BACKGROUND European Union s judicial institution uniform interpretation and application of the law of the European Union General Court

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1 The General Court

BACKGROUND For the purpose of European construction, the Member States (now 28 in number) concluded treaties establishing first the European Communities and then the European Union, with institutions

2 BACKGROUND For the purpose of European construction, the Member States (now 28 in number) concluded treaties establishing first the European Communities and then the European Union, with institutions which adopt laws in specific areas. With the entry into force of the Lisbon Treaty on 1 December 2009, the European Union, henceforth possessing legal personality, replaced the European Community. The Court of Justice, the General Court and the Civil Service Tribunal make up the European Union s judicial institution, whose essential task is to assess the legality of the acts and to ensure the uniform interpretation and application of the law of the European Union. The General Court is an autonomous court distinct from the Court of Justice. The decision to set it up was taken in 1988 by the Council at the request of the Court of Justice. The aim of its creation was to lighten the workload of the Court of Justice and to improve the judicial protection of citizens by introducing a two-tier court system. It began work on 31 October On 2 November 2004 it was decided to attach to the General Court the Civil Service Tribunal, the task of which is to rule on disputes between the European Union and its officials and other staff. It became operational on 12 December 2005.

3 COMPOSITION The General Court is made up of at least one judge from each Member State (now 28 in number). The judges are appointed by common accord of the governments of the Member States after consultation of a panel responsible for giving an opinion on candidates suitability to perform the duties of Judge. Their term of office is six years, and is renewable. They appoint their President, for a period of three years, from amongst themselves. They appoint a Registrar for a term of office of six years. The judges perform their duties in a totally impartial and independent manner. Unlike the Court of Justice, the General Court does not have permanent Advocates General. However, that task may, in exceptional circumstances, be carried out by a judge. The General Court sits in Chambers of five or three judges or, in some cases, as a single judge. It may also sit as a Grand Chamber (thirteen judges) or in plenary session when this is justified by the legal complexity or importance of the case. More than 80% of the cases brought before the General Court are heard by a Chamber of three judges. The presidents of the Chambers of five judges are elected from amongst the judges for a period of three years. The General Court has its own Registry, but uses the services of the Court of Justice for its other administrative and linguistic requirements.

4 JURISDICTION The General Court has jurisdiction to hear and determine: direct actions brought by natural or legal persons for annulment of acts of the institutions, bodies, offices or agencies of the European Union which are addressed to them or are of direct and individual concern to them (for example, an action brought by a company against a Commission decision imposing a fine on that company), regulatory acts which are of direct concern to them and do not entail implementing measures, as well as actions brought by those persons for a declaration of a failure to act on the part of those institutions, bodies, offices or agencies; actions brought by the Member States against the Commission; actions brought by the Member States against the Council relating to acts adopted in the field of State aid, trade protection measures (anti-dumping measures) and acts by which it exercises implementing powers; actions seeking compensation for damage caused by the institutions or the bodies, offices or agencies of the European Union or their staff; actions based on contracts made by the European Union which expressly give jurisdiction to the General Court; actions relating to intellectual property brought against the Office for Harmonisation in the Internal Market (Trade Marks and Designs) and against the Community Plant Variety Office; appeals, limited to points of law, against the decisions of the Civil Service Tribunal. actions brought against decisions of the European Chemicals Agency. The decisions of the General Court may, within two months, be subject to an appeal before the Court of Justice, limited to points of law. PROCEDURE The General Court has its own Rules of Procedure. Cases before the General Court all follow the same procedure, subject to certain specific features peculiar to intellectual property actions and appeals. In general, the procedure includes a written phase and an oral phase. An application, drawn up by a lawyer or an agent and sent to the Registry, opens the proceedings. The main points of the action are published in a notice, in all official languages, in the Official Journal of the European Union. The Registrar serves the application on the other party to the case, which then has a period within which to lodge a defence. As a general rule, the applicant may lodge a reply, within a certain time-limit, to which the defendant may respond with a rejoinder.

Any person who can prove an interest in the outcome of a case before the General Court, as well as the Member States and the institutions of the European Union, may intervene in the proceedings.

In some cases, the intervener may also submit its observations in the oral procedure. During the oral phase a public hearing is held.

5 Any person who can prove an interest in the outcome of a case before the General Court, as well as the Member States and the institutions of the European Union, may intervene in the proceedings. The intervener submits a statement in intervention, supporting or opposing the form of order sought by one of the parties, to which the parties may then respond. In some cases, the intervener may also submit its observations in the oral procedure. During the oral phase a public hearing is held. At that hearing, the judges can put questions to the parties representatives. The Judge-Rapporteur summarises, in a report for the hearing, the facts relied on and the arguments of each party and, if applicable, of the interveners. This document is available to the public in the language of the case.

6 The judges then deliberate on the basis of a draft judgment prepared by the Judge-Rapporteur and the judgment is delivered in open court. The procedure before the General Court is free of fees. However, the costs of the lawyer authorised to practise before a court of a Member State, by whom the parties must be represented, are not paid by the General Court. Even so, an individual who is not able to meet the costs of the case may apply for legal aid. Interim proceedings An action brought before the General Court does not suspend the operation of the contested act. The Court may, however, order the suspension of its operation or other interim measures. The President of the General Court or, if necessary, another judge - as the judge hearing applications for interim measures - rules on such an application by reasoned order. Interim measures are granted only if three conditions are met: 1) the action in the main proceedings must appear, at first sight, to be well founded; 2) the applicant must show that the measures are urgent and that it would suffer serious and irreparable harm without them; 3) the interim measures must take account of the balancing of the parties interests and of the public interest. The order is provisional in nature and in no way prejudges the decision of the General Court in the main proceedings. In addition, an appeal against it may be brought before the President of the Court of Justice. Expedited procedure This procedure allows the General Court to rule quickly on the substance of the dispute in cases considered to be particularly urgent. An expedited procedure may be requested by the applicant or by the defendant. Language arrangements The language used for the application, which may be one of the 24 official languages of the European Union, will be the language of the case (without prejudice to the application of specific provisions). The proceedings in the oral phase of the procedure are simultaneously interpreted, as necessary, into various official languages of the European Union. The judges deliberate, without interpreters, in a common language which, traditionally, is French.

CASE-LAW From the beginning of its operation until the end of 2010, the General Court ruled on 7 311 cases.

7 CASE-LAW From the beginning of its operation until the end of 2010, the General Court ruled on cases. Its case-law has developed in particular in the fields of intellectual property, competition and State aid. More recently, the litigation before the General Court has diversified further into subjects such as the fight against terrorism, access to documents of the institutions, reduction of greenhouse gas emissions and the placing on the market of plant protection products. A few examples will give a good idea of the type of cases brought before the General Court. Community trade marks The company Henkel had applied to the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), which is responsible for promoting and managing Community trade marks, for registration of a trade mark for a washing powder or dishwasher tablet. The three-dimensional trade mark applied for was in the form of a round tablet with two layers coloured white and red. The application was rejected by OHIM and the applicant brought an action before the General Court against the decision. According to European Union law, it is not possible to register a trade mark devoid of any distinctive character. In this case, the contested trade mark was made up of the form and arrangement of the colours of the product, that is to say by the appearance of the product itself. The Court took the view that that trade mark would not allow consumers, when choosing which product to buy, to distinguish between the goods covered by the trade mark and those of another commercial origin. Consequently, it dismissed the company s action, since OHIM had been right to conclude that the three-dimensional trade mark was devoid of any distinctive character (Henkel v OHIM, 2001). Similarly, the Court has decided that the shape of the Bounty chocolate bar (Mars v OHIM, 2009) or an exclamation mark (JOOP! v OHIM, 2009) cannot be registered as Community trade marks on the ground that they are devoid of any distinctive character. Lego submitted to OHIM an application for registration of a trade mark in respect of a red building block. One of its competitors, Mega Brands, opposed the registration. Subsequently, the application was rejected by OHIM and Lego brought an action before the General Court to have the decision annulled. The General Court held that the red Lego brick could not be registered as a Community trade mark because signs made up exclusively of the shape of the product necessary to achieve a technical result cannot be registered (Lego Juris v OHIM, 2008).

The scope of application of competition rules In the case of Piau v Commission, the General Court reiterated that competition rules could, on some occasions, apply to sport.

8 The scope of application of competition rules In the case of Piau v Commission, the General Court reiterated that competition rules could, on some occasions, apply to sport. In that case, the Commission had rejected the applicant s complaint against regulations of the Fédération internationale de football association (FIFA) governing the activities of players agents. In its judgment in 2005, the General Court found that football clubs and the national associations of which they are members are undertakings and associations of undertakings respectively within the meaning of competition law, so that FIFA itself, whose members are the national associations, constitutes an association of undertakings. Those preliminary considerations enabled the General Court to hold that the regulations governing the activities of players agents constituted a decision of an association of undertakings. Those activities are intended regularly and for remuneration to bring a player and a club into contact with a view to conclusion of an employment contract or two clubs with a view to conclusion of a transfer agreement. It is, therefore, an economic activity involving the provision of services which does not fall within the scope of the specific nature of sport as defined in case-law (Piau v Commission, 2005).

Cartels European Union law prohibits all agreements between undertakings, all decisions by associations of undertakings and all concerted practices which may affect trade between Member States and

9 Cartels European Union law prohibits all agreements between undertakings, all decisions by associations of undertakings and all concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market. The Commission, through a decision, finds a breach of competition rules by a company. In relation to fines imposed by the Commission on companies that infringe competition law, the General Court is required to verify the lawfulness of the decision of the Commission at the request of the company on which the fine is imposed. In this context, it can confirm the decision, annul it or reduce or increase the fine imposed by the Commission. The Commission adopted a decision in 2004 finding that several companies, including Prym and Coats, had participated in a series of anti-competitive agreements through which they had shared product markets and geographic markets in the needles sector. The Commission imposed a fine of EUR 30 million on each of the two companies.

10 The General Court held that the Commission had made errors in its assessment and consequently decided to reduce the fines. In relation to Prym, the General Court held that, even if it were true that Prym had never actively assisted the Commission in clarifying certain points, it had always expressly stated that it did not dispute the facts, which was sufficient to grant it a reduction in the fine fixed by the General Court at EUR 27 million. In relation to Coats, the General Court held that the Commission had not put forward sufficient evidence to show that that company had participated in the cartel beyond Therefore, the General Court held that Coats merely facilitated the entry into force of the framework agreement for the cartel in a role more like that of a mediator than that of a full member of the cartel. Taking account of that attenuating circumstance and of the proven length of the infringement, the General Court reduced the fine imposed on Coats by EUR 10 million (William Prym v Commission and Coats v Commission, 2007). Abuse of a dominant position In 2004, the Commission adopted a decision finding that there was an abuse of a dominant position by Microsoft consisting, firstly, in refusing to provide information relating to the interoperability of the Windows PC system necessary for undertakings wishing to develop and distribute work group server operating systems and, secondly, in the abuse resulting from the linked sale of the Windows PC operating system and Windows Media Player. The General Court dismissed the action against the decision of the Commission and consequently confirmed the fine imposed on the company of more than EUR 497 million. In relation to the refusal of Microsoft to provide interoperability information, the General Court held that, given the dominance of Microsoft products for PCs, its competitors on the market in work group server operating systems had to be able to interoperate with Windows on an equal footing to enable them to compete viably with Microsoft products. In relation to the abuse resulting from the linked sale of Windows for PC and Windows Media Player, the General Court held that that conduct had the effect of restricting competition. The linked sale of those two separate products by a company in a dominant position discouraged consumers and manufacturers from using other multimedia players (Microsoft v Commission, 2007).

Mergers Airtours, a British company selling package tours from the United Kingdom, wished to acquire a competitor, First Choice. The Commission was informed by Airtours of this proposed merger.

12 Mergers Airtours, a British company selling package tours from the United Kingdom, wished to acquire a competitor, First Choice. The Commission was informed by Airtours of this proposed merger. The Commission declared the merger incompatible with the common market on the ground that it would have led to a collective dominant position. Airtours brought an action before the General Court for annulment of the Commission s decision. The Court stated that, pursuant to the relevant regulation applicable at the material time, a merger may be prohibited if it will lead directly and immediately to the creation or reinforcement of a dominant position, significantly distorting effective competition in the market over a long period. The Court concluded that, because the Commission had made a number of errors of assessment, it had not shown sufficient evidence of the negative effects of the merger on competition, and the Court therefore annulled the contested decision (Airtours v Commission, 2002). In a judgment of 2006, the General Court specified the criteria upon which the turnover of two parties to a merger should be calculated in order to verify its Community dimension and consequently the necessity to notify the merger to the Commission. In the case, Gas Natural, a Spanish company active in the energy sector, had notified the national competition authority of its intention to launch a bid to acquire the entire share capital of Endesa, a Spanish company active mainly in the electricity sector. Being of the opinion that the transaction had a Community dimension and, therefore, should be notified to the Commission in accordance with the regulation on merger control, Endesa had brought a complaint before the Commission, which had been rejected. Endesa challenged that decision before the Court in submitting, in particular, that the Commission evaluated its turnover incorrectly. In this context, the Court specified that, for questions of legal certainty, the turnover to be taken into consideration with a view to determining the appropriate authority to be notified of a merger must, in principle, be defined on the basis of the published annual accounts of the undertaking. It is only by way of exception, where particular circumstances so justify, that certain adjustments should be made in order best to reflect the financial position of the undertakings in question. The Court therefore dismissed Endesa s action (Endesa v Commission, 2006).

State aid In a judgment of 2008, the General Court annulled the decision under which the Commission had examined separately two agreements concluded by the airline company Ryanair with, respectively,

13 State aid In a judgment of 2008, the General Court annulled the decision under which the Commission had examined separately two agreements concluded by the airline company Ryanair with, respectively, the Walloon Region, owner of Charleroi airport, and Brussels South Charleroi Airport (BSCA), manager and operator of the airport. Those agreements provided, in particular, for the grant by the Walloon Region to Ryanair of a reduction of some 50% as compared with the regulatory level of landing charges and for its undertaking to compensate Ryanair for any loss of profit resulting from a subsequent change to airport charges. According to that decision, those two agreements involved State aid incompatible with the common market. The Court noted, firstly, that, as BCSA was an economic entity dependent on the Walloon Region, the Commission should have considered them as being one and the same entity. Further, it held that, in concluding its agreement with Ryanair, the Walloon Region was not acting as a public authority, rather it was carrying out an economic activity, namely the management of airport infrastructure. The mere fact that that activity is carried out in the public sector did not mean that it was an exercise of public authority powers. In addition, the mere fact that the Walloon Region has regulatory powers in relation to fixing airport charges does not mean that a scheme reducing those charges ought not to be examined by reference to the principle of the private investor in a market economy. The Court held that the fixing of the amount of landing charges, and the related compensation guarantee, is an activity that is directly linked to the management of airport infrastructure, which is an economic activity. The Court concluded that the Commission s refusal to examine together the advantages granted by the Walloon Region and by BCSA and to apply the principle of the private investor in a market economy to the measures adopted by the Walloon Region in spite of the economic links binding those two entities is vitiated by an error in law (Ryanair v Commission, 2008).

14 Combating terrorism In a series of judgments, in particular three cases concerning the People s Mojahedin Organization of Iran (PMOI), the General Court emphasised the importance of fundamental rights in the European Union. It held that, in taking measures freezing funds, the Council must respect the rights of the persons or entities the subject of such measures, in particular the right to be informed of the reasons for which they were added to the list on freezing funds, the right to property and the right to an effective judicial remedy (People s Mojahedin Organization of Iran v Council, 2006 and 2008). Access to documents Messrs Franchet and Byk, the former Director-General and former Director of Eurostat respectively, were refused access to various documents from the European Anti-Fraud Office (OLAF) and from the internal service of the Commission calling into question their management and relating to alleged irregularities within Eurostat. Those documents had been provided to the French and Luxembourg judicial authorities in the context of an investigation into their liability. The General Court, firstly, noted that exceptions to the principle of access to documents of the institutions must be interpreted and applied in a restrictive manner. It then examined the manner in which the Commission had applied those exceptions, particularly those deriving from the protection of court proceedings and of the purpose of inspections, investigations and audits. The Court annulled the decision to refuse access on the ground that the Commission could not show that the various documents had been drafted solely for the purposes of court proceedings. The action which the competent national authorities or institutions take in response to the documents forwarded by OLAF is within the responsibility of those authorities and it is possible that a communication from OLAF will not lead to the institution of judicial proceedings at national level or disciplinary or administrative proceedings at European Union level. Moreover, as regards certain communications to the Commission, OLAF made a decision without showing that the disclosure of those documents would really adversely affect the protection of the purpose of inspections, investigations and audits (Franchet and Byk v Commission, 2006).

16 Court of Justice of the European Union: Case-law: Press releases: Gateway to the institutions of the European Union Access to the law of the European Union: General Court of the European Union Rue du Fort Niedergrünewald L-2925 Luxembourg QD EN-C Photos : G. Fessy CJUE Press and Information February 2011 edition Court of Justice of the European Union Press and Information L-2925 Luxembourg doi: /54550 ISBN

The Court of Justice. Composition, jurisdiction and procedures

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