Prof. Costanza Honorati* and Avv. Giorgio Corno** European Court of Justice, Judgment 20 October 2011, Case C-396/09, Interedil

Transcription

1 IILR_2012_000018_1 IILR 1 Prof. Costanza Honorat* and Avv. Gorgo Corno** A double lesson from Interedl: hgher courts, lower courts and prelmnary rulng and further clarfcatons on COMI and establshment under EC Insolvency Regulaton. European Court of Justce, Judgment 20 October 2011, Case C-396/09, Interedl The Interedl judgment focuses on two man ssues wthn the judcal cooperaton n cvl matters. Frst of all, t allows, on a general ground of the prelmnary rulng concernng the nterpretaton of Artcle 3, to go more nto depth ± or, better, confrm ± varous ssues regardng the relatons between courts of merts and supreme courts n front of EU law, and, therefor, to affrm the prmacy of EU law. Secondly, whle t confrms varous ssues concernng the noton, the nterpretaton and the acknowledgment of COMI, the judgment provdes new elements to have a more clear, unvocal and predctable ascertanment of COMI. Some ssues stll, however, reman unresolved and requre further clarfcatons from the European Court of Justce, manly wth regard to the relatons between the prncple of freedom of establshment wthn the EU and Insolvency Regulaton. 1.Facts and proceedngs of the Interedl case 1. Interedl S. r. l. was establshed accordng to Italan law, and, over the years, acqured several propertes n the dstrct of the Bar and of the Taranto Court. On 22 July 1998 Interedl shareholders resolved to dssolve the company and to open a voluntary lqudaton proceedng; later on a lqudator was apponted. On 2July 2001 the shareholders transferred the shares of Interedl to an Englsh company named ATP Konney Ltd. On 18 July 2001 Interedl shareholders resolved to transfer ts regstered offce from Monopol (Italy) ± whch fell wthn the dstrct of the Italan Court of Bar ± to London (England), On 31 July 2001, Interedl lqudator appled for ts cancellaton from the competent Italan Companes Regster (regstro delle mprese), on the ground that Interedl actvty had ceased n Italy due to the transfer * Full Professor of EU Law, Unversty of Mlano-Bcocca. Prof. Honorat s responsble for Sec ** Avvocato (Bar of Monza) and solctor (Supreme Court of England and Wales). Avv. Corno s responsble for Sec. 1, 4±9. 1 The summary of facts descrbed n ths artcle are grounded on the judgments ssued by the Court of Bar, the Corte d Cassazone as well as by the ECJ; on the defense statements of the partes nvolved n the proceedngs, whch the Author had the opportunty to read (but not on the documents fled by the partes n the sad proceedngs); on the certfcates of the Italan and Englsh regsters of companes consulted and descrbed by F. M. Muccarell, Da Monopol a Londra, ct., p.11. Satzspegelhæhe: 192mm

2 2 IILR IILR_2012_000018_1 of ts regstered offce n England 2. The cancellaton was made effectve from 5 September On 23 October 2001, almost two months after the cancellaton from the Italan Companes Regster, Interedl obtaned a regstraton at the Regster of Companes for England and Wales as a foregn company wth an address n London, based on the exstence, accordng to Englsh company law, that Interedl had a place of busness n England. Ths legal seat, whch was at the same address of ATP Konney Ltd, was subsequently moved twce n London. Subsequently Interedl resolved to transfer to Wndowmst Ltd 3, aganst shares of the same Wndowsmst, part of ts busness, nclusve of ts mmovable propertes based n Monopol as well as of, on part of ts busness, nclusve of ts mmovable propertes based n Taranto, respectvely on 14 December 2001 and on 27 February Both transfer deeds were sgned and executed n London and subsequently made publc n Italy, n order to regster the transfer deed n the competent Italan land regster. On 15 July 2002, the Regstrar of Companes for England and Wales declared Interedl to have ceased to have ts place of busness n England; and, on 22 July 2002, removed t from the sad Regster. On 28 October 2003, after more than one year from the cancellaton from the Englsh companes' regster and followng an enforcement proceedngs started over Interedl assets n 1998, Intesa Gestone Credt S. p. A. fled a petton wth the Trbunale d Bar for the openng of fallmento proceedngs aganst Interedl 4. Ths applcaton started the Interedl case, whch occuped Italan courts for more than ten years (and stll does at the present tme) and s one of the frst ones concernng nternatonal jursdcton 5 under Regulaton No 1346/2000 on crossborder nsolvency proceedngs 6 (herenafter also referred to as: ``Insolvency Regulaton'') to have been appled. 2 And based on prevous Italan precedents. See Trbunale d Monza 5 Aprl 2002, Gur. Comm. 2003, 558. These precedents were overcome by the Corte d Cassazone wth judgment 20 May 2005, n , ssued n the Interedl case. 3 An Englsh company wth regstered offce n London and a secondary seat n Rome. At the tme of the sad transfer, Wndowmst Ltd was controlled by Canopus Company Ltd, who owned the majorty of the shares of ATP Konney Ltd, who controlled Interedl. ATP Konney was cancelled as well by the Englsh regster of companes on 1 July 2003, followng the cancellaton of Interedl from the Englsh regster of companes. 4 Intesa Gestone Credt S. p. A. had started enforcement proceedngs over the assets of Interedl. Such proceedngs was pendng at the tme the petton for fallmento was fled. 5 Pror to ths case the ECJ had dealt wth nternatonal jursdcton under Regulaton 1346 n the followng cases: 2May 2006, Case C- 341/04, Eurofood IFSC Ltd, n E. C. R. I-3813 (herenafter: ``Eurofood''); 17 January 2006, Case C-1/04 [2006] Susanne Staubz ± Schreber, n ECR I-701, n. 27 (herenafter: ``Staubz-Schreber''). Followng the Interedl judgment under comment, the ECJ dealt wth the same subject n 15 December 2011, Case C-191/10, Rastell Davde & C. (herenafter quoted as ``Rastell''). 6 Regulaton 1346 s wdely based on the EC Conventon on Insolvency Proceedngs, opened for sgnature n Brussels on 23 November 1995, whch faled to come nto effect as a result of the Brtsh non-cooperaton polcy. The hstory of the conventon s able to grant an nsght nto Regulaton 1346, provdng practcal gudance n matters of ts nterpretaton. Among the many comments on Regulaton 1346 see: I. Fletcher, Insolvency n Prvate Internatonal Law, Oxford Press, 2005, ; Moss, Fletcher, Isaacs, The EC Regulaton on Insolvency Proceedngs, Oxford Press, 2009; Pannen (Ed.), European Insolvency Regulaton 1346, De Gruyter Recht, Berln, 2007; C. Paulus, Europasche Insolvenz-verordnung. Kommentar, 2.Auflage, (2008, Verlag Recht und Wrtschaft, Frankfurt am Man), 292, 2; B. Wessels, Internatonal Insolvency Law, Kluwer, 2012, 341 ff.. M. Vrgos, E. Schmt, Report on the Conventon on Insolvency Proceedngs, Councl of the European Unon, Document No 6500/96/EN (herenafter: ``Vrgos / Satzspegelhæhe: 192mm

3 IILR_2012_000018_1 IILR 3 Interedl challenged the jursdcton of the Trbunale d Bar and on 18 December 2003 fled ts defence n such proceedngs. On 24 May 2004 the Trbunale d Bar opened the fallmento proceedngs of Interedl. The sad fallmento order was appealed before the Trbunale d Bar tself on 18±21 June 2004, accordng to the exstng Italan nsolvency regulatons, on the assumpton, among others, that the court of Bar had no jursdcton, as the debtor's regstered offce had been transferred to England and that no subsdary exsted n Italy. Based on a request fled by Interedl on 13 December 2003 for a rulng on the prelmnary ssue of jursdcton ± pendng the proceedng for the sad fallmento order ± on 20 May 2005 the Corte d Cassazone adjudcated on the sad prelmnary ssue by way of order. Specfcally, the Italan Supreme Court stated that the presumpton n the second sentence of Artcle 3(1) of Insolvency Regulaton could be rebutted as a result of varous crcumstances and held that the Italan court had jursdcton. In 2006, the European Court of Justce (herenafter: ``ECJ'') rendered the well known judgment n the Eurofood case 7, whch provded some crtera n the nterpretaton of the ``center of man nterests'' (herenafter: ``COMI''), whch could be used n the Interedl case as well. Based on ths ECJ case, the Court of Bar ± wthn the proceedng followng the appeal made by Interedl aganst the fallmento order ± doubted the valdty of the Corte d Suprema d Cassazone's fndng. In lght of the crtera establshed n Eurofood, on 6 July 2009 the Court of Bar decded to stay the sad appeal proceedng and referred certan questons to the ECJ. Pror to the referral order to the ECJ, on 16 Aprl 2007, the Court of Bar, actng as the judge of the Regstrar of Companes ± on an applcaton made by the former lqudator of Interedl on 6 December 2006 n order to have regstered the shareholders' resoluton whch apponted another lqudator ± judged that the transfer of Interedl regstered offce from Monopol to London dd not cause the dssoluton of Interedl n Italy and, therefor, consdered erroneous the cancellaton of sad company from the regster as made on 5 September Consequently, the Court of Bar revoked the sad cancellaton, affrmng that, at the tme of the regstraton n London, Interedl stll exsted n Italy. On 20 October 2011 the ECJ ssued the judgment under comment 8. Followng such judgment, the Court of Bar wll fnally adjudcate on the appeal aganst the Schmt Report'') whch s usually used for nterpretaton to Regulaton 1346, even though t was related to the Conventon on Insolvency Proceedngs whch was opened for sgnature n Brussels on 23 November On nternatonal jursdcton wthn nternatonal nsolvency law and n the Regulaton 1346 see, specfcally, P. De Cesar, G. Montella, Insolvenza transfrontalera e gursdzone talana, Ipsoa (Mlan), Comments to Eurofood are numerous. Among others see S. Baratt, Il regolamento n. 1346/ 2000 davant alla Corte d gustza: l caso Eurofood, n Rv. dr. proc., 2007, pp ; L. Fumagall, Apertura della procedura prncpale, competenza gursdzonale e rconoscmento della decsone, n Gur. comm., 2007, I, pp ; F. M. Muccarell, Eurofood, ovvero: certezza del drtto formale e ncoerenza de prncp, n Gur. comm., 2008, I, pp ; B. Wessels, The place of the regstered offce of a Company: a cornerstone n the applcaton of the EC Insolvency Regulaton, European Company Law, August 2006,volume 3, ssue 4, p. 188 ff. 8 On the Interedl judgment, see P. De Cesar, Procedura prncpale e procedure terrtoral. Nuov spunt nterpretatv fornt dalla Corte d Gustza, n Fall. 2012, p. 545; I. Fletcher, The Law of Insolvency. Frst supplement to the fourth edton, Sweet and Maxwell, 2011, p. 114.; F. Jault-Seseke ± D. Robne, Procedure d'nsolvablt : crt res et date d'appr caton du centre des Satzspegelhæhe: 192mm

4 4 IILR IILR_2012_000018_1 fallmento order of Interedl S. r. l. and affrm or deny Italan jursdcton on the controversal case. The judgment of the court s expected to be ssued n The four questons referred to the ECJ for a prelmnary rulng focus on two man ssues wthn the judcal cooperaton n cvl matters. The frst three concern the nterpretaton of the term ``the centre of a debtor's man nterests'' as stated by Artcle 3(1) of Insolvency Regulaton. In partcular the referrng court nvestgates the defnton of the term and the factors or consderatons decsve for dentfyng t, the content of the presumpton lad down n Artcle 3(1) and the possble ways to rebut t and, fnally, whether certan crcumstances exstng n the Interedl case are suffcent factors to rebut sad presumpton. The fourth queston, on the contrary, concerns a dfferent topc related to the authorty of a natonal prelmnary rulng on jursdcton (regolamento preventvo d gursdzone) by the Corte d cassazone and ts relaton to the rght conferred by EU law to any court to refer a prelmnary rulng to the ECJ. 2.On the effects of EU law on the relatons between hgher and lower courts: the general framework. From a logcal pont of vew the frst queston to be addressed s the one referred to the ECJ as the fourth one. In fact, by ts fourth queston the Trbunale d Bar asks ``whether EU law precludes a natonal court from beng bound by a natonal procedural rule under whch that court s bound by the rulngs of a hgher natonal court, where t s apparent that the rulngs of the hgher court are at varance wth EU law, as nterpreted by the Court of Justce'' 9.Inotherwords the referrng lower court asks whether t s compelled (by a natonal rule) to follow the gudelnes gven by a hgher court (n ths case regardng the ssue of nternatonal competence), where t has doubts on the compatblty of such a rulng wth EU law. Frstly, t should be noted that the queston rased by the natonal court dd not touch drectly on the rght of the lower court to refer for prelmnary rulng to the ECJ. A textual readng of the prelmnary reference leads to understand the queston n a way that s qute dfferent from what was ultmately answered by the ECJ and gves t a dfferent ± wder ± scope. It seems to us that the lower court s ndeed askng the ECJ f, n the gven case, EU law allows t to dvert from the bndng nterpretaton gven by a hgher court where, n the vew of the lower court, the gven nterpretaton s not compatble wth EU law, and f the lower court s thus enabled by EU Law to gve drect nterpretaton and applcant rets prncpaux du d bteur, Revue crtque de drot nternatonal prv 2012, p. 189; G. Montella, La Corte d gustza e l COMI: eppur (forse) s muove, n , p. 1 (web ste consulted on 15 June 2012); G. Moss, ``Head Offce Functons''. Test trumphs n ECJ. Interedl Srl v Fallmento Interedl Srl (European Court of Justce, October 20, 2011, Insolvency Intellgence, 2011, p. 26; F. M. Muccarell, Da Monopol a Londra, passando dal Lussemburgo: appunt sull'emgrazone delle socet talane, n Gur. Comm. 2012, II, p. 11; N. Ns, Centro degl Interess Prncpal e Trasfermento della Sede Statutara: la Corte d Gustza dell'unone Europea torna sul regolamento n. 1346/2000 n matera d nsolvenza transfrontalera, Luc Papers n. 246 Sere Impresa e sttuzon, 29 febbrao 2012, p. 1; L. Panzan, La nozone d COMI nella dscplna comuntara dell'nsolvenza transfrontalera: cas Interedl e Rastell, Int'l ls 2012, p. 32; J. L. Vallens, Transfert du s ge statutare et transfert du centre des nt ržts prncpaux, Recuel Dalloz 2011, p See par. 34. Satzspegelhæhe: 192mm

5 IILR_2012_000018_1 IILR 5 ton of EU law. Even though some prelmnary questons are ndeed referred to the ECJ, wth ts fourth queston the Trbunale d Bar hnts at the dea that an `addtonal' prelmnary rulng s not really needed. Indeed when referrng the prelmnary rulng (2009) the ECJ had just pronounced tself n the Eurofood case 10, thus gvng much of the gudance needed to correctly apply Artcle 3 Regulaton No 1346/2000. Notwthstandng ths understandng of the queston, the ECJ made use of ts power to reformulate prelmnary questons and approached the relevant topc from a dfferent angle. The queston urged by the Trbunale d Bar, touchng on the herarchcal relatons between natonal courts and rsng clear dangers for ts potental nterferences n nternal legal systems, was thus settled wthn the more tradtonal and safe envronment of natonal courts, re-affrmng ther unfettered rght to refer prelmnary questons. The path then followed by the ECJ s a qute tradtonal and well establshed one. It s ndeed a well-known prncple n the ECJ case-law that ``the court at frst nstance remans free to refer questons to the Court pursuant to Artcle 234 EC, regardless of the exstence of a rule of natonal law whereby a court s bound on ponts of law by the rulngs of a superor court'' 11. Such a prncple was stated n far away 1976 n the Rhenmçhlen (I and II) decsons; and t was then restated n several other occasons, the most relevant for the present case beng the Carteso decson n 2008, and the recent Elchnov decson n On a frst lecture the case at ssue shows n fact several ponts of contact wth the Elchnov case, and t s no surprse that both the ECJ and the Advocate General make express reference to (only) such a decson. It s worth underlnng, however, that the soluton retaned by the ECJ n Interedl s grounded on a number of precedents, all of whch confrm the unfettered freedom and dscreton of natonal courts ± any natonal court, even a lower one ± to refer prelmnary questons to the ECJ 13. On a closer vew, then, t seems that the closest precedent to the case dscussed here s the older Rhenmçhlen case, where the answer to the present case s already to be found. That decson orgnated from a prelmnary rulng referred by a German Fnanzgercht n a case concernng refunds for export towards non-ec States. On appeal of the judgment rendered by the Fnanzgercht, the Bundesfnanzhof had annulled ths decson and had sent t back for reconsderaton to the same court wth ts own nterpretaton of EU law (at that tme EC law). Regardng the vews of the upper court as beng nconsstent wth EC law, the Fnanzgercht wants the 10 See t cted supra, footnote January 1974, Case 166/73 Rhenmçhlen-Dçsseldorf (II) [1974] ECR, p Respectvely, besdes Rhenmçhlen-Dçsseldorf (II) ct., ECJ 12February 1974, case 146/73, Rhenmçhlen-Dçsseldorf (I), [1974], par. 3; 16 December 2008, case 210/06, Carteso [2006] ECR 9641, par. 94; 5 October 2010, case C-173/09, Elchnov, (unpublshed). It should be recalled that, where two decsons are gven n the same case, decson No I s the one that s fled frst wth the Regstry, not the one whose decson s frst handed down. 13 The prncple has been affrmed n a number of decsons, some of whch do not deal wth exactly the same legal queston dscussed n ths paragraph, but stll confrm the same approach under many other aspects. See for example: 27 June 1991, Case C-348/89 Mecanarte [1991] ECR I-3277, par. 44; 10 July 1997, Case C-261/95 Palmsan [1997] ECR I-4025, par. 20; 9 March 2010, case C-378/08 ERG [2010] ECR, I-1919, and lastly 22 June 2010, joned cases C-188/10 Melk and Abdel [2010] ECR I-5667, par. 4. Satzspegelhæhe: 192mm

6 6 IILR IILR_2012_000018_1 ECJ to solve the controversal ssue. In a smlar way to what happened now n the Interedl case, also then a natonal procedural law ± 126 n. 5 of the 1965 Fnanzgerschtsordnung ± opposes such a rght by statng that the (lower) court to whch the case s sent back to s bound by the judgment of the hgher court. Therefor, the queston was put whether such a provson precludes the lower court from referrng a case to the Court of justce for a prelmnary rulng. Already n 1976, and not surprsngly, the ECJ gave a negatve answer. The legal reasonng s very straghtforward and to the pont. The Court emphaszes the essental role of prelmnary rulng n avodng dvergences n the nterpretaton of EU law. Ths am s ensured by makng a means avalable to the natonal judge for elmnatng dffcultes, whch may arse from the need to gve EU law ts full effect. It then follows that ``any gap n the system so organzed could undermne the effectveness of the provsons of the Treaty and of the secondary communty law''. 14 The Court hence strengthens the uncondtonal and unfettered rght of natonal courts to make use of such a powerful means and to refer a case for a prelmnary rulng whenever the judge perceves that a case pendng before t rases questons nvolvng nterpretaton, or consderaton of the valdty, of provsons of EU law 15 and thus has the wdest dscreton n referrng matters to the EU Court. Applyng ths prncple to the case at hand, t follows that a rule of natonal law as the one mentoned before cannot deprve the nferor courts of ther power to refer to the ECJ for prelmnary rulng. Hence, ``the nferor court must be free f t consders that the rulng on laws made by the superor court could lead t to gve a judgment contrary to communty law, to refer questons to the court whch concern t''. 16 Argung n a dfferent way, and thus restrctng access of lower courts to prelmnary nterpretaton, would mean that ``the applcaton of communty law at all levels of the judcal systems of the member States would be compromsed''. The quotaton s meant to show how n the early Seventes the ECJ feared that a dfferent soluton mght prejudce not only the sound nterpretaton of EC law, but ts same applcaton `at all levels'. Facts underlyng the recent Elchnov case (2010) 17 are qute smlar to the ones just mentoned. On a case where the frst nstance decson was repealed by the Bulgaran Supreme Admnstratve Court (the Varchoven admnstratven Sad), the lower court re-examned the case and ± after havng collected more evdence on the controversal ssue ± was doubtful on the compatblty wth UE law of the prncples stated by the Supreme court's decson. It therefor decded to refer a prelmnary rulng to the ECJ. Here, too, the queston was on the relevance of the natonal rule (Artcle 224 of Bulgaran Code of admnstratve procedure) statng that drectons on the nterpretaton and applcaton of the law gven by the superor court were bndng on the lower court that would re-examne the case. 14 Rhenmçhlen-Dçsseldorf (II) ct., par 2(emphass added). On the decson see, for all T. Hartley, Artcle 177 EEC: Appeals aganst an Order to Refer, n European Law Revew 1975, 48± 50 and R. K., Journal du drot nternatonal 1976, 198± It may be noted how the ECJ underlnes that ``ths artcle gves natonal courts the power and, where approprate, mposes on them the oblgaton to refer a case for a prelmnary rulng'' (Rhenmçhlen-Dçsseldorf (II) ct., par. 3, emphass added; see also n Carteso ct., par. 88) 16 Rhenmçhlen-Dçsseldorf ct., par See t cted supra, footnote 11. Satzspegelhæhe: 192mm

7 IILR_2012_000018_1 IILR 7 The Court repeats lterally the same argument used n Rhenmçhlen-Dçsseldorf (II) and re-states the wdest freedom of (any) natonal court to refer prelmnary questons 18. However, referrng to the ECJ would not be enough to grant effectveness and correct mplementaton of the prelmnary rulng, f the result thereof were to be left unattended. To avod any (possble) msunderstandng, the Court therefor adds a further step (that, whlst mssng n ts prevous decsons, certanly s not surprsng) makng clear that ts judgment on a prelmnary rulng s bndng on the natonal court regardng the nterpretaton or the valdty of EU acts 19. Wthout sayng expressly so, a comparson s thus drawn between the nternal superor court's decson and the ECJ decson: whle the former can be dsregarded, the latter s bndng n the natonal court. The concluson gven to the Elchnov case follows smoothly from the abovementoned consderatons. The natonal court, havng exercsed the dscreton conferred on t by Artcle 267 TFEU, s bound by the nterpretaton of the provsons at ssue gven by the Court. Prevous rulngs of a natonal hgher court that appear nconsstent wth that nterpretaton must be dsregarded. Havng recalled these precedents, the soluton gven n the Interedl case s hardly surprsng. On the contrary, t flls perfectly nto the manstream of the ECJ caselaw favourng a drect and mmedate relaton of the ECJ wth each natonal court referrng the case. ECJ case-law on ths pont appears to be mult-faceted but altogether consstent and very clear. As s well known, snce early tmes the ECJ worked trelessly at shapng the neutral procedural acton provded by the old Artcle 177 EEC Treaty nto a powerful tool for the unform and sound applcaton of EU law, addng new brcks to ts constructon each tme the opportunty arose. The man and nnovatve core of the new approach was to create a drect lnk between the ECJ and all and any natonal court that had the responsblty of applyng EU law, no matter how small or low n the natonal herarchy. Dvertng from what would have appeared the easest and most tradtonal approach of searchng for the cooperaton of other superor courts, the ECJ opted for the revolutonary choce of consderng all natonal courts equal and on the same footng, supportng the correct nterpretaton and applcaton of EU law wherever ths was needed. Needless to say, such equalty of footng n the face of UE law was obvously n conflct wth the `nequalty' (or, better sad, wth the dfferent role) underlyng the herarchcal organzaton of natonal judcal systems. To renforce the autonomy so granted to lower courts, the ECJ constantly declared that t s solely for the natonal court before whch a dspute has been brought, and whch must assume responsblty for the subsequent judcal decson, to determne, n lght of the partcular crcumstances of each case, both the need for a prelmnary rulng n order to enable t to delver judgment and the relevance of the questons whch t submts to the Court 20. Ths s true both wth regard to the ECJ, whch declares to be bound, n prncple 21, to gve the 18 See also the decsons mentoned supra, footnote See Elknov, par. 29, wth further references to the prevous Case law. 20 A number of judgments state ths prncple. Besdes Carteso ct., par. 67, see ECJ, 26 January 2010, n case C-118/08, Transportes Urbanos, par. 25; 31 January 2008, n case C-380/05, Centro Europa 7, par. 52; 15 June 2006, n case C-466/04, Acereda Herrera, par. 47; 15 December 1995, n case C-415/93, Bosman, par. 59. Satzspegelhæhe: 192mm

8 8 IILR IILR_2012_000018_1 requested rulng where the questons submtted concern the nterpretaton of European Unon law, regardng other superor natonal courts. Consstent wth ths global strategy s the further step that was recently taken to leave the decson as to whether to wthdraw or not the referral entrely to the referrng court, even n the case that the relevant order for a prelmnary rulng has been revewed or annulled by a superor court, at least as long as the fnal responsblty for applyng EU law remans wth the lower court. Indeed the ssue concernng the effects of the appeal to a superor court of the order for prelmnary rulng s one that has been on the table for a long tme and s one that over tme has developed consderably 22. The startng pont at the outset n 1962was the prncple of separaton of legal systems and respect for nternal judcal organzaton. The ECJ stated therefor that the (at the tme: EEC) Treaty does not preclude that orders for prelmnary rulngs are subject to judcal remedes avalable under natonal law and leaves the determnaton of such remedes to natonal law 23. Through the years and the case-law, t further assessed that a reference for a prelmnary rulng s valdly brought before t ``as long as the request s nether wthdrawn by the court from whch t emanates or s not quashed on appeal by a superor court'' 24. Untl recently, the praxs n proceedngs pendng before the ECJ was to stay the procedure as soon as the Regstrar was nformed by the natonal referrng court that the order was appealed; the case was then dsmssed f the order was eventually quashed by the natonal superor court. A bg role was played by the prncple of judcal procedural autonomy ± statng that t s for the legal system of each Member State to desgnate the procedural rules governng actons for safeguardng rghts whch ndvduals derve from the drect effect of Communty law, provded that such rules are not less favourable than those governng smlar domestc actons nor render vrtually mpossble or excessvely dffcult the exercse of rghts conferred by the EU (prncple of equvalence and effectveness). 25 Respectng ths prncple was however also the easest way to observe the requrement set by the ECJ that a prelmnary rulng s gven only for the resoluton of a real dspute 21 The ECJ has n fact lmted ts rght to control and eventually consder nadmssble a request for prelmnary rulng n the followng cases: a) when t s obvous that the rulng sought by that court bears no relaton to the actual facts of the man acton or ts purpose; b) where the problem s hypothetcal; c) where the Court does not have before t the factual or legal materal necessary to gve a useful answer to the questons submtted to t; or d) when the referrng court has not defned the factual and legslatve context of the questons t s askng. See, for all, ECJ, 31 January 2008, n case C-380/05, Centro Europa 7, par. 53, For lterature on ths ssue pror to Carteso, see D. O'Keefe, Appeals aganst an order to refer under Artcle 177 of EEC, n Eur. Law Rev., 1984, p ; T. Hartley, Artcle 177 EEC: Appeals aganst an Order to Refer, n Eur. Law Rev. 1975, p. 48± ECJ 6 Aprl 1962, case 13/61, de Geus, [1962] ECR, p. 50; 12 February 1974, case 146/73, Rhenmçhlen-Dçsseldorf (I), [1974], p. 139, par ECJ 30 January 1974, case 127/73, Belgsche rado en televse [1974], p. 4; 9 March 1978, case 106/77, Smmenthal, [1978], p. 629 ss., par Ths s the formula used by the Court to descrbe what s known as the `prncple of procedural autonomy'. See for further references, ECJ 14 December 1995, C-312/93, Peterbroeck, par. 12. In legal lterature, n addton to the authors cted nfra note 35, see D.-U. Galetta, L'autonoma procedurale degl Stat membr dell'unone europea: Paradse Lost?, Torno 2009, fosterng the thess that the prncple s to be construed as servng the superor oblgaton to guarantee the prmacy and effcency of EU law, and s thus `functonal' to the needs of EU law; G. Vtale, Drtto processuale nazonale e drtto dell'unone europea. L'autonoma procedurale degl Stat membr n settor a dverso lvello d europezzazone, Catana Satzspegelhæhe: 192mm

9 IILR_2012_000018_1 IILR 9 and therefor s not admssble when t s used n order to receve advsory opnons on general or hypothetcal questons. In fact, where the superor court quashes the order for prelmnary reference, (the case may be that) there s no longer a dspute before the referrng court. On the other hand, t s easy to see how the prncple of procedural autonomy conflcts hopelessly wth the need to preserve the effcency of the prelmnary rulng and, through t, to guarantee unformty n European Unon law applcaton 26. Wth the Carteso decson the ECJ undergoes a ``Coperncan revoluton'' 27 and searches for a better compromse between the two prncples. After havng recalled that EU law does not preclude the legal possblty to revew the referrng order 28 ± therefor payng lp-servce to ts prevous case-law and to the prncple of procedural autonomy of natonal legal systems ± the Court allows for a substantal revrement n ts case-law and deprves of all practcal effect the allowed revson by a superor court of the order for prelmnary rulng, at least as long as ths court s called upon to take the fnal decson and apply EU law 29. In fact, the ECJ now states that t s only for the referrng court to draw the proper nferences from such judgment and to decde whether t s approprate to mantan the reference for a prelmnary rulng, or to amend or wthdraw t 30.If the sole responsble of the case s the referrng court, the ECJ must, ``also n the nterests of clarty and legal certanty'', abde by the decson to make a reference for a prelmnary rulng as ths must have ts full effect ``so long as t has not been revoked or amended by the referrng court'' 31. In concluson, n the specfc case of an appeal of the sole order for reference that leaves the man proceedng n ts entrety pendng before the referrng court, the decson of the superor court s downgraded to a smple `qualfed opnon' that the natonal court can ether follow or dsregard at ts own dscreton 32. A logcal thread connects Carteso and Elchnov/Interedl, the two sets of decsons beng dfferent faces of the same prncple. The lower court's freedom to make ts own decson on the need for a referral, wthout feelng bound by a prevous decson on the same pont of the natonal hgher court, s the drect consequence of the prevously stated ndfference of that same court to the decson of the superor court revewng ts order for a prelmnary rulng. At the core of ths approach s the central role of the referrng court and ts `autonomous' competence ± at least as long as ths court s called upon to take the fnal decson and apply EU law 33. As the Advocate General Poares Maduro empha- 26 J. Ch. Barbato, Le drot communautare et les recours nternes exerc s contre les ordonnances de renvo, n RTDeur., 2009, p J. Ch. Barbato, Le drot communautare et les recours nternes ct. 28 Carteso op. ct., par The scope of applcaton of the Carteso soluton s n fact lmted to the specfc case that the natonal procedural rule allows for a lmted appeal of the sole order for reference, leavng the man proceedng n ts entrety pendng before the referrng court. Ths pont, mplct from the facts of the Carteso case, was later expressly confrmed by ECJ, order 24 March 2009, case C-525/06, De Natonal Loterj, par. 7±11. See also S. Cresp, Nuove e vecche queston n matera d rnvo pregudzale alla luce della sentenza Carteso, ndr. Un. eur., 2009, p. 957± Carteso op. ct., par Carteso op. ct., par See also S. Cresp, op. ct., p. 955, hghlghtng how, after Carteso, the sole effect of a superor court'srevewwllbetosuggest to the lower court a new assessment as to the need and opportunty of the referral to the ECJ. Satzspegelhæhe: 192mm

10 10 IILR IILR_2012_000018_1 szes n hs Conclusons to the Carteso case, through the central role thus granted to the referrng court, all natonal courts become Communty law courts 34. Ths role s a cornerstone of the European judcal system and should be preserved as much as possble. From the EU pont of vew, the approach ultmately outlned s not only a consstent `system', but also one that s needed for effcency and unformty of European Unon law. 3.Effects of Interedl on Hgher Courts: the mplct pressure for more frequent referrals for prelmnary rulng. Although the soluton n the Interedl case appears to be n lne wth prevous EU case law and well grounded on EU general prncples, ts mpact on natonal (melus on Italan, n ths case) procedural systems s noteworthy. What makes the dfference s the content of the natonal rule relevant for the case. Artcle 382 of the Italan cvl procedure code poses the prncple that, when the Corte d Cassazone states on jursdcton, t makes a fnal decson and fnds the competent court. The mentoned provson n fact rules the effects of decsons adopted by the Italan Supreme court when rulng on a regolamento d gursdzone ± a specal knd of proceedngs whch s gven for the purpose of adjudcatng only on jursdcton and s decded by the sole Corte d Cassazone. It should frst of all be noted that the legal case at ssue fts perfectly nto the scope of applcaton of the Carteso decson recalled above. In fact, pursuant to Artcle 41 Italan Cvl Procedure Code, the regolamento d gursdzone refers to the Supreme Court the sole ssue of nternatonal jursdcton, whle the remanng part of the proceedngs s left on the lower court. On the other hand, however, a man dfference wth ths case s to be found n the legal authorty of the decson gven at the end of ths knd of proceedng. Pursuant to Artcle 382(1) Italan Cvl Procedure Code and to the correspondng case law, the authorty of these decsons s comparable to the effects of res judcata, because the fndng s fnal and bndng on the lower court that has the responsblty of the man proceedng 35. Besdes ths, t should be ponted out that when adjudcatng on ths knd of proceedngs, the Court rules n plenary sesson, thus authorzng the suggeston that these decsons are taken wth addtonal care and competence. Altogether, the result s that the Interedl case affects the natonal judcal system much more than what the prevously mentoned precedents do, as t challenges (agan) the prncple of res judcata. Ths s not the rght venue to examne the delcate ssue of the relaton between the prncple of prmacy of EU law and natonal decsons that, whle conflctng wth EU law, have nonetheless acqured the fnal stablty accorded by res judcata. As s known, the debate was especally strong after the Lucchn, Fallmento Olmpclub and Asturcom decsons 36. Recent comments have underlned 33 Carteso op. ct., par Opnon of Advocate General Poares Maduro delvered on 22 May 2008 [ECR, 2008, p. 9641], who strongly emphaszes how the need for a lower court to nteract drectly wth the Court of Justce s vtal to the unform nterpretaton and the effectve applcaton of EU law. He also stresses how, through the request for a prelmnary rulng ``the natonal court becomes part of a Communty law dscourse wthout dependng on other natonal powers or judcal nstances'' (op. ct., para 19) 35 See for example, (comma) Cass. 19 October 2006 n , n Gust. Cv., Mass. 2006, 10. Satzspegelhæhe: 192mm

11 IILR_2012_000018_1 IILR 11 the pecularty of these cases, stressng how the need for stablty and legal certanty are basc values also n the European Unon and how the ECJ ± when consderng ts overall case-law and not lmtng the analyss to `' ± has manly endorsed and respected the prncple of res judcata also wthn natonal legal systems. 37 Undoubtedly, res judcata (ncludng the one acqured by natonal decsons) s a general prncple of EU law. The queston as to whether the res judcata of decsons provdng a materal fndng should be treated dfferently from res judcata of decsons n purely procedural ssues may for the moment be left unattended 38. In fact, whle declarng formal respect to ths prncple, the ECJ has shown ± and s confrmng n the Interedl case ± that all general prncples can be balanced one aganst the other and be derogated f, under the gven condtons, ths s approprate n order to preserve the proper functonng of EU law. In all cases, as convncng as the reported `self-restraned' lecture of ths case-law may appear, t s clear that the emotonal mpact of ECJ decsons touchng on res judcata, one of the most relevant legal prncples under natonal procedural law, s stronger than the one produced by `normal' decsons. Insofar, even f from a European pont of vew the Interedl case s wholly logcal, consstent and also not unexpected, from the natonal pont of vew the dea that lower courts can dsregard a hgher court decson conferrng or denyng natonal jursdcton on t and seek elsewhere another rulng on ths same pont s hard to accept and a cause of dstress for the whole system Respectvely, ECJ 18 July 2007, case C-119/05, Lucchn; 3 September 2009, case C-2/08, Fallmento Olmpclub; and 6 October 2009, case C-40/08, Asturcom Telecomuncacones. Asthe man topc of ths Artcle s elsewhere we shall lmt ourselves to few legal references, especally from Italan lterature, see: P. Bavat, La sentenza Lucchn: l gudcato nazonale cede al drtto comuntaro, Rass. trb p ; R. Baratta, La cosa gudcata non lmta l prncpo della prmaut... peraltro espunto dal progetto d rforma dell'unone europea, Gust. cv. 2007, p ; C. Consolo, La sentenza Lucchn della Corte d Gustza: quale possble adattamento degl ordnament processual ntern e n spece del nostro?, n Rv. dr. proc. 2008, p. 225±238; G. Rat, Le pronunce Olmpclub ed Asturcom Telecomuncacones: verso un rdmensonamento della paventata ``crs del gudcato cvle nazonale'' nella gursprudenza della Corte d gustza, Rv. dr. proc., 2010, p. 677±689; F. Sptaler (ed), L'ncdenza del drtto comuntaro e della CEDU sugl att nazonal defntv, Mlano, 2009; G. Vtale, Il prncpo dell'autonoma procedurale n due recent sentenze della Corte d gustza: cas Olmpclub e Asturcom, Dr. Un. Eur., 2010, p. 727±753. Among non-italan lterature see: R. Kovar, L'ncdence du drot communautare sur l'ntangblt des decsons natonales defntves, Chemns d'europe ± M langes en l'honneur de Jean Paul Jacqu, Pars, 2010, p. 203; P. Brza, Lucchn SpA ± Is There Anythng Left of Res Judcata Prncple?, n Cv. - Just. Quart., 2008, p. 40; P. Nebba, Do the rules on State ads have a lfe of ther own? Natonal procedural autonomy and effectveness n the Lucchn case, Eur. Law Rev p. 427±438; M. F. Orzan, Ops...the ECJ dd t agan! The relatonshp between the prncple of effectveness of EU law and the prncple of legal certanty n the Case-by-case approach, Eur. Law Reporter, 2010 p. 63±69; H. Schebesta, Does the Natonal Court Know European Law? ± A Note on Ex Offco Applcaton after Asturcom, Eur. Rev. Prv. Law, 2010, p A. Tzzano, B. Gencarell, Drot de l'unon et d csons natonales d fntves dans la jursprudence r cente de la Cour de Justce, n Dr. Un. eur. 2010, E.A. Barber, Il regolamento preventvo d gursdzone, la rmessone del rcorso gursdzonale ammnstratvo all'adunanza plenara ed l drtto comuntaro, n Rv. t. dr. pubbl. com., 2011, p. 1366, seems to consder that the two cases should allow for dfferent conclusons. On the contrary, E. D'Alessandro, L'ordnanza conclusva del regolamento d gursdzone captola dnanz alla ``prmaut '' del drtto dell'unone europea, n Foro It., 2011, p. 549, consderng the queston from the European level and thus acceptng that they receve the same treatment. Satzspegelhæhe: 192mm

12 12 IILR IILR_2012_000018_1 Under the specal crcumstances hghlghted before (.e.: a natonal remedy/ procedure mplyng revew on one sngle ssue but leavng the responsblty of the case wth the lower court), the effect of the Interedl decson s that lower courts, by means of the specal relaton that the prelmnary rulng creates between the ECJ and themselves, are nvested wth the pecular capacty to trgger a revew of the decsons of those same courts that are at the peak of ther judcal system and that normally have the fnal word on the revew of decsons. From the pont of vew of Supreme Courts, these are not only, as all other natonal courts, subject to EU law and compelled to gve t prorty, under the supervson of the ECJ. From now on Supreme Courts wll be subject to an assessment on the compatblty of ther decsons wth EU law and, what s even worse, ths assessment, even though ultmately made by the ECJ, wll be trggered by a lower court. Decades were needed n Italy n order to accept the prmacy of EU law over natonal law. Now that ths result s generally wdely acheved 40,a new assumpton s made that wll be even harder to swallow, whereby t s declared that the hghest court's decson, taken n a plenary sesson and provded under natonal law wth the fnal effect of res judcata, can be smply set asde by a lower court consderng for ECJ advce. The stuaton looks even grmmer f one consders the other ± unexpressed ± ssue that s underlyng the Interedl judgment, one that would be able to carry the effects of such a decson even further. It was already noted that the (fourth) queston submtted by the Trbunale d Bar was n fact reformulated by the ECJ, as ts lteral understandng would have led to a dfferent nvestgaton. As seen, the ECJ answered the doubts of the natonal court by allowng t to refer a prelmnary rulng on the place of COMI. Nonetheless, the queston of the Trbunale mght have hnted at the possblty that the natonal court could solve the ssue concernng EU law on ts own by gvng drect applcaton to the relevant EU prncples already stated n prevous decsons, and dsregardng to ths effect the rulng gven by the Italan Supreme Court on nternatonal competence of the Italan courts. It s nterestng to note that the ECJ was faced wth exactly the same problem n the Elchnov case, where ths dfferent possblty was expressly consdered by the ECJ. In ths case the European Court argued that ``the queston whch [the natonal court] refers to the Court does not appear to exclude the possblty that [t] mght consder adjudcatng wthout makng a prelmnary reference, departng from legal rulngs gven n the same case by the hgher natonal court, whch t regards as nconsstent wth European Unon law'' 41, nonetheless n that case (as n the Interedl case), the ECJ concludes that ths s not what the natonal court s actually seekng ``snce the natonal court has made a reference for a prelmnary rulng to the Court seekng clarfcaton of the doubts whch t has as 39 See n fact the very crtcal remarks of E. A. Barber, Il regolamento preventvo d gursdzone ct., p. 1365, who however speculates on the effects of the Interedl decson f a smlar case occurred before the Admnstratve Supreme Court. 40 But see the un-orthodox argumentaton provded by the Trbunale d Roma, 23 March 2011 n the Lucchn case, after the ECJ prelmnary rulng (n Int'l Ls, 2011, p. 139, wth crtcal note of G. Rat, La forza ``d accao'' del gudcato Lucchn nell'natteso (temporaneo?) eplogo della vcenda pregudzale comuntara dnanz al Trbunale d Roma, p. 140 ss.). 41 Elchnov ct., par. 23 (emphass added). Satzspegelhæhe: 192mm

13 IILR_2012_000018_1 IILR 13 to the correct nterpretaton of European Unon law'' 42. In other words, the fact tself that the referrng court refers for nterpretaton also other questons, on top of the one concernng the prelmnary rulng tself, t s consdered suffcent proof of the unwllngness of the lower court to dsregard by ts own moton the rulng of ts own hgher court. The cauton of the ECJ should be apprecated. It s also nterestng to note that the reported quotaton of the Elchnov decson was omtted n the Interedl judgment, even though the referred fourth queston would have requred the same clarfcaton. Stll, legal lterature should nvestgate the ssue at hand as t mght hde unexplored developments and a potental `danger' for the natonal judcal system organzaton. What are the powers/dutes of a lower court n the case that a Superor Court ± judgng n one of the few dfferent cases where ts decson, whle fnal, mples reconsderaton of the proceedngs by a lower court ± gave a rulng that s obvously and manfestly conflctng wth EU law? The statement made n 1978 n the Smmenthal case, and always repeated snce, accordng to whch ``a natonal court whch s called upon to apply provsons of EU law s under a duty to gve full effect to those provsons, f necessary refusng of ts own moton to apply any conflctng provson of natonal legslaton'', s so well known and strongly establshed that, f the queston was posed, the soluton looks clear and unavodable. What are the optons under these crcumstances? It does not look reasonable to hope for a change of drecton n the European case-law trend. As was seen, the concluson that, n the gven hypothess, the lower court s subject only to the European Unon and ± for t ± to the ECJ t s based on well-grounded basc prncples and serves farly well the needs of European law. An acceptable way out should be searched on the natonal level. It s suggested that a far, balanced compromse, able to meet and respect the needs of all partes could be found n a larger use of the prelmnary rulng at the proper stage and by placng such a powerful tool n the hands of the Supreme Courts. Hgher Courts should recover ther leadng role also wth regard to European Unon law and n fact become the prvleged counterpart of cooperaton and dalogue wth the ECJ. Whenever addressed wth a case nvolvng EU law, Supreme Courts should put extra care n nvestgatng whether a correct applcaton of the relevant EU rules s gven. Questons that dd not arse at a prevous stage ± or that dd arse, but were deemed not necessary or unclear by the lower courts ± should be referred to the ECJ by the Supreme Courts themselves. As easy as ths may seem, t s mportant to emphasze that ths s not what happens at the present tme 43. The Interedl affare s qute a good example n ths respect. Indeed, on careful examnaton, the atttude of the Italan Supreme court could be blamed as beng 42 bdem. 43 See, for example, the analyss of M. Condnanz (I gudc talan ``avverso le cu decson non possa pors un rcorso gursdzonale d drtto nterno'' e l rnvo pregudzale, n Dr. Un. - eur., 2010, p. 295 ss.) on the approach of the Italan Supreme Court to cases nvolvng the applcaton of EU law, and the crtcal observatons of the author on some cases where a very much needed prelmnary rulng was omtted. See also a general overvew n M. C. Reale, M. Borraccett, Da gudce a gudce: l dalogo tra gudce talano e Corte d gustza delle Comunt europee, Mlano Satzspegelhæhe: 192mm

14 14 IILR IILR_2012_000018_1 qute superfcal. Not only could the Corte d Cassazone have rased the same questons on the proper nterpretaton of Artcle 3 Reg. 1346/2001 that were later advanced by the Trbunale. Besdes ths, one would have probably expected the Italan Supreme Court to stay ts proceedngs, as n October 2004 the prelmnary referral n the Eurofood case was publshed n the OJEU 44,gven that the questons referred nvolved the same relevant rule (Artcle 3, Reg. 1346/ 2001) and the controversal ssue at hand dealt wth the smlar problem of dentfyng the centre of man nterest of a company havng ts prncpal seat abroad, but actve n Italy and havng propertes and relevant assets there. Instead, as t was seen, none of these actons were taken. The number of cases referred for prelmnary rulng by the Corte d Cassazone s of course sgnfcantly less than the ones referred by lower courts, 45 and smlar fgures are to be found n most other European countres. Ths stuaton fnds a partal explanaton n the obvous consderaton that lower courts deal wth a hgher number of cases than hgher courts do; hence, they are faced wth a hgher number of chances to apply EU law. Stll, some perplextes arse f one consders that whle lower courts may refer a prelmnary rulng wthout beng compelled to do so, hgher courts ± that s: courts ``aganst whose decsons there s no judcal remedy under natonal law'' ± have a legal oblgaton to do so under Artcle 267, paragraph 3, TFUE. On a more careful consderaton, therefor, t looks lke hgher courts are comparatvely gvng drect nterpretaton of the relevant rules of EU law n more cases than lower courts do. If ths s reasonable n the majorty of cases, 46 t may also conceal a dfferent reason. The legal theory of `acte clar', permttng under strct condtons to derogate to the oblgaton set out by Artcle 267(3) TFUE, has specal attracton n hgher courts, as t gves them the freedom to escape from what could stll be felt as a burden and duty. The result s that Superor Courts end up avodng a referral to the ECJ for prelmnary rulngs also n cases 44 The natonal court referral n the Eurofood case was publshed n 2004 (OJ C 251, 9 October 2004, p. 7). It should be noted that the thrd queston referred to the ECJ sounded pretty close to the case at hand of the Italan Supreme Court, even though the two cases were n effect qute dfferent: ``3. Does Artcle 3 of the sad Regulaton (...) have the effect that a Court n a Member State other than that n whch the regstered offce of the company s stuate and other than where the company conducts the admnstraton of ts nterests on a regular bass n a manner ascertanable by thrd partes, but where nsolvency proceedngs are frst opened has jursdcton to open man nsolvency proceedngs? (The sentence began wth ``Does'')''. It may be useful to brefly recall that the Corte d Cassazone rendered ts decson on the Italan jursdcton on 20 May 2005 and the ECJ ts decson n the Eurofood case on 2 May Accordng to M. Condnanz, I gudc talan «avverso le cu decson ct., p. 305, snce ts frst referral n 1975 to year 2008 (when avalable data ended), the Corte d Cassazone referred only 65 cases (101, f one consders all joned cases). Wth ts average less than 2cases per year (or lttle more than 3, f one consders all cases unjoned), the rate s startlng low. The stuaton s smlar regardng the Consglo d Stato (the Supreme Admnstratve Court), that n the same tmeframe referred 47 cases (62, f calculated unjontly). The stuaton here summarzed wth reference to Italy s qute smlar n most EU countres. 46 It should be noted that ths s what happens ± and ndeed ought to happen ± n most cases. See for example the prevously cted (supra, footnote 28), De Natonal Loterj case, where the Belgan appellate court, whle recognzng that the court of frst nstance was fully enttled to rase the queston of the compatblty of natonal rules wth EU law, held however that the answer to the referred queston was clear. In fact, after examnng the natonal rules n lght of a prevous ECJ decson, the natonal appellate court concluded that natonal rules were compatble wth EU law, and adjudcated the dspute between the partes to the man proceedngs. As was prevously noted, the ECJ approved of such a decson and dsmssed the referral. Satzspegelhæhe: 192mm