Under international law, rarely is a country allowed to sue another country for breach of contractual agreements between the two countries. However, it is a different case when it comes to the European Union. The European Union is not only a bond between neighbouring nations, but also an economic partnership between them. The actions of one country will influence the economy and the way of life of other countries (Craig & de Burca, 2008). The best example of this would be the Greek Crisis. The meltdown of the Greece economy has been a cause of alarm and bailouts from the other European nations. Recently, the Spanish debt crisis has left the European Union in turmoil. The Union has established a set of contractual obligations that all member states must adhere to and honour. These obligations are not meant to scare away any potential new members of the union but rather to ensure that there is no exploitation within the union.
This paper will give an analysis of Article 258 TFEU. The paper will begin by first giving the major highlights of the article and defining major terms. The procedure for effecting Article 258 is then given, followed by court action in case adjudications reach the court. The paper ends with having a clear look at the court action and reaction of the member state towards the ruling.
It is with this thought in mind that the European Union provides an effective and efficient way of enforcing members to adhere to their obligations. The Union has set down procedures for dealing with any breach of Treaty obligations by a Member State. The commission on behalf of the Union can initiate enforcement actions; a member state can also initiate proceedings against another member state for breaching the treaty. However, although the second option exists in the books, it is rarely affected in practice (Craig & de Burca, 2008). Article 258 of the Treaty covers cases brought by the European Commission, while Article 259 covers cases brought by member states. No natural or legal person can bring proceedings against an errant Member State on their behalf or on the behalf of another person. However, an individual under the doctrine of direct effect can hold a member state at ransom if the state breaches Article 10EC of the Treaty. Member states can also be held responsible and sued for the actions of their citizens.
An infringement procedure can be initiated against a member state for many reasons, but in particular for the following reasons: if a member state breaches a Primary Law; if a Member State breaches a norm of Secondary law, which is a binding act of the Union; if one of the members breaches an international agreement agreed by the European Union on behalf of all the member states. The proceedings can also start in case of a breach of the general principles of law under the treaty and if a Member State breaches a ruling of the CJEU.
The European Court of Justice highlighted the need to observe the rules and contracts of the Union more than forty years ago in Costa v ENEL, in case 6/64. It was upheld in this case that failure to uphold the rules of the Union would involve questioning the legal basis for the existence of the community itself (Craig & de Burca, 2007).
In its initiation, Article 258 was drawn to be a key mechanism for enforcing adherence to the European Union law. However, over time, the European Union has established the doctrines of indirect effect, direct effect, and state liability. These doctrines govern the rules whether the state is responsible to individuals or not. Direct action under Article 258, therefore, forms part of the enforcement of the European Union law (Fairhurst, 2010).
Article 4(3 TEU) provides that all the Member States of the European Union should take any appropriate measure, whether particular or general, to ensure complete fulfilment and adherence to obligations arising from the treaties or from acts of the institutions of the community. The article also provides that a Member State shall provide a favourable environment for the fulfilment of the obligations, and that it will not engage in any activity that will curtail or jeopardize the achievement of the obligations (Forster, 2010). This article serves to ensure that the member states are aware of their responsibilities pertaining to the treaty. The article binds the Member States in all their actions. It makes the states aware that all their actions affect the entire union in one way or another, and it is their duty to ensure that they are in line with the set objectives of the union (Hartley, 2010).
Failure and Breach
A Member State can be held responsible for either a failure or a breach of obligation. It is, therefore, vital to understand the meaning of the two words under the definition of the European Union. According to Kaczorowska (2010), a member of the European Union fails to honour its contractual obligations in the following circumstances: if the member state applies a national law that is incompatible with the laws of the European Union (Forster, 2010). Here, the members should have the laws of the European Union in their mind while they are formulating their own laws. In other words, the laws of the Union are more superior to respective national laws. Secondly, if a member adopts a legislative act that contravenes the EU law, it is deemed as a failure. Here also, a member state should compare all the legislations it intends to adopt to ensure that they do not contradict the superior EU law (Hartley, 2010). The third instance of failure is when a member blindly refuses to fulfil the obligations of the Union. A failure to act can also constitute a failure under Article 258. If a member fails to act within the prescribed time, it is also a failure, and the member state can be sued at the European Court of Justice.
On the other hand, a breach concerns a specific, pre-existing, and precise obligation. A breach refers to a breach of a provision of the Treaty or any other binding legislation under the Act. Several cases can help highlight the offenses the commission can bring on behalf of the member states. For example, in case Commission v Belgium, in 1987, Belgium was deemed to have failed its obligations under the Treaty because of late adherence to a pollution directive (Forster, 2010). In case Commission v France, French farmers for over a decade protested against agricultural imports from other European nations. The government of France, however, took no action against the farmers. The European Union is a free trade area where international trade is allowed (Craig & de Burca, 2007). Member states can export or import from any other Member State. The failure of the government to stop the farmers from protesting was an indication that they were supporting the farmers, and subsequently, breaching the Treaty. The European Court of Justice found France guilty of breaching its obligations under Article 4 TEU. This is because of its failure to take any preventative measures (Craig & de Burca, 2007).
There are dozens of major ways through which the Commission discovers that a Member State has committed any violations of the Treaty. The Commission can gather the information from complaints by other member states, through their constant investigations, complaints from third parties, from the mass media, from national official journals or from questions and petitions that the European parliament raises. Examples:
In Star Fruit Company v Commission, Case 247/87- the company had made numerous submissions to the Commission concerning breaches of the European Law by France. This was in relation to how the banana market in France was organized. The company was suing the Commission for its failure to act on the complaints of the company. The presiding court ruled in favour of the Commission, as the Commission has no duty to any individual. The court held that the Commission had discretion on whether to commence proceedings against France or not. However, from this case, the Commission discovered France’s breach of the Treaty. In addition, the Commission is under no legal obligation to keep the complainant aware of any progress of their proceedings. (Kent, 2001)
The sole defendant in Article 258 of the treaty is a Member State that is under investigation. The term Member State has been extended to refer to any arm of the government: the judiciary, legislature, or executive.
For example, in case 77/69 Commission v Belgium, the Commission had sued Belgium for its failure to amend a Belgium tax legislation that was in contravention with European Union law. In its defence, Belgium argued that it was not responsible for failing to amend the law, rather its Parliament was. The court held that the state of Belgium was responsible regardless of the agency of state that was responsible for ensuring adherence to the law. By virtue of failure of its parliament, Belgium was held in breach of the UE law.
The Procedure for Execution of Article 258
The European Commission is the guardian of the Treaty, and by virtue of this, it is responsible for enforcing adherence to the statutes. Specifically Article 17(1) provides that:
The Commission shall promote the general interest of the Union and take appropriate initiatives to that end. It shall ensure the application of the Treaties, and of measures adopted by the institutions pursuant to them. It shall oversee the application of Union law under the control of the Court of Justice of the European Union. (Hartley, 2010)
The article above gives the Commission the mandate to initiate legal proceedings against any of its members in order to protect the interests and well-being of other signatories to the Treaty. The power to exercise this mandate is specified in Article 258 TFEU:
If the Commission considers that a Member State has failed to fulfil an obligation under the Treaties, it shall deliver a reasoned opinion on the matter after giving the State concerned the opportunity to submit its observations. If the State concerned does not comply with the opinion in the period laid down by the Commission, the latter may bring the matter before the Court of Justice. (Hartley, 2010)
The litigation is a two-step procedure involving the administrative stage and the judicial stage. The proceedings only head to the European Court of Justice after the end of the administrative phase. Having the pre-litigation or administrative phase grants the Commission the opportunity to weigh and gauge the nature of the breach and the extent of the alleged infringement; it enables the Commission to determine the seriousness of the infringement (Steve, 1999). The phase also grants the member state that is being sued the opportunity to know their right to a reasonable defence. Thirdly, the phase gives both parties a chance to familiarize with each other before the proceedings. The two parties can resolve their feud before the judicial stage.
The Administrative Stage
In this phase, the Commission investigates the Member State to determine whether there was any breach or failure to comply with the provisions of the Treaty. These obligations may fall under the European Commission Treaty, under agreements reached with the European Union, under Article 218 or under secondary agreements (Weiler, 1991). It is vital to note that this stage is an informal stage; however, the Member State under investigation is bound by the Treaty to cooperate with the investigators. Failure to do this will amount to a further breach by the Member State. The country under investigation should not withhold any relevant information from the Commission.
If there is enough reason to suspect a breach, the Director General of the Union Policy under investigation will write to the member state that is accused of having breached the provisions of the Treaty. The letter is known as the letter of formal notice. The letter lets the Member state know that the Commission suspects that there is a violation of the Treaty (Horspool & Humpreys, 2006). The state is also given an opportunity to comment on its non-compliance with the Treaty (Case Study Commission v Italy). If the Commission deems the explanation from the member state to be insufficient, it will proceed by offering what is called a reasoned opinion (Weiler, 1991).
This is a confidential opinion that is delivered to the member state. According to Lutticke, the communication cannot be challenged, nor is it legally binding to the member state. The opinion spells out the reasons of law and fact that convinces the Commission that the member state is breaching the provisions of the Union. In addition, the state is made aware of the measures that both parties can take to ensure that the breach comes to an immediate halt. Case 7/61 of Italy v Commission (Pork Inputs) spells out that, as long as the Commission gives its reasons for its suspicions, the Commission is not required to set its case in its entirety (Steiner, Woods, & Wigg-Flesner, 2007).
The delivery of the opinion ends the administrative phase; the Commission has it in its discretion to transfer the case into the judicial phase. Statistics show that the administrative phase is highly effective with more than fifty percent of the mentioned cases failing to reach the judicial phase.
Situations that End Proceeding with Article 258
As written above, a majority of cases do not go beyond the administrative phase. The first reason is if there is a likelihood of reaching a solution or if the court case is delayed. Secondly, if the effects of the breach of the Treaty are minor, and thirdly, if there is a possibility that the provision that has been breached will be amended in the near future, the case comes to a halt. If the country agrees to rectify the breach, it has a right to be given enough time to do so. In case the state is not awarded enough time, the European Court of Justice can dismiss a case that bases on inadequate time limits.
The Judicial Stage
It is very rare for an enforcement case of one nation against another, i.e. under Art. 259. If the enforcement is under Article 258, then the European Court of Justice has an obligation to pursue the complaint in order to provide an amicable solution and ensure the rectification of the breach. Although the case is against the state, national governments appear as the defendants. This precedent was set in case 77/69, Belgium v Commission. No action has ever been taken against a violation by a national court. This is probably because it would undermine the powers of the Judiciary. In the Cohn Bendit case, the French national Court failed to comply with the provisions of the Treaty, but the European Court of Justice took no action. The Commission cannot raise new allegations against the Member State in the course of the proceeding; the ECJ only hears cases that have passed the administrative phase (Tobler &Beglinger, 2010).
The ECJ has dismissed a majority of defences raised by member states. The court only entertains defences that have a basis on denial of obligation.
Force Majeure refers to unforeseeable and abnormal circumstances that are beyond the control of the party involved, whose consequences would not have been avoided through the exercise of due care and diligence. The precedence was set at Case 96/ 86, Ministry of Agriculture v McNicholl. In the Commission v Italy case, the ECJ accepted Force Majeure on the premise that the terror attack on a data processing centre delayed the implementation of an EU directive (Steiner, Woods, & Twigg-Flesner, 2006). However, a delay of four years after the bombing was inexcusable.
Political upheavals and difficulties are not admissible defences at the European Court of Justice. Reciprocity is also not a defence under the ECJ. Reciprocity is saying that you breached your contractual obligations because other parties breached the same violations and were not punished.
Once the European Court of Justice issues a judgment, the concerned member state is bound by it. If the Commission deems that the State does not comply with the ruling, it can bring back the case at the ECJ. A payment is levied in relation to each extra day the country fails to comply with the court ruling.