May case law digest
Rights of Residence
C-331/16 and C-366/16 K. v Staatssecretaris van Veiligheid en Justitie and H. F. v Belgische Staat
Judgment date 2 May 2018
K is of Croatian and Bosnian nationality and, before Croatia’s accession to the EU, made 3 unsuccessful attempts to claim asylum in the Netherlands. In 2015, the Dutch authorities agreed to lift their ban on K but declared him an undesirable immigrant on the grounds he was guilty of war crimes whilst in the Bosnian army.
H.F is an Afghan national who arrived in the Netherlands in 2000 and was unsuccessful with an asylum claim. In 2011, he and his daughter settled in Belgium. In 2013, H.F. submitted a fresh application to Belgium as a family member of an EU citizen, on the basis his daughter was a Netherlands national. Belgium refused this on the grounds he had also participated in war crimes. Both the Dutch and Belgian courts asked the Court of Justice to interpret the EU directive on the right of movement and residence of EU citizens.
The court pointed out that Member States may adopt measures restricting free movement and residence of EU citizens and their families on the grounds of public policy or public security, under which significant reasons to believe someone is guilty of war crimes or crimes against humanity may fall. However, past denial of refugee status cannot be used in the decision making; each case must be made on a case-by-case basis. Each individual must be subject to an overall assessment, including their personal conduct, the seriousness of the alleged crimes, their degree of involvement, grounds for excluding criminal liability and whether they have been convicted.
The court also observed that conduct showing a persistent hostile disposition to the values of the EU can constitute a genuine, present a serious threat to one of society’s fundamental freedoms. Therefore, Member States must weigh the threat of an individual to the fundamental interests of their society against the protection of the rights of EU citizens and their families. Finally, the court held thatto adopt an expulsion decision, due regard must be given to factors such as the length of their residence in the Member State, the time elapsed since the alleged crimes, their behaviour since then, their current threat to society and the solidity of their social, cultural and family links to the Member State.
T-197/17 Marc Abel and Others v Commission
Judgment date 4 May 2018
The General Court has dismissed the action for damages brought by 1,429 individuals following the adoption by the Commission of a 2016 regulation on pollutant emissions from vehicles.
This 2016 regulation defined the emission limits for nitrogen oxides during real driving emissions tests (“RDE tests”). 1,429 individuals brought an action against the EU seeking compensation for harm they claim to have suffered because of the Commission’s adoption of this regulation. It was argued this harm caused them material damage through a reduction of air quality and resultant deterioration in health, and non-material damage through their fears in that regard for themselves and those around them, and their fear linked to their loss of confidence in the EU.
The General Court dismissed the action as having no basis in law. For the EU to be held liable, an EU institution must have acted unlawfully, the harm alleged must actually exist and there must be causation between the EU’s conduct and the harm. The court held, without looking at the first and third conditions, that the individuals could not satisfactorily prove that the alleged damage is actual and certain, demonstrate its extent or prove that the damage affected them personally.
With regards to the material harm, only unspecific and general assessments of the emissions could be attempted, garnering inconclusive results. In relation to the non-material damage, the Court held that all the parties had a high awareness that air pollution was insufficient to establish a fear for their health so great as to affect their living conditions. In addition, individual feelings do not constitute non-material damage.
C-82/16 K.A. and Others v Belgian State
Judgment date 8 May 2018
Belgium ordered several non-EU nationals to return to their respective countries and banned them from entering Belgium on the grounds of being threats to public policy. They then submitted residence permit applications in Belgium based on their status as either a dependent relative in the descending line of a Belgian citizen, the parent of a minor Belgian child or a lawfully cohabiting partner in a stable relationship with a national citizen. Belgium did not consider these applications on the basis that the individuals were subject to entry bans and, as a matter of national law, these bans cannot be suspended unless there is an application for their withdrawal lodged outside Belgium.
The Belgian court referred the question to the Court of Justice, asking whether the EU directive on illegal staying or Article 20 TFEU (EU citizenship) are applicable in situations where applications are not considered due to entry bans and, in addition, where the various EU citizens concerned do not travel regularly to other Member States or have not developed family lives with the non-EU citizens during genuine period of residence in Member States other than Belgium.
The Court referred to its case law, which details that even though EU citizens have not made use of their freedom of movement, rights of residence must still be granted to their family members who are non-EU citizens. This is because the EU citizen may otherwise have to leave the EU, undermining the substance of their rights and undermine the effectiveness of EU citizenship.
The Court stated, in relation to relationships of dependency, that adults can live independent existences away from their family and, therefore, a derived right of residence is therefore only conceivable where there could be no separation from the individual and the person upon whom they are dependent. It was also stated by the Court that, where individual bans are justified on public policy grounds, such grounds cannot automatically lead to a refusal to grant the non-EU citizen a derived right of residence.
T-712/16 Deutsche Lufthansa AG v Commission
Judgment Date 16 May 2018
In 2005, the Commission cleared Lufthansa to acquire Swiss on the condition that they comply with fare commitments given by both in relation to the Zurich-Stockholm and Zurich-Warsaw routes. Once a new air service provider began operations on the routes concerned. In 2013, Lufthansa and Swiss requested that the Commission waive the fare commitments because (i) the joint venture agreement between Lufthansa and Swiss had been terminated in 1995, (ii) the Commission’s policy had changed with regard alliance partners in merger reviews and (iii) there was now competition between Swiss and SAS/LOT. The Commission rejected that request, so Lufthansa brought an action before the General Court seeking annulment of the decision.
The Court said that the Commission’s decision should have been based on a careful examination of the whether the contractual conditions to bring about a waiving of the commitments had been met and that the Commission had failed to fulfil that obligation. In particular, the Commission did not examine the impact on points i and ii made by Lufthansa. The Commission could have considered a codeshare agreement entered into by Swiss and SAS, and whether that restricted competition. However, it did not undertake a concrete analysis of that agreement.
The Court therefore held that the Commission had made a manifest error in relation to the Zurich-Stockholm route and held their decision in relation to this should be annulled. However, as regards the Zurich-Warsaw route, there had been no change in the contractual relationship between Swiss and LOT since 2005 (when the fare commitments were made) and therefore the Commission’s failings were not sufficient to cause the decision to be annulled.
Unfair terms in consumer contracts
C-147/16 Karel de Grote-Hogeschool VZW v Susan Romy Jozef Kuijpers
Judgment Date 17 May 2018
Ms Susan Kuijpers was a student in Belgium who was not able to pay the €1,546 she owed in respect of registration fees and study trip costs. She therefore entered into a contract with the educational establishment whereby they would advance her the money and she would pay it back (interest free) across 7 months. This contract provided for 10% interest and an indemnity in relation to debt collection in the event of default (without formal notice). Ms Kuijpers received a formal notice but remained in default.
The establishment brought an action against her and the Belgian court referred it to the Court of Justice, wondering whether, in the context of default procedure, they could examine whether the contract fell within the scope of an EU directive on unfair terms in consumer contracts. It also wondered whether the educational establishment financed by state funds must be regarded as a ‘seller or supplier’ within the meaning of the directive.
The Court recalled its case law under which a national court is obliged to examine whether the contract containing the term falls within the scope of the EU directive. In relation to the notion of ‘seller or supplier’, this is intended to be a broad definition. Moreover, the Court held the case does not directly concern the educational establishment but rather a service provided by them which is complimentary and ancillary to their normal activity. The supply of the contract was therefore fundamentally a contract for credit and fell within the meaning of ‘seller or supplier’ within the directive.
European Parliamentary Procedure
Judgment Date 31 May 2018
Mr Janusz Korwin-Mikke is an MEP who, at plenary sessions of the Parliament on 7 June 2016 and 1 March 2017 made shocking comments in respect of migrants and women. By decision of 5 July 2016 and 14 March 2017, the President of the Parliament penalised Mr Korwin-Mikke through temporary forfeitures of his entitlement to a daily subsistence allowance and temporary suspensions from parliamentary participation. In the latter decision, he was also prohibited from representing Parliament for a year. The Bureau of the Parliament upheld these decisions so two actions were brought before the General Court for the annulment of these decisions and reparation for losses allegedly caused.
The General Court noted that freedom of expression could be restricted in certain circumstances, but only if the restriction was (i) ‘prescribed by law’, (ii) intended to achieve a general-interest objective and (iii) not excessive. In addition, MEP’s freedom of expression must be afforded greater protection given the importance Parliament plays in democracy. In its original version (relevant to case T-770/16), Rule 166 applies only to actions of MEPs, not comments. In an amended version (relevant to case T-352/17), it does allow for penalties ‘in serious cases of disorder or disruption of Parliament in violation of principles laid down in Rule 11’. However, a breach of Rule 11 does of itself amount to a ground for imposing a penalty; there must also be a disruption of Parliament.
The Court found that Mr Korwin-Mikke’s comments had not caused any disorder in the sessions in which they were made (this was acknowledged by the Parliament). The Parliament were therefore not entitled to impose any sanctions and the Court annulled the decisions of the Bureau. In relation to compensation, the Court referred to the fact that Parliament would have to reimburse Mr Korwin-Mikke so he would incur no financial loss. In relation to non-pecuniary loss, there was nothing to suggest that the decisions caused him pain or suffering. As such, his claims for reparations were rejected.
Advocate General Opinions
Unfairness of contractual terms
C-51/17 OTP Bank Nyrt and OTP Faktoring Koveteleskezelo Zrt v Terez Ilyes and Emil Kiss
Opinion delivered 3 May 2018 by Advocate General Evgeni Tanchev
In 2008, Ms Ilyes and Mr Kiss entered into a credit contract with a Hungarian Bank for Swiss francs. The repayments were, however, in Hungarian Forints. The borrowers accepted the risks involved with currency fluctuations. The exchange rate then changed considerably to their detriment which significantly increased the repayments.
The borrowers brought legal proceedings in 2013 against OTP Bank and OTP Factoring. As part of the proceedings, the question of whether the borrower taking on exchange rate risk was unfair and therefore not binding. In the meantime (2014), Hungary adopted new laws which removed unfair terms from these contracts and converted virtually all of them to Hungarian Forints. They did, however, keep in place the exchange rate risk on the borrow. The Hungarian Court has therefore asked for an assessment on the validity of this term despite it having been confirmed by the Hungarian legislator.
In his opinion, Advocate General Tanchev recalled that the exclusion of terms reflecting mandatory statutory provisions from the scope of application of the directive is justified by the fact that it may be legitimately supposed that the national legislature has struck a balance between all the rights and obligations of the parties to the contracts concerned. However, that assumption does not hold true where the statute in question was passed after that date on which the contract was agreed and with a view to implementing a judicial finding of non-compliance with the directive. He also stressed that the legislative response of a Member State to a finding of a Court that their law is incompatible with a directive cannot be excluded from judicial review. Finally, he proposed that a term which has become part of a foreign currency loan contract through legislation, and which places exchange rate risk on the borrower, does not reflect mandatory statutory or regulatory provisions and the national court can therefore examine whether it constitutes an unfair term not binding on the consumer.
C-207/16 Ministerio Fiscal
Opinion delivered 3 May 2018 by Advocate General Henrik Saugmandsgaard Øe
Spanish police asked an examining magistrate, in an investigation concerning the robbery of a wallet and mobile phone, to grant them access to the ID of those using telephone numbers activated from the stolen telephone for a period of 12 days before the theft. The magistrate refused, due to national law that the theft did not constitute a ‘serious’ offence. After this decision, the Spanish legislature introduced two alternative criteria for the seriousness of an offence for these purposes; a substantive criterion relating to terrorism and organised crime and a normative criterion laying down a threshold of a minimum of three years imprisonment. The Spanish Court referred to the Court of Justice questions concerning the setting of the seriousness threshold for offences beyond which infringements of fundamental rights may be justified when authorities seek access to personal data.
In his opinion, Advocate General Henrik Saugmandsgaard Øe stated that the request by the police constituted an interference with the rights of a private life and protection of personal data. In any case, the Court of Justice – in its judgments in Digital Rights Ireland and Others and Tele2 established a link between the seriousness of the interference and the seriousness of the reason justifying the interference. Therefore, where there is an offence serious enough to justify derogating from the principle of electronic communications being confidential, the interference must necessarily be serious too. That essential element is lacking in this case.
However, the Attorney General stated that the nature of interference in this case is different to the two cases above as it relates to a targeted measure intended to allow access to a limited group of people for a limited period. This means the potentially harmful effects for the persons concerned by the request for access are both slight and limited, given there would be no public disclosure. Consequently, the interference is not particularly serious. It is only where interference suffered is serious that the offence capable of justifying it must be serious. Where the interference is not serious (and so do not entail a serious infringement of privacy), even criminal offences which are not particularly serious may justify such interference.
The Attorney General’s conclusion was that the measure requested by police entails interference with fundamental rights and does not attain a sufficient level of seriousness for such access to be confined to cases in which the offence concerned is ‘serious’.