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Court of Justice of the EU condemns French court for failing to make preliminary reference

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Case C-416/17 Commission v France ECLI:EU:C:2018:811

For the first time in infringement proceedings, the CJEU has ruled that a national court, the French Conseil d’Etat, breached EU law for not making a preliminary reference regarding the interpretation of EU law in accordance with Article 267 TFEU. Although the facts of the case are unrelated to environmental law, the significance of the ruling to environmental protection cannot be overstated. Above all, it serves as a stark reminder to national courts that they are bound by the case law of the CJEU and that failure to make preliminary references can result in infringement proceedings and a CJEU ruling of non-compliance with the Treaty.

The case concerned whether the Conseil d’Etat’s treatment for tax purposes of French parent companies receiving dividends from foreign subsidiaries breached Articles 49 (free movement of establishment) and 63 TFEU (free movement of capital). The Commission brought infringement proceedings on the basis that:

  1. the Conseil d’Etat applied French tax law in a way that disregarded previous preliminary rulings of the CJEU on the interpretation of Articles 49 and 63 TFEU in this context.
  2. In failing to make a preliminary reference when it clearly had doubts as to the correct interpretation of the CJEU’s case law on the subject, the Conseil d’Etat breached the third paragraph of Article 263(3) TFEU.

The Court found in favour of the Commission on both of these pleas. In particular, with regard to the second plea, the Court specifically stated that the purpose of the preliminary reference procedure is to prevent a body of national law that is not in accordance with EU law being established in a Member States. Therefore, where a question of the interpretation of EU law leaves room for reasonable doubt on the part of a national court of last instance, it is obliged to make a reference under Article 267 TFEU. Applied to the facts of the case, the CJEU agreed that there was reasonable doubt on the part of the Conseil d’Etat and failure to refer the question was in breach of Article 267 TFEU.

This judgment is particularly significant to the field of access to justice in environmental matters for two reasons. First, it is the first time that the Commission has initiated infringement proceedings on the basis of a Member State court’s disregard of CJEU case law. It shows a willingness on the part of the Commission to police the application of EU judicial precedent, as well as implementation of the Treaties and EU legislation. In the absence of binding EU legislation implementing Article 9(3) of the Aarhus Convention, we rely on CJEU case law to clarify and apply the Member States obligations in this respect. Therefore, if national courts ignore such case law with impunity, the Aarhus Convention may simply be ignored in some Member States. At a time when we are experiencing significant rollback in Aarhus obligations in many Member States, this is a welcome signal from the Commission.

Second, many environmental NGOs litigating at national level across the EU face resistance from national judges to refer questions on the interpretation of EU environmental law to the CJEU in accordance with Article 267 TFEU. This stark warning from the Court of Justice that national courts will be condemned for breaching Article 267 TFEU will hopefully contribute to putting a stop to this conduct.

 

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