C-240/98

OCÉANO GRUPO EDITORIAL AND SALVAT EDITORES

OPINION OF ADVOCATE GENERAL SAGGIO delivered on 16 December 1999 *

1. By orders (which are identical in con- administrative provisions of the Member tent) of 31 March and 1 April 1998, the States relating to unfair terms in contracts Juzgado de Primera Instancia (Court of concluded between a seller or supplier and First Instance), Barcelona, Spain, has refer- a consumer (Article 1(1)). red to the Court of Justice for a preliminary ruling a question concerning the interpreta- tion of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts 1('the Directive'). This is the first Under Article 2, 'seller or supplier' means time that the Court has been called upon to any natural or legal person who is acting give a ruling on the Directive. The national for purposes relating to his trade, business court is asking, in particular, whether the or profession, whether publicly owned or system of protection which the Directive privately owned, and 'consumer' means guarantees to consumers implies that a any natural person who is acting for court, in deciding a case concerning the purposes which are outside his trade, alleged non-performance of a contract business or profession. concluded between a seller or supplier and a consumer, may determine of its own motion whether a term inserted in that contract is unfair. The present case relates to a term which confers upon the court of 3. The Directive aims to ensure that, in the the district where the undertaking has its legal systems of the Member States, the principal place of business exclusive juris- consumer is provided with a minimum level diction to adjudicate on disputes concern- of protection while giving Member States ing the application of a contract of sale. the option to afford a higher level of protection through national provisions that are more stringent than those of the Directive (12th and 17th recitals; Arti- cle 8).

the consumer has therefore not been able to the contract nor to the adequacy of the influence the substance of the term, parti- price and remuneration, on the one hand, cularly in the context of a pre-formulated as against the services or goods supplied in standard contract'. The following subpara- exchange, on the other, in so far as these graph specifies that '[T]he fact that certain terms are in plain intelligible language'. aspects of a term or one specific term have been individually negotiated shall not exclude the application of this Article to the rest of a contract if an overall assess- ment of the contract indicates that it is nevertheless a pre-formulated standard 5. In order to determine specifically those contract'. The third subparagraph then terms that cause a significant imbalance to adds that '[W]here any seller or supplier the detriment of the consumer, the Direc- claims that a standard term has been tive refers, in its Annex, to terms which individually negotiated, the burden of may be regarded as unfair; this list is of a proof in this respect shall be incumbent purely indicative and non-exhaustive on him'. nature and leaves it to the Member States to add to it or to formulate it in more restrictive terms under their laws (17th recital and Article 3(3)).

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graph further provides that the contract is The national legislation to continue to bind the parties 'if it is capable of continuing in existence without the unfair terms'.

8. The Directive was transposed into Span- ish law by Law No 7/1998 of 13 April 1998, 2 that is to say after the period prescribed for doing so. The purpose of the Law, as stated in its preamble, was to transpose the Community legislation on Member States must also ensure 'that, in unfair terms in consumer contracts and to the interests of consumers and of competi- regulate general contractual terms. Pur- tors, adequate and effective means exist to suant to the third final provision, the Law prevent the continued use of unfair terms in entered into force following a vacatio legis contracts concluded with consumers by of 20 days from the date of publication in sellers or suppliers' (Article 7(1)); in parti- the Boletín Oficial del Estada, that is on cular, those means are to include provisions 3 May 1998. whereby persons or organisations may take action according to the national law con- cerned before the courts or before compe- tent administrative bodies for a decision as to whether contractual terms drawn up for general use are unfair, so that they can apply appropriate and effective means to prevent the continued use of such terms 9. The 1 9 9 8 Law a m e n d e d Law (Article 7(2)). The Directive does not, No 26/1984 of 9 July 1984 on consumer however, expressly state whether or not protection, 3by introducing, inter alia, a the national court has the power to invoke new Article 10a containing the definition of its own motion the unfairness of the of 'unfair terms', which was to be under- term and hence its unenforceability against stood as meaning all provisions not indivi- the consumer. dually negotiated which, contrary to the requirement of good faith, cause a signifi- cant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer. The second paragraph of that article provides that unfair terms, conditions and provisions are to be automatically void and deemed not to have formed part of the contract.

In accordance with and pursuant to Arti- transposing the Directive, do not expressly cle 10a, terms laid down by the additional govern the question whether a court may of provision, which include, in paragraph 27, its own motion raise the issue of the nullity provisions granting jurisdiction to a court of unfair terms. In Spanish law there does other than that corresponding to the con- not appear to be any legal basis which sumer's domicile or the place of perfor- could clearly serve as a foundation for a mance of the obligation, are to be regarded court's power to examine that issue in the as unfair. absence of an initiative taken by a party. In Spanish case-law this problem has hitherto been the subject of contradictory solutions, some courts taking the view that they were able to derive that power expressly from the Directive. The actions provided for by the Law may be brought as from the date of its entry into force, even in respect of contracts conclu- ded previously. However, in the case now before us the Law was not yet in force on the date on which the applicant companies brought actions against the consumers, in respect of whom the new provisions are not The facts and the questions referred for a applicable in the circumstances in point preliminary ruling here. Previously, protection of the consu- mer against unfair terms inserted in con- tracts concluded with a seller or supplier were governed by the above-mentioned 11. On various dates between May 1995 Law No 26/1984. That Law required that and April 1996 Oceano Grupo Editorial SA the provisions inserted in the contracts and Ms R. Murciano Quintero, of El Ejido, referred to should, inter alia, be consistent Almería, and Salvat Editores SA and Mr J. with good faith and guarantee the proper M . S á n c h e z - A l c ó n P r a d ė s , M r J. balance between the various contractual L. Copano Badillo, Mr M. Berroane and obligations. Thus unfair terms — con- Mr E. Viñas Feliu, all residing in various strued as meaning terms which adversely parts of Spain, entered into contracts for affect the consumer in a disproportionate the purchase by instalments of an encyclo- or inequitable manner or cause an imbal- pedia. ance in the contract between the parties' rights and obligations, to the detriment of consumers or users — were accordingly deemed to be automatically void [Arti- cle 10(1)(c), point 3]. 12. In the contracts for sale on deferred payment terms, which had been drawn up in advance by the sellers in a standard form, the parties agreed that, in the event of a dispute, the court of Barcelona, the city in 10. It should be added, finally, that the which the abovementioned companies have Spanish consumer-protection provisions, their principal place of business, would including those contained in the Law have exclusive jurisdiction.

'whether the scope of the consumer protec- tion provided by Council Directive No 93/13/EEC on unfair terms in consu- When those actions were brought, the mer contracts is such that the national Directive had not yet been transposed into court may consider of its own motion Spanish law. The national court, however, whether a term is unfair when making its doubts whether the jurisdiction clause in preliminary assessment as to whether leave the contract is valid inasmuch as, under the should be granted for a claim to proceed terms of the Directive, it should be regar- before the ordinary courts.' ded as 'unfair'. In its view the court of competent jurisdiction should be that of the place of residence of the defendants. On 9 September 1997 the Barcelona court forwarded the file to the Public Ministero (State Counsel's Office), requesting it to 15. By order of the President of the Court give its opinion on the possibility of that of 20 July 1998, the cases were joined for court's declaring, of its own motion, the the purposes of the written and oral jurisdiction clause to be void. The Publico procedure and the judgment. Ministere Counsel's Office replied that, in the context of the 'juicio de cognición', 4 the procedure applicable in this case, it is not possible if the court designated by the parties to a contract is that of the place of residence of at least one of them, 5for that court to raise the issue of lack of jurisdic- tion of its own motion. Substance

In dealing with this question and in order term in question must fall within the to provide the national court with a helpful general category referred to in subpara- reply, I consider it necessary to undertake graph (q) of the above-mentioned Annex two consecutive operations. First, it is inasmuch as it has the effect of 'hindering necessary to interpret the provisions of the the consumer's right to take legal action or Directive in order to ascertain whether the exercise any other legal remedy'. For our

In domestic law which would lead to a short, for a term of a contract to fall within different outcome in terms of territorial its scope, the Directive only requires that it jurisdiction. Second, it is necessary to should not be individually negotiated determine whether that disapplication between the seller or supplier and the may possibly arise in a dispute such that consumer and that it should cause 'a in point in the cases in the main proceed- significant imbalance in the parties' rights ings, where the parties are two private and obligations arising under the contract', persons, even if the Community rule, which to the detriment of the consumer (Arti- differs in substance from the requirement of cle 3(1)). While respecting these general domestic procedural law, is included in a parameters, the Member States may indeed directive that has not been transposed. indicate other, more specific terms than those contained in the list: in that case the terms will be 'unfair' in the light of the Directive and will therefore be subject, as I have said, to the regime which the Directive seeks to apply to them.

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him to bring or defend proceedings before the court of the district where the company has its principal place of business in connection with any dispute arising from 19. It is also not without importance that, the contract has undeniable advantages for when transposing the Directive, that is to the company in question but may diminish, say, when giving substance to the general to a substantial extent, the consumer's principle referred to in Article 3(1) of the rights of defence. As the national court Directive, the Spanish Government, in stated, on the basis of practical experience accordance with the solutions adopted in in procedural matters, in the order for other Member States, 7expressly wished to reference, the consumers' obligation to include in the list of unfair terms the term submit to the jurisdiction of the court which requires actions to be brought in a specified by the company, which may be a court other than that of the place of very long way from his place of residence, residence of the consumer or the place of entails the risk that the he may, for performance of the obligation. 8In the light practical purposes, be unable to defend of these arguments, it may justifiably be himself in view of the high cost associated concluded that a term contained in a with entering an appearance, especially if contract between a consumer and a seller that cost is compared to the modest amount or supplier which, for any dispute relating at issue in the dispute; in addition to this, to the contract, stipulates that the court there is the fact that the persons involved in corresponding to the principal place of these cases come for the most part from a business of such seller or supplier is to modest social background and have fairly have exclusive jurisdiction may be classi-

convenient and less expensive. I believe that sives (Committee on Unfair Terms) set up by Article L- a situation of this kind gives rise, without 132.2 of the Code de la Consommation (Consumers' Code), includes among terms that are presumed to be unfair those any doubt, to a significant imbalance in the which have the object or effect of derogating from the statutory rules governing territorial jurisdiction or conferred parties' rights and obligations. It follows jurisdiction.

No 26/19841.

21. With regard to the substance, I feel that it is necessary to point out, in the first place, that the defendant in the dispute pending before the national court (the consumer) did not appear as party to the proceedings, thus forgoing the right to 23. It should be noted that the system of invoke the lack of jurisdiction of the court protection guaranteed by the provisions of before which the case was brought on the the Directive proceeds from the general ground that that jurisdiction was based on principle that, in contracts entered into by a an unfair term. According to the Spanish seller or supplier, the consumer must be Government, decisive significance must be regarded as the 'weak party', who needs attached to the party's behaviour. Given' special protection: the aim of the Directive that the powers conferred upon the is therefore to restore, in these relations, a national court must be assessed exclusively contractual balance, while at the same time in the light of national law, which, as noted safeguarding the general interest in the earlier, does not give the court a power of observance of proper commercial practices. that kind in proceedings such as the main In this context, the Directive imposes upon proceedings in this case, it follows that it is Member States an obligation of result, in impossible for that court to raise the this instance to make sure that terms ineffectiveness of the contractual term of judged to be unfair cannot be binding on its own motion. the consumer, as provided for under national law (Article 6). Consequently, while it is for the Member States to choose the specific civil-law penalty to be applied 22. May I say at once that I do not find this to such terms — ineffectiveness, nullity, interpretation to be convincing. In agree- voidability — they are in any event asked ment with the Commission and the French to introduce a system whose objective is to

provide effective protection for consumer system of protection which involves — and rights. actively so — persons unconnected with the individual contractual relationship. On the basis of the obvious premiss that the reaction of consumers to terms that are harmful to their interests is not an effective remedy because of the cost of bringing an individual action and the disinclination of That objective, as the Commission most consumers to venture into complex pro- appropriately points out, may be difficult ceedings against sellers or suppliers who are to attain if the court is not given the more powerful and better organised, the opportunity to determine of its own motion Directive requires that 'Member States whether a contractual term is unfair. In shall ensure that, in the interests of con- reality, the system for protecting the weak sumers and of competitors, adequate and contracting party, as defined in the Direc- effective means exist to prevent the con- tive, seems to disregard the consumer's tinued use of unfair terms in contracts

terms'. This is obviously illustrative and for guidance and Directive would be irreparably endangered. does not preclude other forms of action such as action by the court of its own motion but is particularly important in the system of protection guaranteed by the Directive in so far as it offers consumer bodies or associations access to dissuasive action that is of a preventive nature and thus not related to a specific dispute. This form of protection — which is particularly effective because of its general nature — is a totally novel feature for the legal systems of certain Member States, particularly those which follow the Roman law tradition, and that is why Member States were quite understandably expressly asked to make provision for this in their domestic law. As the French Government

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OPINION OF MR SAGGIO — JOINED CASES C-240/98 TO C-244/98

court of its own motion constitutes not obligation to be aware of the unfairness of only a means that is extremely effective for the term, having to retain a lawyer for a the purposes of sanctions but also seems be dispute involving a small amount, etc.) an effective instrument for dissuading sell- which prompted the Member States to ers or suppliers from inserting the terms in include the binding choice of the forum of contracts entered into with consumers. the seller or supplier as one of the contrac- tual terms that are detrimental to the consumer.

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fail to be reflected in the powers conferred the fact that the consumer may have signed upon the national court. 11 the contract even though it has not been negotiated individually — and, from the procedural point of view, for action by the court which, having assessed the harm done to the consumer, may decide to disapply the term irrespective of the consumer's proce- dural conduct.

This, then adds that 'they are ineffective only in respect of the consumer and that ineffectiveness may be raised of its own motion by the court.' With regard to the Belgian system, moreover, is a principle that has been see Balate, E., 'Le contrôle des clauses abusives: premier applied a number of times in the Court's bilan', in Droit de la consommation, 1997, p. 321 et seq., in particular pp. 131 and 140, where it is stated that, as a decisions, on the basis of which, in accor- result of the public policy nature of the provisions referred to, the court is required to apply them of its own motion, dance with the general principle of the even if the consumer fails to appear. For a generai primacy of Community law, 12 national discussion of these matters, see M. Tenreiro, 'The Com- munity Directive on Unfair Terms and National Legal procedural provisions cannot be applied Systems', in European Review of Private Law, 1995, p. 273 by a court unless they afford effective et seq., in particular p. 282, where it is pointed out that the non-technical expression, namely that unfair terms 'are not binding' on the consumer, enables practical conclusions to be drawn, in particular that 'the judge shall declare a term as unfair and refuse to enforce it ex officio, without any need for special demand from the consumer'. 12 — Case 106/77 Simmenthal [1978] ECR 629, paragraphs 17

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28. In this connection it should be noted exclusive jurisdiction in respect of disputes above all that in the present case it is not arising from the contract the court of the district where the seller or supplier has his principal place of business, thereby dero- 13 — I would point out that, with regard to the question of the relationship between the duties of the national court and gating from the general criteria of jurisdic- the principles of domestic procedural law, the Court has stated on a number of occasions that, in the absence of tion; on the other hand, according to the Community rules on the matter, it is for the domestic legal system of each Member State to lay down the procedural general principles on which the consumer- regime for court actions intended to ensure that the rights protection arrangements contained in the derived by individuals as a consequence of Community law

There is clearly no domestic legal [1983] ECR 3595, paragraph 14; Cases 331/85, 376/85 and 378/85 Bianco and Girard [1988] ECR 1099, p a r a - provision that can be 'interpreted' in such a g r a p h 12; Case 104/86 Commission v Italy [1988] ECR 1799, paragraph 7; Cases 123/87 and 330/87 Jeune- homme and EGI [1988] ECR 4517, paragraph 17; Cases C-6/90 and C-9/90 Francovitch and Others [1991] ECR I-5357, paragraph 4 3 ; Case C-96/91 Commission v Spain [1992] ECR I-3789, paragraph 12; Cases C-31/91 to C-44/91 Lageder and Others [1993] ECR I-1761, p a r a - graphs 27 t o 29; Cases C-430/93 and C-431/93 Van Schijndel and Van Veen [1995] ECR I-4705, p a r a - g r a p h s 16 and 17, and Case C-312/93 Peterbroeck [1995] ECR I-4599, paragraph 12; Case C-242/95 GT- Link [1997] ECR I-4449, paragraphs 24 and 27; and Case C-126/97 Eco Swiss [1999] ECR I-3055, paragraphs 3 1 t o

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way as to attain the objective required by main proceedings is in reality between two the Directive. 15 However, it is, I repeat, for private persons, the fact that one of the the national court to make a more precise parties failed to appear being clearly of no determination in that respect. importance in the context in question. On the other hand, if it is considered that a directive that has not been transposed cannot have such an effect, all that would remain for the national court would be to accept the validity of the choice of forum made by the term it considers to be unfair.

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national court. . . cannot assume the role of the transposing authority, there is nothing, on the other hand, to prevent it clear that those obligations apply to all from disapplying a national rule that is incompatible with a provision which is hierarchically superior to it by reason bodies of the Member States, including, of the principle of primacy. Conversely, any other solution which would have the effect of authorising the national within the limits of their jurisdiction, courts to make a domestic provision that is incompatible judicial bodies. In this context, the Court with Community law prevail would directly call into question the primacy of Community law, in this instance, has above all recognised that, in the specifically, the binding effect and uniformity of applica- tion of directives. Admittedly, the proposed analysis application of national law, irrespective of presupposes a decoupling of direct effect and primacy, whether the provisions in question were hut wis severance does indeed appear to constitute one of the principal threads in the recent development of the case- adopted before or after the directive, the law both of the Court of Justice and of the national courts' [in French added in the Opinion] (emphasis added); national courts are required to interpret Prêchai, 'Directives', in European Community Law, their national law in the light of the Amsterdam, 1955, in particular at pp. 121 and 122: 'if the theoretical underpinning of the principle of supremacy wording and purpose of the directive. is the conception of an autonomous Community legal order involving a transfer of powers to the Community and Accordingly, between two possible inter- consequent limitations o f M e m b e r States' sovereign pretations of the national provisions the

directives: quelques interrogations', in Revue trimestrielle ECR I-4135, paragraph 8; Case C-334/92 Wagner Miret de droit européen, 1990, pp. 669 and 690; Bach, 'Direkte [1993] ECR I-6911, paragraph 20; and Case C-131/97 Wirkung von EG-Richtlinien', i n / Z , 1990, p. 1108 et seq.; Carbonari and Others [1999] ECR I-1103, paragraph 4 8 . Lenaerts, 'L'égalité de traitement en droit communautaire', It will be noted that in the Marleasing case the Court of in Cahiers de droit européen, 1 9 9 1 , p. 38 and note 120; Justice asked the national court to interpret the Civil Code Slot, 'Commento alla sentenza CIA Security International in such a way as to preclude application of the domestic SA', in Common Market Law Review, 1996, pp. 1036 and provisions which provide for a declaration of nullity of the 1049; Timmermans, 'Community Directives Revisited', instrument of incorporation of a company with share Yearbook of European Law, 1998, p . 1 et seq., and Barav, capital on a ground other than those listed in a directive Rapport Général, XVIII Congrès FIDE, Stockholm, 1998, that has not been transposed. I therefore consider that this

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it was marketing. The two defendants maintained inter alia that the system in question did not comply with current Belgian legislation since it had not been approved under that legislation. CIA, for its part, maintained that the domestic legisla- tion was not applicable because it had not 32. In this connection, reference may use- been notified to the Commission pursuant fully be made to the judgment in CM to the Directive. Although the dispute Security International case. 19 In that case involved private persons, the Court rightly the Court was called upon by the Tribunal referred to its settled case-law according to de Commerce de Liège to interpret Arti- which 'wherever provisions of a directive cles 8 and 9 of Council Directive 83/189/ appear to be, from the point of view of EEC of 28 March 1983 laying down a their content, unconditional and suffi- procedure for the provision of information ciently precise, they may be relied on against any national provision which is not in accordance with the directive' (para- 18 — It should be noted that, in a different context, this graph 42; emphasis added).

country. This case does not therefore concern the direct effect of those rules' (paragraph 47, emphasis added}. rendering] such technical regulations inap- Ultimately, as in the case with which we are dealing, the plicable so that they may not be enforced higher-ranking rule is used as a parameter of the legality of the lower-ranting rule, irrespective of the existence, in so against individuals' (paragraph 45). In far as the individual is concerned, of a right upon which he short, it follows from this judgment that it can rely in legal proceedings. While it is true that the present case, unlike the Racke case, concerns relations between the Community legal order and the national legal is not open to a private person to raise, as system, 1 believe that this factor should not lead to a against another private person, a plea based different solution, particularly bearing in mind the typi- cally 'monist' approach which the Court has always followed when defining relations between the two legal

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on a failure to comply with a provision insurer from being able to rely on statutory adopted in breach of a directive. A directive provisions or contractual clauses to refuse operates as a 'shield' against the applica- to compensate third-party victims of an tion of a provision that is incompatible accident caused by the insured vehicle' with it, it being of no importance whether (paragraph 20). In this case too the Court application of the conflicting law is sought requested the national court not to apply before the court by the State (for instance, the national provisions, which were incom- in the person of a governmental supervisory patible with the directive, even though the body or the State Counsel's Office) or a directive in question had not been correctly private person. 21 transposed. The private person — in this instance the insurance company — there- fore had to meet a pecuniary obligation which was not incumbent upon it under national law.

21 — The circumstances of the Unilever Italia case (C-443/98, a 24 — C-431/92 [1995] ECR I-2189 et seq. See also Case case which is pending before the Court) are similar to those C-72/95 Kraaijeveld and Others [1996] ECR I-5403, of the CIA Security International case. paragraph 59 et seq. 22 — Case C-129/94 [1996] ECR I-1829. 25 — Council Directive 85/337/EEC of 27 June 1985 (OJ 1985 23 — OJ, English Special Edition 1972 II, p. 360. L 175, p. 40).

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ings. The Court dismissed that objection, sions of the directive in such a way as to drawing a clear distinction between com- preclude a condition of that kind from pliance with the directive and the impact of being made a prerequisite for the enjoy- the directive on national legislation, on the ment by the agent the protection provided one hand, and the capacity of private for in the directive. The Court thus identi- persons to rely directly on the directive on fied an incurable incompatibility between the other. 26 The question of the obligation, the two systems that was plainly such as to for the State, to comply with the Directive preclude any recourse to a 'conforming '[wa]s quite separate' from that of whether interpretation'. 29 Accordingly, it concluded individuals may rely on provisions of a non-transposed directive (paragraph 26). that 'the Directive precludes a national rule which makes the validity of an agency contract conditional upon the commercial agent being entered in the appropriate

questions (Case C-343/90 Lourenço Dias [1992] ECR I-4673). It should next be noted that the facts of the case in the main proceedings here are different from those in the Spano and Others (C-472/93 [1995] 26 — In support of this interpretation see D. Edward, 'Direct ECR I-4321), in which the Court, in a dispute between Effect, The Separation of Powers and the Judicial Enforce- two private persons, interpreted the content of a directive ment of Obligations', in Studi in onore di Giuseppe that had not been transposed because the national court Frederico Mancini, volume II, Diritto dell'Unione europea, sought to determine 'the extent to which national law, Milan, 1998, pp. 423 and 438. more particularly Article 2112 of the Civil Code, [could] 27 — Case C-215/97 [1998] ECR I-2191. be applied in conformity with the directive' (para- 28 — OJ 1986 L 382, p. 17. graph 18).

court not to apply the conflicting national for their transposition has expired, the legislation, which was incompatible with valid formation of the national rules, then, the Directive that had not been transposed in a dispute between individuals the within the prescribed period. 30 national court would have no alternative but to apply the subsequent national provi- sions, even if they were adopted in contra- vention of the directive, and to grant the individual, if the necessary conditions were satisfied, only compensation for damage.

37. Ultimately, the national court's func- contain a regime that is clearly not so in tion as a Community court of ordinary law conformity. In fact, this is a situation that is entails entrusting it with the delicate task of anything but unlikely. 3 1In such cases, if guaranteeing the primacy of Community directives were not recognised as having the law over national law. The need to prevent power to affect, once the period prescribed the harmonising action of the Community directives from being compromised by Member States' unilateral behaviour, whe- 30 — This was in fact how the judgment was interpreted by the Italian courts. See Judgment No 4817 of the Corte ther through omission (failure to imple- Suprema di Cassazione, sez. Lavoro (Supreme Court of Cassation, Labour Section) of 18 May 1999, which ment a directive within the prescribed precluded application, in a dispute between private period) or action (adoption of incompatible persons, of the national provision which the Court ruled was not in conformity with the directive. national rules), implies that the application 31 — A question of this kind is the subject of a case pending of incompatible legal provisions is in any before the Court ( Case C-343/98 Collino and Chiappero), event excluded. In order to be able to in which the Court is called upon to interpret, in a dispute between private persons, Council Directive 77/187/EEC of 14 February 1977 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses (OJ 1977 L 161, p. 26). 32 — Simmenthal case, cited above, paragraph 17.

38. It should further be noted that a solution of this kind, which distinguishes between the 'substitution effect' and the 'exclusionary effect' of a directive which has not been transposed within the pre- 39. On the basis of all the foregoing scribed period, already appears in embryo observations, I consider, to come back to in the Court's case-law concerning the the case which concerns us here, that no consequences of a declaration of failure to problem will arise, and that, on the con- fulfil an obligation under the Treaty. The trary, it will be perfectly consistent with the Court has, as we know, stated on a number general principles governing the relations of occasions that, if it is established that an between Community law and national law, obligation laid down by Community law if the national court is requested to 'set has been infringed, this entails for the aside' the domestic procedural rule in order judicial and administrative authorities of to guarantee that Community law is fully the Member State in question an obligation effective, even in circumstances where that not to apply the incompatible national device falls to be used in order to preclude, provision. Initially applied to infringements in a dispute between private persons, the of provisions of the Treaty, 3 3that obliga- application of a provision of the code of tion was subsequently extended to include procedure that is contrary to the provisions infringements of the provisions of a non- of a directive that has not been transposed. transposed directive. 34 If a judgment of the The exclusion of the incompatible rule Court delivered pursuant to Article 169 of would not, in this case, give rise to a 'legal the EC Treaty (now Article 226 EC) is void' — which could in any event be filled regarded as not creating any right since it is by application by analogy or recourse to confined to establishing a failure by the general principles of national law if those State to fulfil an obligation, it follows that national provisions comply with the prin- no action by the Court is required for this ciples on which the directive is based — since the application of the general proce- dural rule which requires an action to be 33 — Case 48/71 Commission v Italy [1972] ECR 529, para- brought in the court of the district where graph 7. the debtor resides would fill any such 34 —Case C-101/91 Commission v Italy [1993] ECR I-191, paragraph 23. 'void'.