Avis juridique important

Judgment of the Court of 18 April 1991. - Les Assurances du Crédit SA and Compagnie Belge d'Assurance Crédit SA v Council of the European Communities and Commission of the European Communities. - Action for damages - Directive - Article 57 (2) of the EEC Treaty - Export credit insurance operation. - Case C-63/89. European Court reports 1991 Page I-01799

Summary Parties Grounds Decision on costs Operative part

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1. Non-contractual liability - Conditions - Adoption of coordinating directives in the field of the freedom of establishment - Sufficiently serious breach of a superior rule of law

(EEC Treaty, Art. 215, second paragraph)

2. Free movement of persons - Freedom of establishment - Taking-up and pursuit of the business of direct insurance other than life assurance - Directives 73/239 and 87/343 - Scope - Exclusion of public export credit insurance operations - Lawfulness

(EEC Treaty, Art. 57(2): Council Directives 73/239 and 87/343)

1. The adoption of directives for the coordination of the provisions laid down by law, regulation or administrative action of the Member States concerning the taking up and pursuit of activities as self-employed persons provided for by Article 57(2) of the Treaty is generally difficult, and for that reason, in this field, the competent Community institutions must be recognized as enjoying a discretion in relation to the stages in which harmonization is to take place.

Consequently, as is the case with the rules governing the Community' s liability in respect of legislative acts involving choices of economic policy, the unlawfulness of a coordinating directive is not in itself sufficient to establish the Community' s non-contractual liability. There is no non-contractual liability on the part of the Community unless there has been a sufficiently serious breach of a superior rule of law for the protection of the individual and the institutions concerned manifestly and gravely disregarded the limits on the exercise of their powers.

2. The exclusion of public export credit insurance operations from the scope of Directive 73/239, introduced by that directive and maintained by Directive 87/343, is not discriminatory because it takes account of the differences resulting from the legal and factual situation existing at one stage of the process of coordinating the national provisions in the field of insurance. In such operations and at that stage, protection for insured and third parties, which the abovementioned directives seek to provide, is provided by the State itself, so that the obligation to provide financial guarantees, prescribed by the directive for other export credit insurance operations, is not justified.

In Case C-63/89,

Les Assurances du Crédit S.A., whose registered office is in Namur, and Compagnie Belge d' Assurance Crédit S.A., whose registered office is in Brussels, represented by Nicholas Forwood Q.C. and Mark Clough, Barrister, of the Bar of England and Wales, and by Hervé de Liedekerke, of the Brussels Bar, with an address for service in Luxembourg at the Chambers of Messrs Elvinger and Hoss, 15 Côte d' Eich,

applicants,

v

Council of the European Communities, represented by Bernhard Schloh and Juergen Huber, Legal Advisers, acting as Agents, with an address for service in Luxembourg at the office of Joerg Kaeser, Manager of the Legal Directorate of the European Investment Bank, 100 Boulevard Konrad Adenauer,

and

Commission of the European Communities, represented by David Robert Gilmour, Legal Adviser, acting as Agent, with an address for service in Luxembourg at the office of Guido Berardis, a member of the Commission' s Legal Department, Wagner Centre, Luxembourg,

defendants,

ACTION brought under Article 178 and the second paragraph of Article 215 of the EEC Treaty for compensation for the damage caused by the exclusion of export credit insurance operations for the account of or guaranteed by the State from the scope of Directive 73/239/EEC of the Council of 24 July 1973 on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance (Official Journal 1973 L 228, p. 3), as amended by Council Directive 87/343/EEC of 22 June 1987 (Official Journal 1987 L 185, p. 72),

THE COURT

composed of: O. Due, President, G.F. Mancini, T.F. O' Higgins, J.C. Moitinho de Almeida, G.C. Rodríguez Iglesias (Presidents of Chambers), Sir Gordon Slynn, F.A. Schockweiler, M. Zuleeg and F. Grévisse, Judges,

Advocate General: G. Tesauro,

Registrar: J.A. Pompe, Deputy Registrar,

having regard to the Report for the Hearing

after hearing the oral argument presented by the representatives of the parties at the hearing on 11 July 1990,

after hearing the Opinion of the Advocate General delivered at the sitting on 23 January 1991,

gives the following

Judgment

1 By an application lodged at the Court Registry on 3 March 1989, Les Assurances du Crédit and Compagnie Belge d' Assurance Crédit S.A. brought an action under Article 178 and the second paragraph of Article 215 of the EEC Treaty against the Council and the Commission seeking compensation for the damage they claim to have sustained as a result of the exclusion of export credit insurance operations for the account of or guaranteed by the State from the scope of the First Council Directive (73/239/EEC) of 24 July 1973 on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance (Official Journal 1973 L 228, p. 3), as amended by Council Directive 87/343/EEC of 22 June 1987 (Official Journal 1987 L 185, p. 72).

2 The purpose of Council Directive 73/239, adopted on the basis of Article 57(2) of the EEC Treaty, is to coordinate national provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance, and to that end it contains provisions relating to the financial guarantees required of insurance undertakings.

3 In its original version, Article 2(2)(d) excluded export credit insurance operations for the account of or with the support of the State from the scope of the directive, pending further coordination which was to be implemented within four years.

4 The amending directive, Directive 87/343, continues the exclusion, "pending further coordination, [of] export credit insurance operations for the account of or guaranteed by the State, or where the State is the insurer".

5 Directive 87/343 also increases the financial guarantees required of certain insurance undertakings, in particular by requiring an equalization reserve to be set up (Article 15a inserted in Directive 73/239).

6 The applicants are private insurance companies carrying on the business of export credit insurance in Belgium, where they have their registered offices, and in the United Kingdom and France where Assurance du Credit operates through branch offices. They claim that Directive 87/343 and the Community institutions' delay in bringing export credit insurance operations for the account of or guaranteed by the State (hereinafter referred to as "public export credit insurance operations") within the scope of Directive 73/239 produce distortions of competition giving rise to damage for which they seek compensation. They claim that the damage is equal to the proportion of the financial cost of setting up the equalization reserve which they will be unable to pass on in their premiums because of the competition they face from public or quasi-public bodies which are not subject to the same requirements. They also ask the Court to order the Commission and Council to take all appropriate measures to bring to an end the illegal situation which is the cause of the alleged damage.

7 Reference is made to the Report for the Hearing for a fuller account of the facts, the procedure and the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

The claim for compensation

8 The applicants claim that damage was caused by the way in which the Council and the Commission exercised, in the insurance sector, the powers conferred on them by Article 57(2) of the Treaty.

9 Under Article 57(2), in the version prior to the amendments introduced by the Single European Act, the Council, acting on a proposal from the Commission and after consulting the European Parliament, is empowered, in order to make it easier for persons to take up and pursue activities as self-employed persons, to issue directives for the coordination of the provisions laid down by law, regulation or administrative action concerning such activities.

10 The implementation of harmonizing provisions of that kind is generally difficult because it requires the competent Community institutions to draw up, on the basis of diverse, complex national provisions, common rules which conform to the objectives laid down by the Treaty and obtain, as appropriate, either the unanimous agreement of the Council or the agreement of a qualified majority of its members.

14 The applicants claim firstly that certain provisions of Directive 87/343 are unlawful. In so far as that directive maintains the exclusion of public export credit insurance operations from the scope of Directive 73/239, they say that it infringes the general principle of equality of treatment, the principle of non-discrimination between public and private undertakings, the rules on competition laid down in Article 90(1) and Article 3(f) of the EEC Treaty, Article 52 of the Treaty, concerning the right of establishment, and Articles 92 and 54(3)(h) of the Treaty, on the prohibition of State aid.

15 It is clear from the second recital in the preamble to Directive 73/239 that it seeks to facilitate the taking-up and pursuit of the business of direct insurance other than life assurance by eliminating the divergencies which exist between national supervisory legislation, and by coordinating, in particular, provisions relating to the financial guarantees required of insurance undertakings.

16 The purpose of those guarantees is to provide adequate protection for insured and third parties in all the Member States. What is required to ensure adequate protection varies depending on the nature of the risks covered, the characteristics of the insurance undertakings in question and the conditions in which they carry out their operations. In order not to impose obligations which would be unjustified or disproportionate to the result to be achieved, the Community legislature took account of those various elements in defining the financial guarantees required.

17 Accordingly, the solvency margin which was introduced by Article 16 of Directive 73/239 and was designed to ensure that undertakings can cope with business fluctuations is, as the ninth recital in the preamble states, related to the overall volume of business of the undertaking and determined by reference to two indices of security, one based on premiums and the other on claims.

18 Similarly, the guarantee fund provided for by Article 17 of that directive, which is intended to ensure that undertakings possess adequate resources when they are set up and that in the subsequent course of business the solvency margin in no event falls below a minimum of security, is calculated by reference to the size of the risk in the classes undertaken (tenth recital in the preamble).

19 Finally, the wish to impose only those obligations which were necessary for the protection of insured and third parties also led the Council to exclude from the scope of the directive, and thus to exempt from the guarantees which it prescribes, certain mutual associations which, by virtue of their legal status, fulfil appropriate conditions as to security and financial guarantees (fourth recital in the preamble and Article 3 of the directive). To that same end, the Second Council Directive (88/357/EEC) of 22 June 1988 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 73/239/EEC (Official Journal 1988 L 172, p. 1) grants to policy-holders who, by virtue of their status, their size or the nature of the risk to be insured, do not require special protection in the State in which the risk is situated, complete freedom to avail themselves of the widest possible insurance market, and guarantees adequate protection to other policy-holders (fifth recital in the preamble).

20 Those principles were applied to the risk inherent in credit insurance, the special nature of which was underlined by the seventh recital in the preamble to Directive 87/343. The special nature of that risk justified an increase in the guarantee fund required of undertakings whose operations in this class of insurance exceeded a certain volume (seventh and ninth recitals in the preamble to Directive 87/343 and Article 17(2)(a) of Directive 73/239, as amended). The special nature of the risk also justified the introduction of the equalization reserve - but only in relation to undertakings whose credit insurance business amounted to more than a small proportion of their total business (fifth recital in the preamble to Directive 87/343) - provided for in Article 15a of Directive 73/239, as amended, whose purpose is to offset any technical deficit or above-average claims ratio arising in that class for a financial year.

21 However, with regard to public export credit insurance operations, the Council considered that the protection of insured persons normally provided by the directive was provided by the State itself (second recital in the preamble to Directive 87/343). That observation was the basis for provisionally maintaining the exclusion of such operations from the scope of the directive.

22 That exclusion, which the applicants claim is invalid, is consistent with the spirit and the purpose of Directive 73/239, as amended by Directive 87/343. Compared with other export credit insurance operations, public export credit insurance operations are in an objectively different situation in which the financial guarantees prescribed by the directive are no longer justified by the need to protect insured and third parties. Moreover, the exclusion applies only to public operations, irrespective of the legal status of the undertaking effecting such operations, and not to public insurance undertakings or undertakings acting on behalf of the State, which remain subject to the requirements laid down in the directive in respect of operations effected for their own account and not guaranteed by the State.

23 By maintaining the exclusion of public export credit insurance operations, Directive 87/343 thus took account of the differences resulting from the legal and factual situation existing at one stage of the process of coordinating the national provisions. It is not, however, the cause of discrimination which would constitute an infringement of the abovementioned provisions of the Treaty relied on by the applicants in support of their application.

24 However, it should be pointed out that if, in certain Member States, the conditions in which the State provided its guarantee or, more generally, its support for export credit insurance operations infringed the provisions of the Treaty, and in particular the provisions relating to competition and State aid, that would not render the directive on partial coordination at issue unlawful but might justify recourse to legal action to penalize infringement of those provisions.

25 The applicants also claim that Directive 87/343 is vitiated by misuse of powers on the ground that the new financial constraints which it imposes were demanded by the Government of the Federal Republic of Germany in return for its acceptance of the abolition of the rules on compulsory specialization for insurance undertakings, but they have not, in any event, adduced detailed argument before the Court to substantiate that submission.

26 Finally, the applicants allege that the Council and the Commission are at fault in so far as they failed to pursue the harmonization of national laws in the insurance sector within the period of four years laid down by Article 2(2)(d) of Directive 73/239, in its original version, before the expiry of which measures ought to have been adopted on coordination in the field of public export credit insurance operations.

27 That period was, in any event, not a mandatory period legally binding on the Community authorities; failure to comply with it does not therefore constitute a wrongful omission of such a kind as to establish the Community' s liability. Nor does the fact that Article 1 of Directive 87/343 postpones the application of Directive 73/239 to public export insurance credit operations, without giving other details apart from a reference to further coordination, constitute such an omission, since, for the abovementioned reasons, the Council has not acted unlawfully by adopting the contested provisions nor, a fortiori, manifestly and gravely disregarded the limits on the exercise of its powers.

29 It is therefore also unnecessary to determine whether those conclusions are admissible and, in particular, whether the objections of inadmissibility raised by the Council and the Commission can be upheld.

The application for an order from the Court requiring the Council and the Commission to bring to an end the situation which is the cause of the alleged damage

31 In response to the objections of inadmissibility raised by the Council and the Commission, the applicants rely, in their reply, on the second paragraph of Article 176 of the Treaty, concerning compensation for damage caused by an act declared void, and on Article 186 of the Treaty, relating to the interim measures which the Court may prescribe.

32 Without its being necessary to analyse the reasons why those provisions may not, in any event, serve as a legal basis for the applicant' s conclusions, it is sufficient to state that those conclusions, which seek an order from the Court requiring the institutions to suspend the application of certain provisions of Directives 73/239 and 87/343, or to replace them with new provisions, presuppose that the aforesaid provisions are unlawful. As consideration of the applicant' s claim for compensation has shown, that is not the case. Accordingly, this part of the application must be rejected.

33 For all the foregoing reasons, this application must be dismissed.

Costs

34 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the applicants have failed in their submissions, they must be ordered to pay the costs.

On those grounds,

THE COURT

hereby:

1. Dismisses the application;

2. Orders the applicants to pay the costs.