• In the case of Case C-106/89 Marleasing [1990] ECR I-4135, the European Court of Justice widened the definition of indirect effect based on a directive that had not been implemented.
  • This case was about the doctrine of indirect effect in relation to the enforcement of EU directives.
  • This case involved freedom of establishment and national courts.

Facts of the Case

  • C contended that the contract formed with D was void since D was deceiving the lenders.
  • C attempted to rely on a Directive on company law harmonisation in this appeal pointing out that the national law in Spain was unclear regarding the Directive not having been implemented.

Issues

  • Could C rely on the rules established by Directive 68/151?
  • Was a declaration of nullity prevented for reasons otherwise explained by the Directive 68/151?

Held by European Court of Justice

  • C’s claim dismissed – the Directives did not have horizontal direct effect.

Judge Mancini (President)

Indirect effect

  • Indirect effect can be used whether the Member State legislation was enacted before or after the Directive.
  • “The answer to the question submitted must therefore be that a national court hearing a case which falls within the scope of Directive 68/151 is required to interpret its national law in the light of the wording and the purpose of that directive in order to preclude a declaration of nullity of a public limited company on a ground other than those listed in Article 11 of the directive.”

Advocate General Van Gerven

National law and Community law

  • Only the national courts could interpret the Directive’s phrasing in line with European Community law.
  • “Community directives have no “horizontal” legal effect and that their provisions cannot be relied upon in legal relations between individuals. The fundamental objection is no doubt the legal uncertainty which the opposite view would cause in legal relations between individuals.”
  • The Advocate General cited Case 14/83 Von Colson and Kamann v Land Nordrhein-Westfalen [1984] ECR 1891 and held “It follows that, in applying national law, whether the provisions in question were adopted before or after the directive, the national court called upon to interpret it is required to do so, as far as possible, in the light of the wording and the purpose of the directive in order to achieve the result pursued by the latter and thereby comply with the third paragraph of Article 189 of the Treaty.”

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