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Language of document : ECLI:EU:C:1999:412

JUDGMENT OF THE COURT (First Chamber)

14 September 1999 (1)

(Failure to fulfil obligations Regulation (EEC) No 4055/86 Freedom toprovide services Maritime transport)

In Joined Cases C-171/98, C-201/98 and C-202/98,

Commission of the European Communities, represented by Frank Benyon, LegalAdviser, and Bernard Mongin, of its Legal Service, acting as Agents, with anaddress for service in Luxembourg at the office of Carlos Gómez de la Cruz, of itsLegal Service, Wagner Centre, Kirchberg,

applicant,

Kingdom of Belgium (C-171/98 and C-201/98), represented by Jan Devadder,General Adviser in the Legal Directorate of the Ministry of Foreign Affairs,Foreign Trade and Cooperation with Developing Countries, acting as Agent, withan address for service in Luxembourg at the Belgian Embassy, 4 Rue desGirondins,

and

Grand Duchy of Luxembourg (C-202/98), represented by Nicolas Schmit, Conseillerd'État, Head of the International Economic Relations and Cooperation Directorate

of the Ministry of Foreign Affairs, acting as Agent, with an address for service inLuxembourg at the office of that Ministry, 5 Rue Notre-Dame,

defendants,

THE COURT (First Chamber),

composed of: P. Jann, President of the Chamber, D.A.O. Edward (Rapporteur)and L. Sevón, Judges,

Advocate General: A. La Pergola,

Registrar: R. Grass,

having regard to the report of the Judge-Rapporteur,

after hearing the Opinion of the Advocate General at the sitting on 20 April 1999,

gives the following

Judgment

1.

By applications lodged at the Court Registry on 8 May 1998 (C-171/98) and 25 May1998 (C-201/98 and C-202/98), the Commission of the European Communitiesbrought three actions under Article 169 of the EC Treaty (now Article 226 EC) fordeclarations that, by concluding and maintaining in force the agreements containingcargo-sharing arrangements with the Togolese Republic (C-171/98 and C-202/98)

and the Republic of Mali (C-201/98 and C-202/98) and by failing either to adjustthe agreements with the Republic of Senegal and the Republic of Côte d'Ivoire(C-201/98 and C-202/98) in such a way as to provide for fair, free and non-discriminatory access by Community nationals to the cargo shares due to Belgiumand Luxembourg or to denounce those agreements, the Kingdom of Belgium(C-171/98 and C-201/98) and the Grand Duchy of Luxembourg (C-202/98) hadfailed to fulfil their obligations under Council Regulation (EEC) No 4055/86 of 22December 1986 applying the principle of freedom to provide services to maritimetransport between Member States and between Member States and third countries(OJ 1986 L 378, p. 1), in particular Articles 3 and 4(1) thereof with respect to theRepublic of Senegal and the Republic of Côte d'Ivoire and Article 5 thereof withrespect to the Republic of Mali and the Togolese Republic.

2.

By order of the President of the Court of 15 July 1998, Cases C-171/98, C-201/98and C-202/98 were joined for the purposes of the written and oral procedure andjudgment.

Legal background

3.

Article 1(1) of Regulation No 4055/86 provides:

'Freedom to provide maritime transport services between Member States andbetween Member States and third countries shall apply in respect of nationals ofMember States who are established in a Member State other than that of theperson for whom the services are intended.

4.

Article 2 of that regulation provides:

'By way of derogation from Article 1, unilateral national restrictions in existencebefore 1 July 1986 on the carriage of certain goods wholly or partly reserved forvessels flying the national flag, shall be phased out at the latest in accordance withthe following timetable:

carriage between Member States by

vessels flying the flag of a Member

State: 31 December 1989,

carriage between Member States and

third countries by vessels flying

the flag of a Member State: 31 December 1991,

carriage between Member States and

between Member States and third

countries in other vessels: 1 January 1993.

5.

Article 3 of the regulation provides:

'Cargo-sharing arrangements contained in existing bilateral agreements concludedby Member States with third countries shall be phased out or adjusted inaccordance with the provisions of Article 4.

6.

Article 4(1) provides:

'Existing cargo-sharing arrangements not phased out in accordance with Article 3shall be adjusted in accordance with Community legislation and in particular:

(a) where trades governed by the United Nations Code of Conduct for LinerConferences are concerned, they shall comply with this Code and with theobligations of Member States under Regulation (EEC) No 954/79;

(b) where trades not governed by the United Nations Code of Conduct forLiner Conferences are concerned, agreements shall be adjusted as soon aspossible and in any event before 1 January 1993 so as to provide for fair,free and non-discriminatory access by all Community nationals, as definedin Article 1, to the cargo-shares due to the Member States concerned.

7.

Article 5(1) of the regulation provides:

'Cargo-sharing arrangements in any future agreements with third countries areprohibited other than in those exceptional circumstances where Community linershipping companies would not otherwise have an effective opportunity to ply fortrade to and from the third country concerned. In these circumstances sucharrangements may be permitted in accordance with the provisions of Article 6.

8.

In accordance with Article 12, Regulation No 4055/86 entered into force on the dayfollowing its publication in the Official Journal of the European Communities, thatis, on 1 January 1987.

9.

Under Article 3(1) of the agreement between the Belgo-Luxembourg EconomicUnion (hereinafter 'the BLEU) and the Republic of Côte d'Ivoire, which enteredinto force on 25 October 1979:

'As regards maritime freight traffic of any kind between the countries of the twoParties, whatever the port of loading or unloading, the system to be applied by theContracting Parties to vessels operated by their respective fleets shall be based onthe allocation formula 40/40/20, with respect to cargoes by value of freight and byvolume.

10.

Article 4(2) of the agreement between the BLEU and the Republic of Senegal,which entered into force on 3 September 1984, provides inter alia:

'As regards maritime freight traffic (liner traffic) between the countries of the twoParties, whatever the port of loading, the system to be applied by the ContractingParties to vessels operated by their respective national shipping lines shall be basedon the allocation formula 40/40/20, with respect to cargoes by value of freight andby volume.

11.

Under Article 4(2) of the agreement between the BLEU and the Republic of Mali,which entered into force on 26 June 1987:

'As regards maritime freight traffic (liner traffic) between the countries of the twoParties, whatever the port of loading or unloading, the system to be applied by theContracting Parties to vessels operated by their respective national shipping linesshall be based on the allocation formula 40/40/20, with respect to cargoes by valueof freight and by volume. If the 20% allocated to third countries is not transportedby them, the remainder shall be divided equally by freight and volume between thenational shipping lines of the Republic of Mali and the national shipping lines ofthe BLEU.

12.

Article 4(2) of the agreement between the BLEU and the Togolese Republic,which was signed on 19 October 1984 and entered into force on 19 October 1987,provides:

'As regards maritime freight traffic (liner traffic) between the countries of the twoParties, whatever the port of loading or unloading, the Contracting Parties agreeto apply the principle of sharing cargoes on the basis of strict equality of rights andaccording to criteria of tonnage of paying unit and value of the freight, the lattercriterion taking precedence.

The share of trade reserved to vessels operated by their respective shipping linesshall be equal to at least 40% of total traffic, the share available to third countries'fleets not exceeding 20%.

13.

Under Article 5 of that agreement:

'Without prejudice to its international commitments, each Contracting Party shallhave absolute disposal of its rights of traffic under the present agreement.

14.

Under Article 21 of that agreement:

'The present Agreement shall enter into force once each Contracting Party hasnotified the other Party by diplomatic channels that the necessary constitutionalprocedures have been completed.

The present Agreement shall be concluded for a period of five years. It shall beautomatically extended for a period of one year at a time unless denounced bydiplomatic channels by either Contracting Party on six months' notice.

The pre-litigation procedure

15.

By letter of 10 April 1991 to the Belgian Government (C-171/98) and two lettersof 9 November 1995 to the Belgian Government (C-201/98) and the LuxembourgGovernment (C-202/98) respectively, the Commission stated that those twoMember States had failed to fulfil their obligations under Regulation No 4055/86,in particular Articles 3 and 4(1) thereof with respect to the agreements between theBLEU and the Republic of Senegal and the Republic of Côte d'Ivoire and Article5 with respect to the agreements between the BLEU and the Republic of Mali andthe Togolese Republic, and therefore gave them formal notice to submit theirobservations within two months.

16.

In Case C-171/98 the Commission sent the Kingdom of Belgium a reasoned opinionby letter of 11 October 1993, and a supplementary reasoned opinion on 26 January1996.

17.

In Cases C-201/98 and C-202/98 the Commission sent a reasoned opinion to theKingdom of Belgium on 16 June 1997 and to the Grand Duchy of Luxembourg on29 July 1997.

18.

In Case C-171/98 the Commission, in reply to a letter of the Belgian Governmentof 7 June 1991 stating that in its opinion the agreement between the BLEU andthe Togolese Republic was an existing agreement within the meaning of Articles3 and 4 of Regulation No 4055/86, set out in its supplementary reasoned opinionthe reasons for which that agreement was to be regarded as a future agreementgoverned by Article 5 of that regulation. The Commission explained that it followedfrom Article 21 of the agreement between the BLEU and the Togolese Republicthat each contracting party had to carry out the 'necessary constitutionalprocedures before actually being bound by the agreement. In those circumstances,the signing of the agreement in 1984 did no more than authenticate the text, andit was by the Belgian law of 9 October 1987 'approving the agreement that theKingdom of Belgium actually approved the agreement with the Togolese Republic,that being after the entry into force of Regulation No 4055/86.

19.

The Belgian Government, in its reply of 30 April 1996, contested the view takenby the Commission, arguing that the provisions of the agreement with the TogoleseRepublic had in fact been implemented before the constitutional procedures werecompleted. It also maintained that:

a distinction between existing and future agreements is unknown to theusual terminology of the law of treaties;

as from the signature of the agreement, the contracting parties had torefrain from any act contrary to the agreement;

the parties to the agreement expressed their intention of being bound by itas from its conclusion;

the stated intention of the parties is the essential factor;

the agreement had effect as from its signature, without there being any needto wait for its ratification.

20.

In Case C-201/98 the Belgian Government stated, in its reply of 7 February 1996to the Commission's letter of formal notice, that the agreements between theBLEU and the Republic of Senegal, the Republic of Côte d'Ivoire and theRepublic of Mali were in the course of adjustment. On 31 October 1996 theBelgian Government sent the Commission a copy of a letter of 26 February 1996from the Senegalese Ministry of Foreign Affairs in which that country accepted theadjustment of the bilateral agreement. However, the Commission was not given anyinformation on the substance of that agreement.

21.

As regards Case C-202/98, the Luxembourg Government stated, in its reply of 14March 1996 to the Commission's letter of formal notice, that the Kingdom ofBelgium had concluded maritime agreements on behalf of the BLEU, in thetradition of the BLEU Convention, and that the practice was not to subject suchagreements to the ratification procedure in the Grand Duchy of Luxembourg oreven to publish them in the Mémorial. The Luxembourg Government alsoquestioned whether the Grand Duchy of Luxembourg, as opposed to the BLEU,was in breach of obligations, given that the agreement names the Belgianadministration as the competent authority, that it contains several provisions whichhave no real consequences for Luxembourg, and that it has not been shown thatany Luxembourg shipping lines are involved.

22.

Since it found that the adjustment procedures had not been completed, theCommission brought the present actions for failure to fulfil obligations.

The applications

23.

The Commission observes that it is clear from Article 1(1) of Regulation No4055/86 that the regulation applies the freedom to provide maritime transportservices between Member States and between Member States and third countriesto nationals of Member States who are established in a Member State other thanthat of the person for whom the services are intended. Articles 3 and 5 cover thesituation concerning third countries, Article 3 applying to existing agreements andArticle 5 to future agreements.

24.

For trades governed by the United Nations Code of Conduct for Liner Conferences(hereinafter 'the Code of Conduct), covered by Article 4(1)(a) of Regulation No4055/86, no period is allowed for adjustment of an agreement. In contrast, fortrades not governed by the Code of Conduct, Article 4(1)(b) allows a period foradjustment extending to 1 January 1993 at the latest. The Commission thereforefinds that whichever the provision applicable to the various trades, Article 4(1)(a)or Article 4(1)(b) of Regulation No 4055/86, the agreements in question shouldlong since have been adjusted.

25.

Since the agreements between the BLEU and the Republic of Senegal, theRepublic of Côte d'Ivoire, the Republic of Mali and the Togolese Republic containcargo-sharing arrangements which reserve part of the traffic for Belgian andLuxembourg shipping lines to the exclusion of shipping lines from other MemberStates of the Community, the Commission considers that they are contrary toRegulation No 4055/86.

26.

As the agreements between the BLEU and the Republic of Senegal and theRepublic of Côte d'Ivoire entered into force on 3 September 1984 and 25 October1979 respectively, before the entry into force of Regulation No 4055/86, theCommission contends that they are existing agreements which come under Articles3 and 4 of that regulation and that, since they are discriminatory, they should,under Article 3, be phased out or adjusted in accordance with the provisions ofArticle 4.

27.

The agreement between the BLEU and the Republic of Mali entered into force on26 June 1987 and that between the BLEU and the Togolese Republic on 19October 1987. The Commission contends that those agreements are futureagreements within the meaning of Article 5 of Regulation No 4055/86, and shouldtherefore be phased out or adjusted in accordance with that provision.

28.

In Case C-171/98, the Belgian Government states that by exchanges of lettersconfirming a verbal agreement between the BLEU and the Togolese Republic,Articles 4 and 5 of the agreement, which are considered to be contrary to Article5(1) of Regulation No 4055/86, have been adjusted in accordance with theCommission's wishes. However, because of a material error, it proved necessary toproceed to a new exchange of letters, which should be done in the near future.

29.

In Case C-201/98, the Belgian Government observes that from the start of theprocedure it has always stated that it never intended to evade its obligationsconcerning the implementation of Regulation No 4055/86. However, negotiationswith the various countries took longer than expected.

30.

By letter of 25 November 1998 the Belgian Government informed the Commissionthat the obligations under Regulation No 4055/98 were now complied with asregards the agreements with the Republic of Mali and the Republic of Senegal.

31.

In Case C-202/98, the Luxembourg Government concurs with the observationssubmitted by the Belgian Government in its defence in Case C-201/98.

32.

The Court finds, first, that since the Belgian law approving the agreement betweenthe BLEU and the Togolese Republic was adopted on 9 October 1987, that is,after the date of entry into force of Regulation No 4055/86, that agreement is tobe categorised as a future agreement within the meaning of Article 5 of thatregulation. Similarly, in that it entered into force on 26 June 1987, the agreementbetween the BLEU and the Republic of Mali likewise constitutes a futureagreement. On the other hand, the agreements between the BLEU and theRepublic of Senegal and the Republic of Côte d'Ivoire entered into force on 3September 1984 and 25 October 1979 respectively, before the entry into force ofRegulation No 4055/86, so that they constitute agreements governed by Articles 3and 4 of that regulation.

33.

Second, as regards determination of the date from which an agreement should havebeen adjusted, Article 4(1) of Regulation No 4055/86 distinguishes between tradesgoverned by the Code of Conduct and trades not so governed. Only with respectto the latter trades does the regulation allow Member States a period expiring on1 January 1993 for the adjustment prescribed. Where trades are governed by theCode of Conduct, no period is allowed for adjustment of an agreement.

34.

The Code of Conduct was ratified by the Kingdom of Belgium on 30 March 1988.The Grand Duchy of Luxembourg, on the other hand, has not ratified it.

35.

However, as the Commission observes, whatever the time-limit applicable, theagreements at issue in the present cases should long since have been phased outor adjusted by the Kingdom of Belgium and the Grand Duchy of Luxembourg.

36.

The Belgian Government does not dispute that there has been a failure to fulfilobligations and states that it never intended to evade its obligations concerning theimplementation of Regulation No 4055/86. On the other hand, the Grand Duchyof Luxembourg denies that there is a failure to fulfil obligations. However, since itrefers to the Belgian Government's observations on the substance, the LuxembourgGovernment contests the failure to fulfil obligations only in a formal sense.

37.

In those circumstances, since the agreements between the BLEU and the Republicof Mali, the Togolese Republic, the Republic of Senegal and the Republic of Côted'Ivoire were not adjusted within the prescribed periods, the actions brought by theCommission must be regarded as well founded.

38.

Accordingly, by concluding and maintaining in force the agreements on cargo-sharing arrangements with the Togolese Republic (C-171/98 and C-202/98) and theRepublic of Mali (C-201/98 and C-202/98) and by failing either to adjust theagreements with the Republic of Senegal and the Republic of Côte d'Ivoire

(C-201/98 and C-202/98) in such a way as to provide for fair, free and non-discriminatory access by Community nationals to the cargo shares due to Belgiumand Luxembourg or to denounce those agreements, the Kingdom of Belgium(C-171/98 and C-201/98) and the Grand Duchy of Luxembourg (C-202/98) havefailed to fulfil their obligations under Regulation No 4055/86, in particular Articles3 and 4(1) thereof with respect to the Republic of Senegal and the Republic ofCôte d'Ivoire and Article 5 thereof with respect to the Republic of Mali and theTogolese Republic.

Costs

39.

Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to beordered to pay the costs if they have been applied for in the successful party'spleadings. Since the Kingdom of Belgium has been unsuccessful in Cases C-171/98and C-201/98, it must be ordered to pay the costs. Since the Grand Duchy ofLuxembourg has been unsuccessful in Case C-202/98, it must be ordered to pay thecosts.

On those grounds,

THE COURT (First Chamber)

hereby:

1. Declares that, by concluding and maintaining in force the agreementscontaining cargo-sharing arrangements with the Togolese Republic(C-171/98 and C-202/98) and the Republic of Mali (C-201/98 and C-202/98)and by failing either to adjust the agreements with the Republic of Senegaland the Republic of Côte d'Ivoire (C-201/98 and C-202/98) in such a wayas to provide for fair, free and non-discriminatory access by Communitynationals to the cargo shares due to Belgium and Luxembourg or todenounce those agreements, the Kingdom of Belgium (C-171/98 andC-201/98) and the Grand Duchy of Luxembourg (C-202/98) have failed tofulfil their obligations under Council Regulation (EEC) No 4055/86 of 22December 1986 applying the principle of freedom to provide services tomaritime transport between Member States and between Member Statesand third countries, in particular Articles 3 and 4(1) thereof with respectto the Republic of Senegal and the Republic of Côte d'Ivoire and Article 5thereof with respect to the Republic of Mali and the Togolese Republic;

2. In Cases C-171/98 and C-201/98, orders the Kingdom of Belgium to pay thecosts and, in Case C-202/98, orders the Grand Duchy of Luxembourg to paythe costs.

JannEdward

Sevón

Delivered in open court in Luxembourg on 14 September 1999.

R. Grass

P. Jann

Registrar

President of the First Chamber

1: Language of the case: French.