C-144/99

COMMISSION V NETHERLANDS

OPINION OF ADVOCATE GENERAL TIZZANO delivered on 23 January 2001 1

I — Introduction II — The legal background

A — The Community legislation

1. In the present action, brought by the European Commission under Article 169 of the EC Treaty (now Article 226 EC), the Court of Justice is called upon to determine whether the obligation incumbent upon the Kingdom of the Netherlands to transpose 2. The Directive seeks to approximate the into national law Council Directive laws, regulations and administrative provi- 93/13/EEC of 5 April 1993 on unfair terms sions of the Member States relating to in consumer contracts (OJ 1993 L 95, p. 29; unfair terms in contracts concluded hereinafter 'the Directive') may be deemed between a seller or supplier and a consumer to have been discharged by virtue of the (Article 1(1)), its main aim being to protect fact that the Netherlands Civil Code the consumer in cases where terms of that already contains provisions allegedly in nature have been inserted in contracts conformity with the Directive. In particu- concluded with a 'seller or supplier', that lar, the Court has been asked whether is to say, with 'any natural or legal person certain provisions in that Code relating to who, in contracts covered by [the] Direct- obligations and contracts in general achieve ive, is acting for purposes relating to his the result sought by Articles 4(2) and 5 of trade, business or profession, whether pub- the Directive, specifically in the light of the licly owned or privately owned' (Art- relevant Netherlands case-law. icle 2(c)). After defining the concept of 'unfair terms' (Article 3), the Directive provides that such terms are not to be 1 — Original language: Italian. binding upon consumers (Article 6).

6. Book III of the Netherlands Civil Code sets out the general rules of property law; Book VI covers obligations and general Article 7(2) requires the Member States to contracts; and Books VII and VIII govern introduce legislation under which persons specific types of contract.

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7. Although in the course of the proceed- party, unless that party could reason- ings, the Netherlands Government has ably have supposed that the contract relied on various provisions of the Civil would have been concluded even in the Code, the parties subsequently focused absence of that information; their attention exclusively on the provisions quoted hereunder (unofficial translation):

— Article 35 of Book III (b) if, having regard to its actual or required state of knowledge regarding the misapprehension, the other party were under a duty to enlighten the party misled;

'The fact that a statement made by a person or conduct on his part does not faithfully reflect his intentions is no defence against another person who has understood that statement or conduct as addressing to him a statement to particular effect where, in the light of the circumstances, that is a reason- (c) if, at the time when the contract was able inference.' concluded, the other party proceeded on the basis of the same misapprehen- sion as the party in error, save where the other party, even if possessed of a correct understanding of the situation, could not have been expected to realise that, but for the misunderstanding, the — Article 228 of Book VI party in error would not have conclud- ed the contract.

(a) if it is abnormally onerous for the other party, having regard to the nature and content of the contract, the manner in which the terms came to be formulated and the interests of each party, as (a) "standard terms" shall mean one or evident to the other, and the other more terms, expressed in writing with a circumstances of the case; view to their inclusion in a number of contracts, other than terms which describe the material contractual obligations;

(b) if the other party has not been given sufficient opportunity to acquaint him- self with the standard terms.'

(b) "user" shall mean the person who employs standard terms in contracts;

— Article 248 of Section IV ('Effects of contracts') of Book VI

(c) "the other party" shall mean the per- son who has consented, in writing or '1. A contract produces not only the legal otherwise, to the use of standard effects agreed by the parties, but also those terms.' which, according to the nature of the

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8. The Commission claims that the Court should declare that the Kingdom of the Netherlands has failed to fulfil its obliga- tions in that the tranposition of the Direct- ive into Netherlands law was insufficient in terms of the form and method chosen, and 11. It points out first of all that the third incomplete in terms of its effects. paragraph of Article 189 of the EC Treaty (now the third paragraph of Article 249 EC) leaves Member States free to choose the form and methods necessary to trans- pose a directive into national law and that the Court has consistently held that in view 9. Specifically, the Commission objects that of that freedom, specific implementing only in very closely defined circumstances measures are not indispensable if the may a directive be deemed to have been national legal system already secures the 'implicitly' transposed into national law aims pursued by the directive. That is the simply because provisions in conformity position in the present case, given both the with that directive already exist within the above provisions of the Civil Code — legal system of the Member State in ques- which the Netherlands Government ana- tion. This is especially important where, as lyses at length — and the unwritten rules in the present case, the aim of the directive of law acknowledged within that legal is to protect consumers by conferring upon system, such as the principle of interpreta- them specific rights. In such cases, the tio contra proferentem, which is in all

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OPINION OF MR TIZZANO — CASE C-144/99

respects equivalent to the provision made IV — Legal analysis by the second sentence of Article 5 of the Directive.

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complies with the provisions of the direct- cific implementing measures are not indis- ive in question. 3That framework must be pensable, still less legislative action. That is designed in such a way as to remove all so particularly when the relevant legislation doubt or ambiguity, not only as regards the already in force in the State concerned is content of the relevant national legislation 'sufficiently precise and clear', that is to and its compliance with the directive, but say, when it is such that 'the persons also as regards the authority of that legisla- concerned are made fully aware of their tion and its suitability as a basis for rights, and, where appropriate, afforded regulation of the sector. Thus, for example, the possibility of relying on them before the for the purposes of transposing a directive national courts'. 6However, it should be correctly into national law, mere adminis- noted that such cases constitute an excep- trative practice or ministerial circulars are tion, in derogation from the above princi- not sufficient. In contrast with proper ples, which is justified by considerations of legislative measures, these offer no safe- legislative economy. Accordingly, in com- guards in terms of consistency, binding mon with all such derogations, they are authority and publicity. 4 Consequently, subject to very stringent rules of interpreta- given that the Member State concerned is tion. In the present case, this means that, if required to 'ensure the full and exact the Member State in question is not to be application of the provisions of any direct- found in breach of its obligations, it is not ive', it falls short of its obligations so long enough that the national legislation should, as it 'has not completely complied with [the generally speaking, be compatible with the directive]', even if 'that [domestic] law has directive: the relationship between the two to a large extent already secured the must be one of clear and precise confor- objectives of the directive'. 5 mity.

19. Now that the general position has been made clear, I should point out that I am not entirely certain that in this case Nether- lands law fully complies with the require- ments described above. That is to say, I am not convinced that the Netherlands law governing the matters covered by the Directive complies fully with the Directive, or, in any event, that it does so with 'sufficient' clarity and lack of ambigu- ity — as enjoined by the Court — to ensure that the persons concerned 'are made fully aware of their rights and, where appropriate, afforded the possibility of relying on them before the national court'. 18. The possibility of dispensing with a specific implementing measure should therefore be appraised even more rigor- ously in the case of directives intended to confer rights on individuals, and particu- larly where, as in the present case, the directive sets out a body of rules to secure 20. On the contrary — leaving aside for greater protection for consumers — a the moment the merits of this issue, which broad but indeterminate category — will be examined hereunder — I would say against 'stronger' contracting parties. As that the parties' exchange of views on this the Court observes, this 'is of particular point demonstrates, albeit indirectly, the importance where the directive in question extent to which interpretation of those is intended to accord rights to nationals of rules is anything but free of uncertainty other Member States because those nation- and ambiguity. The very fact that the als are not normally aware of such princi- debate has in large measure centred on ples [of what is laid down by law in the implications and importance to be

23. First, I would like to consider the contention that the Netherlands legal sys- tem already embodies a general principle analogous to the principle set out in the 21. The fact that the Netherlands Govern- second sentence of Article 5 of the Direct- ment thought it necessary to adopt a law to ive, to the effect that the interpretation 'clarify' and 'express more plainly' the which must prevail is that most favourable domestic law governing unfair terms in to the consumer. According to the Nether- standard contracts strongly suggests that, lands Government, that principle consti- despite its various contentions, even that tutes a canon of interpretation which is Government was aware of the need to normally applied by the courts. However, remove the difficulties flagged up by the this is belied by the decisions of the Hoge Commission. Whether or not that law Raad — appositely invoked by the Com- achieves the desired result is irrelevant for mission — which on several occasions has present purposes, since it was adopted denied that that principle constitutes a 'rule more than a year after the deadline fixed of law'. 10 by the Commission in the reasoned opinion and, in consequence, would be incapable of remedying the Netherlands' alleged failure to fulfil its obligations. 9 10 — As well as the judgment of 12 January 1996 (NJ 1996, N o 683) cited by the Commission in its pleadings, see the references in 'CLAB Europa', European Database on Case Law about Unfair Contractual Terms, www.europa.cu.int/ clab/ (see NL000047, NL000056 and NL000079), and in E. Hondius, Non-implementation of the Directive on 9 — According to established case-law, failure to fulfil obliga- Unfair Contract Terms: the Dutch Case, European Review tions falls to be appraised in relation to the situation existing of Private Law, 1997, p. 193, in particular, pp. 194 and on expiry of the deadline fixed in the reasoned opinion: see, 195, and footnote 4 with citations, which states that after ex multis, Case C-327/98 Commission v France [2000] ECR the entry into force of the Directive, the position of the I-1851, paragraph 28; Case C-69/99 Commission v United Netherlands Courts remained unaltered, even though, on Kingdom [2000] ECR I-10979, paragraph 22; and Case the basis of the case-law of the Court, they were required C-374/98 Commission v France [2000] HCR I-10799, to interpret national law in the light of the wording and paragraph 14. purpose of the Directive.

25. To my mind, however, the Commis- sion's position is the more valid. The Commission points out that: 26. Moving on to the question whether Netherlands law is compatible with the provisions of Article 4(2) and the third sentence of Article 5, I should point out immediately that the Kingdom of the Netherlands has failed to demonstrate the existence of domestic provisions to equival- (a) while Article 6:233 of the Civil Code ent effect. It has merely stated, essentially, provides for the automatic cancellation that specific implementing measures are of a term which contravenes the prin- unnecessary since the aims of the above ciple of transparency, the application of provisions can be met by a schematic the rule of interpretation provided for interpretation of Netherlands legislation. in the Directive to the effect that the However, for reasons which I shall now interpretation most favourable to the explain, I am not persuaded that the consumer must prevail (or even of the position is exactly as they describe it or ''interpretatio contra proferentem') per- that the method suggested by the Nether- mits the term in question to be lands authorities constitutes in practice a retained; faithful transposition of the Directive into national law.

(b) the criterion of 'reasonableness' refer- red to by Articles 3:35 and 6:248 of the 27. First, it should be recalled that Art- Civil Code for the purposes of inter- icle 4(2) of the Directive expressly provides preting obscure or incomprehensible that, if terms are obscure or ambiguous, terms does not necessarily coincide even those relating to the definition of the with the criterion espoused by the main subject matter of the contract or to Directive, in accordance with which the adequacy of the price and remunera- the interpretation most favourable to tion, on the one hand, as against the the consumer is to be preferred; services or goods supplied in exchange, on

28. By contrast, it does not seem to me that a comparable measure of certainty and clarity as regards the rules and their effects 30. A further difficulty arises in connection could be achieved through a schematic with the third sentence of Article 5 of the interpretation of the Civil Code by the Directive. Pursuant to that provision, in national courts. On the contrary, as the proceedings where it is sought to prevent a Civil Code stands at present, it looks to me seller or supplier from continuing to use a as if, pursuant to Article 6:233 of the Civil standard contractual term which is ambigu- Code, it is still possible for a seller or ous, the seller or supplier may not rely on supplier to prevent the consumer from the principle that the interpretation most seeking cancellation of 'terms which favourable to the consumer must prevail, if describe the material contractual obliga- he would thereby be enabled to oppose the tions'. Moreover, the fact that Art- order sought. As the Commission points icle 6:231 removes 'terms which describe out, the purpose of that provision is to the material contractual obligations' from prevent a principle intended to protect the the ambit of the expression 'standard consumer from being used against him. terms' (that is to say, the only terms that That aim would be frustrated if, as the can be cancelled under Article 6:233) Netherlands Government proposes, a means that the seller or supplier can always schematic interpretation of domestic law rely on that provision to prevent such terms were adopted, because the Civil Code from being classed as 'standard terms'. would in all cases allow the defendant seller or supplier to rely on that principle.

with the obligation of transparency incum- Code are not in conformity with the bent upon the seller or supplier when Directive, it remains to be determined drawing up the terms of standard contracts whether matters may be remedied by the for the purposes of the first sentence of decision handed down by the Hoge Raad Article 5 of the Directive. The bundle of on 19 September 1997 (see point 12 provisions relied upon by the Kingdom of above), and in particular by application of the Netherlands as being prima facie com- the principle expressly laid down in that parable in effect depends rather on criteria judgment, to the effect that Netherlands of reasonableness and fairness. However, as law should be so construed as to comply the Commission points out, that is only an with the Directive. As I have already indirect means to the end sought. By mentioned, the Netherlands Government contrast, a provision which expressly contends that the aim sought by the reflects the principle laid down in the Directive is fully secured, thanks to the Directive is efficient and immediate in its interpretative role played by the national effect, especially — as again the Commis- courts and, in particular, to the above sion observes — if it is borne in mind that judgment of the Hoge Raad. the approach chosen by the Community legislature is specifically intended to require the seller or supplier to make sure at the outset that the contractual terms are plain and intelligible, thus ensuring that, before entering into the contract, the consumer has access to all the information needed to 33. However, I must first point out that the arrive at his decision in full knowledge of above approach, albeit espoused by the the facts. 11 Netherlands courts, does not constitute an established feature of Netherlands law; nor is it of particular significance for present purposes. Indicative of support for a gen- eral policy, it does not concern — and cannot therefore resolve —· the issue before the Court, that is to say, the question whether existing national law is sufficient C — Interpretation of Netherlands law in to ensure the full and correct implementa- such a way as to comply with the Directive tion of a directive.

3 6 . As A d v o c a t e G e n e r a l Léger observed — and as is apparent from the case-law cited above — that 'would run counter to the fundamental requirements underlying any transposition: those of legal certainty and adequate publicity. The Court has stated on many occasions that the provisions of a directive must be imple- mented "with unquestionable binding force ... with the specificity, precision and clarity required ... in order to satisfy the requirement of legal certainty" and so that "where the directive is intended to create 35. However, I repeat, that principle of rights for individuals, the persons con- interpretation does not solve the problem at cerned can ascertain the full extent of their issue here. It is designed to be of use rights and, where appropriate, rely on them pending the transposition of a directive into before the national courts". National case- national law — or even after transposition law interpreting provisions of domestic law if this is incorrect or incomplete — but it in a manner regarded as being in confor- certainly cannot serve as an excuse for mity with the requirements of a directive is failure to transpose or for inadequate not sufficient to make those provisions into transposition. As has been rightly observed, measures transposing the directive in ques- the mere fact that a national court pur- tion'. 14 Consistently with that approach, as ports, in accordance with the principles laid I have already mentioned, the Court down by the Court, to interpret national explained in the same case that 'it is law in the light of Community law 'does particularly important, in order to satisfy not affect the obligation imposed on all the the requirement for legal certainty, that other authorities of that Member State, individuals should have the benefit of a particularly the legislature, to adopt all the clear and precise legal situation enabling measures necessary, within the scope of them to ascertain the full extent of their their competence, to ensure that the Com- 13 — See point 19 of the Opinion of Advocate General Da Cruz Villaça in Case 412/85 Commission v Germany [1987] 12—Joined Cases C-240/98 and C-244/98 Océano Grupo ECR 3503. Editorial [2000] ECR I-4941, paragraph 30, in which 14 — Sec points 24 and 26 of the Opinion in Case C-236/95, further references arc given. cited above, in which further references are given.

D — Costs

38. Admittedly, those decisions pre-date the 1997 judgment referred to above, but the fact remains that at least one of those 40. Under Article 69(2) of the Rules of decisions was handed down after the Procedure, the unsuccessful party is to be Directive entered into force. To my mind, ordered to pay the costs if these have been this — taken together with all the fore- applied for. Since the Commission has going observations — is further confirma- applied for costs and having regard to my recommendation as to how this case should be decided, I consider that the Commission 15 — Case C-236/95, cited above, paragraph 13 (where further references are mentioned). should be awarded costs.

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Conclusion

In the light of the foregoing, I propose that the Court declare that: