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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Commission v Spain (Free movement of goods) [1997] EUECJ C-160/94 (23 October 1997)
URL: http://www.bailii.org/eu/cases/EUECJ/1997/C16094.html
Cite as: [1997] EUECJ C-160/94
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IMPORTANT LEGAL NOTICE - IMPORTANT LEGAL NOTICE - The source of this judgment is the web site of the Court of Justice of the European Communities. The information in this database has been provided free of charge and is subject to a Court of Justice of the European Communities disclaimer and a copyright notice. This electronic version is not authentic and is subject to amendment.
JUDGMENT OF THE COURT
(Failure of a Member State to fulfil its obligations - Exclusive rights to import and export electricity)
applicant,
supported by
United Kingdom of Great Britain and Northern Ireland, represented by Lindsey
Nicoll, of the Treasury Solicitor's Department, acting as Agent, assisted by
David Anderson, Barrister, with an address for service at the British Embassy,
14 Boulevard Roosevelt,
v
defendant,
supported by
French Republic, represented by Catherine de Salins, Head of Subdirectorate
in the Directorate for Legal Affairs, Ministry of Foreign Affairs, and
Jean-Marc Belorgey, Chargé de Mission in the same directorate, acting as
Agents, with an address for service in Luxembourg at the French Embassy, 8b
Boulevard Joseph II, and
Ireland, represented by Michael A. Buckley, Chief State Solicitor, acting as
Agent, assisted by John D. Cooke SC and Jennifer Payne, Barrister, with an
address for service in Luxembourg at the Irish Embassy, 28 Route d'Arlon,
APPLICATION for a declaration that, by reserving to itself exclusive import and export rights for electricity, the Kingdom of Spain has failed to fulfil its obligations under Articles 30, 34 and 37 of the EC Treaty and Article 48 of the Act concerning the conditions of accession of the Kingdom of Spain and the Portuguese Republic and the adjustments to the Treaties (OJ 1985 L 302, p. 23),
THE COURT,
composed of: G.C. Rodríguez Iglesias, President, C. Gulmann, H. Ragnemalm and
M. Wathelet (Presidents of Chambers), G.F. Mancini, J.C. Moitinho de Almeida,
P.J.G. Kapteyn, J.L. Murray, D.A.O. Edward (Rapporteur), J.-P. Puissochet,
G. Hirsch, P. Jann and L. Sevón, Judges,
Advocate General: G. Cosmas,
Registrars: H. von Holstein, Deputy Registrar,
D. Louterman-Hubeau, Principal Administrator,
having regard to the Report for the Hearing,
after hearing oral argument from the parties at the hearing on 7 May 1996, at
which the Commission was represented by Richard B. Wainwright and Fernando
Castillo de la Torre, of its Legal Service, acting as Agent, the United Kingdom
of Great Britain and Northern Ireland by Nicholas Green, Barrister, the
Kingdom of Spain by Gloria Calvo Díaz, the French Republic by Marc Perrin de
Brichambaut, Director of Legal Affairs in the Ministry of Foreign Affairs,
acting as Agent, and Jean-Marc Belorgey, and Ireland by Paul Gallagher SC and
Jennifer Payne,
after hearing the Opinion of the Advocate General at the sitting on 26 November
1996,
gives the following
Judgment
- By application lodged at the Court Registry on 15 June 1994 the Commission of
the European Communities brought an action under Article 169 of the EC Treaty
for a declaration that, by reserving to itself exclusive import and export
rights for electricity, the Kingdom of Spain had failed to fulfil its
obligations under Articles 30, 34 and 37 of the EC Treaty and Article 48 of the
Act concerning the conditions of accession of the Kingdom of Spain and the
Portuguese Republic and the adjustments to the Treaties (OJ 1985 L 302, p. 23,
hereinafter 'the Act of Accession').
- In Spain, Article 1(1) of Law No 49/84 of 26 December 1984 on the unified
operation of the national electricity system (BOE No 312 of 29 December 1984,
hereinafter 'the 1984 Law') provides:
'The unified operation of the national electricity system over the high-voltage networks is a public State service, the purpose of which is to optimize the system as a whole on the basis of the functions and activities set out in Article 2 of this Law. The service shall be managed by a State company in accordance with the present Law and the provisions adopted for its implementation.' - Article 2(1) of the 1984 Law defines the functions and activities which the
public service comprises, which are, in particular:
'...
(e) to operate and maintain ... all international connection facilities ...;
...
(i) to engage in such international trade as is considered appropriate in order to ensure the supply of electric energy, to reduce production costs on a national scale or, for reasons of national interest, to allocate to each undertaking its share of such international trade and monitor the conduct thereof;
...'. - By Royal Decree No 91/85 of 23 January 1985 (BOE No 24 of 28 January 1985,
hereinafter 'the 1985 Royal Decree'), adopted in implementation of the 1984
Law, those functions and activities were entrusted to a State undertaking, Red
Eléctrica de EspaÄna SA (hereinafter 'Redesa').
- Taking the view that, under the abovementioned provisions of Spanish
legislation, taken together, exclusive rights to import and export electricity
are reserved to the State, which exercises them through Redesa, and that those
rights are contrary to Articles 30, 34 and 37 of the Treaty and to Article 48
of the Act of Accession, the Commission initiated against the Kingdom of Spain
the procedure provided for by Article 169 of the Treaty.
- Article 48 of the Act of Accession provides:
'1. Without prejudice to paragraphs 2 and 3 of this article, the Kingdom of Spain shall, from 1 January 1986, progressively adjust State monopolies of a commercial character within the meaning of Article 37(1) of the EEC Treaty, bearing in mind, where appropriate, Article 90(2) of the EEC Treaty, so as to ensure that by 31 December 1991 at the latest no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of the Member States.
...
2. The Kingdom of Spain shall, from 1 January 1986, abolish all exclusive export rights.
...'. - Article 48(3) of the Act of Accession is not applicable to electricity.
- By two orders of 14 December 1994, the President of the Court granted leave to
the French Republic and to Ireland to intervene in support of the forms of
order sought by the Kingdom of Spain; by order of the same date he granted
leave to the United Kingdom of Great Britain and Northern Ireland to intervene
in support of the forms of order sought by the Commission.
- In support of its application, the Commission asserts that the 1984 Law, in
conjunction with the 1985 Royal Decree, establishes a system under which the
State alone, acting through the State-owned Redesa, is authorized to import
and export electricity. It maintains that those exclusive rights are contrary
to Articles 30 and 34 of the Treaty respectively, and in both cases to Article
37 thereof, as made applicable to the Kingdom of Spain by Article 48 of the Act
of Accession, and cannot be justified under either Article 36 or Article 90(2)
of the Treaty.
- The Spanish Government denies, in limine, that the 1984 Law and the 1985 Royal
Decree give Redesa exclusive rights to import and export electricity.
- It states, first, that the supply of electricity was declared a public service
by royal decree in 1924, without the various supply activities, namely
generation, transmission and distribution, thereby falling within the
exclusive competence of the State.
- It goes on to say that it was precisely in order to cope with the problems
arising from the existence of numerous undertakings generating and
distributing electricity, particularly from the point of view of security of
supply and the emergence of large and costly surpluses, that the 1984 Law was
adopted. It is clear, however, from the preamble to that Law, its title and
its provisions, in particular Article 1(1), that it was not intended to bring
all such supply activities within a single operation but rather to unify and
ensure the continuity of the operation of the various electricity undertakings
in accordance with criteria of economic efficiency, while observing the
property rights of the undertakings concerned and their freedom to run their
own plants. Thus, Redesa is entrusted only with the unified operation of the
national electricity system through the transmission network.
- The Spanish Government contends, finally, that Article 2(1)(i) of the 1984 Law
does not in itself create any exclusive right in respect of international
trade but merely gives Redesa an opportunity to engage in such trade where, and
only where, the public-interest requirements expressly indicated in that
provision are satisfied.
- The Commission replies that it is clear from Article 2(1)(e) and (i) of the
1984 Law that Redesa has exclusive import and export rights, even if those
rights are not expressly mentioned. It also points out that the Kingdom of
Spain has not cited a single example to show that there has been any
international trade, as referred to in subparagraph (i), by undertakings other
than Redesa.
- However, the Commission's objection cannot be upheld.
- The Commission alleges in its application that, by the combined provisions of
the 1984 Law and the 1985 Royal Decree, the Kingdom of Spain has established
a statutory monopoly on the import and export of electricity in favour of the
Spanish State, which it exploits through Redesa.
- However, the Commission, upon which, in an action to establish the failure of
a Member State to fulfil its obligations under Article 169 of the Treaty, the
burden of proof falls, has not demonstrated the existence of any Spanish
legislative provisions that grant such exclusive rights to Redesa.
- In the first place, as worded, the provisions relied on by the Commission
entrust Redesa only with the unified operation of the national electricity
system over the high-voltage networks. In the light of the preamble to the
1984 Law and the context in which it was adopted, as described by the Spanish
Government without being contradicted by the Commission, that unified
operation involves coordination of the activities by which the various
electricity-generating and distribution undertakings contribute to the
country's electricity supply rather than concentration thereof in the hands
of a single operator.
- It is not an argument to the contrary that Redesa is made responsible, by
Article 2(1)(e) of the 1984 Law, for operating all international connection
facilities, since such operation does not mean that undertakings other than
Redesa cannot, for the purpose of importing and exporting electricity, have
access to the transmission network managed by Redesa, including the
international connection facilities.
- Secondly, Article 2(1)(i) of the 1984 Law, in providing that, under certain
conditions, Redesa is to allocate to each undertaking its share of
international trade, necessarily implies that those undertakings may
participate in such trade and does not restrict their freedom to do so where
those conditions do not apply.
- Finally, since the Commission's complaint relates only to the existence of a
statutory monopoly on imports and exports of electricity, allegedly deriving
from the legislation in issue, its argument that the Kingdom of Spain has not
cited any instance of an undertaking other than Redesa actually importing or
exporting electricity is irrelevant.
- Accordingly, the Commission's action must be dismissed and it is unnecessary
to examine the other pleas in law and arguments of the parties.
Costs
- Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be
ordered to pay the costs if they are applied for in the successful party's
pleadings. Since the Commission has been unsuccessful, it must be ordered to
pay the costs. Under Article 69(4) of the Rules of Procedure, Member States
and institutions which intervene are to bear their own costs.
On those grounds,THE COURT
hereby:
1. Dismisses the application;
2. Orders the Commission of the European Communities to pay the costs;
3. Orders the United Kingdom of Great Britain and Northern Ireland, the French Republic and Ireland, as interveners, to bear their own costs.
|
Rodríguez Iglesias Gulmann Ragnemalm Wathelet Mancini Moitinho de Almeida Kapteyn MurrayEdward Puissochet Hirsch Jann Sevón
|
Delivered in open court in Luxembourg on 23 October 1997.
R. Grass
G.C. Rodríguez IglesiasRegistrar
President
1: Language of the case: Spanish.