The Gazette 1975

Legal Europe

SUGO SEMINAR on E.E.C. LAW—OCTOBER 1974

THE E.E.C. A ND THE ORD I NARY SOLICITOR—SOME RELEVANT CASES

By JOHN F. BUCKLEY, Solicitor

Part III

Transport

The provisions of the Treaty relating to Transport

provide for the drafting of a common policy on trans-

port and also make provisions for the abolition of re-

strictions which have the effect of limiting competit-

ion. Very few cases have in fact come before the

Courts arising out of the provisions of this portion of

the Treaty but a trio of cases heard together are worthy

of note. They are the

Grad Lesage and

Haselhorst

cases being Number 9, 20 and 23 of 1970 (1971)

C.M.L.R. 1 which decided that an obligation under

Article 4 (2) of a Council decision of 13th May 1965

as completed by Article 1 of the First Directive on turn-

tax of 11th April 1967 was unconditional and suf-

ficiently clear and precise. It was consequently capable

of creating direct effects anl legal relations between the

Member States and individuals and so could be invoked

by individuals in litigation. It also provided that a tax

on freight where the criterion was the mere fact of trans-

portation and the basis of assessment was the load to

which the roads were exposed did not correspond

a usual form of Turnover Tax. There is a fairly recent

transport case,

Commission

v French Republic

167/

1973, (1974) ECR 359 which held that France was

in default in not complying with Regulation No. 1612/

68 dealing with the freedom of movement for workers

by not amending a French Law which provided that

such proportion of the crew of a ship as is laid down

by order of the Minister for the Merchant Fleet must

be French Nationals. There were orders that, subject to

special exemptions, employments on the bridge, in the

engine room, and in the wireless service, on French

vessels was limited to persons of French Nationality

and general employment on ships was limited in the

ratio of three French to one non French.

Competition Policy

Article 85 and 86 of the Treaty which govern Re-

strictive Trade Practices and Monopoly situations are

among the most diligently litigated of the entire Treaty.

Article 85 provides for the prohibition of all agreements,

decisions and concerted practices which may affect

trade between Member States and which have, as their

object

or effect, prevention,

restriction

or dis-

tortion of competition. This has been implemented by

Regulation 17 of 1962 which provided for the notifi-

cation of agreements to the Commission and for block

exemptions to be given for certain categories of agree-

ments. It is unfortunate that the question of the

status of an agreement which has been notified to the

Commission but which has not been adjusted on by

the Commission, although already the subject of num-

erous cases, is still not entirely clear, particularly 4ft

relation to the new Member States but there have been

a number of cases which have had to clarify the in-

terpretation of Article 85 and Regulation 17 in general.

The

Five v Mertons

(No. 2) case, (1963) C.M.L.R.

329, was decided by the Amsterdam District Court

which held there was no breach of Article 5 of Regul-

ation 17 where (1) there was no proof that any under-

taking other than those resident in the territory of a

Member State had participated in a Restrictive Practices

Agreement; (2) the product originated from a Manu-

facturer resident within the territory of a Member State

and (3) the Restrictive Practices Agreement was wholly

domestic in character and did not regulate imports

or exports as between Member States.

A particular and familiar kind of Restrictive Prac-

tices Agreement came before the Turin Appeal Court

in the

Lagattolla

case, (1964) C.M.L.R. 84, where it

was held that an agreement entered into between a

Company and a former employee under which the

latter undertook not to compete with the Company

for a period of five years after the termination of his

employment, in a golden handshake situation, did not

contravene Article 85.

The

Cadillon

case (No. 1 of 1971) (1971) C.M.L.R.

420 gave the European Court an opportunity to con-

sider the same area as had been dealt with in the

Five

case and it held (1) that an agreement was cap-

able of affecting trade within Member States if, looked

at on the basis of a whole pattern of legal and factual

elements, it appeared with a sufficient degree of prob-

ability that it could exercise an influence direct or in-

direct, actual or potential, on the trade patterns be-

tween Member States so as to hinder the realization

of the objectives of a single market and (2) an Exclusive

Dealing Agreement could escape the prohibitions of

Article 85 if, in view of the weak position of the parties

on the market in the products and the area in question

it was not capable of hindering the realization of the

objectives of a single market even when it established

an absolute territorial protection.

The

de Haecht

case No. 23 of 1967 (1968) C.M.L.R.

26 held that an exclusive dealing agreement was not

necessarily incompatible with the Common Market

and void as such

but it could be void if it was cap-

able of affecting trade between Member States

and had as its object or effect the prevention,

restriction or distortion of competition. The de

.Haecht case is of interest because it was not, as most

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