Running Head: CONFLICT OF LAW IN THE EUROPEAN UNION 1

Conflict of Law in the European Union: How Supreme are EU Laws Over Member State Laws

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CONFLICT OF LAW IN THE EUROPEAN UNION 2

Conflict of Law in the European Union: How Supreme are EU Laws Over Member State

Laws

States are like human beings – they behave and respond like natural persons whenever

confronted by different circumstances. Just like human beings, states possess different economic,

political, cultural views. Hence, forming an association or union gives them a chance to think

and act as one body. In Europe, the European Union is a collective organization composed

mainly of European countries towards achieving one economic and political goal. One of the

ways to effectively carry out the goals of the Union is to respect the supremacy of EU law. As

such, in adjudicating cases, regardless of the existence of national laws of each member state, EU

law takes precedence over other laws.

I. HISTORY OF EUROPEAN UNION

Some scholars argued that the post-Cold War paved the way for integration of

European nation-states (Palmowski, 2011). However, European Union traced its history as early

as post-World War II. European Union was established in the early 1950s as an attempt to

rebuild the European nations, after the devastating World War II. It is a social artefact that aims

to provide for a legal framework in helping the nation state members to achieve their goals

(Dawson & de Witte, 2013). Part of the objective of the Union was to integrate the economies if

the nations, through a closer political and legal integration. This was also an attempt to ward off

the threat of Soviet expansion and totalitarianism (de Burca, 2018).

By allowing to be integrated into one legal system, EU possesses an international legal

personality (Hay, 1965). According to some theorists, this legal personality paved the way for

the union to participate in their own right by entering into special relations and agreements with
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other organizations and third countries (non-EU states). There are several conditions before a

state can access or become a member of the Union.

For instance, the Union imposes a particular political condition, such that the state must

respect “the principles of liberty, democracy, and respect for human rights and fundamental

freedoms and of the rule of law” (Treaty on European Union, Art. 49 and 6). Ergo, no state shall

be accepted if it practices domestic dictatorship within its territory. This has been proven

following the admission of Greece, Spain, and Portugal in the latter part of the 20th century.

Those three countries ended dictatorship before they were given access to the Union.

As a matter of fact, this political condition imposed upon members is a continuing

condition. To effectively carry out this principle, a sanction mechanism was adopted in the

Treaty on European Union (TEU), such that any member who persistently and seriously

disregards the political principles espoused by the EU may be suspended of its voting rights in

union (TEU, Art. 7). In this regard, it can be concluded that EU is an effective mechanism to

promote and protect liberal constitutionalism and democracy.

One of the most controversial turning points in the history of EU was the vote of the

UK to exit in the Union (i.e. Brexit). Majority of the UK population voted to leave, because of its

growing concern over immigration policies of the Union. As such, leaving the Union was its way

to regain its control over their law-making powers, borders, and even economy. Nevertheless, it

could be seen how EU has played fundamental roles in making Europe what it is today.

The effects of EU may be seen from two aspects – internal and external domains. In the

external aspect, it has been said that EU paved the way for Europeanization or the “process by

which subjects adopt everything that is truly ‘European’ such as its culture, history, politics and

law” (Petrov & Kalinichenko, 2011). This is carried out through EU’s external initiatives and
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policies toward third countries (non-EU countries). On the other hand, EU affects the internal

domain, by looking at the legal order of each European country. Each member state has to adapt

a legal and institutional structures that are in accordance with the requirements imposed by the

EU.

II. IMPORTANT CHARACTERISTICS OF EU LAW

1. Centralized System of Arbitration in EU

Cases that call for the application of EU law fall under the jurisdiction of CJEU. The

centralized system of arbitration is necessary in order to ensure integration of its members

(Cuyvers, 2017). This is also important in order to impose upon nation-state members the

supremacy of EU law over national laws. For instance, in prosecuting antitrust law violators, EU

has a main agency tasked to enforce antitrust laws - the Directorate General for Competition

(DG-COM) (Dabbah, 2010). Under Treaty on the Functioning of the European Union (TFEU),

pursuing of cases under the EU antitrust laws may commence through a complaint, investigation,

a leniency application, and a written report by any individual though the whistleblower tool

(TFEU, Art. 10). In any way, investigation precedes every claim against law violators of antitrust

laws.

The investigation may be initiated by the DG-COM motu proprio or through the initiative

of a third-party complainant. Although the Commission is under no obligation to initiate a

proceeding, it has no duty to inform the concerned firms that an investigation has commenced. In

fact, the Commission is entitled to conduct surprise inspection on the firm’s premises, if it has

reasonable belief that the concerned party violated the law (Aguzzoni, 2013). Meanwhile, the

firm is afforded due process in the investigation proceeding by allowing them to file their

response with regard to the allegation made against them. After hearing and analyzing evidence
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presented by parties involved, the DG-COM may either close the case or take an infringement

decision. In either way, the Commission consults several bodies, such as the directorates general

members and other national competition legal authorities. In the same vein, any adverse decision

taken against the firm may be appealed before the Community Courts. The latter body has the

power to modify, uphold, or even annul the fine imposed against the firm (Aguzzoni, 2013).

While the process seemed simple, critics argued that a particular private claim takes an average

of 3-4 years to successfully bring their causes of action into fruition.

2. Wide Scope of EU Law: Territorial and Extraterritorial Jurisdiction of EU law

The EU law consists of fundamental principles of the Member States and the EU itself

(Hartkamp, 2011). Generally, the scope of EU law encompasses all its bodies and institutions,

including their decision and legislation. Moreover, all fundamental rights guaranteed by it falls

within the ambit of EU law. The EU law does not only determine the limits of its competences,

but also its scope (Cuyvers, 2017). This means that whether a certain case falls under the

jurisdiction of EU law is not a question of municipal or national law but of EU law. Further, just

because a certain case falls under the national law does not ipso facto divest the jurisdiction of

EU law. This means, therefore, that there are issues where the EU law and national law can be

applied at the same time.

The concept of territorial jurisdiction means that a state can only exercise its

jurisdiction over conduct that happened in its space (Scott, 2014). The concept also extends to

cases where the state can exercise its jurisdiction even to persons who are not its citizens,

provided the involved act or conduct happened or has substantially happened in its boundary. In

the case of EU law, this test is referred as presence-based test – the application of said law is

dependent upon the fact that the person involved is domiciled, resident or has established his
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residence in the EU. On the other hand, extraterritoriality means “the application of a measure

triggered by something other than a territorial connection with the regulating state” (Scott, 2014,

p. 90). This concept is often applied in cases where EU law will be applied to legal or natural

persons, recognized or authorized by the EU to render specific services inside or outside the EU

territory.

For instance, the Wood Pulp case adjudicated in 1988 supports the principle of

extraterritoriality (Griffin, 1999). In this case, the Commission sued various producers based in

the US, on the ground that the latter committed practices in violation of the EU antitrust laws.

The defendants argued that the Commission had no jurisdiction over them, as they had no

branches or subsidiaries in the EU Common Market (Re Wood Pulp Cartel: A. Ahlstrom

Osakeyhtio v. E.C. Commission, 1988 E.C.R. 5193). In ruling against the defendants, the

Commission upheld its jurisdiction and reasoned out that the involvement of one of the cartels

has substantially affected the competition in the EU common Market. The decisions held in the

Nippon case and Wood Pulp case emphasized that the EU and US antitrust laws apply the

extraterritoriality principle in case of violation of their respective laws. Hence, a firm or

individual may not abscond the sanction imposed on the ground of lack of jurisdiction over the

person or conduct.

In general EU can only exercise jurisdiction over the conduct of its own nationals even

carried out in foreign land. Conversely, it cannot exercise jurisdiction over the conduct of a non-

EU citizen done outside the EU territory, except when such individual is domiciled or resident of

EU (Scott, 2014). With regard to the actions of EU member states, three things should be

understood.
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First is that Member states will be covered by EU jurisdiction if it applies or

implements any EU rules (Cuyvers, 2017). This means that a private citizen who wishes to

challenge an act of its country that applies or implements EU measures will be subject to the EU

jurisdiction. Also, jurisdiction will also vest to EU in case of dispute of two companies, whereby

one company invokes its national law that applies an EU directives.

The second scope of EU law with regard to the actions of its member states that in any

way impair any rights and rules granted by EU law. Moreover, any act that derogates free

movement will also fall under the scope of EU law (Cuyvers, 2017). Relevant to this discussion

is the case of Schmidberger (2003 ECR I-5659), where the EU took cognizance the case filed

against Austria, when it vehemently denied access to one of the main transport ways to southern

Europe – Brenner Pas. It should be noted that free movement, in this case, is not confined with

the movement of persons, but also services, goods, capital, and even establishments (Cuyvers,

2017).

The last category of EU’s jurisdiction involves cases that, although it does not concern

any EU law or directive, the act complained of indirectly affects the Union. An example of this is

the case of Fransson (ECLI:EU:C: 2012:340), where it recounted the criminal case filed against

a Swedish who evaded taxes. Although the complained act was in fact a violation of national

law, the case still fell under EU’s jurisdiction. This is due to the fact that the case affects VAT

collection; hence, detrimental to EU’s financial interest (Cuyvers, 2017).

3. Common Sanction in EU Law: Imposition of Fines and Leniency

One of the salient features of sanctions in EU system is the strict adherence to fines.

This could be seen in cases of violation of antitrust law. It is not disputed that antitrust laws are

essential in market economies, because they discourage businesses from resorting to means that
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would prevent fair competition (Sokol, 2017). To bolster this objective, imposing fines is a

fundamental tool to enforce strictly antitrust laws.

Fine imposition is one of the most common mechanisms used to enforce antitrust laws.

As a matter of fact, between 2014 to 2018, the EU had already imposed a total of €8, 522, 679,

000 (European Commission, 2018). In EU antitrust laws, imposition of fine is based on two

objectives – deter and punish. Fines are assessed on the basis of various factors, such as the

percentage of value of the relevant sales, duration, leniency reductions, and settlement

reductions. All these factors guide the EU to impose fine against the antitrust violators.

The first factor taken into consideration is the percentage value of the sales, which

pertains to the “sales of the products covered by the infringement during the last full year of the

infringement” (European Commission, 2018). The fine that may be imposed can go up to 30% of

the relevant sales, depending on the gravity of the infringement committed by the erring firm. As

such, factors like market sharing, price fixing, and abuse of power are also taken into

consideration. Duration is another factor that affects the fine assessment. This factor only means

that the fine is multiplied by the number of months or years the violation lasted.

EU laws do not impose criminal penalties against law violators. At most, erring firms are

only subject to large fines, in order to deter their act. This is contrary, for instance, in the US,

because aside from fines, imprisonment has also been regarded as a crucial tool to enforce their

antitrust laws (Aguzzoni, 2013). Due to the fact that firms do not possess tangible existence,

such penalty is imposed upon their managers who may be found guilty. Moreover, imprisonment

is without prejudice to the possible treble damages that may be imposed against the erring firm.

In this aspect, it can be argued that US antitrust laws are harsher than EU antitrust laws.
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Relevant to this discussion is the landmark case decided by the US Supreme Court in the

latter part of 1990s. The international vitamins cartel case recounts how some international firms

entered into agreement on how much product each of the member would produce, the amount

that they would charge, and the customers they would supply (Clarke & Evenett, 2003). Some of

the victims, Procter & Gamble, Coca-Cola, General Mills, Tyson Foods, and Kellogg, directly

purchased from the international vitamin cartel members. The said conspiracy brought a total

damage of $5 billion in the US commerce (US Department of Justice, 2019). Later on, aside

from the imposition of fines, the investigation of the case led to the imprisonment of top

executives of various Japanese, Swiss, US, Canadian, and German firms. This case sends a

powerful message that the US is committed to strict enforcement of antitrust laws. As of 2012,

the US government has filed almost 70 criminal cases and obtained a total amount of $1.14

billion fines (Erbach, 2014). Among these cases, 45 criminal complaints have been adjudicated

in favor of the government. Meanwhile, critics believed that the more lenient sanction system in

EU antitrust laws paved the way to repeated offenders.

There are also times when the EU allows for leniency reduction. For instance, in case of

cartels, the Commission usually encourage firms involved in cartels to help them deter such acts

and initiate a case. In order to do this, the Commission incentivizes the first firm to come out by

affording them full immunity from any fine. In addition, a 50% reduction of fine is also given to

subsequent companies that will come out (Aguzzoni, 2013). Lastly, settlement reduction is

another mechanism used by the Commission to expedite cartel cases. In this case, firms are

allowed to enter into settlement with the Commission to get a 10% reduction of fine (Aguzzoni,

2013). Overall, these factors allow the Commission to make an apt assessment of fines against

antitrust law violators.

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III. ADJUDICATION OF CASES INVOLVING EU LAW

1. National Courts as the Judicial Arm of the EU

European Union offers a legal system, whereby a domestic actor can intervene in their

national policy. For instance, in case a private litigant wants to question a specific national

policy, he may bring his claim to the European Court of Justice (ECJ). The ECJ would then

instruct the concerned national court to either harmonize their national law with that of European

law or use instead European law instead of their national law (Alter, 2000). Hence, it is not

astonishing that groups and litigants often resort to the European legal system to pressure or

mobilize their government with regard to a controversial national policy.

There are two cases when national courts are directed to request certification to the

ECJ. The first case is when any national tribunal or court entertains doubt regarding the validity

and legality of European law (Mayer, 2003). This is due to the fact that it is only the ECJ that has

authority to decide whether a particular European law is valid or not. The second instance when

the national courts have the duty to make preliminary references to ECJ is in cases falling under

Article 234 (3) of EC. This provision states that “a court or tribunal of a Member State against

whose decisions there is no judicial remedy under national law” may elevate the matter to the

ECJ, especially if the case imposes upon the duty to interpret European laws. The duty imposed

by Article 234 of EC upon the national courts is necessary to avoid instances where Treaties are

interpreted and applied differently in the national level.

Failure to observe Article 234 of EC may expose the member state concerned to

possible penalty or lump sum payment (Article 228, EC). This sanction is necessary to ensure

that the national courts faithfully comply with their duties to respect the obligation imposed upon

them by the EU law. Some scholars believed that this set-up does not necessarily imply that the
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Court of Justice is higher in hierarchy than national courts. Rather, it should be viewed that the

Court of Justice is only a special court that has specific cases to adjudicate (Schermers, 1974).

Thus, the Court of Justice should still be presented such that it is in the same footing with the

national courts.

The same duty is imposed by Article 267(2) TFEU, which provides that in cases where

there is a question regarding the right application and interpretation of any provision of

TFEU/TEU or any secondary acts of EU, the national courts has the discretion to elevate the

matter to the CJEU for interpretation. It could be gleaned, however, that contrary to the

mandatory provision of Article 234 of EC, this provision of TFEU gives option to the national

court whether to refer the matter or not. In other words, the national court is authorized to

determine the accuracy of the factual and legal context of a specific case (Cafaggi, et. al., 2012).

In this regard, the provision of EC is more stringent than TFEU.

2. The European Court of Justice as a Court of First Instance

The EU is composed of integral organs – the Council of Ministers, the European

Parliament, the Court of Justice, and the Commission. The main agency tasked to adjudicate

cases is the European Court of Justice (ECJ), which is based in Luxembourg (Arevalo, 2011).

According to the EC Treaty, the ECJ is composed of 25 judges, each judge should come from

each Member State (Article 221). Each judge is appointed by their respective government and

renders a term of 6 years (Article 223). To aid the ECJ judges, there are also eight (8) advocates-

general appointed who are expected to submit their reasoned decisions in cases needed to be

adjudicated (Article 222).

The ECJ’s main function is to see to it that the law is observed and implemented in the

course of applying and interpreting the Treaties (Article 220, EC Treaty). The ECJ is also tasked
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to adjudicate cases when the EEC Treaty is in question. However, the roles of ECJ may be

summarized into four: 1. as an administrative tribunal in cases involving the union’s civil

servants; 2. as an administrative or civil courts on claims for damages against the EU; 3. as an

administrative body in cases when the decision of the Union is in question; and 4. as an

international tribunal in cases when there is a question on whether a particular member state has

breached its Treaty obligations (Schermers, 1974).

It should be noted that the doctrine of consensuality does not find application in cases

falling under the jurisdiction of ECJ. This means, therefore, that “its jurisdiction is compulsory

and its judgments directly enforceable” (Arevalo, 2011, p. 6). Member States have neither the

option to reserve or to conditionally accept the jurisdiction of ECJ. Thus, all judgments rendered

by the ECJ is binding between and among the Member States including the people.

3. ACTE CLAIR PRINCIPLE

Due to the duty imposed upon by Article 234 of EC, one can easily assume that every

party of the litigation has the right to ask the national court to refer the matter to the ECJ.

However, there are circumstances that may prevent the party from elevating the dispute to the

ECJ. This exception is often referred to as the ACTE clair principle, which was derived from the

CILIFT decision (Mayer, 2003). According to this principle, there are only instances where one

can assume that the national court has no duty to refer the matter to the ECJ. The first instance is

when the question does not call for the national court to decide or the question is deemed

irrelevant for it to decide. The second instance is when the interpretation of the EC law in

question is obvious. In other words, this is the case when the text and intent of the community

law in question is clear and unambiguous; hence, leaves “no room for any reasonable doubt”

(Mayer, 2003, p. 7). Therefore, this calls for the party to convince the national tribunal or court
CONFLICT OF LAW IN THE EUROPEAN UNION 13

that the interpretation of the matter or law is obvious not only to the member states involved but

also to the ECJ. To date, the German courts, in various instances, have avoided to refer the

matter to ECJ. There are also other European Member States which have not yet referred any

matter to the ECJ.

IV. PRINCIPLES OF DIRECT APPLICABILITY AND DIRECT EFFECT

There are two overarching doctrines between and among EU members – the direct

effect and supremacy of EU law (Cuyvers, 2017). Both doctrines are deemed important to

integrate its nation-state members. Direct effect of EU law pertains to the fact that companies

and individuals can invoke the EU law before any public bodies or national laws, in the same

way that they rely on their national laws (Cuyvers, 2017). Perforce, EU law is deemed neither as

an international nor a foreign law that needed to be imported into one’s national legal order just

to have a legal effect. On the contrary, EU law forms part of each member state’s national law.

Hence, even without state or community member legislation, these treaty articles can still be

effectively applied (Persaud & Goebel, 1997).

The direct effect doctrine was applied in the landmark case of Van Gend en Loos v

Netherlands Inland Revenue Administration (EU:C:1963:1). In this case, a private company Van

Gen den Loos sought to import a particular product from Germany to the Netherlands. However,

the recipient country planned to impose a higher import duty. The private company resisted the

duty and averred that such act of increasing the import duty from its original imposition is

prohibited under the European Economic Community (EEC) Treaty, to wit, “Member states shall

refrain from introduction between themselves any new customs duties on imports or exports or

any charges having equivalent effect, and from increasing those which they already apply in their

trade with each other” (EEC, Article 12).

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Disputing the claim of the private company, the government of Netherlands argued that

it was improper for a private company like Van Gen den Loos to invoke international obligation

in a private transaction. The Dutch government further noted that said provision of EEC is

directed to states and not to private juridical entity. In ruling for the private German company,

the CJEU emphasized that there exists a direct effect of the aforesaid Treaty provision, provided

the following requisites can be established: the subject measure or rule must be precise and

sufficiently clear; that the same is unconditional; and that the letter of the measure does not leave

any ambiguity or doubt that will require the member state’s legislative discretion in interpreting

it (Van Gend en Loos v Netherlands Inland Revenue Administration, EU:C:1963:1). Applying

these conditions to the case at bench, the CJEU pronounced that the said prohibition of

increasing customs duties as stipulated in EEC was unconditional, precise, and sufficiently clear.

Therefore, the same can be resorted to by member states, even if one of the contracting parties

was a private company.

There are various important points held by CJEU in this case, which explained why the

force and effects EEC Treaty are not the same the effects of ordinary international obligations.

First, the treaty was intended to bind not only the member states, but also their subjects. Hence,

whatever obligations created by the treaty is imposed not only to the states, but also to the

individuals living in those member states. It can be argued, therefore, that the objective and text

of EEC was to create both obligations and rights, with states and individuals as its objects and

subjects.

The second reason is connected to the autonomy of EEC Treaty, by which the CJEU

noted that “the Community constitutes a new legal order of international law for the benefit of

which states have limited their sovereign rights, albeit within limited fields, and the subject of
CONFLICT OF LAW IN THE EUROPEAN UNION 15

which comprise not only Member States but also their nationals” (Van Gend en Loos,

EU:C:1963:1). This was an express pronouncement directly implying that EEC treaty is a legal

order that can be relied upon by member states and individuals.

IV. DOCTRINE OF SUPREMACY OF EU LAW OVER NATIONAL LAWS

A. Landmark cases on the supremacy of EU law

The supremacy of EU law may be seen when compared to other international

agreement. For example, the principle of equal treatment enshrined in GATT Agreement and

EEC Treaty differ when it comes to binding effects. The GATT Agreement imposes an

obligation that:

“The products of the territory of any contracting party imported into the territory of
any other contracting party shall not be subject, directly or indirectly, to internal
taxes or other internal charges of any kind in excess of those applied, directly or
indirectly, to like domestic products” (Art. III, 2).

On the other hand, this obligation is echoed under the EEC Treaty, to wit:

“A member state shall not impose, directly or indirectly, on the products of the other
Member States any internal charges of any kind in excess of those applied directly or
indirectly to like domestic products (Art. 95, 1).

Both provisions imposed the same obligation to member states not to apply any charges

that would contravene the equal treatment principle. However, although the purpose, content,

and wording of the two laws are almost the same, their binding effects differ. For example, in

various cases, courts in Germany refused to acknowledge the direct application of GATT

Agreement. According to the German courts, the obligation imposed by the agreement only

binds the member states who are parties to the agreement. As such, the individuals could not

derive any rights from it (Bebhr, 1970). Meanwhile, the highest tribunal that governs fiscal
CONFLICT OF LAW IN THE EUROPEAN UNION 16

matters in Germany (i.e. Bundesfinanzhof), made a different statement regarding the direct

application of EEC Treaty.

“Whereas GATT is an international treaty in the classical sense regulating economic

relations among States, the EEC Treaty created, on the other hand, by its objectives,
its institutional structure and its consequences a legal order binding on all subjects, a
legal order which authorizes the Court of the Communities to declare the prohibitions
of the Treaties as self-executing” (Decision of the Finanzgericht of the Saar, 1967).

Moreover, contrary to scope of the GATT, the EEC was saIn this regard, it could be gleaned that

the supremacy of EEC has been upheld.

On the other hand, the Costa-Enel case spelled out the doctrine of supremacy of EU

law. This case recounts the dispute between an Italian lawyer, Costa, with ENEL – an Italian

electric firm (Flaminio Costa v ENEL, 1964: ECR 585). The firm issued an electricity bill, but

Costa refused to pay. During that time, Italy had ratified already the EC Treaty. Costa averred

that he could not be made to pay, because the nationalization law of Italy’s electricity industry

contravenes the community law. When the matter was referred to the ECJ, the court categorically

described the nature of the European Community, to wit:

By creating a Community of unlimited duration, having its own institutions, its own
personality, its own legal capacity and capacity of representation on the international
plane and, more particularly, real powers stemming from a limitation of sovereignty
or a transfer of powers from the States to the Community, the Member States have
limited their sovereign rights, albeit within limited fields, and have thus created a
body of law which binds both their nationals and themselves.

The integration into the laws of each Member State provisions which derive from the
Community, and more generally the terms and the spirit of the Treaty, makes it
impossible for the States, as a corollary, to accord precedence to a unilateral and
subsequent measure over a legal system accepted by them on a basis of reciprocity
(Flaminio Costa v ENEL, 1964: ECR 585).

The fact that the subject national rule has been passed when there have been existing community

measures only meant that the national law could not be given higher primacy. Since at the time
CONFLICT OF LAW IN THE EUROPEAN UNION 17

of the complained act, Italy has already acceded to the community legal system, then it should

have abided by its rules (Schuman, 2005). This is in consonance with the EC Treaty that imposes

an obligation to every Member State to ensure faithful compliance with their treaty obligations

(Article 10). As such, the ECJ proceeded to lay down the doctrine of supremacy of EU law:

It follows from all these observations that the law stemming from the Treaty, an
independent source of law, could not, because of its special and original nature, be
overridden by domestic legal provisions, however framed, without being deprived of
its character as Community law and without the legal basis of the Community itself
being called into question. The transfer by the States from their domestic legal
system to the Community legal system of the rights and obligations arising under the
Treaty carries with it a permanent limitation of their sovereign rights, against which a
subsequent unilateral act incompatible with the concept of the Community cannot
prevail.

It could also be gleaned that the ruling laid down in the earlier case of Van Gend en Loos, setting

out the autonomy of EU legal system was again upheld. The rights emanating from the

community law should be binding not only to the Member States, but also to the individuals of

such states.

B. Other Cases where the doctrine of supremacy was upheld

In the realm of labor laws, the supremacy of EU laws can also be observed. However, it

should be noted that the supremacy of EU law over labor disputes is still aligned with the

member states’ existing treaties, the generally accepted principles of the legal order of EU, and

its secondary legislation (Bercusson, 2008). Henceforth, it cannot be argued that the assumption

of jurisdiction of EU over labor cases is plainly arbitrary, because it attempts to harmonize

various sources of labor obligations.

The doctrine of supremacy of EU law cannot also be overridden by the mere invocation

of constitution. This was the principle laid down in the case of Internationale

Handelsgesellschaft, where the community provision was challenged for being contrary to
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German constitution. In ruling for the supremacy of EU law, the ECJ said that “the validity of a

community measure or its effect within a Member State cannot be affected by allegations that it

runs counter to either fundamental rights as formulated by the constitution of that State or the

principles of a national constitutional structure” (Internationale Handelsgesellschaft mbH v.

Einfuhr- und Vorratsstelle für Getreide und Futtermittel, 1970: ECR 1125). This implied that

national laws, even if the same concerns the fundamental rights of a person, cannot override the

supremacy of EU law. Henceforth, the member state’s national court should see to it that the EU

law is effectively enforced, even if it contravenes their constitution. This principle was

subsequently reiterated in the case of Simmenthal II.

In this case, Simmenthal was asked to pay for a fee after he imported his product to

Italy. Said fee was in consonance with earlier community legislation and EC Treaty, imposing

public health inspection fee. This was later on challenged, because Italy has subsequently passed

a legislation in contravention of such fee. Two points were raised by those who moved to

eradicate the imposition of public health fee. Firstly, they argued that the Italian national

legislation should be respected, because it was passed at a later date. Second, assuming arguendo

that such Italian legislation is unconstitutional for violating the community law, the declaration

of the Italian Constitutional Court should first be issued (Amminstrazione delle Finanze dello

Stato v Simmenthal, 1978: ECR 629). The two contentions by the Italian authorities were

rejected by the ECJ and upheld the supremacy of EU law:

Furthermore, in accordance with the principle of the precedence of Community law,

the relationship between provisions of the Treaty and directly applicable measures of
the institutions on the one hand and the national law of the Member State on the
other is such that those provisions and measures not only by their entry into force
render automatically inapplicable any conflicting provision of current national law
but – in so far as they are an integral part of, and take precedence in, the legal order
applicable in the territory of each of the Member States – also preclude the valid
CONFLICT OF LAW IN THE EUROPEAN UNION 19

adoption of new national legislative measures to the extent to which they would be
incompatible with Community provisions.

Indeed any recognition that national legislative measures which encroach upon the
field within which the Community exercises its legislative power or which are
otherwise incompatible with the provisions of Community law had any legal effect
would amount to a corresponding denial of the effectiveness of obligations
undertaken unconditionally and irrevocably by Member States pursuant to the Treaty
and would thus imperil the very foundations of the Community (Simmenthal II case).

This ruling means that in case of conflict between national law and EU law, the latter shall

always prevail. However, it should be noted that the effect of such conflict is the mere

disallowance of the national law to apply in a given instance. The EU law does not contemplate

an annulment of any conflicting provision of national law. It is also important to note that the

decision rendered by the EU is binding in fact and in law, not only those to whom the decision is

addressed, but also to third parties. However, this binding force is stemmed not from the

principles of supremacy and direct effect of EU law, but of res judicata (Odudu, 2007).

C. Critics of the Doctrine of Supremacy of EU Law

Europe constitutes a constitution that is characterized by a substantial and dynamic

process of policy-formation, “based neither on the foundational idea of a national will nor on the

freestanding idea of individual rights but on the messy, contingent, and contested interplay of

law, politics and society, national as well as supranational” (Wilkinson, 2013, p. 193). This

means, therefore, that there is no single player that dominates the legal system in Europe.

Constitutional balance is ensured - “a way to balance between different interest groups, political

actors and institutions in order to create a structure capable of achieving specific common

objectives” (Dawson & Witte, 2013, p. 818). This principle does not seem to find any application

in EU law.
CONFLICT OF LAW IN THE EUROPEAN UNION 20

The effect of the decision laid down in the case of Simmenthal paved the way for

various backlash. For instance, in the case of Internationale Handelsgesellschaft mbH v Einfuhr-

und Vorratsstelle für Getreide und Futtermittel (1974,2 CMLR 540) adjudicated in Germany, the

court rejected the doctrine of EU law primacy. According to the German Constitutional Court, in

the event of conflict, the inalienable constitutional rights should always prevail over the EU law.

In Spain, another case sparked controversy when their constitutional court gave higher regard to

the right of an accused to a fair trial as enshrined in the Spanish Constitution over the provision

of arrest warrant in EU (Melloni v Ministerio Fiscal, 2013, 2 CMLR 43 ECJ). These cases only

proved that the doctrine of supremacy of EU law has the tendency to reject the importance or

specificity of some rights and protections that are guaranteed by the member states’ national

constitutional laws.

Due to this growing concern, one of the critics of the supremacy of EU law posits that

the quality and strength of the EU’s institutional structures and constitutional features do not

enhance or support, rather undermine the member states’ democratic constitutional systems (de

Burca, 2018). The uncompromising doctrine of supremacy of EU law has the tendency to

undermine integral aspects of the member states’ constitutional identity. This tendency seemed

paradoxical, considering that under the TEU, the EU “shall respect the equality of member states

before the Treaties as well as their national identities, inherent in their fundamental structures,

political and constitutional, inclusive of regional and local self-governance” [Article 4 (2)].

Meanwhile, proponents of the doctrine of supremacy of EU law upheld that it bolsters liberal

constitutionalism; thus, support constitutional identity. EU law supports the basic tenets of liberal

constitutional, yet there are instances where it sometimes challenges “aspects of the way in

which liberal constitutional is interpreted in specific national context” (de Burca, 2018, p. 361).
CONFLICT OF LAW IN THE EUROPEAN UNION 21

The doctrine of supremacy of EU law was reiterated in subsequent landmark cases. In

another landmark case, Amminstrazione delle Finanze dello Stato v Simmenthal (1978: ECR

629), the ECJ compelled all national judges to interpret their national laws in accordance with

that of the EC law. In the same vein, in The Queen v Secretary of State for Transport ex parte

Factortame Ltd. (1990 ECR I-2433), the Court upheld the view that Member States of the Union

have limited sovereign rights and permanently transferring the same to the community legal

order. Thus, EU law, including its secondary legislation, takes primacy over national laws,

whether written or unwritten. Hence, every Member State is proscribed from taking steps that

could jeopardize the achievement of the objectives of the EC Treaty.

D. Justifying the doctrine of Supremacy of EU Law

There are various reasons why the doctrine of supremacy of EU law is proper and

should still be upheld. The first reason concerns the autonomous characteristic of EU’s legal

order. This means that the EU law “determines its own validity, and that its validity cannot be

undermined by national law” (Cuyvers, 2017, p. 177). This means, therefore, that if national law

would be permitted to trump EU law, the validity of the latter would be left to the discretion of

national laws. This consequently undermines the autonomy of EU law.

The second justification is intertwined with the concept of reciprocity. Under this

doctrine, each member state undertakes to respect and comply with all the obligations imposed

by the EU law (Cuyvers, 2017). Hence, giving higher primacy to national laws means giving the

right to each member state to unilaterally reject any provision of the EU law. This might

undermine the obligation of member states to respect the principle of reciprocity. In fact, giving

the member states the power to unilaterally deviate from their obligation would result in
CONFLICT OF LAW IN THE EUROPEAN UNION 22

disintegration of the legal order. This defeats the very purpose of the EU – the integration of the

European members.

The third justification rests on the Costa-ENEL case, where the Court indicated that

“wherever the Treaty grants the States the right to act unilaterally, it does this by clear and

precise provisions” (Flaminio Costa v ENEL, 1964: ECR 585). Conversely, without a valid

expressed provision, each member state is not allowed to deviate from its obligation under the

EU law.

CONCLUSION

EU is a collective body that aims to integrate the legal system of its members. Some

scholars argued that EU adopt written constitutions in the form of treaties. It is also composed of

a directly elected parliament and a rights-based judicial review body – the European Court of

Justice (ECJ). The ECJ is the judicial body of EU that ensures the effective application of EU

law. There are two important doctrines that aid the ECJ in adjudicating cases – the direct effect

and supremacy of EU law over national laws. The direct and supremacy principles have been

accepted and upheld in various jurisprudence.

The ruling laid down in Van Gend en Loos paved the way for the drawing of lines

between a typical international law and the legal order imposed by EU. The doctrine pronounced

in the said law made sure that EU law would take higher hierarchy over any national laws. More

importantly, EU law became a direct source of rights and obligations not only by state members,

but also of individuals. The principle of direct effect can be effectively enforced by resorting to

another principle laid down in the case of Costa-ENEL – the supremacy of EU law over national

laws. This objective of this doctrine is to preempt the national courts from declaring the EU laws

inapplicable to the national level. The supremacy doctrine is necessary to prevent the national
CONFLICT OF LAW IN THE EUROPEAN UNION 23

laws, however framed, to override the community law. From the foregoing, it can be concluded

that the doctrine of supremacy of EU law is not derived from any expressed provision of EU

treaties, rather a principle developed by the EU itself. The doctrines of direct effect and

supremacy of EU law have played important roles to maintain the sanctity of community law in

the EU.
CONFLICT OF LAW IN THE EUROPEAN UNION 24

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