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Publication 08 Dec 2022 · International

General principles of the European Law in recent judgments of the Court of Justice of the EU

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General principles of law in judgments of the Court of Justice of the European Union

The general principles of EU law, together with the Treaties, make up the primary law of the European Union. The general principles have been developed in the case-law of the Court of Justice of the European Union (“CJEU”) based on national legal systems, international agreements made by the Member States and on EU law. Some of those general principles have also been acknowledged and codified in the Charter of Fundamental Rights of the European Union. 

The general principles are of key importance for the correct interpretation and application of EU law. They establish the boundaries within which those vested with rights may exercise them and the CJEU refers directly to those principles in its numerous judgments.

Below we discuss some of the general principles which are particularly important from the perspective of the matters we have been handling recently.

The principle of legal certainty

The principle of legal certainty has recently been cited by the CJEU, among others, in the cases where the CJEU decided on the rules applicable to limitation period calculation. In case C-267/20 (Volvo AB, DAF Trucks NV vs RM), the CJEU indicated that: “in order to ensure observance of the principles of legal certainty and the protection of legitimate expectations, the substantive rules of EU law must be interpreted as applying to situations existing before their entry into force only in so far as it clearly follows from their terms, their objectives or their general scheme that such effect must be given to them.” 

In case C-308/19 (Consiliul Concurenţei vs Whiteland Import Export SRL), the CJEU acknowledged the primacy of the principle of legal certainty over the principle that a national court is required to interpret the provisions of national law in conformity with EU law. In this case, the CJEU noted that the principle whereby national law must be interpreted in conformity with EU law is limited by general principles of law, including the principle of legal certainty, and cannot serve as the basis for an interpretation of national law contra legem.

However, in 5 judgments delivered in 2022 the CJEU held that the principle of res judicata, being the procedural manifestation of the principle of legal certainty, must in some circumstances give way to the principle of effectiveness of EU law (case C-600/19, joined cases C-693/19 and C-831/19, case C-725/19 and case C-869/19). All of these cases concerned the primacy of effective consumer protection under Directive 93/13 over the principle of res judicata. The fact that these cases concerned consumer protection seems to be of key importance to the acknowledgement of the primacy of the principle of the effectiveness of protection arising from Directive 93/13. In contrast, in an earlier case, C-126/97 (Eco Swiss China Time Ltd vs Benetton International NV), concerning relationships between business entities, the CJEU held that the principle of res judicata prevails even over the Treaty rules regarding competition protection. 

The principle of proportionality and the related prohibition of abuse of rights

The CJEU frequently refers to the principle of proportionality as a general principle of EU law in the context of penalties for infringement of EU law (e.g. in case C-452/20 (PJ vs Ufficio dei monopoli per la Toscana)). In one of its recent judgments, issued on 13 October 2022 in case C-431/21 (X GmbH & Co. KG vs Finanzamt Bremen), the CJEU noted that the nature and amount of the penalty imposed should in each individual case be proportionate to the gravity of the infringement, which it is designed to penalise.

The principle of proportionality of penalties also applies to consumer protection cases. The CJEU addressed this issue directly in case C-42/15 (Home Credit Slovakia), stating that: “while the choice of penalties remains within the discretion of the Member States, such penalties must be effective, proportionate and dissuasive”. 

The principle of proportionality is not only important for the evaluation of whether or not specific penalties are adequate. It may also be a useful tool for finding a balance between the interest of an individual and the general interest of the European Union and its citizens. The CJEU cited the principle of proportionality for that purpose in case C-44/79 (Liselotte Hauer). 

In this context, the CJEU may address the principle of proportionality in cases C-520/21 and C-140/22, which concern finding a balance between consumer protection and the general interest of the stability of the banking and financial system. The fact that protection of the stability of the banking and financial system is in the general interest of the European Union has been acknowledged in the case-law of the CJEU (in its judgment of 1 June 2022 in case T-481/17, and earlier in cases C-526/14, C-8/15 P to C-10/15 P and C-41/15). In cases C-520/21 and C-140/22, the CJEU may clarify whether consumer protection measures, which disregard the general interest of the European Union, are proportionate and may be applied. 

The principle that prohibits the abuse of rights is directly linked to the principle of proportionality. The prohibition of abuse of rights is well established in the case-law of the CJEU (cases C-373/97, C-255/02, C-196/04, C-321/05, and recently in cases C-251/16 and C-273/18). Crucially, it follows from the above-mentioned judgments that the prohibition of abuse of rights applies regardless of whether such rights have been set out in Treaties, resolutions or directives.

The principle of equality

The principle of equality is arguably the principle that the CJEU refers to most frequently (recently in cases C 598/19 and C-336/19). The principle requires that comparable situations not be treated differently and different situations not be treated alike unless such treatment is objectively justified.  

Whether or not a difference in treatment is objectively justified should be evaluated in an objective and reasonable manner. In its judgment issued in case C-127/0 (Société Arcelor Atlantique et Lorraine and Others), the CJEU linked the principle of equality to the principle of proportionality by stating that a difference in treatment is justified if it is proportionate to the aim pursued by the treatment.

The principle of equality has also been acknowledged directly in Article 20 of the Charter of Fundamental Rights. 

Prohibition of unjust enrichment

In light of the consistent case-law of the CJEU, the prohibition of unjust enrichment also constitutes a general principle of EU law (cases T-166/98, C-47/07, C-259/87 and C-76/17). In its judgment issued in joined cases C-295/04 to C-298/04 (Manfredi), the CJEU stated directly that: “Community law does not prevent national courts from taking steps to ensure that the protection of the rights guaranteed by Community law does not entail the unjust enrichment of those who enjoy them.”

The prohibition of unjust enrichment should be linked to the right to property acknowledged in Article 17 of the Charter of Fundamental Rights of the European Union. 

Obligation to show reasonable diligence in limiting the extent of a loss or damage

Finally, we would like to draw attention to a principle which is of special importance for redress-of-damage cases. The CJEU has acknowledged that a principle that is common to the legal systems of the Member States and a general principle of EU law is that an injured party must show reasonable diligence in limiting the extent of their loss or damage (joined cases C-104/89 and C-37/90 (Mulder)). 

The CJEU has repeated the same principle in its judgment issued in joined cases C-46/93 and C-48/93 (Brasserie du Pêcheur SA), indicating that in order to determine the loss or damage for which reparation may be granted, a national court may inquire whether the injured person showed reasonable diligence in order to avoid the loss or damage or limit its extent and whether, in particular, they availed themselves in time of all the legal remedies available to them.

The Audiolux case, or what is not a general principle of law

It should also be noted that the CJEU sometimes issues judgments where it concludes that a general principle of EU law cited by a party to the proceedings does not exist. This is true for case C-101/08 (Audiolux SA and Others) where the CJEU held that Community law does not include any general principle of law under which minority shareholders are protected by an obligation on the dominant shareholder, when acquiring or exercising control of a company, to offer to buy their shares under the same conditions as those agreed upon when an acquired shareholding conferred or strengthened the control of the dominant shareholder.

It follows from the above that when hearing the cases brought to it, the CJEU is right to have recourse to the general principles of law. When preparing a party’s position in proceedings before the CJEU, one should not disregard an analysis of the case from the perspective of the general principles of EU law.  

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International Disputes Digest - 2022 Winter Edition

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