C-416/17 Commission v France : failure of a Member State to fulfil its obligations under Article 267(3) TFEU

By Vincent Delhomme and Lucie Larripa

In the landmark judgement Commission v France rendered on the 8th of October, the Court of Justice condemned for the first time a Member State for a breach of Article 267(3) TFEU in the context of an infringement action, after the French administrative supreme court (Conseil d’Etat) failed to make a necessary preliminary reference. This decision is undoubtedly a crucial step towards a more complete system of remedies in the EU legal order, but may, upon closer examination, lead to detrimental consequences for judicial dialogue.

Background to the case

The background to the present judgement is rather complex and deserves some clarification.

On substance, the case deals with French rules intended to eliminate economic double taxation of dividends. This regime allowed a parent company to set off against the advance payment the tax credit applied to the distribution of those dividends if they originate from a subsidiary established in that Member State, but does not offer that option if those dividends originate from a subsidiary established in another Member State. In its first 2009 judgement, the Conseil d’Etat made a preliminary reference to the Court of Justice as to whether Articles 49 TFEU and 63 TFEU (free movement of establishment and capital) precluded such legislation. In its Accor judgement rendered in 2011, the Court of Justice found these rules contrary to Articles 49 and 63 TFEU and laid down principles for the reimbursement of advance payments made in breach of EU law.

The matter returned to the Conseil d’Etat, which subsequently established in two judgements rendered in 2012, Rhodia and Accor, the conditions for the reimbursement of the unlawful payments. Doing so, it partially ruled on a point that had not been addressed by the Court of Justice in Accor, the taxation of sub-subsidiaries established in another Member State. No such claim had been raised before the Conseil d’Etat in 2009. It is important to note that right before the Conseil d’Etat issued these judgements, the Court of Justice decided precisely this point in another case related to the UK tax regime, Test Claimants. The French Supreme Court decided to depart from this ruling without making a second preliminary reference to the Court.

Following the Conseil d’Etat’s decisions, the Commission received a number of complaints claiming that the conditions for reimbursement of advance payments were contrary to EU law, which ultimately led it to bring an action against France for failure to fulfil its obligations on the basis of Article 258 TFEU. Interestingly enough, the Commission argued for a breach of Article 267(3) TFEU, according to which when a question over the correct interpretation (or validity) of EU law ‘is raised in a case pending before a court or tribunal of a Member State against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court’.

On substance, the Court followed the Commission and found the reimbursement conditions contrary to EU law (though two of the three grounds of the Commission were rejected) and, most importantly, found that France breached Article 267(3) TFEU for failure to make a preliminary reference on the part of the Conseil d’Etat. It is on this later point that we shall examine in detail the Court’s reasoning.

Reasoning of the Court

The Court starts by recalling that a Member State’s failure to fulfil its obligations may be established ‘whatever the agency of that State whose action or inaction is the cause of the failure to fulfil its obligations, even in the case of a constitutionally independent institution’ citing its earlier decisions in Commission v Italy and Commission v Spain (para. 107).

Elaborating on the fundamental importance for national courts of last resort to transmit questions on the interpretation of EU law, the Court, following its Cilfit doctrine of acte clair, recalls that such an obligation may be waived in only three situations: if the question raised before the national court is irrelevant, if it has already been answered by the Court of Justice or if the correct application of EU law does not leave scope for any reasonable doubt (para. 110).

It is precisely on this latter point that the Court contests the refusal by the Conseil d’Etat to make a preliminary reference and finds a breach of the third paragraph of article 267 TFEU.

First, the Court of Justice points to the fact that the Conseil d’Etat chose to depart from the Test Claimants judgement on the ground that the scheme at stake in that case was different from the one before it, ‘while it could not be certain that its reasoning would be equally obvious to the Court’ (para. 111).

Second, the Court adds that the very fact that the solution found by the Conseil d’Etat has been found incompatible with EU law shows that a reasonable doubt existed when it reached its decision (para. 112).


The judgement is remarkable and at the same time hardly surprising. The Commission v Spain and Ferreira da Silva decisions had paved the way for it, the first by establishing that a Member State’s failure to fulfil its obligations could arise from a national supreme court judgement, the second by finding a breach of the obligation contained in Article 267(3) by such a supreme court. The present decision brings them together in a clear and powerful manner and complements the case law of the Court on State liability for a breach of EU law established in the Köbler case.

One the one hand, it is a good and welcome development. The preliminary reference procedure is fundamental to the EU legal order and its decentralised judicial model whereby national courts are ordinary judges of the European Union. In that framework, a failure to make a preliminary reference by a national court of last instance when necessary threatens the uniform application of EU law. The obligation contained in the third paragraph of Article 267, as expressed by the Court, ‘prevent[s] a body of national case-law that is not in accordance with the rules of EU law from being established in any of the Member States’ (para. 108). The present judgment reinforces this obligation and clearly signals that the Commission and the Court will carefully police it.

In this case, the failure to comply with the third paragraph of Article 267 is undeniable. On the point of law that had not been decided on in Accor, the Court had rendered a posterior judgement in Test Claimants, a case judged ‘particularly clear’ by Advocate General Wathelet in its Opinion (para. 40). Departing from a previous judgement of the Court in a situation where the disagreement on the interpretation of EU law was publicly raised during the Conseil d’Etat hearing (see Opinion of the Advocate General para. 99) could surely not be considered to be an obviously correct reasoning which leaves no scope for any reasonable doubt.

Furthermore, the justification offered by the Conseil d’Etat for disregarding the Test Claimants case appears rather scant. It simply and briefly argued that the British and French tax regimes could not be compared and that the findings of Test Claimants ‘[could not] usefully be used to determine the tax credit that may be opened under the French legislation in dispute’ (Accor, para. 23; Rhodia, para. 28). The Conseil d’Etat failed to explain precisely why the differences between the two systems justified to disregard these findings. One may wonder if the Court would have ruled differently had the French court sufficiently motivated its choice.

On the other hand, part of the Court’s reasoning appears problematic. As a second argument, the Court considered that the existence of a reasonable doubt at the time of the Conseil d’Etat judgement was constituted by the fact that the solution reached on substance was wrong (see also the Opinion of the Advocate General, para. 86 and a contrario para. 95). The Court deduces the existence of a reasonable doubt from the discrepancy between its substantial decision and the solution reached by the French court.

This is an unfortunate conclusion. If we can legitimately assume that a difference of solutions between a national court and the Court of justice a posteriori would demonstrate an a priori existence of a reasonable doubt, the reciprocity is wrong. A doubt can exist in the first place, even if the solutions found by both courts end up being the same at the end. Let us imagine that the Court had sided with the Conseil d’Etat on substance in the present case, would that simply erase the legitimate reasonable doubt existing at the earlier point intime ? Reasonably, the answer is no. This is, however, what is implied by the Court’s reasoning in paragraph 112.

A reasonable doubt is an objective situation that should be evaluated having regard to the circumstances at the time of the decision not to make a reference. The Court, when dealing with a potential infringement of Article 267(3), should place itself at the moment where such a decision is made. In a way, considering that the risk for a national supreme court to see the Court of Justice adopting a different solution can never entirely be ruled out, the present judgement acts like a powerful incentive for supreme courts to systematically refer the questions raised before them. This amounts to calling de facto into question the acte clair doctrine which precisely gives a margin of appreciation, albeit a small one, to national courts.

This may be the intention of the judgement, but this sits uneasily with the idea of Article 267 as an instrument of cooperation and the fact that ‘the national court or tribunal has sole responsibility for determining whether the correct application of EU law is so obvious as to leave no scope for any reasonable doubt and for deciding, as a result, to refrain from referring to the Court a question concerning the interpretation of EU law which has been raised before it’ (Ferreira da Silva, para. 40).


This judgement is a milestone which strengthens the system of remedies available under EU law. It reinforces the obligation lying with Member States and their judiciary to make references to the Court and hence protect the uniform application of EU law. Yet, the Court of Justice, while carefully policing this obligation, should refrain from sanctioning national courts which, in good faith, would consider a reference as not necessary to resolve a case before them. The generalisation of the reasoning developed by the Court in Commission v France would otherwise seriously damage the dialogue des juges, especially considering that when dealing with a potential failure to make a reference, the Court of Justice is both a judge and a party to the dispute.