Typo in the TFEU

I wanted to share something with our readers, I thought it would be fun to write about a random discovery I made in the Treaty on the Functioning of the European Union. There is a typo in the English version of the Treaty. Remarkable, but true. I thought they would check the thing a number of times before sending it to the presses, but nonetheless article 28 (2) TFEU as available on the eur-lex website is translated incorrectly.

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One rule to rule them all: the report on Rome I and voluntary assignment

As was pointed out in an earlier post, the Commission report under Article 27(2) Rome I Regulation (Regulation (EC) 593/2008 on the law applicable to contractual obligations) will be based on a recent study by the BIICL titled “Study on the question of effectiveness of an assignment or subrogation of a claim against third parties and the priority of the assigned or subrogated claim over a right of another person”. Although the title is a bit misleading (as the study itself indicates, the study deals not with the effectiveness but with the law applicable to the effectiveness of an assignment or subrogation of a claim against third parties and to priority issues), this is a thorough and excellent study. The report consists of a collection of statistical data, an EU-wide empirical analysis, national reports from twelve Member States and a comprehensive analysis of the question of whether it would be desirable to amend Art. 14 Rome I Regulation to include the third-party aspects of assignment.

The results of the questionnaire show that a vast majority of stakeholders who addressed this particular issue indicated that a uniform EU solution would be of positive impact to their business. Reduction of legal costs and due diligence, increased legal certainty and higher transaction volumes are regarded as positive effects of the introduction of a uniform rule on the property aspects of an assignment. In view of this, it seems highly unlikely that those who argue in favour of preserving the status quo (the description of which can be found in the earlier post) will win the day. The maxim ‘any rule is better than no rule at all’ wins at the expense of the principle ‘no rule better than a bad rule’. In other words,  legal certainty is a commodity to be valued in itself and there is a general need for a rule that covers all proprietary aspects of assignment. Which rule will it be?

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C-337/09 P Zhejiang Xinan Chemical Industrial Group (Xinanchem)

One of the most interesting and complex issues in international trade over the past decade has been how to deal with the opening Chinese market. As China has become more integrated into international markets and has joined the WTO, its trading partners have sometimes struggled with the non-market aspects of its economy. Industries hard hit by Chinese competition have argued that Chinese interference with its internal market and support for domestic companies amount to unfair trading practices, and that they should consequently be compensated or controlled. Regulators have had sympathy for these concerns, applying trade remedies like countervailing measures and anti-dumping duties to Chinese products. However, this practice has led to counter-accusations of protectionism and discrimination. The recent spate of complaints both by and against China in the WTO is evidence of this struggle.

Last week’s Xinanchem judgment, however, is a significant step along the path toward normalized trade relations between China and the EU. In this case, which Advocate General Kokott called “of fundamental importance for future trade relations between the European Union and a number of dynamic emerging countries, such as the People’s Republic of China” (AG para. 1), the Grand Chamber of the ECJ dismissed the Council’s appeal of a General Court judgment in favor of the Chinese company.

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Introducing a new category of posts: Readings we particularly enjoyed, or put differently Pas obligatoire, mais fortement recommandé (POMFR)

On one of these random internet-research expeditions probably many of us do while we would have lots of better and more urgent things to do I discovered JOTWELL. The basic idea (see their ‘Mission Statement’ here) of this Journal of Things We Like (Lots) is that in today’s world of legal mass production/publication, it becomes increasingly difficult to stay on top of things. While people are generally able to keep abreast with their field, they find it difficult to judge what is worth reading in neighbouring fields or at a more general level. JOTWELL should thus close this lacuna in US law by providing information as to what is ‘new, important, and interesting in most areas of the law’.

The project of founding a veritable journal for this purpose as these US scholars have done may be beyond the reach of this blog. Still, the underlying idea of creating space for sharing readings merits further consideration. This is what the new category of blog posts on ‘pas obligatoire mais fortement recommandé/POMFR’ is going to be about.Continue reading

VALE: a never ending story on free movement of companies within the EU finally ended?

On 12 July 2012 the European Court of Justice (ECJ) ruled in the VALE case (C-378/10) that

“Articles 49 TFEU and 54 TFEU are to be interpreted as precluding national legislation which enables companies established under national law to convert, but does not allow, in a general manner, companies governed by the law of another Member State to convert to companies governed by national law by incorporating such a company.”

The case concerned a cross-border conversion of a company established under Italian law, VALE Construzioni Srl, into a company incorporated under Hungarian law, VALE Építési kft. Under Italian law it is possible for a company to convert into a company established under foreign law. Under Hungarian law only companies incorporated under the law of Hungary are allowed to convert. The VALE case is the ‘mirror image’ of the Cartesio case (C-210/06) which concerns a transfer of a registered office of a company under Hungarian law to Italy without a conversion. In the Vale case the Court stated that a Member State may restrict a company governed by its law to retain the status of the company established under the law of that Member State if the company intends to move its seat to another Member State, thereby breaking the connecting factor required under the national law of the Member State of incorporation. However, the Member State of origin of that company cannot prevent a company from converting itself into a company governed by the law of the other Member State, to the extent that it is permitted under that law to do so.

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Case C-176/11 HIT & HIT LARIX v. Bundesminister für Finanzen

On 12 July 2012, the  ECJ handed down a new ruling on gambling advertisements. The judgment in C-176/11 HIT and HIT LARIX clarifies that a country may restrict advertisements for foreign casinos on the ground that the casino’s home state does not provide equivalent protection for gamblers. However, they cannot require identical regulation, and the restriction must be directly related to protecting consumers.

At the same time, however, the judgment raises once more the question of what regulations should be found proportional in gambling cases. The disagreement over proportionality is evident in the differences between the opinion of the Court and that of Advocate General Mazák, and will no doubt lead to further debate regarding the exact scope of Member State freedom in this area.

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Case C-171/11 Fra.bo: Horizontal Effect of Article 34 TFEU

Yesterday, the Court decided to give horizontal effect to Article 34 TFEU on the free movement of goods. In the Fra.bo case, the Oberlandesgericht Düsseldorf had asked whether a private-law association (DVGW) ought to be subject to the principle of free movement of goods. The organisation at issue operates both to draw up technical standards for products used in the drinking water supply sector and to certify products based on these standards.

As Laurens has pointed out in his post on the Advocate General’s opinion, the Court has accepted such horizontal effect for the other Treaty freedoms, but not yet for the case of the free movement of goods. Advocate General Trstenjak, however, suggested in her Opinion to extend the reasoning of cases like Bosman, Viking and Laval by analogy. Based on their horizontal effect, fundamental freedoms could thus be imposed in cases where non-public organisations held the power to draw up certain kinds of collective rules. In the present case, the German private organization DVGW possessed in her view a de facto competence to determine what fittings could be offered for sale on the market in pipes and accessories for drinking water supply in Germany (para 41). The Advocate General pointed out that horizontal effect was required by the effet utile of European Union law because (paras 46 ff.) the abolition of obstacles to trade imposed on Member States might otherwise be compromised by obstacles erected by private parties. Also, the fact that some Member States would rely on public standardisation bodies while others turn to private organisations may lead to inequalities in the application of EU law.Continue reading

What happens to the request for the Court’s Opinion now that ACTA has been rejected by the European Parliament?

Well, that came as no surprise. Today, the European Parliament officially rejected ACTA. In a vote today 478 MEPs voted against ACTA, 39 in favour, and 165 abstained. As we mentioned earlier on the blog, the Commission already requested the Opinion of the Court on the compatibility of ACTA with the Treaties and the Charter in accordance with article 218 (11) TFEU.

Now that the European Parliament has rejected ACTA, what happens to this request? The Commission could retract its request, saving the Court from a lot of headaches and drawing it into this political mud-fight. That would be kind of the Commission of course. However, since the Commission has been so determined in arguing the benefits of ACTA, as well as defusing concerns over fundamental rights issues, the Commission might be tempted to hear the Court’s Opinion anyway. The advantage for the Commission would be that it obtains legal certainty on whether ACTA is compatible with the Treaties and the Charter, possibly opening the door to ratification or renegotiation. And if the Court were to rule that ACTA is compatible, the Commission would have proven its case and save some face.

The question is: does the Court still need to give an Opinion now that the European Parliament has rejected ACTA?

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