A decision about the prevalence of the unity and consistency of EU law
By 4 February 2011 the European Union Civil Service Tribunal (CST) filed an order in which they dismissed application brought by Mr. Arango Jaramillo and other staff of the European Investment Bank (EIB) on the ground that it was out of time. The application concerned for annulment of the EIB decision to increase its contributions to the pension scheme and also an order that the EIB pay the Applicants damages. The members of the staff appealed the decision of the CST before the General Court of the European Union (GC).1
The GC however dismissed the appeal on the ground that in the absence of any provision setting the time-limits for bringing proceedings applicable to disputes between the EIB and its members of staff, such proceedings must be brought within a reasonable period of time, which was to be assessed in the light of the circumstances of the case. In the view of the GC the period of three months for bringing proceedings which was set out in a staff regulation, applicable for other individuals than those of the EIB, could serve as a “relevant point of comparison” (C-334/12 RX II, para. 15) and that such a time limit should be considered as reasonable. The GC deduced “by argument a contrario … that any action brought by an EIB staff member after the expiry of a threemonth time limit, extended on account of distance by a single period of ten days, must, as a general rule, be considered not to have been brought within a reasonable period.”
Judgment of the European Court of Justice
The European Court of Justice (ECJ) considered two specific grounds for review of the GC judgment. Firstly, whether the GC adopted an interpretation consistent with the case-law of the Courts and secondly whether the GC’s approach was such as to undermine the right to an effective legal remedy as provided for in Article 47 of the Charter of Fundamental Rights. The ECJ pointed out that the GC paradoxically had stated that the question of whether an action for annulment has been brought within a reasonable period requires account to be taken of all of the circumstances of the case. However the GC dismissed the action concerned without taking into consideration the particular circumstances of the case. The ECJ considered the GC to have departed from the case-law of the Court of Justice relating to the concept of ‘reasonable period’.
According to the Court, it follows from the case law (Joined cases C-238/99 P et al.) that in situations where the duration of a procedure is not set out in EU law, the concept of reasonable is to be determined “in the light of all of the circumstances specific to each case and, in particular, the importance of the case for the person concerned, its complexity and the conduct of the parties to the case” (para. 28). The Court further recognized that the institutions and bodies of the EU have a duty to allow for reasonable periods of time and that such reasonable period of time not is to be determined by reference to precise maximum limits determined in abstract manner (para. 30). Although previous case-law concerned the reasonableness of the duration of administrative procedures the Court concluded that it would be appropriate to apply the same concept of reasonable period to issues such as the one concerned in this case, where time-limits are not provided for in EU law for actions or applications to the Courts. The conclusion of this being that in both situations, the European Union Courts must take the circumstances of each specific case into account. The ECJ further stated that such an interpretation ensures that the concept of reasonable period is applied consistently.
The question was whether the GC by its judgment had undermined the right to an effective remedy as established in Article 47 of the Charter. The court noted that “the principle of effective judicial protection is a general principle of European Union law” (para. 40). By reference to case-law of the European Court of Human Rights (Anastasakis v. Greece, No. 41959/08, of 6 December 2011) the ECJ further noted that the right contained in Article 47 of the Charter is not absolute, however limitations of the right such as conditions for admissibility should not prevent litigants from availing themselves of an accessible legal remedy. Since the GC instead decided on the admissibility on grounds of a pre-determined period, the ECJ considered the staff to have been unable to defend their rights laid down by Article 47 of the Charter. The ECJ concluded on these grounds that the GC must have misinterpreted the concept of reasonable period as defined by previous case-law. The ECJ held that the interpretation of the concept by the GC was contrary to its own case-law and hence “fundamentally altered the very essence of the concept of reasonable period” (para. 46).
Since the Court found that the GC judgment was clearly contrary to previous case-law and the concept of reasonable period, including the taking into account the circumstances in each case, the ECJ also found it necessary to consider if and to what extent the judgment affected unity or consistency of EU law. In this regard the ECJ pointed out four aspects to be considered:
the fact that the judgment of the GC was the first in which it dismissed an appeal against an order of the CST which itself dismissed an action for annulment on the ground of expired time-limit, without taking the circumstances into consideration. This means that the judgment at issue could constitute a precedent for future cases;
the GC by its interpretation of reasonable period departed from the established case-law of the Courts;
the errors of the GC relate to procedural concepts which are not limited to the specific circumstances of the case, but is also applicable regardless of the matter;
The concept of reasonable period and effective judicial protection have an important position in the EU legal order (para. 49 – 53).
The ECJ concluded that the four aspects together led to the GC judgment affecting the consistency of EU law and hence, in accordance with Article 62b of the Statute of the Court of justice of the European Union (The statute) it referred the case back to the GC.
There are many interesting aspects of this case, especially regarding the unity and consistency of EU law when considering previous case-law. The possibility for the ECJ to review GC judgments on ground of unity and consistency of EU law is a relatively new phenomenon. In accordance with Article 256 (2) Treaty of Functioning of the European Union (TFEU) the ECJ has the authority to review GC judgments, but only in exceptional cases, “under the conditions and within the limits laid down in the Statute, where there is a serious risk of the unity or consistency of the Union law being affected”. Article 62b of the Statute that
“[i]f the Court of Justice finds that the decision of the General Court affects the unity or consistency of Union law, it shall refer the case back to the General Court which shall be bound by the points of law decided by the Court of Justice. (…) [If,] however, having regard to the result of the review, the outcome of the proceedings flows from the findings of fact on which the decision of the General Court was based, the Court of Justice shall give final judgment.”
The first case in which the court applied the concept unity and consistency of EU-law to annul a GC judgment was in 2009 (Case C-197/09 RX-II). In that case the ECJ first established the four factors for determining whether or not a ruling from the General Court can be said to affect the unity and consistency of EU law (para. 62-65).
The possibility for the ECJ to review GC judgments in this way is important due to the guarding role the ECJ has over the interpretation and cohesion of EU law. As made clear by the Statute and by the Court in its judgment, the seriousness of the errors constitutes an important part of the procedure. The main aim is to ensure that an incorrect GC ruling will not be a part of the corpus of EU law. The ECJ has been given the power to ensure that the unity and consistency of EU law prevails, and as Advocate General Mazák concluded in his opinion to Case C-197/09 RX II the purpose of such a procedure is to safeguard “not the interests of the parties to those particular proceedings but the interests of Community law” (para. 5). Thus, the review procedure is important considering that the GC is not autonomous from the ECJ and its case-law has an important impact on the EU legal order. As Tracol argues:
“The review procedure aims at ensuring compliance with the hierarchy between the essential role of the Court of Justice and the secondary role of the General Court, since the logic of the review procedure authorizes the Court of Justice, through the inordinate power of self-referral, to impose its vision of the unity and consistency of EU law and its own case-law on the General Court.” (Common Market Law Review vol. 49, 2012, p. 1472)
The role of the ECJ in the review procedure of this kind is to examine whether a development of case-law made by the GC is well founded. However giving the ECJ jurisdiction to examine whether decisions of the GC is undermining the unity and consistency of EU law in practice might be that the ECJ can act when the GC develop the law in a direction the ECJ does not approve of. To go against precedence in practice means that the unity and/or consistency of EU law will be affected since a risk of effect results from the precedent, which is likely to be attached to such a decision of the GC. The review procedure can be said to exist in the interest of the ECJ and as Tarcol notices “[i.e.] to preserve the role of the Court of Justice as the supreme court of the Union in the interpretation of EU law” (Common Market Law Review vol. 49, 2012, p. 1470).
The doctrine of stare decisis does not formally exist in EU law and judgments of the Court only declare the pre-existing state of the law, however as shown above, the judgments of the Courts in fact do have a broader effect that is formally recognized. Having the possibility to overrule or declare invalid a judgment of GC, on the ground that the same is contrary to previous case-law, is a clear indication that the doctrine of stare decisis or binding precedent plays an important role in practice. The development of the EU legal order is to a large extent based on case-law, and as in the common law legal system, similar cases have been decided so as to give similar and predictable outcomes – the principle of precedent is such a mechanism that ensures that this goal is accomplished. It thus seems like the ECJ, in its role as the guardian of the EU law, can to a certain extent make use of this common law principle to ensure the unity and consistency of EU law, even if it does not formally accept the doctrine of precedent or stare decisis in the EU legal order. In our opinion, the risk of affecting unity and consistency of EU law is tantamount to departing from previous case-law, and hence the system of precedent is not so unthinkable in the European legal order, especially since the ECJ noted that one of the key points of the case was whether the GC had adopted an interpretation consistent with the case law of the Courts.The case addressed in this comment is the second one of its kind. Moreover, at the present there is a pending case before the Court, in which the ECJ will yet again review a GC judgment on grounds of unity and consistency of EU law. It remains to be seen what the outcome will be, however it does seem likely that the ECJ will continue to recognize the four factors mentioned above as decisive for the determination of whether or not a GC ruling has affected the unity and consistency of EU law.
by Sofia Falkner, Aljosa Noga & Amanda Lorentz
1 Case T-234/11 P