England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		29/07/2010

Mr Justice Floyd:

1. Conex Banninger Limited ("Conex") has brought this action for declarations against the European Commission ("the Commission"), and by this application seeks a reference of certain issues prior to judgment in the action to the Court of Justice of the European Union ("ECJ") under Article 267 of the Treaty on the Functioning of the European Union ("TFEU").
2. On 20^th September 2006, following an investigation under its competition powers, the Commission concluded that there had been an infringement of what is now Article 101 TFEU (formerly Article 81) in relation to the market for copper and copper alloy fittings. It issued a decision to that effect ("the Copper Fittings Decision"). It found that three undertakings (not including Conex), namely Advanced Fluid Connections PLC, IBP Limited and IBP France SA, had participated in that infringement until 1^st April 2004. IBP France was the party found "directly liable". Advanced Fluid Connections PLC and IBP Limited were found jointly and severally liable in their capacity as parent companies of IBP France SA. IBP Limited was fined 11.26 million Euros, IBP France was fined 5.63 million Euros and Advanced Fluid Connections was fined 18.08 million Euros.
3. IBP Limited did not, and claims that it could not, pay any part of the debt created by its fine, which ranked as an unsecured debt owed to the European Commission. Advanced Fluid Connections were by that time in administrative receivership and could not pay the fines for which they were jointly and severally liable. In March 2006 the administrative receivers of Advanced Fluid Connections sold all the assets of that company to Pearl Fittings Limited. Those assets included IBP Limited and IBP France SA. In December 2006 IBP Limited instructed accountants, Deloitte, to consider restructuring of the IBP Group. In January 2007 Pearl Fittings instructed accountants to find a buyer for the IBP Group and/or its businesses. The highest offer received valued IBP's assets as a going concern at about £32 million, which was less than its indebtedness to secured creditors, and would therefore leave nothing for unsecured debtors, such as the Commission.
4. In February 2007 IBP France SA and IBP Limited applied in the Companies Court for administration orders. On 2^nd March 2007 David Richards J placed the two companies in administration. Two individuals from Deloitte were appointed joint administrators. The administration was of the kind which has come to be known as a "pre-pack" under which a "Newco", Copper Holdco, would be formed to assume responsibility for the secured creditors and to acquire the relevant shareholdings. These arrangements were completed. On 13^th March 2007 Copper Holdco changed its name to Conex.
5. In the light of the insolvency of the companies to which the Copper Fittings Decision was addressed the Commission began to consider what remedies it might have against companies that might have succeeded to the assets and liabilities of IBP. Having first made some enquiries of the administrators of IBP Limited, on 5^th June 2009 the Commission adopted a decision and issued an information request to Conex, to which Conex in short course replied. On 16^th October 2009 the Commission issued a further information request to Conex, to which Conex again replied promptly. Finally on 28^th April of this year the Commission requested yet further information from Conex, and Conex responded on 14^th May.
6. Not surprisingly, Conex asserts that the uncertainty over whether it can be made liable to the Commission for the very substantial sum owed to the Commission by IBP is adversely affecting its ability to operate its business. It contends that, in the circumstances which I have briefly described, Conex cannot be made liable for the infringement found in the Fittings Decision. It contends further that there is an issue of law as between Conex and the Commission as to the interpretation of Article 101 TFEU. The Commission, by its actions in seeking information, has made it clear that it considers that Conex can be made liable in these circumstances. Given the existence of that issue between the parties, and given the commercial utility of having that matter decided so that Conex can trade without the shadow of the fine hanging over its head, Conex submits that the Court can and should take steps to have that matter resolved in this declaratory action, by referring appropriate questions to the ECJ. If that course is taken a decision could be obtained from the ECJ in about 17 months (the average time taken by the ECJ at the moment for dealing with references from national courts), whereas if the matter takes its course through to a second decision from the Commission, and an action for the annulment, the uncertainty will persist for several years beyond that.

The declarations

7. By its particulars of claim, Conex seeks the following declarations:

"1. A declaration that the Claimant is not liable in law, and cannot be made liable in law, to pay the unsecured debts owed by IBP Limited and IBP France SA to the Defendant pursuant to the [Copper Fittings] Decision of 20 September 2006…

2. A declaration that those debts cannot be enforced by the Defendant against the Claimant in England and Wales in accordance with Article 299 [TFEU] …

3. A declaration that the Claimant is not liable in law, and cannot be made liable in law, by succession or otherwise, for the infringements committed by IBP Limited and IBP France SA identified in the [Copper Fittings] Decision of 20 September 2006, whether jointly or severally with those companies or otherwise."

The questions sought to be referred

8. Conex has put before the Court a draft set of questions and accompanying Schedule to the order for reference. Mr Khan on behalf of the Commission told me that the schedule was agreed as far as it went, but that the Commission was not content either with the way in which its legal position was characterised or with the completeness of the factual summary. He was not, however, able to identify any specific further facts which the Commission contended should be included in the Schedule.
9. The draft questions which Conex seek to have referred are as follows:

"(1) In the circumstances set out in the Order for Reference, and having regard to question 2 below, does European Union law preclude a national court from entertaining a claim to a domestic declaratory remedy against the Commission where the declaration sought, which is to be based upon a preliminary ruling delivered by the Court of Justice under Article 267 TFEU, concerns the legality of an act that the Commission might take against the Claimant, purportedly in the exercise of its power as under the competition rules of the TFEU?

(2) In the circumstances set out in the Order for Reference, and as a matter of European Union law (and in particular of the correct interpretation of Article 101 TFEU and/or Article 299 TFEU, if relevant), where a company ("the Debtor") has been fined by the Commission for infringing Article 101 TFEU and has subsequently been placed into administration pursuant to national insolvency legislation, and where the Administrators of the Debtor then realise the property of the Debtor in the course of the Administration of the Debtor, can a purchaser of some of the Debtor's assets be made liable in law, by succession or otherwise, for the infringement of Article 101 TFEU, whether jointly or severally with the original infringer or otherwise?"

The contentions of the parties

10. The Commission contended that Conex's action and the order for reference were misconceived at almost every stage. Through submissions presented by both Mr Khan and Ms Gray, the Commission submitted that:

i) The English court had no jurisdiction to grant the substantive declaratory relief sought in the action where it would seek to interfere with a pending competition investigation. Conex must wait and bring an action for annulment of any future decision under Article 263 TFEU. The relief here, in seeking a definitive declaration of non-liability, went further than any relief obtainable by such an action and was not available in law.

ii) Moreover even if the court had jurisdiction to grant such relief, it would decline to exercise it because the court should not risk making a decision which would conflict with a decision of the Commission in competition proceedings.

iii) The declarations sought cannot provide the protection which Conex seeks, because the Commission is not bound by the decision of a national court.

iv) The declarations sought would accordingly not be useful to Conex.

11. Conex submitted that the Court did have jurisdiction to grant the declarations sought. The EU law principle of effective judicial protection meant that a party in the position of Conex should not have to wait to be fined before it could challenge the legality of an investigation into its conduct. If there was no directly available remedy before the courts of the European Union, national courts may and in appropriate cases should intervene to secure such protection.

EU law

12. Article 263 TFEU provides, so far as material, as follows:

"The Court of Justice of the European Union shall review the legality of legislative acts, of acts of the Council, of the Commission and of the European Central Bank, other than recommendations and opinions, and of acts of the European Parliament and of the European Council intended to produce legal effects vis-à-vis third parties. …

It shall for this purpose have jurisdiction in actions brought by a Member State, the European Parliament, the Council or the Commission on grounds of lack of competence, infringement of an essential procedural requirement, infringement of the Treaties or of any rule of law relating to their application, or misuse of powers…

Any natural or legal person may, under the conditions laid down in the first and second paragraphs, institute proceedings against an act addressed to that person or which is of direct and individual concern to them, and against a regulatory act which is of direct concern to them and does not entail implementing measures."

13. In Case 60/81 IBM v Commission [1981] ECR 1857, the Commission had instigated competition proceedings against IBM. IBM had been served with a statement of objections, a Commission document issued at an interim stage of an investigation particularising the Commission's case based on competition law. IBM sought annulment of the decision initiating the procedure and the statement of objections itself. The ECJ held that the legality of these matters was not reviewable under Article 173, the contemporaneous equivalent of Article 263 TFEU. Review was only available for acts of binding legal effect. The court said this:

"9. In order to ascertain whether the measures in question are acts within the meaning of Article 173 it is necessary, therefore, to look to their substance. According to the consistent case-law of the Court any measure the legal effects of which are binding on, and capable of affecting the interests of, the applicant by bringing about a distinct change in his legal position is an act or decision which may be the subject of an action under Article 173 for a declaration that it is void. However, the form in which such acts or decisions are cast is, in principle, immaterial as regards the question whether they are open to challenge under that article.

10. In the case of acts or decisions adopted by a procedure involving several stages, in particular where they are the culmination of an internal procedure, it is clear from the case-law that in principle an act is open to review only if it is a measure definitively laying down the position of the Commission or the Council on the conclusion of that procedure, and not a provisional measure intended to pave the way for the final decision.

11. It would be otherwise only if acts or decisions adopted in the course of the preparatory proceedings not only bore all the legal characteristics referred to above but in addition were themselves the culmination of a special procedure distinct from that intended to permit the Commission or the Council to take a decision on the substance of the case.

12. Furthermore, it must be noted that whilst measures of a purely preparatory character may not themselves be the subject of an application for a declaration that they are void, any legal defects therein may be relied upon in an action directed against the definitive act for which they represent a preparatory step…

19. A statement of objections does not compel the undertaking concerned to alter or reconsider its marketing practices and it does not have the effect of depriving it of the protection hitherto available to it against the application of a fine ... Whilst a statement of objections may have the effect of showing the undertaking in question it is incurring a real risk of being fined by the Commission, that is merely a consequence of fact, and not a legal consequence which the statement of objections is intended to produce.

20. An application for a declaration that the initiation of a procedure and a statement of objections are void might make it necessary for the Court to arrive at a decision on questions on which the Commission has not yet had an opportunity to state its position and would as a result anticipate the arguments on the substance of the case, confusing different procedural stages both administrative and judicial. It would thus be incompatible with the system of the division of powers between the Commission and the Court and the remedies laid down by the Treaty, as well as the requirements of the sound administration of justice and the proper course of the administrative procedure to be followed in the Commission.

21. It follows from the foregoing that neither the initiation of a procedure nor a statement of objections may be considered, on the basis of their nature and the legal effects they produce, as being decisions within the meaning of Article 173 of the EEC Treaty which may be challenged in an action for a declaration that they are void… they are procedural measures adopted preparatory to the decision which represents their culmination."

14. It is clear that the Court's decision turned on the correct interpretation of Article 173 (now Article 263) as a matter of policy. At [23] in the decision the Court contemplated the case where the Commission's acts lacked "even the appearance of legality", but expressly refrained from expressing any view on whether in such circumstances the Court would have power to review the matter, as it was unnecessary for them to do so. Finally, at [24] the Court concluded that IBM had adequate legal protection if the measures in question could in due course be reviewed. In other words, it was acceptable if IBM had no effective remedy until a point in time at which they were likely to have had a fine imposed on them. They said:

"Moreover, in this instance adequate legal protection for IBM does not require that the measures in question be subject to immediate review. If, on the conclusion of the administrative procedure and after any observations which IBM may submit in the course of it have been examined, the Commission were to adopt a decision which affects IBM's interests, that decision will, in accordance with Article 173 of the EEC Treaty, be subject to judicial review in the course of which it will be permissible for IBM to advance all the appropriate arguments. It will then be for the Court to decide whether anything unlawful has been done in the course of the administrative procedure and if so whether it is such as to affect the legality of the decision taken by the Commission on the conclusion of the administrative procedure."

15. IBM was decided in 1981, before the jurisdiction of the ECJ was divided so as to create the Court of First instance (now the General Court), to which the direct action for annulment would now lie. Much more recently, however, in Case T-457/08R Intel v European Commission (Order of the President of the General Court dated 27^th January 2009) the position of the Court was restated in similar terms by the President of the Court in dismissing an application for interim measures at [52]:

"In this respect, it must be stated that, according to consistent case-law, only a measure whose legal effects are binding on the applicant and are capable of affecting his interests, by bringing about a distinct change in his legal position, is an act or decision which may be the subject of an action for annulment. In the case of acts or decisions adopted by a procedure involving several stages, in particular where they are the culmination of an internal procedure, it is in principle only those measures which definitively determine the position of the Commission upon the conclusion of that procedure which are open to challenge and not intermediate measures whose purpose is to prepare for the final decision."

16. There is no suggestion in either of these cases that it was the intention of the framers of the treaties establishing the European Union that it should be left to the courts of the Member States to fill in the gap left by the absence of a remedy before the European Union Courts in respect of preparatory acts. On the contrary it appears that it was thought that there were sound policy reasons for limiting the scope of the action for annulment to acts which brought about a distinct change in the applicant's legal position. It might be said that it has throughout been open to those courts to adopt a wider construction of Article 263 to give the opportunity to review measures on a wider basis.
17. Between the decisions in IBM, on the one hand, and Intel on the other comes Case C-432/05 Unibet (London) Ltd and another v Justitiekanslern [2007] ECR I-2271. Swedish law did not provide for a free-standing application for a declaration that a provision of national law is incompatible with a higher ranking rule, such as a rule of EU law. Unibet was placing advertising in the Swedish media for its internet betting service. The Swedish authorities took action against the advertisers on the basis that the advertisements contravened the Swedish law on lotteries, but no action was taken against Unibet. Unibet accordingly started an action in Sweden for a declaration that it had the right under EU law to promote its betting service and that it was not prevented from doing so by the relevant provision of Swedish domestic law (the Law on Lotteries) together with other relief including damages. The action for a declaration was dismissed on the above basis, leaving the action for damages in place. The principal question which the ECJ was asked by a reference from the Swedish Supreme Court (Högsta domstolen) was this:

"Is the requirement of Community law that national procedural rules must provide effective protection of an individual's rights under Community law to be interpreted as meaning that an action for a declaration that certain national substantive provisions conflict with Article 49 EC must be permitted to be brought in a case where the compatibility of the substantive provisions with that article may otherwise be examined only as a preliminary issue in, for example, an action for damages, proceedings concerning infringement of the national substantive provisions or judicial review proceedings? "

18. The Court stated that it was not necessary for the national court to create specific new remedies if the existing remedies gave Unibet the opportunity to challenge the Community law measure in question. It concluded that Swedish national law provided such opportunities, including the opportunity in the action for damages to challenge the validity of the relevant Community measure. However, the Swedish Supreme Court had drawn attention to the fact that Unibet could have the question whether the Law on Lotteries is compatible with Community law examined, amongst other ways, if it breached the provisions of that law and was subject to criminal proceedings. The Court of Justice picks up this suggestion at [62]:

"Moreover, the Högsta domstolen states that if Unibet disregarded the provisions of the Law on Lotteries and administrative action or criminal proceedings were brought against it by the competent national authorities, it will have the opportunity, in proceedings brought before the administrative court or an ordinary court, to dispute the compatibility of those provisions with Community law."

19. As to this, the Court said at [64]:

"If, on the contrary, as mentioned at paragraph 62 above, it was forced to be subject to administrative or criminal proceedings and to any penalties that may result as the sole form of legal remedy for disputing the compatibility of the national provision at issue with Community law, that would not be sufficient to secure for it such effective judicial protection."

20. The Court accordingly answered the Swedish Supreme Court's question in the following way:

"Accordingly, the answer to the first question must be that the principle of effective judicial protection of an individual's rights under Community law must be interpreted as meaning that it does not require the national legal order of a Member State to provide for a free-standing action for an examination of whether national provisions are compatible with Article 49 EC, provided that other effective legal remedies, which are no less favourable than those governing similar domestic actions, make it possible for such a question of compatibility to be determined as a preliminary issue, which is a matter for the national court to establish".

21. The interaction between the remedies afforded in the European courts and those in domestic courts to challenge the validity of European legislation was considered in Case C-50/00P Unión de Pequeños Agricultores v Council of the European Union [2003] QB 893. A direct action before the Court of First Instance was dismissed on the grounds that the applicants, a trade union association representing the interests of small Spanish agricultural businesses, did not satisfy the test of "individual concern" established by the case law as a necessary pre-condition for locus standi to challenge the validity of a Regulation. The members of the trade union were not affected by the regulation in question "by reason of attributes that were unique to them or factual circumstances which differentiated them from all other persons". The applicants' appeal to the Court of Justice was dismissed. The Court, having confirmed the inadmissibility of the action in question, observed:

"[38] The European Community is, however, a community based on the rule of law in which its institutions are subject to judicial review of the compatibility of their acts with the Treaty and with the general principles of law which include fundamental rights.

[39] Individuals are therefore entitled to effective judicial protection of the rights they derive from the Community legal order, and the right to such protection is one of the general principles of law stemming from the constitutional traditions common to the member states. That right has also been enshrined in articles 6 and 13 of the European Convention for the Protection of Human Rights and Fundamental Freedoms. [citation omitted]

[40] By article 173 and article 184, (now article 241 EC), on the one hand, and by article 177, on the other, the Treaty has established a complete system of legal remedies and procedures designed to ensure judicial review of the legality of acts of the institutions, and has entrusted such review to the Community courts … Under that system, where natural or legal persons cannot, by reason of the conditions for admissibility laid down in the fourth paragraph of article 173 of the Treaty, directly challenge Community measures of general application, they are able, depending on the case, to plead the invalidity of such acts, either indirectly before the Community courts under article 184 of the Treaty, or before the national courts and to ask them, since they have no jurisdiction themselves to declare those measures invalid … to make a reference to the Court of Justice for a preliminary ruling on validity.

[41] Thus it is for the member states to establish a system of legal remedies and procedures which ensure respect for the right to effective judicial protection.

[42] In that context, in accordance with the principle of sincere cooperation laid down in article 5 of the Treaty, national courts are required, so far as possible, to interpret and apply national procedural rules governing the exercise of rights of action in a way that enables natural and legal persons to challenge before the courts the legality of any decision or other national measure relative to the application to them of a Community act of general application by pleading the invalidity of such an act."

22. I think it is possible to draw the following conclusions from these cases:

i) It is not possible in an action for annulment under Article 263 TFEU to challenge preparatory steps, that is to say steps leading up to an act having a legal effect on an individual (IBM, Intel);

ii) It is an open question whether a preparatory step which lacks all appearance of legality may be the subject of early judicial review (IBM);

iii) National courts must provide effective judicial protection for individuals seeking to challenge provisions of national law as being in conflict with the rules of EU law (Unibet; Unión de Pequeños Agricultores);

iv) A national system of procedural rules will not meet the requirement of effective judicial protection if it is necessary for an individual to act in breach of the national provision or expose himself to financial penalties in order to be in a position to challenge the national rule (Unibet);

v) The fact that a direct action for a declaration of invalidity (annulment) falls to be dismissed on grounds of admissibility by a Community court does not automatically mean that a national court is deprived of jurisdiction to entertain an action in which the validity of that legislation is in issue (Unión de Pequeños Agricultores).

23. The Regulation laying down the procedure for competition investigations is Council Regulation (EC) No.1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 [now 101 and 102] of the Treaty. Article 16(1) of that Regulation provides:

"1. When national courts rule on agreements, decisions or practices under Article 81 or Article 82 of the Treaty which are already the subject of a Commission decision, they cannot take decisions running counter to the decision adopted by the Commission. They must also avoid giving decisions which would conflict with a decision contemplated by the Commission in proceedings it has initiated. To that effect, the national court may assess whether it is necessary to stay its proceedings. This obligation is without prejudice to the rights and obligations under article 234 [now 267] of the Treaty."

24. This rule is a legislative recognition of the Court's decision in Case C-344/98 Masterfoods v HB, [2000] ECR I-11369. The national court should consider staying any proceedings which run the risk of conflicting with a Commission decision. However the rights and obligations in relation to references under Article 267 are unaffected.

Domestic law

25. Neither party was able to draw my attention to any case in which the English court had used its undoubtedly wide jurisdiction to grant declaratory relief in circumstances akin to the present. If Conex is right, the remedies sought in this action against the Commission would, at least in principle, be available in any pending competition investigation to which the party under investigation took objection in point of law. That would undoubtedly lead to a very large increase in the number of such cases. So the availability of the remedies sought needs to be scrutinised carefully.
26. In a decision handed down long before Masterfoods and Regulation 1/2003, Iberian UK Limited v BPB Industries [1996] 2 CMLR 601, Laddie J explained the importance of deferring to the expertise of the Commission in competition cases. Having reviewed a body of English and European case law he said this:

"[69] In my view these cases reinforce and support the following propositions:

1. The courts here should take all reasonable steps to avoid or reduce the risk of arriving at a conclusion which is at variance with the decision of, or on appeal from, the Commission in relation to competition law.

2. Except in the clearest cases of breach or non-breach, it will be a proper exercise of discretion to stay proceedings here to await the outcome of the European proceedings."

27. In Messier-Dowty Limited and another v Sabena SA and others [2001] 1 All ER 275 Lord Woolf reviewed the authorities on the grant of negative declarations. At [41] he rejected what he described as "artificial limits wrongly related to jurisdiction". He said instead that the jurisdiction to grant negative declarations "should be kept in proper bounds by the exercise of the courts' discretion". Having pointed out the need for caution in granting such negative declarations, he concluded that "there should be no reluctance to their being granted where it would be useful to do so".

Discussion

28. Mr Paul Lasok QC, who appeared on behalf of Conex with Mr Andrew Macnab, seized on paragraph 64 of Unibet. Here, he said, was the ECJ laying down a rule that it was simply not good enough to force parties to be subject to administrative or criminal proceedings and any penalties that may result from them as the sole form of challenge to legality. But, he submitted, that was exactly the Commission's position here. If the Commission were right, Conex would have no remedy to challenge what Conex regards as the Commission's misguided interpretation of Article 101 of the Treaty until the Commission had issued a decision condemning Conex to a fine. Mr Lasok meets the force of cases such as IBM and Intel on the footing that those are cases about the specific form of action provided by Article 263 TFEU. Conex was not seeking to bring such an action, and as Unión de Pequeños Agricultores shows, the jurisdiction of national courts is not necessarily coterminous with the requirements for admissibility of such an action.
29. Mr Khan, for the Commission, submitted that the English court had no jurisdiction to grant a declaration against the Commission which would pre-empt the outcome of a pending investigation by the Commission.
30. I prefer not to decide this case on the basis of this wide ranging submission about jurisdiction. Just as the ECJ in IBM reserved the position as to the jurisdiction of the ECJ in relation to a case where the acts of the Commission lacked even the appearance of legality, so also I would reserve the position in relation to the jurisdiction of the English court to grant such a declaration and the range of circumstances in which it might do so. I think that it is necessary to focus on the fact that both the substantive declaratory remedy in the action, and the decision to refer questions to the ECJ are matters over which the court retains a judicial discretion.
31. I have come to the conclusion that I should not, in the exercise of the court's discretion, refer the questions to the ECJ which Conex seeks.
32. I consider first the final relief sought, namely the declarations as to whether Conex can be held liable. In the normal way, the present case would be one where the English court would be likely to defer its decision at trial until the Commission has concluded its investigation, on the principles laid down in Masterfoods, Article 16(1) of Regulation 1/2003 and as explained by Laddie J in Iberian v BPB. It seems to me, therefore, that whatever the position about jurisdiction, the most likely result would be that the decision of the Commission (either to abandon its investigation or to issue a second decision) will come before any declaration falls to be granted. Thereafter, if the Commission's second decision is adverse to Conex, it is common ground that Conex would have to pursue its remedy through the action for annulment in the General Court.
33. Mr Lasok sought to deflect the impact of Masterfoods, Article 16(1) of Regulation 1/2003 and Iberian v BPB on the ground that what these are concerned with is the special experience of the Commission in the analysis of the nuts and bolts of the economic arguments which arise in competition cases. The present case, he submitted, raised a straightforward question of EU law. For my part I do not think that such a clear distinction can be made. The Commission does have experience of determining which undertakings can be brought within the EU law notion of an "agreement between undertakings". The undesirability of the English court and the Commission reaching conflicting views on this question would, it seems to me, be a very strong if not overwhelming reason for restraint in exercising the declaratory jurisdiction in the way which Conex seeks.
34. No doubt the position would be different if, by the time of trial, the ECJ had answered the questions referred in Conex's favour, to the effect that on the present facts there was no basis to hold Conex liable. At one point the Commission appeared to be arguing that, even then, the Commission would not be bound to take notice of these decisions. In practical terms, however, it seems to me to be most unlikely that the Commission would press on in the face of such an adverse decision. To do so would be to fly in the face of the principle of the rule of law.
35. It is therefore essential in my judgment to determine whether there is any realistic prospect that the ECJ will rule in Conex's favour on either of the two questions posed in the draft reference. In order to achieve that, the ECJ will have to be persuaded to embark at this stage on an investigation into the legality of the Commission's investigations, something which its case law shows it has not been prepared to do hitherto.
36. Mr Lasok submitted that the principle emerging from IBM and Intel (about declining relief in respect of preparatory acts) was directed solely to the scope of the direct action for annulment. I reject that submission. It seems to me that the ECJ's reluctance to embark on investigations of preparatory acts is based on much more than narrow and legalistic requirements of admissibility of the direct action for annulment. As paragraph 20 of the decision in IBM, which I have quoted above, makes clear, the reluctance is based on the fact that it is undesirable to pre-empt the acts of the EU institutions and to anticipate the arguments on the substance of the case. It is also based on the desirability of not confusing different administrative and judicial procedural stages, and not acting incompatibly in connection with the division of powers. Finally it is based on the requirement for the sound administration of justice. In those circumstances I consider that it is unrealistic to suppose that the ECJ will take a different view of the underlying policy, merely because the issue comes before it through the means of a reference from a national court.
37. The ECJ itself recognised that the principles emerging from IBM and Intel may perhaps be subject to a narrow exception, where the acts in questions lack even the appearance of legality. But Mr Lasok did not attempt to place the present case in that category. The question raised in this case of the scope of the principle of successor liability for infringement of the competition rules is a matter which is susceptible of argument on both sides.
38. I do not think that the Court of Justice in Unibet was intending to undermine this important general principle of EU law. The Court in Unibet came to the conclusion that effective judicial protection was afforded by Swedish procedural law. It did not need, in reaching its decision, to deal with those remedies in Swedish law which, if they had been the only such remedies, would not afford effective judicial protection. It is also not entirely clear to me whether the court was simply contemplating a case where it was necessary for a party to take positive steps to breach a national law in order to have its legality determined. In such a case it might be said that there is a barrier to obtaining relief which prevents the protection being effective. Conex is certainly not in this position: it does not have to act (or, on the assumption that it has already done so, act further) in contravention of any provision of EU or domestic law. What is done is done.
39. Quite apart from that distinction, however, it would be an odd result if the effect of the decision in Unibet is that European Union law now requires effective judicial protection not simply for rights created by European law but also against the impact of preparatory acts of European institutions, even though those who framed the Treaties did not so provide. I do not believe that such a consequence was contemplated by the Court in Unibet.
40. Finally, so far as effective judicial protection is concerned, it should not pass without comment that Conex could have challenged, by way of action for annulment before the General Court, the Commission's formal decision to request information from Conex dated 5^th June 2009. In so doing Conex could have raised the issue of law which it now seeks to have decided. In those circumstances it can hardly be said that there is a necessity for the national court to provide an alternative remedy. Conex says that, had it taken this route, it would have run the risk of raising a suspicion that it had something to hide. It also points out that even if it had raised such a challenge, it would not be decided for some years to come. But all these matters are features of the system which EU law has provided for protection against this particular form of administrative action. They do not form a basis for enlarging the remedies available.
41. I should not, in the exercise of my discretion, refer the questions to the ECJ if I consider, as I do, that the references have no realistic prospect of obtaining for Conex the protection they seek. In those circumstances, and for those reasons, I propose to dismiss the application for a reference to the ECJ.