Provisional text
OPINION OF ADVOCATE GENERAL
EMILIOU
delivered on 6 June 2024 (1)
Case C‑766/21 P
European Parliament
v
Axa Assurances Luxembourg SA,
Bâloise Assurances Luxembourg SA,
La Luxembourgeoise SA,
Nationale-Nederlanden Schadeverzekering Maatschappij NV
(Appeal – Arbitration clause contained in a contract concluded by the European Union – Articles 123 and 166 of the Rules of Procedure of the General Court – Defendant in default – Judgment by default – Application to have a judgment by default set aside – Articles 41 and 56 of the Statute of the Court of Justice of the European Union – Admissibility of the appeal and cross-appeal)
I. Introduction
1. The present proceedings concern an appeal brought by the European Parliament against the judgment of the General Court of 29 September 2021, Parliament v Axa Assurances Luxembourg and Others, (2) as well as a cross-appeal brought by Nationale-Nederlanden Schadeverzekering Maatschappij NV (‘NN’) against that judgment.
2. In this Opinion – my second Opinion in the present case, since the oral procedure has been reopened following the delivery of my first Opinion on 18 January 2024 (3) – I shall deal with the issue of whether the appeal brought by the Parliament should be declared inadmissible, in the light of the principles stemming from the judgment of the Court of Justice of 18 January 2024, Eulex Kosovo v SC. (4)
II. Legal framework
3. Article 41 of the Statute of the Court of Justice of the European Union (‘the Statute’) reads as follows:
‘Where the defending party, after having been duly summoned, fails to file written submissions in defence, judgment shall be given against that party by default. An objection may be lodged against the judgment within one month of it being notified. …’
4. The first paragraph of Article 56 of the Statute provides:
‘An appeal may be brought before the Court of Justice, within two months of the notification of the decision appealed against, against final decisions of the General Court and decisions of that Court disposing of the substantive issues in part only or disposing of a procedural issue concerning a plea of lack of competence or inadmissibility.’
5. Article 123 of the Rules of Procedure of the General Court (‘the RPGC’), entitled ‘Judgments by default’, states:
‘1. Where the General Court finds that a defendant on whom an application initiating proceedings has been duly served has failed to respond to the application in the proper form or within the time limit prescribed … the applicant may, within a time limit prescribed by the President, apply to the General Court for judgment by default.
…
3. The General Court shall give judgment in favour of the applicant in the judgment by default, unless it is clear that the General Court has no jurisdiction to hear and determine the action or that the action is manifestly inadmissible or manifestly lacking any foundation in law.
…’
6. Article 166 of the RPGC, entitled ‘Application to set aside a judgment by default’, provides:
‘1. Application may be made pursuant to Article 41 of the Statute to set aside a judgment given by default.
2. The application to set aside the judgment must be made by the defendant in default within one month from the date of service of the judgment given by default. …
3. After the application has been served, the President shall prescribe a time limit within which the other party may submit his written observations.
…
5. The General Court shall decide by way of a judgment which may not be set aside.’
III. Background to the present Opinion
7. The most relevant aspects of the factual and legal background to the dispute, up to the delivery of my first Opinion, are set out in points 13 to 31 of that Opinion. I see no need to reiterate them here.
8. In my first Opinion – which, at the request of the Court of Justice, focused on the admissibility of the cross-appeal and some other procedural issues – I proposed that the Court: (i) find NN’s response to the Parliament’s appeal admissible, and (ii) dismiss NN’s cross-appeal as inadmissible. In the alternative, were the Court to consider NN’s cross-appeal to be admissible, I suggested that the Court set aside points 1 and 3 of the operative part of the judgment under appeal due to an infringement of Article 123(3) of the RPGC. (5)
9. On the same day that my first Opinion was delivered, the Court of Justice (Fourth Chamber) delivered the abovementioned judgment in Eulex Kosovo, the main aspects of which I shall now discuss briefly.
10. In her action before the General Court, the applicant in that case had sought the annulment of a decision adopted by Eulex Kosovo and compensation in respect of the damage allegedly suffered on account of Eulex Kosovo’s conduct. In response, Eulex Kosovo raised a plea of lack of jurisdiction and inadmissibility against that action, but failed to lodge a defence within the prescribed time limit.
11. The applicant applied to the General Court for a judgment by default. In its judgment, given by default, the General Court ruled against Eulex Kosovo. (6)
12. Eulex Kosovo applied to have the judgment by default set aside on the basis of Article 166 of the RPGC and, shortly thereafter, also brought an appeal against that judgment before the Court of Justice.
13. In its judgment, the Court of Justice dismissed the appeal, on the ground that ‘an appeal brought against a judgment given by default which is the subject of an application to set it aside is inadmissible’. In particular, the Court found that ‘since [the lodging of an application to have a judgment by default set aside] has the effect of re-opening the proceedings before the General Court, a judgment by default which has been the subject of [such an application] cannot be regarded as a final decision, within the meaning of Article 56 of [the Statute]’. (7)
14. In the light of the judgment in Eulex Kosovo, in the present case, the Court of Justice (Third Chamber) decided, by order of 20 March 2024, to reopen the oral part of the procedure and to hold a hearing, so that the parties could debate upon, and the Advocate General reach a conclusion regarding, the meaning to be given to the passages of that judgment cited above and the potential impact thereof on the present proceedings, in particular with regard to the admissibility of the Parliament’s appeal. In that context, the Court also put two questions to the parties to be answered at the hearing.
15. Axa Assurances Luxembourg SA, Bâloise Assurances Luxembourg SA, La Luxembourgeoise SA, (collectively, ‘the other defendants’), NN (8) and the Parliament presented their views and answered the questions at the hearing before the Court, which was held on 17 April 2024.
IV. Analysis
16. It is my view that the appeal brought by the Parliament is admissible. As I will explain below, contrary to the arguments raised at the hearing by the defendants, the opposite conclusion is not consistent with either the relevant EU procedural rules, or the judgment in Eulex Kosovo.
A. The judgment under appeal as a bundle of judgments
17. At the outset, I should like to emphasise that the judgment under appeal is not a judgment given by default within the meaning of Article 41 of the Statute in its entirety. This follows, first, from the clear wording of that provision: ‘where the defending party, after having been duly summoned, fails to file written submissions in defence, judgment shall be given against that party by default’. (9)
18. Therefore, only the part of the judgment which concerns NN has been given by default, since it is that party which has ‘fail[ed] to file written submissions in defence’. The remainder of the judgment differs in this regard, given that the other defendants at first instance have duly participated in those proceedings.
19. Second, the composite nature of the judgment under appeal is also reflected in its structure and content. It is divided into two parts: one concerns the Parliament’s claims against NN (paragraphs 45 to 61 of the grounds of the judgment and points 1 and 3 of the operative part), and the other concerns the Parliament’s claims against the three other defendants (paragraphs 62 to 138 of the grounds of the judgment and points 2 and 4 of the operative part). Thus, the two parts of the judgment are distinct and independent.
20. The reason for that lies in the fact that, whereas in the second part of the judgment the General Court examined the applicant’s claims by carrying out a full review of the relevant facts and law, in the first part it examined its claims under the test set out in Article 123(3) of the RPGC, which, as I stated in my first Opinion, establishes a ‘light-touch’ form of review. (10)
21. It is for this reason the judgment under appeal should be regarded as a ‘bundle of judgments’. It affects the legal position of the four defendants in an individual and specific manner. (11) In fact, the Parliament could have lodged a separate action against each defendant, which would have given rise to four distinct judgments by the General Court.
22. As the Parliament correctly noted at the hearing, the fact that the four defendants are bound by the same contract does not exclude the possibility that their legal position may be differentiated. That is a fortiori true in the present case, since the contract in question establishes a form of joint, but non-several, liability among the four insurance companies. In addition, nothing in the contract, including in the arbitration clause set out in Article I.19 thereof, requires the Parliament to act simultaneously against all defendants.
23. The fact that the Parliament chose to act against the defendants within one and the same judicial procedure does not change anything in that respect. Indeed, the outcome of a procedure such as the present one need not be necessarily the same for all of the defendants involved. The defendants could, for example, choose different lines of defence or some of them could decide to settle the case with the applicant which may, in exchange, withdraw part of its claims.(12)
24. The judgment in Eulex Kosovo does not cast doubt on the above. Indeed, as mentioned in points 10 to 12 above, that dispute concerned a single defendant, which had failed to submit a defence within the time prescribed. The whole procedure at first instance was carried out in absentia and, consequently, the entire judgment was given by default. Thus, the entire judgment formed the subject of the procedure initiated by the defendant under Article 166 of the RPGC. (13)
25. That is not the case here since, in its application under Article 166 of the RPGC, (14) NN sought the annulment only of points 1 and 3 of the operative part of the judgment under appeal. After all, it could not have been otherwise: those are the only parts of the judgment given – using the terms of Article 41 of the Statute – by default against NN.
B. The partly final nature of the judgment under appeal
26. It follows from the foregoing that the mere fact that one of the defendants in the dispute at issue has failed to submit a statement of defence at first instance does not deprive the General Court’s judgment of its definitive nature in respect of the Parliament’s claims against the other defendants.
27. As far as those defendants are concerned, that judgment constitutes a ‘final decision’ within the meaning of the first paragraph of Article 56 of the Statute and may, thus, be subject to an appeal before the Court of Justice. With respect to those parts of the judgment under appeal, there is – to use the expression employed by the Court in paragraph 29 of the judgment in Eulex Kosovo – no other legal remedy that remains open.
28. In particular, those parts cannot be called into question in the context of a procedure initiated by the defendant in default under Article 166 of the RPGC. The opposite conclusion would lead to a rather odd situation. The General Court would have to re-examine not only the matters which were assessed on the basis of a light-touch examination of the relevant facts and laws (in respect of NN), (15) but also those on which it carried out a fully-fledged assessment thereof (in respect of the other defendants).
29. Moreover, it would have to do so despite the fact that the other defendants do not participate in the procedure to have the judgment by default set aside. Indeed, Article 166 of the RPGC makes it clear that only ‘the other party’ (that is to say, the applicant) may submit its observations in the procedure triggered by the defendant’s application to have a judgment by default set aside. In my view, such a situation would hardly be consistent with the need to protect the rights of the defence of the other defendants and the principle of equality of arms.
30. Certainly, one could argue that the use of the singular in the term ‘party’ in that provision – which, I would add, is consistent across all language versions of the RPGC – does not necessarily preclude, in some cases, the possibility of there being more than one party.
31. However, such an interpretation of Article 166 of the RPGC would fly in the face of the logic of the mechanism provided for therein. The procedure laid down in that provision is not a form of appeal, nor a revision of a judgment. Rather, it is a procedural device allowing for the reopening of the proceedings of a case, (16) enabling the party in default to join the procedure so that a matter that was provisionally adjudicated upon inaudita altera parte (17) can finally be ruled upon following an adversarial procedure in which the principle audi alteram partem is respected. (18) From that perspective, there is clearly no need to involve the other defendants in a procedure initiated under Article 166 of the RPGC because they have already been heard.
32. In this context, I would also add, in passing, that a different interpretation of Article 166 of the RPGC would risk paving the way for procedural abuses. Indeed, in proceedings brought against numerous co-defendants, one of them could strategically choose to stay out of the first set of proceedings so that, should the other defendants lose, the application to have the judgment by default set aside would enable all defendants to have a ‘second shot’ at their case. In this new set of proceedings, the defendants would also enjoy the advantage of knowing the reasons for which the arguments relied on thus far have failed to persuade the General Court. (19) This would, moreover, significantly diminish the effectiveness, in such circumstances, of the provisions regarding the parties’ burden of allegation included in the Rules of Procedure. (20)
33. There is, thus, no basis for considering that the provisional nature of part of a judgment given by default extends to the other parts of the judgment in which the General Court examined matters in the context of an adversarial procedure and handed down a ruling in full knowledge of the arguments of fact and law put forward by all the parties concerned. Accordingly, it is possible to challenge those parts of the judgment by way of an appeal brought before the Court of Justice in accordance with Article 56 of the Statute.
C. Time limit for lodging an appeal
34. At the hearing, the defendants also proposed an alternative interpretation of the relevant procedural framework. They contended that, in respect of the other defendants, the judgment under appeal is indeed final (as also asserted by the Parliament), but it cannot be challenged on appeal until the procedure to have the judgment by default set aside, initiated by NN, has been completed. In their view, that would be necessary in order to safeguard NN’s rights of defence and to avoid the risk of conflicting decisions on the same questions.
35. I am not convinced by those arguments.
36. The wording of the first paragraph of Article 56 of the Statute is very clear in stating that an appeal against (inter alia) a final decision of the General Court should be brought ‘within two months of the notification of the decision appealed against’. No provision of the Statute, the RPGC or the Rules of Procedure of the Court of Justice (‘the RPCJ’) provides any exception to that rule. (21)
37. The defendants’ argument would also be inconsistent with the principle of sound administration of justice, on at least two counts.
38. First, it would significantly prolong the length of the proceedings – and the ensuing state of legal uncertainty – with respect to the parts of the dispute that are not the subject of the procedure under Article 166 of the RPGC. Second, this would de facto give the parties which intend to appeal against the parts of the judgment not given by default a longer (and, more often than not, significantly so) period in which to prepare their appeal. That runs counter to the principle of equality of arms in so far as the other parties to the relevant case before the General Court (in particular, those opposing the form of order sought by the appellant) would have only two months to respond to the appellant’s arguments. (22)
39. I am also not persuaded by the risk of conflicting decisions raised by the defendants. There are specific procedural mechanisms that have been conceived for that purpose. In particular, pursuant to Article 54 of the Statute, Article 69 of the RPGC and Article 55 of the RPCJ, both the General Court and the Court of Justice can order, in situations such as that at issue in the present case, the stay of proceedings until such time as the other Court has delivered its judgment.
40. In fact, that is what has occurred in the present dispute, since the procedure before the General Court to have the default judgment set aside initiated by NN has been suspended until the Court of Justice takes a decision in the present appeal proceedings.
41. In this context, I would also emphasise that the possibility for different outcomes in separate proceedings, in a situation such as that in the case at hand, does not necessarily imply the existence of conflicting decisions. Indeed, as I have previously mentioned in point 23, the position of the various defendants may very well differ from both a substantive and a procedural standpoint. At any rate, it is typically the responsibility of the Court of Justice to ensure consistency in the case-law, by ruling on appeal(s) against decisions delivered at first instance.
42. Nor am I convinced by the arguments concerning a breach of the right of defence of the defendant in default. If I understand it correctly, the gist of the argument would be as follows: the procedure before the General Court to have the judgment by default set aside could be deprived of any significance, since the Court of Justice may definitively rule on the relevant issues in the context of the appeal brought by the other defendants.
43. However, for the reasons explained in points 44 to 65 of my first Opinion, since NN was a defendant at first instance, and has an ‘interest in the appeal being allowed or dismissed’, it is allowed to submit a response to the appeal brought by the Parliament. The fact that, at first instance, it was a defendant in default does not change that. One of the reasons for my position in that respect is that, given the similarity of the issues to be dealt with in the two sets of proceedings (the proceedings before the General Court to have the judgment by default set aside, and the appeal before the Court of Justice), it was necessary to protect NN’s right to an effective remedy and its right to be heard.
44. Therefore, NN is allowed to express its views on all issues on which the Court may rule on appeal. Under those circumstances, there can be no breach of its right to be heard.
45. It may perhaps be impractical for NN that its legal position is being assessed in two separate sets of proceedings (directly before the General Court in the procedure to have the judgment by default set aside, and indirectly before the Court of Justice in the appeal procedure) but that is simply the result of its own choice not to appear in the original proceedings initiated by the Parliament.
46. Finally, I would merely add that the defendants’ alternative interpretation of the relevant procedural framework brings to mind the proverbial desire to have one’s cake and eat it. Indeed, they suggest that the General Court’s findings as regards the Parliament’s claims against the other defendants would be – simultaneously – ‘final’, as they are not subject to the procedure initiated by NN under Article 166 of the RPGC, and yet not open to any appeal so long as that procedure is pending.
47. To my mind, only one of the two hypotheses can be correct: with the procedure under Article 166 of the RPGC, either everything is ‘on the table’ again, or the final parts of the judgment under appeal may be subject to an appeal within the standard two-month time limit. For the reasons explained in the present Opinion, it is my firm conviction that the latter is the correct one. Consequently, the Parliament’s appeal should be considered to be admissible.
V. Conclusion
48. In the light of the foregoing, I propose that the Court of Justice declare the appeal brought by the European Parliament to be admissible.