by José Ricardo Sousa, student of the Master's degree in EU Law of UMinho

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Keywords: primacy; competition rules; non-discrimination; nationalisation; state aid.

Court: CJEU | Date: July 15th 1964 | Case: 6/64 | Applicants: Faminio Costa vs Ente Nazionale Energica Elettrica

Summary: The Italian Republic nationalized the production and distribution of electric energy. In the middle of the proceedings, Mr Costa, shareholder of an energy company affected by the sector nationalization requested the application of article 177 of EEC Treaty to obtain the interpretation of articles 102, 93, 53 and 37 of the same treaty. To Mr Costa, this nationalization infringed the articles mentioned above. The Giudice Consiliatore decided to send a question to CJEU:

“Having regard to Article 177 of the Treaty of25 March 1957 establishing the EEC, incorporated into Italian law by Law No 1203 of 14 October 1957, and having regard to the allegation that Law No 1643 of6 December 1962 and the presidential decrees issued in execution of that Law (No 1670 of 15 December 1962, No 36 of 4 February 1963, No 138 of25 February 1963 and No 219 of 14 March 1963) infringe Articles 102, 93, 53 and 37 of the aforementioned Treaty, the Court hereby stays the proceedings and orders that a certified copy of the file be transmitted to the Court of Justice of the European Economic Community in Luxembourg.’”

On the application of article 177 of EEC Treaty, CJEU began to argue that national courts may submit the matter when there is no judicial appeal and it’s connected to an interpretation of the treaty, however the CJUE has no jurisdiction to apply the judgment to a specific case. Although the question ware misconceived, the CJEU proceed to analyse the European articles without interfering in Italian law validation.

For the Italian Government, the request of Giudice Consiliatore was unnecessary because only national law had been applied to the case. CJEU states that unlike other treaties, EEC treaty became an integral part of the national jurisdictions of Member States and the states must accept that the CJEU has competences to intervene and give their judgements in concrete cases. In other words, the national jurisdiction interpretation of the law is limited since the CJEU was created by the respective states who approved their competences. The precedence of Community Law is confirmed by the article 189 and there is any chance to introduce reservations in the law by Member States.

The Court continued to answer the question singly:

Article 102

When any government wants to proceed to nationalization, they must consult the Commission to receive recommendations about the matter. The goal of this article is to approach national legislations with regard to the objectives of the Treaty. Again, the CJEU remembered the Italian Government that they accepted this legislation and they have to submit to the community rules. At last, this obligation doesn’t fit as an argument for defence of the particular.

Article 93

The objective of article 93 is to keep under control all systems of aid. It’s necessary a closer cooperation between Member States and Commission. The Commission has to be informed about the possible changes by Member States. The CJEU demonstrates concerns about state aids which might generate unfair competition.

Article 53

This article undertakes Member States not to introduce any establishment restrictions to national or foreign companies in their own territory. Unlike all the others articles, the Court states that it’s interest of the particular to protect their rights. The CJEU proceeds their speech remembering that article 53 continues legal if there will be any different legislation between national and international undertakings.

Article 37

This article says that Member States have to adapt State Monopolies to the competition rules in order to reduce discrimination between undertakings.

The decision can be accessed here and the opinion of AG here.