Case Law: Brasserie du Pêcheur

2 Colum. J. Eur. L. 359 (1996)

Petra Foubert. Assistant, Institute for European Law, Katholieke Universiteit Leuven.

Joined Cases C-46/93 and C-48/93, Brasserie du Pêcheur SA and Factortame, judgment of March 5, 1996, not yet reported  Member State liability for damage; Breaches of Community law attributable to the State; Breaches attributable to the national legislature; Conditions for State liability; Extent of reparation The Francovich’ judgment contains far-reaching principles on Member State liability for infringements of Community law. From that day, it was clear that Member State liability was not dependent on the existence of a national system of public tort liability. The decision did, however, not address every aspect of the matter. Brasserie du Pcheur offered the Court an opportunity to provide further clarification, in particular on Member State liability in cases other than failure to implement a directive and about the Community’s criteria for granting individuals the right to reparation.

1. Facts and Procedure

Brasserie du Pêcheur SA, the appellant in the main proceedings in Case C-46/93, is a French brewery based at Schiltigheim (Alsace). Until 1981, it exported beer to the Federal Republic of Germany. In late 1981, however, it was forced to discontinue the exports because the German authorities objected that the beer it produced did not comply with the German Reinheitsgebot (purity requirement) laid down in the Biersteuergesetz (Law on Beer Duty). In the Commission’s view, certain provisions of the Biersteuergesetz were contrary to Article 30 of the EC Treaty, and the Commission brought an action under Article 169 of the Treaty against the Federal Republic of Germany for failure to comply with its obligations under the Treaty. By a decision of March 12, 1987, the Court of Justice held that the German prohibition on marketing beers imported from Member States which did not comply with the Biersteuergesetz was incompatible with Article 30 of the Treaty. Brasserie du Pêcheur consequently brought an action against the Federal Republic of Germany for reparation of the loss suffered by it between 1981 and 1987 as a result of that import restriction, seeking damages. The action was dismissed by the trial court, and then appealed by Brasserie du Pecheur to the Bundesgerichtshof (Federal Court of Justice).

On December 16, 1988 Factortame and a number of other individuals and companies incorporated under the laws of the United Kingdom brought an action before the High Court of Justice, Queen’s Bench Division, Divisional Court (hereinafter “the Divisional Court”), in which they challenged the compatibility with Community law of Part II of the Merchant Shipping Act 1988. The Act provided for the introduction of a new register for British fishing boats and made registration of such vessels, including those already registered in the former register, subject to conditions relating to the nationality, residence and domicile of the owners. Fishing boats ineligible for registration in the new register lost the right to fish. The new system entered into force on December 1, 1988, but registration in the new register was not required until April 1, 1989. The Divisional Court suspended the application of the new registration system and stayed the proceedings pending a preliminary ruling by the Court of Justice. In answer to the questions referred by the Divisional Court, the Court held, in its Factortame II decision, that Part II of the Merchant Shipping Act was contrary to Community law and, in particular, to Article 52 of the Treaty (freedom of establishment). In the meantime, on August 4, 1989, the Commission had brought infringement proceedings against the United Kingdom. By separate document, it also applied for, and was granted, interim measures ordering the suspension of the acts nationality conditions on the ground that they were contrary to the Treaty. Pursuant to that order, the United Kingdom adopted provisions amending the new registration system with effect from November 2, 1989. By judgment of October 4, 1991, the Court confirmed that the registration conditions challenged in the infringement proceedings were contrary to Community law.

On October 2, 1991, the Divisional Court made an order designed to give effect to the Court’s judgment in Factortame II and, at the same time, directed the claimants to give details of their claims for damages against the Secretary of State for Transport. The compensation sought by the claimants was based on damage, including expenses and losses incurred from the entry into force of the new legislation (on April 1, 1989) until its repeal (on November 2 of the same year).

Both national courts were doubtful as to the interpretation of the principle of State liability for damage caused to individuals by infringements of Community law attributable to the State,9 as derived from the Francovich judgment. They decided to stay the proceedings and to refer a number of questions to the Court for a preliminary ruling. The Court considered it advisable that the questions asked by the German and the British national court be dealt with at the same time and decided to join both cases.