JUDGMENT OF 19. 6.

1990 —CASE C-213/89

JUDGMENT OF THE COURT

19 June 1990 *

In Case C-213/89

REFERENCE to the Court under Article 177 of the EEC Treaty by the House of
Lords for a preliminary ruling in the proceedings pending before that court in the
case of

The Queen

Secretary of State for Transport, ex parte: Factortame Ltd and Others,

on the interpretation of Community law with regard to the extent of the power of
national courts to grant interim relief where rights claimed under Community law
are at issue,

THE COURT

composed of: O. Due, President, Sir Gordon Slynn, C. N. Kakouris, F. A.

Schockweiler, M. Zuleeg (Presidents of Chambers), G. F. Mancini, R. Joliét, J. C.
Moitinho de Almeida, G. C. Rodríguez Iglesias, F. Grévisse and M. Diez de
Velasco, Judges,

Advocate General: G. Tesauro

Registrar: H. A. Rühi, Principal Administrator

after considering the written observations submitted on behalf of

* Language of the case: English.

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the United Kingdom, by T. J. G. Pratt, Principal Assistant Treasury Solicitor,

acting as Agent, assisted by Sir Nicholas Lyell, Q C , Solicitor-General, Mr
Christopher Bellamy, QC, and Mr Christopher Vajda, barrister,

Ireland, by Louis J. Dockery, Chief State Solicitor, acting as Agent, assisted by

James O'Reilly, SC,

Factortame Ltd and Others, by David Vaughan Q C , Gerald Barling, barrister,

David Anderson, barrister, and Stephen Swabey, solicitor, of Thomas
Cooper & Stibbard,

the Commission, by Mr Götz zur Hausen, Legal Adviser, and Peter Oliver, a
member of its Legal Department, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral argument presented at the hearing on 5 April 1990 by the
United Kingdom, Factortame Ltd and Others, Rawlings (Trawling) Ltd., the latter
represented by N . Forwood, QC, and by the Commission,

after hearing the Opinion of the Advocate General delivered at the sitting on
17 May 1990,

gives the following

Judgment

1 By a judgment of 18 May 1989, which was received at the Court on 10 July 1989,
the House of Lords referred to the Court of Justice for a preliminary ruling under
Article 177 of the EEC Treaty two questions on the interpretation of Community
law. Those questions concern the extent of the power of national courts to grant
interim relief where rights claimed under Community law are at issue.

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 JUDGMENT OF 19. 6. 1990 —CASE C-213/89

2 The questions were raised in proceedings brought against the Secretary of State
for Transport by Factortame Ltd and other companies incorporated under the laws
of the United Kingdom, and also the directors and shareholders of those
companies, most of whom are Spanish nationals (hereinafter together referred to
as the 'appellants in the main proceedings').

3 The companies in question are the owners or operators of 95 fishing vessels which
were registered in the register of British vessels under the Merchant Shipping Act
1894. Of those vessels, 53 were originally registered in Spain and flew the Spanish
flag, but on various dates as from 1980 they were registered in the British register.
The remaining 42 vessels have always been registered in the United Kingdom, but
were purchased by the companies in question on various dates, mainly since 1983.

4 The statutory system governing the registration of British fishing vessels was
radically altered by Part II of the Merchant Shipping Act 1988 and the Merchant
Shipping (Registration of Fishing Vessels) Regulations 1988 (SI 1988, N o 1926). It
is common ground that the United Kingdom amended the previous legislation in
order to put a stop to the practice known as 'quota hopping' whereby, according
to the United Kingdom, its fishing quotas are 'plundered' by vessels flying the
British flag but lacking any genuine link with the United Kingdom.

s The 1988 Act provided for the establishment of a new register in which henceforth
all British fishing vessels were to be registered, including those which were already
registered in the old general register maintained under the 1894 Act. However,
only fishing vessels fulfilling the conditions laid down in Section 14 of the 1988
Act may be registered in the new register.

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Paragraph 1 of that section provides that, subject to dispensations to be

determined by the Secretary of Sute for Transport, a fishing vessel is eligible to be
registered in the new register only if:

'(a) the vessel is British-owned,

(b) the vessel is managed, and its operations are directed and controlled, from
within the United Kingdom and;

(c) any charterer, manager or operator of the vessel is a qualified person or

company'.

According to Section 14(2), a fishing vessel is deemed to be British-owned if the

legal title to the vessel is vested wholly in one or more qualified persons or
companies and if the vessel is beneficially owned by one or more qualified
companies or, as to not less than 7 5 % , by one or more qualified persons.
According to Section 14(7) 'qualified person' means a person who is a British
citizen resident and domiciled in the United Kingdom and 'qualified company'
means a company incorporated in the United Kingdom and having its principle
place of business there, at least 7 5 % of its shares being owned by one or more
qualified persons or companies and at least 7 5 % of its directors being qualified
persons.

' The 1988 Act and the 1988 Regulations entered into force on 1 December 1988.
However, under Section 13 of the 1988 Act, the validity of registrations effected
under the previous Act was extended for a transitional period until 31 March 1989.

s On 4 August 1989 the Commission brought an action before the Court under
Article 169 of the EEC Treaty for a declaration that, by imposing the nationality
requirements laid down in Section 14 of the 1988 Act, the United Kingdom had
failed to fulfil its obligations under Articles 7, 52 and 221 of the EEC Treaty. That
action is the subject of Case 246/89, now pending before the Court. In a separate
document, lodged at the Court Registry on the same date, the Commission applied

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 JUDGMENT OF 19. 6. 1990 —CASE C-213/89

to the Court for an interim order requiring the United Kingdom to suspend the
application of those nationality requirements as regards the nationals of other
Member States and in respect of fishing vessels which until 31 March 1989 were
carrying on a fishing activity under the British flag and under a British fishing
licence. By an order of 10 October 1989 in Case 246/89 R Commission v United
Kingdom [1989] ECR 3125, the President of the Court granted that application.
Pursuant to that order, the United Kingdom made an Order in Council amending
Section 14 of the 1988 Act with effect from 2 November 1989.

9 At the time of the institution of the proceedings in which the appeal arises, the 95
fishing vessels of the appellants in the main proceedings failed to satisfy one or
more of the conditions for registration under Section 14 of the 1988 Act and thus
could not be registered in the new register.

io Since those vessels were to be deprived of the right to engage in fishing as from 1
April 1989, the companies in question, by means of an application for judicial
review, challenged the compatibility of Part II of the 1988 Act with Community
law. They also applied for the grant of interim relief until such time as final
judgment was given on their application for judicial review.

n In its judgment of 10 March 1989, the Divisional Court of the Queen's Bench
Division : (i) decided to stay the proceedings and to make a reference under Article
177 of the EEC Treaty for a preliminary ruling on the issues of Community law
raised in the proceedings; and (ii) ordered that, by way of interim relief, the
application of Part II of the 1988 Act and the 1988 Regulations should be
suspended as regards the applicants.

1 2 O n 13 March 1989, the Secretary of State for Transport appealed against the
Divisional Court's order granting interim relief. By judgment of 22 March 1989,
the Court of Appeal held that under national law the courts had no power to
suspend, by way of interim relief, the application of Acts of Parliament. It
therefore set aside the order of the Divisional Court.

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3 The House of Lords, before which the matter was brought, gave its abovemen-
tioned judgment of 18 May 1989. In its judgment it found in the first place that
the claims by the appellants in the main proceedings that they would suffer irrep-
arable damage if the interim relief which they sought were not granted and they
were successful in the main proceedings were well founded. However, it held that,
under national law, the English courts had no power to grant interim relief in a
case such as the one before it. More specifically, it held that the grant of such
relief was precluded by the old common-law rule that an interim injunction may
not be granted against the Crown, that is to say against the government, in
conjunction with the presumption that an Act of Parliament is in conformity with
Community law until such time as a decision on its compatibility with that law has
been given.

H The House of Lords then turned to the question whether, notwithstanding that
rule of national law, English courts had the power, under Community law, to
grant an interim injunction against the Crown.

is Consequently, taking the view that the dispute raised an issue concerning the
interpretation of Community law, the House of Lords decided, pursuant to Article
177 of the EEC Treaty, to stay the proceedings until the Court of Justice had
given a preliminary ruling on the following questions:

'(1) Where

(i) a party before the national court claims to be entitled to rights under
Community law having direct effect in national law (the "rights
claimed"),

(ii) a national measure in clear terms will, if applied, automatically deprive

that party of the rights claimed,

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 JUDGMENT OF 19. 6. 1990 —CASE C-213/89

(iii) there are serious arguments both for and against the existence of the
rights claimed and the national court has sought a preliminary ruling
under Article 177 as to whether or not the rights claimed exist,

(iv) the national law presumes the national measure in question to be

compatible with Community law unless and until it is declared incom-
patible,

(v) the national court has no power to give interim protection to the rights
claimed by suspending the application of the national measure pending
the preliminary ruling,

(vi) if the preliminary ruling is in the event in favour of the rights claimed,
the party entitled to those rights is likely to have suffered irremediable
damage unless given such interim protection,

does Community law either

(a) oblige the national court to grant such interim protection of the rights
claimed; or

(b) give the Court power to grant such interim protection of the rights
claimed?

(2) If Question 1(a) is answered in the negative and Question 1(b) in the
affirmative, what are the criteria to be applied in deciding whether or not to
grant such interim protection of the rights claimed?'

i6 Reference is made to the Report for the Hearing for a fuller account of the facts
in the proceedings before the national court, the course of the procedure before
and the observations submitted to the Court of Justice, which are mentioned or
discussed hereinafter only in so far as is necessary for the reasoning of the Court.

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i7 It is clear from the information before the Court, and in particular from the
judgment making the reference and, as described above, the course taken by the
proceedings in the national courts before which the case came at first and second
instance, that the preliminary question raised by the House of Lords seeks essen-
tially to ascertain whether a national court which, in a case before it concerning
Community law, considers that the sole obstacle which precludes it from granting
interim relief is a rule of national law, must disappty that rule.

18 For the purpose of replying to that question, it is necessary to point out that in its
judgment of 9 March 1978 in Case 106/77 Amministrazione delle finanze dello
Stato v Simmenthal SpA [1978] ECR 629 the Court held that directly applicable
rules of Community law 'must be fully and uniformly applied in all the Member
States from the date of their entry into force and for so long as they continue in
force' (paragraph 14) and that '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 States on the other is such that those provisions and measures... by their
entry into force render automatically inapplicable any conflicting provision
of . . . national law* (paragraph 17).

is In accordance with the case-law of the Court, it is for the national courts, in
application of the principle of cooperation laid down in Article 5 of the EEC
Treaty, to ensure the legal protection which persons derive from the direct effect
of provisions of Community law (see, most recently, the judgments of 10 July 1980
in Case 811/79 Ariete SpA v Amministrazione delle finanze dello Stato [1980] ECR
2545 and Case 826/79 Mireco v Amministrazione delle finanze dello Stato [1980]
ECR 2559).

20 The Court has also held that any provision of a national legal system and any
legislative, administrative or judicial practice which might impair the effectiveness
of Community law by withholding from the national court having jurisdiction to
apply such law the power to do everything necessary at the moment of its
application to set aside national legislative provisions which might prevent, even
temporarily, Community rules from having full force and effect are incompatible
with those requirements, which are the very essence of Community law (judgment
of 9 March 1978 in Simmenthal, cited above, paragraphs 22 and 23).

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 JUDGMENT OF 19. 6. 1990 —CASE C-213/89

2i It must be added that the full effectiveness of Community law would be just as
much impaired if a rule of national law could prevent a court seised of a dispute
governed by Community law from granting interim relief in order to ensure the
full effectiveness of the judgment to be given on the existence of the rights claimed
under Community law. It follows that a court which in those circumstances would
grant interim relief, if it were not for a rule of national law, is obliged to set aside
that rule.

22 That interpretation is reinforced by the system established by Article 177 of the

EEC Treaty whose effectiveness would be impaired if a national court, having
stayed proceedings pending the reply by the Court of Justice to the question
referred to it for a preliminary ruling, were not able to grant interim relief until it
delivered its judgment following the reply given by the Court of Justice.

23 Consequently, the reply to the question raised should be that Community law must
be interpreted as meaning that a national court which, in a case before it
concerning Community law, considers that the sole obstacle which precludes it
from granting interim relief is a rule of national law must set aside that rule.

Costs

24 The costs incurred by the United Kingdom, Ireland and the Commission of the
European Communities, which have submitted observations to the Court, are not
recoverable. Since these proceedings are, in so far as the parties to the main
proceedings are concerned, in the nature of a step in the proceedings pending
before the national court, the decision on costs is a matter for that court.

On those grounds,

T H E COURT,

in reply to the question referred to it for a preliminary ruling by the House of

Lords, by judgment of 18 May 1989, hereby rules:

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Community law must be interpreted as meaning that a national court which, in a

case before it concerning Community law, considers that the sole obstacle which
precludes it from granting interim relief is a rule of national law must set aside that
rule.

Due Slynn Kakouris Schockweiler Zuleeg

Mancini Joliét Moitinho de Almeida

Rodriguez Iglesias Grévisse Diez de Velasco

Delivered in open court in Luxembourg on 19 June 1990.

J.-G. Giraud O. Due

Registrar President

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