3) each party undertakes to give the other agreement between the parties as to the at least six months' prior notice of inten- minimum number of contractual goods to be tion not to renew an agreement con- sold annually, by an expert third party, cluded for a definite period. account being taken in particular of sales previously achieved in the territory and of forecast sales for the territory and at national level'.

3. A party may only invoke particular objec- tively valid grounds within the meaning of this Article which have been exemplified in the agreement if such grounds are applied Last, for our purposes, Article 5 of that without discrimination to undertakings regulation provides: within the distribution system in comparable cases.'

'2. Where the dealer has, in accordance with Article 4(1), assumed obligations for the 4. The relevant provisions of Regulation N o improvement of distribution and servicing 1475/95, which entered into force on 1 structures, the exemption shall apply pro- October 1995, differ to a more or less signifi- vided that: cant degree from those set out above.

(3) each party undertakes to give the other at least six months' prior notice of inten- tion not to renew an agreement con- cluded for a definite period. 5. Cabour SA ('Cabour') and Nord Distri- bution Automobile SA ('NDA'), sole dealers in Douai for Citroën and Peugeot cars respectively, brought an action before the Tribunal de Commerce (Commercial Court), Douai, against Arnor ' S O C O ' SARL 3. The conditions for exemption laid down ('Amor'), a seller, not belonging to any dis- in (1) and (2) shall not affect; tribution network, of inter alia new Citroen and Peugeot cars. In particular, they claimed — on the premiss that Regulation N o 123/85 had the effect of prohibiting vehicles from being resold outside the distribution net- — the right of the supplier to terminate the work — that Arnor's activity amounted to agreement subject to at least one year's unfair competition. Cabour and N D A there- notice in a case where it is necessary to fore asked the court hearing the matter to reorganise the whole or a substantial part restrain Arnor from pursuing that business of the network, and to order it to pay damages.

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By judgment of 16 June 1994, the Tribunal sold by a dealer to meet the requirements of de Commerce, Douai, found against the a hire company were in this way diverted applicants, on the grounds, first, that the from their intended use, and it was on that exclusive Peugeot and Citroën dealership basis that they asked the court hearing the contracts did not qualify for the block case, first, to declare that in so far as Arnor exemption under Regulation N o 123/85, and obtained supplies of new vehicles 'improp- thus could not be relied on as against Arnor erly' its method of carrying on business and, second, that since Arnor obtained its amounted to unfair competition vis-à-vis supplies lawfully, it could not have been in authorised dealers and, second, to order breach of those contracts. Arnor in consequence to make good the loss they had suffered.

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Arnor concluded therefore by requesting the were not covered by the exemption and Cour d'Appel to dismiss the appeal and to could not therefore be relied on against third uphold the judgment at first instance of 16 parties. In any event, they have not failed to June 1994. point out that any conflict between the con- tested clauses in those agreements and the relevant provisions of Regulation N o 123/85 cannot be considered sufficient, at least not in itself, to render the agreements concerned void.

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10. Taking the view that those problems relation to the interpretation of Article raised complex questions of Community law, 3(3) and Article 5(2) of the regulation; the C o u r d'Appel, Douai, decided therefore to stay proceedings and refer three questions to the Court of Justice for a preliminary rul- ing. The questions were worded as follows:

(c) lays down a sales target whereby the dealer undertakes to use its best endeav- ours to sell during each annual period a quantity of contract vehicles which, if not specified by agreement between the parties, is fixed by the manufacturer on ' 1 . Can Commission Regulation N o 123/85 the basis of forecasts made by it or crite- of 12 December 1984 on the application of ria determined by it, and specifies that, Article 85(3) of the EEC Treaty be inter- in the event that 90% of 7/11ths of the preted as meaning that an exclusive dealer- sales objective has not been achieved on ship agreement binding a car manufacturer 31 August in the current annual period to a dealer qualifies for the exemption under and the "aggregate percentage penetra- Article 1 of that regulation where that con- tion" of contract vehicles in the territory tract: to which the concession relates, assessed on 31 July of the current annual period, is 15% to 45% — depending on where the territory is located — lower than the national average penetration of contract vehicles, the manufacturer may, on giv- ing three or six months' notice, alter the contract territory and/or withdraw from (a) does not exemplify the "objectively valid the dealer its exclusivity in the territory, reasons" referred to in Article 5(2)(1)(a) or terminate the dealership contract, and (b) and Article 5(3) of that regu- which stipulations should be considered lation; in relation to the interpretation of Article 4(1 )(3), Article 5(2)(2) and Article 5(2)(3) of the regulation?

12. I would first of all point out that, as the Court has consistently held, 'it is for the national courts alone ... which must assume responsibility for the judgment to be given, to determine, having regard to the particular features of each case, both the need for a pre- liminary ruling to enable them to give judg- 11. The questions referred to the Court seek ment and the relevance of the questions therefore to establish whether the Peugeot which they refer to the Court. A request for and Citroën dealership contracts are compat- a preliminary ruling from a national court ible with the requirements of Regulation N o may be rejected only if it is quite obvious 123/85 (Question 1) and Regulation N o that the interpretation of Community law 1475/95 (Question 2), thus whether they sought by that court bears no relation to the qualify for the block exemption provided for actual nature of the case or the subject- by those regulations. If not, then the Court matter of the main action'. 3 is asked whether on a proper construction, Article 85(1) of the Treaty prohibits an exclusive and selective dealership network based on agreements such as those under 3 — See, inter alia. Case C-304/96 Hera v Unità Sanitaria Locale No 3 — Genovese (USL) and Impresa Romagnoli [1997] consideration in this case (Question 3). ECR I-5685, paragraph 11.

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4 — To that effect see, most recently, Case C-408/95 Eurotunnel and Others v SeaFrance [1997] ECR I-6315, paragraph 20. 5 — To that effect, see the order in Case C-286/88 Falciola 14. According to Peugeot and Citroën, how- Angelo v Comune di Pavia [1990] ECR I-191, paragraph 9, and the judgment in Case C-343/90 Lourenço Dias v Direc- ever, the questions referred are irrelevant to tor da Alfandega do Porto [1992] ECR I-4673, paragraph 18. the substance of the case since, even if it 6 — Case C-83/91 Medičke v ADV/ORGA [1992] ECR I-4871, paragraphs 28 to 30. were to be concluded that the disputed 7 — Order in Case C-428/93 Monin Automobiles II [1994] ECR clauses in the contracts in issue were not I-1707, paragraph 15; more recendy, the judgment in Case C-291/96 Grado and Baskír [1997] ECR I-5531, paragraph covered by the block exemption, it would 16. not follow that they were unlawful, still less 8 — Thus in Case C-105/94 Celestini v Saar-Sektkellerei Faber [1997] ECR I-2971, paragraph 25, for example, the Court that the contracts concerned were void. In considered it sufficient, as regards the relevance of the ques­ support of their argument they cite the judg- tions submitted, to show that 'the national court has explained that should it follow from the answers given by ments in Grand Garage Albigeois and Nissan the Court that the oxygen 16/18 method is compatible with Community law, Cclestini's action would have to be dis­ missed', adding that ( [i]t is not for the Court, in the context of these proceedings, to call that assessment in question'. Similarly, in Eurotunnel, cited at footnote 4, in order to counter the objection that a ruling that the contested direc­ 9 — Furthermore, this explains why the case-law on this subject tives were invalid could not have the slightest relevance to increasingly frequently, particularly in recent years, contains the claim for damages brought by the plaintiff in the main the statement 'it is essential for the national court to explain proceedings, the Court merely pointed out that 'if the direc­ the reasons why it considers that a reply to its questions is tives were unlawful the national court could, at the very necessary to enable it to give judgment' (see, to that effect, least, order SeaFrance to refrain in future from effecting for example, Lourenço Dias, cited at footnote 5, paragraph duty-free sales, as Eurotunnel requests' (paragraph 24). 19).

France in which the Court stated that 'Regu- settled solely on the basis of the applicable lation N o 123/85 . . . does not contain any national legislation and case-law. mandatory provisions directly affecting the validity or content of the contractual pro- visions or oblige the contracting parties to adapt the content of their agreement but merely is limited to providing economic agents in the motor vehicle industry with certain possibilities enabling them to remove 15. The Commission also maintains that the their distribution and servicing agreements questions referred are irrelevant in the cir- from the scope of the prohibition contained cumstances, but its line of argument is differ- in Article 85(1) despite the inclusion in those ent in part. In its opinion, there is no need to agreements of certain types of exclusivity give a ruling on the compatibility of the dis- and no-competition clauses'. 10 puted clauses with the block exemption regulations, since the Court has already clearly stated in Grand Garage Albigeois and Nissan France that since Regulation N o 123/85 does not serve to regulate the activi- ties of third parties who may operate in the market outside the framework of distribu- tion agreements 'it cannot be interpreted as prohibiting a trader who is outside the offi- cial distribution network for a given make of motor vehicle and is not an authorised inter- Furthermore, they observe that in those mediary within the meaning of that regu- judgments the Court added that 'the pro- lation from independently carrying on the visions of the exempting regulation cannot business of marketing new vehicles of that affect the rights and obligations of third par- make'. 12 ties in relation to contracts concluded

According to the Commission, it is therefore sufficient for the 10 — Case C-226/94 Grand Garage Albigeois and Others v national court, in order to determine the Garage Massol [1996] ECR 1-651, paragraph 15, and Case C-309/94 Nissan France and Others v Dupasquier and Oth- ers [19%] ECR 1-677, paragraph 15. To this effect see also Case 10/86 VAG France v Établissements Magne [1986] ECR 4071, paragraphs 12 and 16, and, most recently, Case 12 — See paragraph 20 in both the judgments cited at footnote C-41/96 VAG-Handlerbeirat v SYD-Consult [1997] ECR 12. To the same effect, see Case C-128/95 Fontaine and 1-3123, paragraph 16. Others v Aqueducs Automobiles [1997] ECR 1-967, para- 11 — Grand Garage Albigeois and Nissan France (cited in the graph 20, and most recently, Syd-Consuk, cited at footnote previous footnote), both at paragraph 19. 10, paragraph 17.

In fact, as explicitly stated, the national court wishes to ascertain whether the Peugeot and First of all, it is not and cannot be denied Citroën dealership contracts are contrary to that any incompatibility of the disputed Article 85(1) of the Treaty since, in that case, clauses with the exemption regulations the action for unfair competition would lose would not entail the contracts being unlaw- all substance and Cabour and NDA's actions ful, still less void. But such an argument has would certainly, therefore, be dismissed. In no raison d'être. I need merely point out that other words, the national court is not asking it was precisely because the national court the Court whether or not the dealership con- was aware of this that it submitted to the tracts can be relied on against Arnor on the Court a specific, precise question seeking to basis of Community law, as it is well aware ascertain whether or not a distribution net- that, having regard to the Court's decisions work based on agreements containing such in this sphere, the block exemption regula- clauses is caught by the prohibition laid tions do not provide any rule for determin- down in Article 85(1) of the Treaty, if the ing whether such contracts may or may not

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13 — In that connection, see in particular SYD-Consult (cited at footnote 10), paragraphs 9 to 19. 14 — To this effect, see Case 22/71 Béguelin Import v G. L. 15 — This case-law has been consistently applied to unauthorised Import Export [1971] ECR 949, paragraph 29, where the resellers in the context of products marketed through a Court declared that 'an agreement which is null and void selective and exclusive network. It evolved principally in by virtue of this provision has no effect as between the con- connection with perfumery products, and was extended by tracting parties and cannot be relied on as against third par- judgment of 9 July 1996 to the vehicle distribution sector ties'. also.

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— Objectively valid reasons

23. Next, I would observe that I do not 21. The issue here is whether the fact that think that any different conclusion can be the Peugeot and Citroën exclusive dealership drawn from the fact that Article 5(3) pro- contracts do not set out in detail the objec- vides that the objectively valid grounds, tively valid reasons for which the obligation which must 'have been exemplified in the not to compete may be excluded means that agreement', may be invoked only if they they do not satisfy the conditions imposed apply without discrimination to undertak- by Regulation N o 123/85 for the purposes of ings within the distribution system in com- obtaining exemption. That is the argument parable cases. Such a provision might well be put forward by Arnor and adopted by the interpreted as meaning that the objectively national court at first instance. valid reasons, although exemplified in the

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agreement, may be invoked only if they are than state that the parties may rely on objec- applied without discrimination in compa- tively valid reasons in order to be released rable cases. In any event, therefore, that pro- from the obligation not to compete, but vision must necessarily be read in the light without defining those reasons in detail, is and in terms of the provisions referred to not contrary to the relevant provisions of above, which show very clearly that, for the Regulation N o 123/85. purposes of exemption, it is sufficient for the parties to stipulate that the obligation not to compete may be excluded where there are objectively valid grounds.

The relevant clauses in the Peugeot and Citroen contracts, on the basis of which dis- tributors are prohibited from selling new vehicles of other makes except where they put forward objectively valid reasons, cannot 24. In short, I believe that the fact that an therefore be considered to be covered by exclusive dealership contract does no more Article 3(3). Contrary to the arguments of

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Peugeot and Citroen, this interpretation is — Sales targets not in any way contradicted by that part of Article 5(2) which provides that the exemp- tion referred to in Article 3(3) is to apply also to the obligation 'not to sell new motor vehicles other than those within the contract programme', provided that the dealer can be released from that obligation where he shows that there are objectively valid reasons 27. The Court is asked, again with regard to for doing so. That provision therefore, far Regulation N o 123/85, finally whether the from being capable of interpretation to the block exemption applies to a clause in a con- effect that in order to be able to sell vehicles tract which imposes on a dealer a fixed sales other than those offered for supply by the target for a given period and which, if the manufacturer at commercial premises other target is not reached, gives the manufacturer than those at which the contract goods are the right, on three or six months' notice, to sold, permits dealers, where they can show alter the contract territory or to withdraw good reason, to sell vehicles of a different the dealer's exclusivity or even to terminate make, but not competing with the contract the contract. In this context, the relevant goods, even at the premises where those are provisions are Article 4(1 )(3), on the basis of sold. which the manufacturer may require the dealer to endeavour to sell, within the con- tract territory and within a specified period, a minimum quantity of contract goods, and Article 5(2)(2) and (3), which lay down rules for the termination of an exclusive contract.

an obligation imposed on the dealer to definite period (Article 5(2)(3)). Further- 'endeavour to sell' such minimum quantity more, that regulation provides for the right of contract goods as determined by agree- to terminate the agreement for cause (Article ment between the parties or, in the absence 5(4)). Accordingly, the question whether it is of such agreement, on the basis of estimates. sufficient and compatible with the exemption regulation for the manufacturer to set a notice period of three or six months, as pro- vided for in the Peugeot and Citroen agree- ments, for the purposes of altering the con- tract territory and/or withdrawing the dealer's exclusivity, must be assessed in the Clearly, the expression 'endeavour to sell' light of those provisions. can imply no more than an obligation to use best endeavours, and not an obligation to achieve a certain result. It is equally obvious that where, as in the present case, the sales target has been fixed unilaterally by the manufacturer, and not on the basis of agree- ment between the parties, it cannot without There is no doubt in my mind that the examination be ruled out that such target- hypothesis I have just set out, which is dis- setting is arbitrary, having regard to the puted by Arnor, is not in itself contrary to economic and social reality within which the the regulation, in the sense that it may well dealer is constrained to operate. In such cir- be regarded as a case of termination for cumstances — and notwithstanding the fact cause. Nevertheless, it must be stated that it that the regulation does not prohibit the fix- is for the national court to determine ing of sales targets to be reached within a whether the manufacturer's exercise of the certain period as such — it is for the national right to terminate the contract is proportion- court to establish whether the fixing of a ate to the dealer's alleged failure to perform a determined sales targets constitutes an obli- contractual obligation and whether that gation to use best endeavours and whether it sanction is applied in a way which is not dis- is reasonable and fair, having regard in par- criminatory as regards other dealers in a ticular to the estimates relating to the ter- similar situation. ritory and period of time in question.

In this respect, it must however be borne in mind that the national court, precisely in order to justify the necessity and relevance 32. The point is therefore to determine, this of such a question for the purposes of time in the light of Article 3(3) of Regulation resolving the dispute in the main proceed- N o 1475/95, whether the block exemption ings, was careful to point out that 'the claims applies to a clause in a contract which made by the dealers in their action for unfair excludes any opportunity for a dealer to sell competition seek, in part, compensation for new vehicles offered by persons other than damage sustained over several years and, in the manufacturer, even at premises separate part, an injunction for the future'. In the from those at which the contract goods are view of the national court, therefore, the sold. very fact that, in relation to the factors referred to, the action for unfair competition also covers the period following the entry into force of Regulation N o 1475/95 consti- tutes good and sufficient reason for asking for and receiving from the Court an answer relating to the relevant provisions of that regulation as well. That view, I need scarcely add, cannot but be endorsed. I shall at once say that my earlier observa- tions and the conclusions I reached in con- nection with the corresponding provision of Regulation N o 123/85 apply a fortiori in this case, nor could it be otherwise. The pro- vision in question expressly releases from the obligation not to compete which is exempted 31. I shall now go on to consider the by the regulation the situation in which substance of the question in issue, but not new motor vehicles offered by persons other before pointing out that it is concerned than the manufacturer are sold 'on separate solely with the compatibility with Regu- sales premises ... in the form of a distinct lation N o 1475/95 of the contractual clauses legal entity and in a manner which avoids

33. As regards the compatibility of the clause relating to sales targets imposed on 34. In short, contractual clauses fixing sales the dealer by the manufacturer with Regu- targets are compatible with Regulation N o lation N o 1475/95, I consider it sufficient to 1475/95 only in so far as those targets are point out here that Article 4(1)(3) of that not fixed unilaterally and in so far as any regulation differs from the corresponding alteration of the contract territory and/or provision of Regulation N o 123/85 in that it withdrawal of exclusivity from the dealer, as provides that where sales targets have not a penalty for failing to attain the targets so been determined by common agreement they fixed, complies with the conditions laid are to be determined by an expert third party down in the regulation, in particular by pro- on the basis of forecast sales and of sales pre- viding for recourse to a third party or an viously achieved in the territory concerned. arbitrator in the event of disagreement. This means that in accordance with Regu- lation N o 1475/95 it is impossible for the manufacturer unilaterally to require the dealer to sell a minimum number of contract goods within the contract territory during a specified period. The third question

Finally, as regards the manufacturer's right 35. By its third question, the national court to alter the contract territory and/or with- is asking the Court whether the prohibition draw the exclusive contract or even termi- laid down by Article 85(1) of the Treaty nate the contract, on giving three or six applies to the exclusive distribution network months' notice, it must be pointed out that of a motor vehicle manufacturer if that net- the second indent of Article 5(3) expressly work is based on contracts containing

36. In this respect it should first of all be pointed out that long ago the Court stated that 'to define a category is only to make a classification and it does not mean that the agreements which come within it all fall 37. Plainly, those statements mean that con- within the prohibition. N o r does it mean tractual clauses which do not meet the con- that an agreement within the exempted cat- ditions for application of the block exemp- egory, but not exhibiting all the features of tion are not on that account alone prohibited the said definition, must necessarily fall within the prohibition'. In those circum- stances, as explained on the same occasion, a block exemption regulation 'does not create 16 — Case 32/65 Italy v Council and Commission [1966] ECR 389, in particular p. 406. any presumption of law concerning the 17 — VAG France, cited at footnote 10, paragraph 12.

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I scarcely need add that even if it were con- ceivable that such a clause had no anticom- petitive object, its effects would still be irrec- oncilable with the proper 'functioning' of competition in the common market. It is true 38. Turning to the facts of the present case, that this conclusion requires an assessment it must therefore be determined whether a to be made on the basis of a variety of fac- clause which, for example, rules out any tual circumstances such as, in particular, the opportunity for the dealer to sell new level of competition prevailing on the market vehicles supplied by persons other than the in question and the economic and legislative manufacturer, even at commercial premises context in which it is intended the clause separate from those at which the contract should take effect, so as to investigate the goods are offered for sale, is necessary in actual possibility of its distorting compe- order to attain the objective of the contract tition on the common market. Taking it as understood that, where there is no evidence in this connection, it is clearly for the national court to undertake that assessment, 18 — See, for example, the judgment in Joined Cases 29/83 and 30/83 CRAM and Rheinzink v Commission [1984] ECR I shall merely point out here that the clause 1679. in issue appears in contracts which are bind- 19 — See, inter alia, the judgments in Case 42/84 Remia v Com- mission [1985] ECR 2545; Case 161/84 Pronuptia [1986] ing on all the dealers in the distribution net- ECR 353; Case 65/86 Bayer [1988] ECR 5249, and Case work and that, for that reason alone, it is C-234/89 Delimitis [1991] ECR I-935. In addition, for a more detailed analysis of the question, see my Opinion in such as to bring about an appreciable restric- Case C-250/92 DLG [1994] ECR I-5644, in particular points 14-16. tion of competition.

It is common ground here that both the Peu- geot and Citroen distribution systems cover the whole of France and that all the dealers are bound by the contractual clauses under consideration. This is sufficient, it seems to me, to reach the conclusion that those 41. On this point, it should be noted that clauses are liable to affect trade between the Court has had occasion to state that 'the Member States. As the Court has ruled o n automatic nullity in question only applies to several occasions, 'an agreement or practice those parts of the agreement affected by the restricting competition and extending over prohibition, or to the agreement as a whole if the whole territory of a Member State by its it appears that those parts are not severable very nature has the effect of reinforcing the from the agreement itself', 22 or, phrasing it compartmentalisation of markets on a differently, that such nullity applies 'to the

20 — Sec, to this effect, Case 56/65 Société Techniques Minière v Maschinenbau Ulm [1966] ECR 235, page 249, and, most 21 — Remia, cited above at footnote 19, paragraph 22. recently, Casc C-219/95 P Ferriere Nord v Commission 22 — Société Technique Minière, cited above at footnote 20, page [1997] ECR 1-4411, paragraph 20. 250.

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contract. In short, it follows from the relevant case- law that 'the automatic nullity decreed by Article 85(2) applies only to those contrac- tual provisions which are incompatible with Article 85(1)' and that '[t]he consequences of such nullity for other parts of the agreement are not a matter for Community law' but 'are to be determined by the national court With regard to the first of those aspects, I according to its own law'. 25 O n the under- believe it must be pointed out that the fact standing that the automatic nullity of the that a contract which would otherwise be contract as a whole is not a matter for Com- covered by the block exemption contains a munity law where contractual clauses incom- non-exempt clause restricting competition patible with Article 85(1) are severable from may be capable of creating an economic and the exempt clauses and are not essential to competitive situation quite different from the contract in question, it therefore falls to that envisaged by the legislature in providing the national court to determine, on the basis for the block exemption.

250. To the same effect, the Court has more recently given a ruling in VAG France, cited above at footnote 10, in which petitive context identified, whether or not t o it held that 'the consequences of the fact that those contrac- grant an individual exemption. With regard tual provisions which are incompatible with Article 85(1) are automatically void for all other partsof the agreement to the second aspect, however, I shall merely or for other obligations flowing from it are not a matter for Community law' (paragraph 14), and that, accordingly, '[i]t point out that it is difficult to see how an is for the national court to deurmine in accordance with the relevant national law the extent and consequences, for agreement not to compete which has not the contractual relations as a whole, of the nullity of certain been expressly exempted and which rules out contractual provisions by virtue of Article 85(2)' (paragraph 15). any opportunity for the dealer to sell new 25 — To this effect sec Case 319/82 Société de Vente de Ciments vehicles supplied by persons other than the et Bétons v Kerpen & Kerpen [1983] ECR 4173, paragraphs 11 and 12. manufacturer can be regarded as other than

The situation is different, however, as regards 43. More particularly, I would note that in Regulation N o 123/85, since it lays down no this case the decision to be taken is made rules on this point. Here, therefore, it will be easier, at least as regards the consequences necessary to establish whether the contrac- resulting from the nullity of a contractual tual clause imposing an absolute obligation clause laying down an obligation not to not to compete, even at separate commercial compete, such as the one under consider- premises outside the contract territory, is or ation, which does not satisfy the require- is not essential in the scheme of the contract ments of Regulation N o 1475/95. Article and, from that point of view, whether or not 6(1)(3) of that regulation expressly provides it is severable from the exempted clauses. I for the automatic loss of the exemption can only stress that it is difficult to see how where the dealer is forbidden to sell vehicles an obligation not to compete, such as the one supplied by persons other than the manufac- under consideration here, can be regarded as turer on separate premises. 26 Only too other than essential to an exclusive dealer- plainly, this means that all the provisions of ship contract.

Conclusion

44. I n t h e light of the foregoing considerations, I therefore p r o p o s e that the C o u r t r e p l y as follows t o the questions referred b y the C o u r d ' A p p e l , D o u a i :

(1) O n a p r o p e r c o n s t r u c t i o n of C o m m i s s i o n Regulation ( E E C ) N o 123/85 of 12 D e c e m b e r 1984, t h e e x e m p t i o n granted b y t h e regulation

(2) O n a proper construction of Commission Regulation (EEC) N o 1475/95 of 28 June 1995 the exemption granted by the regulation

(a) does not apply to a clause in a contract which excludes any opportunity for a dealer to sell new vehicles offered by persons other than the manu- facturer, even at premises separate from those at which the contract goods are sold;

(b) does not apply to a clause in a contract which allows the supplier unilater- ally to fix sales targets and does not make provision for recourse to an impartial third party or an arbitrator in the event of the parties' disagree- ing as to the alteration of the contract territory and/or withdrawal of exclusivity from the dealer on account of his failure to reach the target.

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(3) Contractual clauses which are not expressly exempted under Regulations N o 123/85 and N o 1475/95, such as those concerned in this case, are caught by the prohibition laid down by Article 85(1) of the Treaty if they restrict compe- tition and are capable of affecting trade between Member States. The auto- matic nullity of those clauses, as provided for by Article 85(2), may extend to the contract as a whole if they cannot be severed from the exempted clauses and are essential to the overall scheme of the contract.