Case Commentary: Costa V Enel 1964

Azzedine El Mourabet Marouf

M1 ORG

EU Legal Proceeding

Case Commentary: Costa V Enel 1964

In 1962, Italy decided to nationalize the production and distribution of electricity, by regrouping the assets of the electrical companies within the company ENEL. A shareholder of one of the companies harmed by this nationalization, Flaminio Costa, refused to pay his electricity bills. Assigned to a court in Milan, he justified his position by asserting that this nationalization was contrary to the Treaty of Rome more precisely about the Article 37 of the Treaty, biding monopolies to ensure respect for the principle of the free movement of goods. This argue force The Milanese court put a preliminary question to the Court of Justice.

Italian Government defend himself by saying that the request of the Milanese court was unfounded because the case was only about national law. On the contrary, M Costa support the idea that the case should be heard by the CJEC. Moreover, law about nationalization is posterior to the treaty. Thus, Italian government argued that even if the law is contrare, the case only concerns Italian government.

In its judgment of July 15, 1964, the Court declared that the law resulting from the European institutions is integrated into the legal systems of the member states and is binding on their jurisdiction. The court did’nt pronounce about the defauit payment of Mr Costa but affirmed for the first time that European law takes precedence over domestic law. The CJEC concluded that the objectives of the European Union will not be achieved if the force of EU law is weakened by giving preference to violations of domestic law. More importantly, the CJEC assert for the first time that European Law, by being a part of the national jurisdictions of member states, take precedence over domestic law.

Could the European Law from the Treaty of Rome can prevail over the Italian domestic Law?

The first step is to see how the Costa V Enel judgment acts as a means of recalling the principles set out a year earlier in the Van Gend and Losse case, that is to say the existence of a European jurisdictional order (I) . The real innovation that result from Costa V Enel cas is the affirmation of a supreme European legal order, a real upheaval in the conception of international organizations (II). This case law will firmly mark the identity of the CJEC, it will maintain this position for years to come (III)

1. The existence of an autonomous jurisdictional order: Costa V Enel as the reminder of the disruptive Van Gend and Loos case

The Italian government maintains the fact that the case should not go to CJEC because only national law had been applied to the case: “A national court, it is claimed, cannot have recourse to this procedure when, for the purposes of deciding a dispute It has only to apply a domestic law and not a provision of the Treaty”.  Italian Government assure that the case doesn’t not enter into the scope of Article 177 of the Treaty of Rome. The article makes provision for national courts to ascertain from the Court of Justice its views on the status and meaning of Community law. Thus, because the case is relate to national legislation, the Court cannot theoretically examinate the case since it is only upon the initiative of the state to do so as its clearly mentioned by CJEU :  « National courts against whose decisions, as in the present case, there is no judicial remedy, must refer the matter to the court of justice so that a preliminary ruling may be given upon the ' interpretation of the treaty ' whenever a question of interpretation is raised before them . This provision gives the court no jurisdiction either to apply the treaty to a specific case or to decide upon the validity of a provision of domestic law in relation to the treaty, as it would be possible for it to do under article 169 . »

However, the Court still give himself competence to acknowledge the case. To do so, CJEC extent the scope of the Article 177.  While there make themselves clear by saying that they will do not give decision upon the validity of Italian legislation “a decision should be given by the court not upon the validity of an italian law in relation to the treaty”., they seen the case as a way to interpreted and clarify the treaty specially the article 37:  “Member States shall adjust any State monopolies of a commercial character so as to ensure that no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States.” Thus, CJUE make himself competent to consider the case : “Nevertheless, the court has power to extract from a question imperfectly formulated by the national court those questions which alone pertain to the interpretation of the treaty . …. upon the interpretation of the abovementioned articles in the context of the points of law stated by the giudice conciliatore”

The Italian government maintained its position by asserting that the national judge should not enforce a treaty law, since the treaty only affects the states. For it to have effects on national legislation, the texts of the treaties must have been transposed. It was then the classic consideration of treaties at that time. Indeed, treaty had effect only under the will of the state. However, the CJEC reaffirms the specificity of the state’s commitments to the Treaty of Rome. Thus, CJEC positioned himself as a supra-national organization and independent of national legal orders: "By contrast with ordinary international treaties, the EEC treaty has created its own legal system which, on the entry into force of the treaty, became an integral part of the legal systems of the member states and which their courts are bound to apply”. In other words, the rules of the treaty do not need to be transposed to have an effect on the state. If the legal rule is perfect, the judge has on his hand two the legal order to be applied, the national legal order and the legal order of the European community. :  “The precedence of community law is confirmed by article 189, whereby a regulation ' shall be binding ' and ' directly applicable in all member states '. this provision, which is subject to no reservation, would be quite meaningless if a state could unilaterally nullify its effects by means of a legislative measure which could prevail over community law.”

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