Case E-18/11: Small steps towards a preliminary reference procedure for the EEA EFTA countries?

The EFTA Court handed down an interesting decision in September 2012 which merits a short comment (I am grateful to Christian Frommelt   for pointing me towards the case). The Surveillance and Court Agreement of the EEA EFTA countries does not foresee a procedure akin to the preliminary reference procedure in the context of EU law. However, there is an advisory opinion procedure, which neither obliges the courts of EEA EFTA countries to submit questions on the interpretation of EEA law nor produces binding outcomes. In its decision in Irish Bank Resolution Corporation and Kaupthing Bank, however, the EFTA Court suggested – at least between the lines – that matters might not be just as simple as that.

For the present comment, I am not so much interested in the substance of the case (which mainly concerns the duty of conform interpretation of national law with EEA law obligations, see paras 122 ff.), but rather in the findings of the EFTA-Court on Article 34 of the Surveillance and Court Agreement (hereinafter SCA Agreement), the treaty which establishes the EFTA Surveillance Authority and the Court itself and determines their respective powers.

Article 34 provides that ‘any court or tribunal in an EFTA State’ ‘may, if it considers it necessary to enable it to give judgment, request the EFTA Court to give’ an advisory opinion on the interpretation of the EEA Agreement. Furthermore, it authorizes EFTA States expressly to limit in their internal legislation the right to request such an advisory opinion to ‘courts and tribunals against whose decisions there is no judicial remedy under national law’.

In the literature, scholars have thus concluded that the setting of judicial remedies in the EEA is incomplete for the EFTA countries, as there is no binding preliminary reference procedure which would ensure one unitary authoritative interpretation of EEA law (see S. Magnússon, ‘On the Authority of Advisory Opinions’, 13 Europarättslig tidskrift (2010) p. 528 at p. 535-536). There are two main points that the EFTA Court tackles in the present case and takes quite an interesting position on: first, whether national courts are truly free of any obligation when deciding whether to submit a question on the interpretation of EEA law; and second, whether as a consequence of the lack of a duty to refer questions higher national courts of EFTA countries can freely amend or reject the requests for advisory opinions of lower courts.

In the case itself, the Reykjavík District Court decided to ask an advisory opinion for two questions on the interpretation of EEA law; on appeal, the Supreme Court of Iceland upheld the request for an opinion, but amended the questions, breaking the first one up into two parts and omitting the second one (paras 36-38).

On the first point (the lack of an obligation to refer questions for an advisory opinion), the EFTA Court rather suddenly brought the duty of loyal cooperation into play. It initially addressed Article 34 SCA, emphasizing that the procedure established a ‘special means of judicial cooperation’ between the Court and national courts (para 53), which was ‘completely independent’ of any initiative by the parties in the case, although of course in practice often an application to submit a question to the EFTA Court will be made by a party to a dispute (para 55). The Court then acknowledged the differences between Article 267 TFEU’s procedure of preliminary reference and Article 34 SCA, which were based on the ‘less far-reaching’ depth of integration of the EEA Agreement (para 57). It is interesting to note that the Court speaks here of a consequently ‘more partner-like’ relationship between the EFTA Court and EFTA national courts of last resort, leaving it unfortunately to our imagination how it would designate the not always harmonious relationship between the CJEU and national courts of last resort of EU Member States…

In the subsequent paragraph 58, the EFTA Court then, however, continued somewhat surprisingly suggesting that such courts of last resort in EFTA countries ‘will take due account of the fact that they are bound to fulfill their duty of loyalty under Article 3 EEA’. It added that it should be noted that ‘EFTA citizens and economic operators benefit from the obligation of courts of the EU Member States against whose decision there is no judicial remedy under national law to make a reference to the ECJ (see Case C-452/01 Ospelt and Schlössle Weissenberg [1993 (sic)] ECR I-9743)’.

Without explicitly saying so, the EFTA Court indicates thus that it considers that, while the wording of Article 34 SCA may not foresee an obligation to submit, courts of last resort of EFTA countries may be obliged by the duty of loyal cooperation enshrined in the EEA Agreement to think at least twice before not submitting their questions. One could even wonder whether the EFTA Court is implying here that in some cases non-submission may be considered to constitute a violation of the duty of loyal cooperation.

On the second point (the possibility for higher courts to amend the requests for advisory opinions of lower courts), the EFTA Court initially noted that Article 34 SCA would not preclude that decisions by lower national courts of EFTA countries remained subject to the remedies available in national law (para 62). In principle, it seems thus that EEA law allows that under national law the Supreme Court of Iceland could amend the District Court’s request for an advisory opinion. However, the Court then found a way to exercise review over that decision, working its way around the restricted version of the questions submitted for an advisory opinion by the Supreme Court.

For this purpose, the EFTA Court emphasized that the provisions of EEA law including the SCA Agreement had to be interpreted ‘in the light of fundamental rights’, pointing out its own respective case law, the ECHR as well as the ECtHR’s case law as relevant sources (para 63). In the Court’s view, the standards of Article 6 (1) ECHR may be violated where a national court of last instance refuses a motion to refer a case to another court, in particular where this refusal is not motivated by reasons. This may also apply to cases where a national court of last instance overrules a lower court’s request to refer questions or amends these questions in its decision (para 64).

One may already stop here to wonder whether the EFTA Court is not making its life too easy speaking of an interpretation of EEA law ‘in the light’ of fundamental rights in the present case; a more thorough reasoning would have had to grapple with the scope of EEA law in the case: Only if Iceland was acting effectively within the scope of EEA law here the fundamental rights standards of EEA law apply under the EFTA Court’s supervision; otherwise one could argue that the Supreme Court of Iceland’s action ought to be judged against the benchmark of domestic fundamental rights and ECHR standards (compare the rich debate on the parallel problem in EU law which focuses on Article 51 of the EU Charter of Fundamental Rights). But the conclusions drawn by the EFTA Court from the right to a fair trial are even more captivating.

Based on the right to a fair trial, the EFTA Court proceeded to all but in name reject the Supreme Court of Iceland’s decision. It first found ‘no substantive difference’ between the first question asked by the District Court and the rephrased two questions of the Supreme Court, and thus decided to answer to the District Court ‘and thereby’ to the Supreme Court (para 66). Then, it decided that it could also answer the deleted second question of the District Court because there was no indication of disagreement on the law or the facts between the Supreme Court and the District Court, and no reasons had been given by the Supreme Court for deleting the second question of the District Court (para 69).

Putting it bluntly, the right to a fair trial authorizes thus the EFTA Court to review – and amend – national court decisions amending the questions asked in an advisory opinion procedure. The Icelandic Supreme Court’s unmotivated decision appears, of course, particularly vexing in terms of standards of judicial propriety. However, one may question whether the EFTA Court is not going very far here in reviewing the appropriateness of domestic judicial decisions in a field where EEA law expressly gives discretion to EEA EFTA States – in deliberate contrast to the constraints imposed on EU Member States under the preliminary reference procedure. The EFTA Court seems to be suggesting that there is a fundamental right for individuals which does probably not include a right to have the questions on EEA law of their case referred to the EFTA Court, but to have at least a motivated decision on why questions are not referred.

To conclude, we are not close to a transformation of the advisory opinion procedure into a preliminary reference procedure. However, the EFTA Court seems to be determined in its interpretative approach to explore the outer limits of its treaty system and of the remedies enshrined therein. It therefore put the duty of loyal cooperation for national courts of last instance on the table, and made clear that it would – at least in some circumstances – not accept unmotivated refusals to refer questions for an advisory opinion. They say that there is an old curse which states ‘May you live in interesting times!’ The – privileged, because uninvolved – academic observer could add: There are some courts which themselves seem determined to make their own times interesting.

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