The Court of First Instance

The Court of First Instance is made up of at least one judge from each Member State (27 in 2007). The judges are appointed by agreement of the Member State governments for a renewable mandate of six years. They appoint their President, for a period of three years, from amongst themselves. They appoint a Registrar for a mandate of six years.

The judges carry out their tasks in a totally impartial and independent manner.

Unlike the Court of Justice, the Court of First Instance does not have permanent Advocates General. However, that task may, in exceptional circumstances, be carried out by a Judge.

The Court of First Instance sits in Chambers of five or three judges or, in some cases, as a single judge. It may also sit as a Grand Chamber (thirteen judges) or as a full court when the legal complexity or importance of the case justifies it. Approximately three quarters of the cases brought before the Court of First Instance are heard by a Chamber of three judges.

The Presidents of the Chambers of five judges are elected from amongst the Judges for a period of three years.
The Court of First Instance has its own Registry, but uses the services of the Court of Justice for its other administrative and linguistic requirements.

The Court of First Instance has jurisdiction to hear:

• direct actions brought by natural or legal persons against acts of Community institutions (addressed to them or directly concerning them as individuals) or against a failure to act on the part of those institutions, for example, a case brought by a company against a Commission decision imposing a fine on that company;
• actions brought by the Member States against the Commission;
• actions brought by the Member States against the Council relating to acts adopted in the field of State aid, ‘dumping’ and acts by which it exercises implementing powers;
• actions seeking compensation for damage caused by the Community institutions or their staff;
• actions based on contracts made by the Communities which expressly give jurisdiction to the Court of First Instance;
• actions relating to Community trade marks.

The rulings made by the Court of First Instance may, within two months, be subject to an appeal, limited to questions of law, to the Court of Justice.

Disputes between the Communities and their staff are heard by the Civil Service Tribunal. However, there is a right of appeal, limited to questions of law, to the Court of First Instance.

The Court of First Instance has its own Rules of Procedure. In general, the proceedings include a written phase and an oral phase.

An application, drawn up by a lawyer or agent and sent to the Registry, opens the proceedings. The main points of the action are published in a notice, in all official languages, in the Official Journal of the European Union. The Registrar sends the application to the other party to the case, which then has a period within which to file a defence. The applicant may file a reply, within a certain time-limit, to which the defendant may respond with a rejoinder.

Any person who can prove an interest in the outcome of a case before the Court of First Instance, as well as the Member States and the Community institutions, may intervene in the proceedings. The intervener files a statement in intervention, supporting or opposing the claims of one of the parties, to which the parties may then respond. In some cases, the intervener may also submit its observations at the oral phase.

During the oral phase a public hearing is held. When the lawyers are heard, the judges can put questions to the parties’ representatives. The Judge-Rapporteur summarises, in a report for the hearing, the facts relied on and the arguments of each party and, if applicable, of the interveners. This document is available to the public in the language of the case.

The judges then deliberate on the basis of a draft judgment prepared by the Judge-Rapporteur and the judgment is delivered at a public hearing.

The procedure before the Court of First Instance is free of court fees. However, the costs of the lawyer entitled to appear before a court in a Member State, by whom the parties must be represented, are not paid by the Court of First Instance. Even so, an individual who is not able to meet the costs of the case may apply for legal aid.

• Interim proceedings

An action brought before the Court of First Instance does not suspend the operation of the contested act. The Court may, however, order its suspension or other interim measures.

The President of the Court of First Instance or, if necessary, another judge rules on the application for interim measures in a reasoned order.

Interim measures are granted only if three conditions are met:

1) the substance of the main proceedings must appear, at first sight, to be well founded;
2) the applicant must show that the measures are urgent and that it would suffer serious and irreparable harm without them;
3) the interim measures must take account of the balance of the parties’ interests and of public interest.

The order is provisional in nature and in no way prejudges the decision of the Court of First Instance in the main proceedings. In addition, an appeal against it may be brought before the President of the Court of Justice.

• Expedited procedure

This procedure allows the Court to rule quickly on the substance of the dispute in cases considered to be particularly urgent.

Expedited procedure may be requested by the applicant or by the defendant.

• Linguistic system

The language used for the application, which may be one of the 23 official languages of the European Union, will be the language of the case.

The proceedings in the oral phase of the procedure are simultaneously interpreted, as necessary, into different official languages of the European Union. The judges deliberate, without interpreters, in a common language which, traditionally, is French.

From the beginning of its operation until the end of 2006, the Court ruled on more than 5,200 cases. Its case-law has developed in particular in the fields of intellectual property, competition and State aid.
A few examples will give a good idea of the type of cases brought before the Court of First Instance.

• Community trade marks

The company Henkel applied to the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), which is responsible for promoting and managing Community trade marks, for registration of a trade mark for a washing powder or dishwasher tablet. The three-dimensional trade mark applied for was in the form of a round tablet with two layers coloured white and red. The application was rejected by OHIM and the applicant brought an action before the Court of First Instance for annulment of the decision.

According to a Community regulation, it is not possible to register a trade mark which is not distinctive. In this case, the contested trade mark was made up of the form and arrangement of the colours of the product, that is to say by the appearance of the product itself.

The Court took the view that that trade mark would not allow consumers, when choosing which product to buy, to distinguish between the goods covered by the trade mark and those made by another manufacturer. Consequently, it dismissed the company’s action, since OHIM had been right to conclude that the three-dimensional trade mark was not distinctive (judgment in Henkel KGaA v OHIM, 2001).

• Mergers

Airtours, a British company selling package tours from the United Kingdom, wished to acquire a competitor, First Choice. The Commission was informed by Airtours of this proposed merger. The Commission declared the merger incompatible with the common market on the ground that it would have led to Airtours having a collective dominant position.

Airtours brought an action before the Court of First Instance for annulment of the Commission’s decision.
The Court stated that a merger may be prohibited if it will lead directly and immediately to the creation or reinforcement of a collective dominant position, significantly distorting effective competition in the market over a long period.

The Court concluded that, because the Commission had made a number of errors of assessment, it had not shown sufficient evidence of the negative effects of the merger on competition, and the Court therefore annulled the contested decision (judgment in Airtours plc v Commission, 2002).

• Cartels

Community law prohibits all agreements between companies, all decisions by associations of companies and all concerted practices which are likely to affect trade between Member States and which are intended to or have the effect of preventing, restricting or distorting competition within the common market.

Following a complaint, the Commission made certain checks and, in 1998, adopted a decision finding that a number of companies participated in a set of prohibited agreements and practices in the European district heating market. The Commission imposed fines amounting to a total of around EUR 92 million on the companies participating in that cartel.

The Court of First Instance dismissed almost entirely the actions for annulment brought against the Commission’s decision, after finding that there was proof of, firstly, the existence of the various elements constituting the overall agreement and, secondly, the individual involvement of the companies in the anticompetitive conduct for which they had been held liable, except with regard to the length of time one of the companies participated in the agreement and the geographical range of the agreement as regards another company.

The fines imposed by the Commission were, moreover, on the whole confirmed by the Court in the total sum of EUR 83 410 000. However, the fines imposed on two companies were reduced (judgment in the Cases HFB and Others v Commission, 2002).

• State aid

By a Law of 1991, a banking organisation owned outright by the Land of North-Rhineland-Westphalia and having the task of granting financial assistance for the building of housing was transferred to a banking organisation governed by public law. The Land received as payment a sum much lower than the market price.

The Commission decided that the transaction was unlawful State aid, incompatible with the common market. According to the Commission, the difference between the market value and the amount paid was the sum of around EUR 808 million, and this constituted unlawful State aid. The Land and the two banking organisations then sought annulment of the Commission decision before the Court of First Instance.

The Court ruled that the Commission, which is subject to a duty to give reasons, had failed to give sufficient reasons for its estimate of the market value. The Court therefore annulled the Commission decision (judgment in Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission, 2003).

• Access to documents

Ms Hautala, a member of the European Parliament, had asked the Council of the European Union to send her a report on arms exports. Relying on its power to refuse access to such a document in order to protect the public interest in the field of international relations, the Council refused to release the report because it contained sensitive information, the disclosure of which might harm the relations of the European Union with non-Member States.

In this situation, Ms Hautala brought an action before the Court of First Instance seeking annulment of the Council’s decision refusing to send her the report.

In its judgment, the Court restated the principle that the public must have the widest possible access to documents, exceptions to that rule having to be interpreted and applied strictly.

It said that the Council should have considered the possibility of editing certain pages likely to harm international relations and therefore looked into whether partial access to the document could be authorised. Since the Council had not taken that step, the Court annulled its decision (judgment in Hautala v Council, 1999).