Report for the Hearing delivered in Case 88/86

I — Facts and procedure

A— The relevant Community rules

Regular coach transport between Member States is governed by Regulation (EEC) No 517/72 of the Council of 28 February 1972 on the introduction of common rules for regular and special regular services by coach and bus between Member States (Official Journal, English Special Edition 1972 (I), p. 143, as amended by Council Regulation (EEC) No 1301/78 of 12 June 1978 (Official Journal 1978, L 158, p. 1).

Article 1 of Regulation No 117/66/EEC of the Council of 28 July 1966 on the introduction of common rules for the international carriage of passengers by coach and bus (Official Journal, English Special Edition 1965-66, p. 177) defines regular services as ‘services which provide for the carriage of passengers at specified intervals along specified routes, passengers being taken up and set down at predetermined stopping points’.

Article 2 of Regulation No 517/72 provides that authorization must be obtained for regular services. Articles 3 and 4 of that regulation set out certain general rules concerning that authorization.

The criteria for authorization are set out in Article 8 of the abovementioned regulation:

‘1. Examination of an application to introduce a regular service or a special regular service shall be for the purpose of establishing that the traffic to which the application relates is not already catered for in a satisfactory manner, both as to quality and as to quantity, by existing passenger transport services. 2. The following, in particular, shall be taken into consideration during the examination referred to in paragraph 1 : (a) the current and foreseeable transport needs which the applicant is planning to meet; (b) in the case of regular services, the state of the passenger transport market in the areas in question. 3. During the examination referred to in paragraph 1, consideration may be given to whether an equivalent transport service could be organized by undertakings already operating in the areas concerned’.

Article 12 et seq. set out the authorization procedure. Under Article 12 (2) applications to introduce a regular transport service must be submitted to the Member State in whose territory the headquarters of the undertaking concerned is situated. Article 12 (4) provides that that Member Sute must forward a copy of the application to the Member States over whose territories the service concerned is to pass and to the Commission. The application must comply with certain requirements described in Article 12 (1) and (2).

Thereafter, the Member States in whose territories passengers are to be taken up or set down commence negotiations concerning the application. They must reach a decision by common accord. Member States whose territories are to be crossed in transit without passengers being taken up or set down therein and the Commission are to be informed of the progress of negotiations and may submit their observations (see Article 13 (2)). Decisions pursuant to Article 13 may only take effect one month after their notification to the Member States referred to in Article 13 (2).

Such Member States may object to the decision before it takes effect (see Article 13 (4)). In that case, or if no agreement is forthcoming from the negotiations referred to in Article 13 (1), a Community arbitration procedure may take place at the request of one of the Member States affected. The Commission then adopts a decision as soon as possible (see Article 14 (1)). The matter may be referred to the Council within the following 30 days. In that case, the Council must take a decision within 30 days (Article 14 (2)).

Finally, Article 16 (1) of Regulation No 517/72 provides that the authorization is to be granted, or the application refused, by the competent authority of the Member State in whose territory the headquarters of the applicant undertaking is situated pursuant to a common accord or a decision of the Commission or Council. Under Article 16 (2):

‘Decisions taken by the competent authorities of Member States pursuant to paragraph 1 must state the reasons on which they are based. Member States shall ensure that transport undertakings in their capacity as such are given the opportunity to make representations concerning their interests, by appropriate means, in respect of such decisions’.

B — The national legislation

The relevant national rules are contained largely in the Uitvoeringsbesluit Autovervoer Personen of 1939 (Implementing Order on Passenger Transport, hereinafter referred to as ‘the Order’).

Those rules provide that applications for authorization must be sent to the Commissie Vervoervergunningen (Committee for the Authorization of Transport Services, hereinafter referred to as\‘the Committee’). They are sent initially to the Rijksinspecteur (State Inspector) in the district where the undertaking is established. The application is published and, within 30 days, persons affected may send written objections to the Rijkinspecteur who will forward them to the Committee, along with his observations.

The Minister informs the Committee when a decision has been taken on the basis of a common accord by the Member States concerned, and the Committee adopt the final decision.

C — The facts

On 5 February 1981 Autobusonderneming Snel en Co. BV (hereinafter referred to as ‘Snel’) applied to the Committee for authorization to introduce a regular coach service on the Amsterdam to London route.

At that time Van Nood Touringcars (hereinafter referred to as ‘Van Nood’) was already offering a coach service between Amsterdam and Calais as part of a service operated between Amsterdam and London using the Calais-Ramsgate hovercraft service. Furthermore, several months after Snel made its application, a transport service was introduced between Amsterdam and London by Bovo Tours BV (hereinafter referred to as ‘Bovo’).

Snel's application was introduced in accordance with the procedure provided for by Regulation No 517/72 and the abovementioned provisions of national law.

Snel's application was published pursuant to the provisions of the Order of 1939 and neither Van Nood nor Bovo raised any objection.

The Netherlands Minister for Transport, Water Control and Construction commenced negotiations with the United Kingdom and Belgium under Article 13 (1) of the abovementioned regulation. On 13 September 1982 the United Kingdom authorities informed him that they were in favour of the authorization being granted. On 10 November 1983 Belgium, whose territory was to be crossed by the service in question, also issued a favourable opinion.

On 17 November 1983, the Minister informed the Committee that the decision to grant the authorization had been taken on the basis of a common accord with the authorities of the United Kingdom and Belgium. The reasons for the Minister's decision were as follows:

‘1. There is considerable public interest in international coach travel. The reason for that interest is, in particular, the reduction in disposable income. The demand for certain services should be met if those services can be operated in conformity with the applicable rules. 2. Coach travel is simpler and cheaper than rail travel. In the case of coach travel it is not necessary for passengers, together with their luggage, to change from one form of transportation to another. 3. With the introduction of this service a wider public can be reached than with the existing service. Tickets can be sold on a wider scale in this country (and in the United Kingdom) through a more extensive sales network. It seems to me that this need not in itself lead to a withdrawal of existing services but rather makes it possible for a wider range of services to be offered on the best possible terms. 4. Over one year ago the United Kingdom authorities declared that they were prepared to grant the relevant authorization’.

By a decision taken on 12 April 1984 the Committee granted the authorization sought by Snel for a period of seven years, between 18 April 1984 and 17 April 1991, provided that the regular transport service was operated in conjunction with the British company Wallace Arnold Tours Ltd of Leeds on the Amsterdam—The Hague— Breda—Zeebrugge (B)—Dover (GB)— Gatwick(GB)—London and return route. The Committee cited the abovementioned grounds appearing in the Minister's Decision of 17 November 1983 as the basis for its decision but prefaced its statement with the following remarks:

‘The purpose of examining an application for the introduction of a regular service is to establish whether or not the traffic to which the application relates is already catered for in a satisfactory manner both as to quality and as to quantity by existing passenger transport services. In the opinion of the Committee, the proposed service between Amsterdam, The Hague, Rotterdam and Breda, on the one hand, and London, on the other, is already catered for in a satisfactory manner, both as to quality and as to quantity, by existing passenger transport services; the granting of the present application would not therefore promote the proper functioning of the transport services. However, it appears from the aforesaid letter of 17 November 1983 that the Minister for Transport, Water Control and Construction, after considering the present application, takes the view that the requested authorization should be granted ... ’.

On 21 May 1984 Bovo and Van Nood brought actions against the abovementioned decisions of 17 November 1983 and 12 April 1984 before the College van Beroep voor het Bedrijfsleven, (Administrative Court of last instance in matters of trade and industry) on the basis of Article 55 of the 1939 Law on passenger transport.

On 29 June 1984 the President of the College van Beroep voor het Bedrijfsleven decided to suspend the application of the decisions in question until that court had given a decision on the substance of the case.

On 14 February 1986 the College van Beroep voor het Bedrijfsleven gave its judgment. It declared the action to be inadmissible in so far as it related to the decision of 17 November 1983 but admissible in so far as it related to the decision of 12 April 1984. It also considered that it was necessary to obtain an answer to certain questions concerning the interpretation of Articles 8, 13 and 16 of Council Regulation No 517/72 in order to be able to give a decision on the substance. It therefore asked the Court of Justice to give a preliminary ruling on the following questions:

‘ (1) Must Article 16 (2) of Regulation (EEC) No 517/72 of the Council be interpreted to the effect that it is sufficient if a Member State provides, in its national legislation implementing that regulation, for a procedure which allows interested parties, before a decision concerning any application is taken, to submit written objections against that application within 30 days of its being deposited for public inspection? Whether Question 1 is answered in the negative or in the affirmative : (2) Must “decisions on applications to introduce a regular service taken by agreement between the Member States in whose territories passengers are to be taken up or set down”, as referred to in Article 13 (1) of Regulation No 517/72, be regarded as: (a) decisions of the Member State in which the undertaking applying for authorization has its headquarters taken by that Member State only after the other Member States concerned have given their assent; or (b) multilateral decisions adopted jointly by several Member States following international negotiations; or (c) sui generis decisions which, in view of their character and the existence of an alternative procedure for adopting a decision in the absence of agreement, may be equated with an act or decision of a Community institution? (3) In the event of the Court's considering that the interpretation set out in part (c) of Question 2 is correct, is the decision which the Netherlands Minister for Transport, Water Control and Construction announced — and for which he stated the reasons — in his letter of 17 November 1983 invalid on the ground that, for the reasons given in the body of this judgment, it conflicts with Article 190 of the EEC Treaty and/or Regulation No 517/72, in particular Article 8 thereof? (4) If the Court does not consider the interpretation set out in part (c) of question 2 to be correct, must Article 8 (1) of Regulation No 517/72 be interpreted to the effect that the expression “existing passenger transport services” covers solely regular passenger services by coach operated on the same route and using the same method of crossing the Channel as the service which is the subject of the application, or does it extend to other types of passenger service by coach (operated partly on a different route; using another method of crossing the Channel) and to passenger services by rail? ’

The judgment making the reference was entered in the Court Registry on 24 March 1986.

In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted by Bovo Tours BV and Van Nood Touringcars BV, the plaintiffs in the main proceedings, represented by M. W. Josephus Jitta of the Amsterdam Bar, by Snel and Co. BV, third party in the main proceedings, represented by R. A. A. Duk, of the Hague Bar, by the United Kingdom, represented by B. F. McHenry, of the Treasury Solicitor's Department, acting as Agent, by the French Government, represented by Régis de Gouttes, acting as Agent, by the Netherlands Government, represented by I. Verkade, acting as Agent, and by the Commission of the European Communities, represented by T. van Rijn, a member of its legal department, acting as Agent.

Upon hearing the Report of the Judge-Rapporteur and the views of the Advocate General the Court decided to open the oral procedure without any preparatory inquiry.

II — The written observations submitted to the Court

A — The first question

The plaintiffs in the main proceedings (hereinafter referred to as the ‘plaintiffs’) and the Commission consider that the first question must be answered in the negative. They maintain that it is not sufficient for a Member State to insert in its national legislation implementing the regulation a provision offering persons affecteid the opportunity to submit written objections within 30 days from the publication of the application. The regulation requires that the decision taken in response to. the application may be reviewed subsequently. Article 16 (2) of Regulation No 517/72 obliges Member States to provide for review of decisions taken pursuant to Article 16 (1). That is apparent from the actual wording of the provision, the preamble to the regulation and the place which that provision occupies in the regulation.

The second subparagraph of Article 16 (2) provides that Member States must ensure that transport undertakings in their capacities as such are given the opportunity to make representations concerning their interests, by appropriate means, ‘in respect of such decisions’. That clearly refers to the formal decision of the Member State on whose territory the applicant undertaking has its headquarters. It would be contrary to the unequivocal wording of that provision to provide solely that undertakings could make representations concerning their interests at an earlier stage than the adoption of the decision of the Member State on whose territory the applicant undertaking has its headquarters.

The preamble to the regulation is even clearer in this respect since its 10th recital states that ‘carriers must be given the opportunity to make representations concerning their interests, by appropriate means, in relation to certain decisions by Member States on applications’. Those interests can only be defended with respect to the final result, that is to say the decision taken pursuant to Article 16 (1).

That interpretation is borne out by the position of the provision within the regulation from which it is clear that transport undertakings must have the opportunity to challenge a decision affecting them in the light of the reasons given for the decision. This is also indicated by the fact that the position of the provision was changed in relation to the original proposal of the Commission under which it would have preceded the present Article 16 (1).

Snel, joined in the main proceedings as third party, the French and Netherlands Governments and the United Kingdom take the view that the second subparagraph of Article 16 (2) does not allow the affected undertakings any opportunity of appeal against decisions granting an authorization.

Provided that the national rules allow undertakings likely to be adversely affected by a new authorization to put forward their point of view and to make representations concerning their rights to the authority which takes the decision, as is the case with Netherlands and United Kingdom legislation, such legislation is compatible with Article 16 (2) of the regulation.

Snel submits that in this respect Member States have a ‘general duty’ and not a ‘specific duty’ (such as, for example, the task of administering a fishing or tariff quota). The wording, the structure and the purpose of Regulation No 517/72 all point towards the interpretation of the provision in dispute which is suggested above. If there were any subsequent judicial review, it would be devoid of purpose.

The intervening Governments stress that it is clear from the second subparagraph of Article 16 (2) that Member States can choose the ‘appropriate means’ to ensure that interested parties have the opportunity to make representations concerning their interests.

Article 16a (1) of Regulation No 517/72 (inserted by Council Regulation (EEC) No 1301/78 of 12 June 1978, Official Journal 1978, L 158, p. 1) envisages the situation in which objections may be made by other interested carriers before an authorization is renewed. If the Council had intended to oblige Member States to organize a system of appeals against decisions adopted under Article 13 (1) it would have explicitly provided for this and Article 16a (1) would mention it.

On the other hand they submit that the competent authority has no discretionary power when applying Article 16 (1); on the contrary it is obliged to act in conformity with the terms of the agreement between the Member States under Article 13 (1). It would therefore be completely unjustified and incompatible with Article 16 (1) to allow national authorities to review a decision taken after agreement between the Member States on whose territory travellers are taken up and set down. The United Kingdom maintains that that decision is an international agreement which cannot be questioned by a national authority.

Finally, the Netherlands Government points out that a subsequent appeal before a national court against the granting of an authorization in a particular Member State might have the effect that a carrier could no longer continue to operate whereas his partner in another Member State could do so on the basis of his own authorization. That is the situation at present on the Amsterdam-London line.

B — The second question

The plaintiffs, the French Government and the Commission believe that the decisions on applications to introduce regular transport services referred to in Article 13 (1) of the regulation should be considered to be decisions taken by the Member State on whose territory the applicant undertaking has its headquarters which that Member State does not adopt until it has obtained the agreement of the other Member States concerned. The fact that the competent authority of the Member State which takes the decision must obtain the prior agreement of the other Member States concerned and, if that is not forthcoming, can only take a decision once the Commission and the Council have arbitrated in the matter, does not affect the strictly national nature of the decision concerned.

The Netherlands Government submits that, in its distribution of powers, the regulation makes a distinction between the Member States, who adopt decisions on the basis of agreement, and the national authority which issues the authorization. Article 16 of the regulation provides that the national authority decides pursuant to the agreement of the States. That decision may therefore be considered to be a joint decision of the Member States taken in implementation of the regulation.

Snel and the United Kingdom point out that the decision referred to in Article 13 (1) of the regulation constitutes an international agreement concluded between the Member States concerned. It cannot therefore be open to review by domestic tribunals or by the Court in so far as it is not an act of a Community institution. Basing itself on the wording of Regulation Nos 516/72 and 517/72 Snel submits that the decision is an agreement between States concerning the introduction of regular international transport services but not a treaty for the purposes of public international law. Snel also notes that under Article 13 (4) of the regulation, ‘decisions pursuant to paragraph 1 shall take effect one month after their notification to the Member States referred to in paragraph 2’. The expression ‘take effect’ indicates that this is not a national decision which is open to review by the courts in the State concerned.

The United Kingdom argues that each Member State in whose territory passengers are taken up or set down has the same interest in whether or not the authorization is granted and that each should therefore be on the same footing as regards the making of the decision. In the instant case, the letter of 17 November 1983 from the Netherlands Minister does not constitute a decision but merely records the decision taken jointly by the United Kingdom and the Netherlands.

The Member State in whose territory the headquarters of the undertaking is situated need not necessarily participate in the decision-making process under Article 13 of Regulation No 517/72. An application for authorization might be made by a transport undertaking whose headquarters is in a Member State other than those States in whose territories passengers are to be taken up or set down. For example, the application could be made by an Italian undertaking to operate a regular service between France and Germany.

The United Kingdom also argues that if domestic courts were permitted to exercise jurisdiction over agreements between Member States, insoluble conflicts between the legal systems concerned would arise. These conflicts can be illustrated using the present case as an example. The services operating from the United Kingdom are provided by a consortium of coach operators established in the United Kingdom and the Netherlands. When the service was set up the members of the consortium made parallel applications to their own Governments for the necessary authorization which was granted pursuant to the procedures laid out in Regulation No 517/72. If the Netherlands courts were to invalidate the authorization issued by the competent authority in the Netherlands the judgment would have no effects vis-à-vis the United Kingdom operator. The outcome would be that only a United Kingdom undertaking could provide the service in question. The competent authority in the United Kingdom could not withdraw the authorization granted since this would constitute a breach of the agreement reached in accordance with Article 13 (1) of Regulation No 517/72 between the Governments of the United Kingdom and the Netherlands.

Finally, the fact that decisions taken under Article 13 are not subject to review by the courts of Member States does not signify that the actions of Member States are free from judicial control. A failure by a Member State to fulfil its obligations under the regulation will lay it open to proceedings under Article 169 of the EEC Treaty.

C — The third question

In the light of the answers to the second question the parties have considered that it is unnecessary to answer the third question.

D — The fourth question

The pkintiffi, the French Government and the Commission consider that the expression ‘existing passenger transport services’ in Article 8 of the regulation must be given a wide meaning to include all existing forms and means of passenger transport which are relevant to the examination of the application.

As regards rail transport, the plaintiffs point out that that is borne out by the third recital of the preamble to Regulation No 516/72 and paragraph 5 of the general considerations which form part of the commentary on the draft of Regulation No 517/72. Air services must also be taken into account when evaluating all the transport services on offer.

The French Government considers that that interpretation is buttressed by the existence of Article 9 (2) of Regulation No 517/72 which specifies that ‘the Member States concerned shall be entitled to vary by agreement, after hearing the holder of the authorization, the conditions subject to which a regular service is operated’, ‘without prejudice to Council Regulation (EEC) No 1191/69 of 26 June 1969 on action by Member States concerning the obligations inherent in the concept of a public service in transport by rail, road and inland waterway’. That interpretation was confirmed by the Commission in its reply to written question No 2311/84 from Mr Georges Patterson (Official Journal, C 203, 12.8.1985, p. 14).

The Commission stresses that the actual wording of the expression ‘existing passenger transport services’ is general and calls for a wide interpretation. Similarly, when considered within the context of the common transport policy as a whole, the purpose of Article 8 also militates in favour of a wide interpretation.

Furthermore, if the Community legislature had wished to restrict the scope of rules to road transport it would have expressly said so (see Article 4 of Regulation No 517/72 containing the expression ‘international passenger road transport’ and Article 4 of Regulation No 117/66, which uses the same expression, as well as the title of that latter regulation).

Finally, the Commission stresses that the transport market is subject to particularly rigid rules. In most Member States rail transport is considered to be the most appropriate form of passenger transport especially over long distances, which explains State subsidies and its privileged position in general. Passenger transport by road is authorized only in so far as it complements existing rail transport services.

Snel and the Netherlands Government consider that the expression ‘existing passenger transport services’ must be interpreted as meaning only regular passenger transport services by coach over the same route as the regular services to which the application relates.

The wording of Regulations Nos 117/66 and 517/72 is limited to international coach transport. The purpose of Article 8 is to guarantee the continuity of transport services and the interests of passengers and not the protection of the commercial interests of existing operators by creating to their advantage a closed market where competition is not admitted.

In the present situation, railways may indeed be taken into account when the services' market is assessed, but the abovementioned regulations refer only to coach and bus transport and do not contain any reference to passenger transport by railway or any other means.

Furthermore, it is clear that Article 8 (1) concerns the route to which the application relates and provides that it must be established that that route is not already served in a satisfactory manner, both as to quality and as to quantity, by existing passenger transport services. In this context there is no question of taking into account forms of passenger transport other than by bus in the assessment of existing transport.

The United Kingdom maintains that the examination of the application should not only take into account the market situation in passenger transport, which might include railway and air transport, but also other factors such as the interests of consumers and the development of a competition policy. It also points out that 13 years after the United Kingdom joined the Community there are still only 25 regular international coach services between the United Kingdom and other Member States. Citizens of the Community are denied access to a convenient, direct and inexpensive- mode of travel. A narrow construction of Article 8 would fetter the development of the market and the development of the freedom to provide services. Therefore the United Kingdom agrees with the reasons given by the Netherlands Minister for Transport in the present case. It. supports the contention that the new service would make coach travel available to a wider public. Experience in the United Kingdom, where long-distance coach services are deregulated, demonstrates that the provision of alternative services leads to substantial improvements in the quality and frequency of services and to increased travel by coach, to the benefit of the travellers and carrier alike. The decision in question was therefore in accord with Article 8 in that the Member States were entitled, in making their decision under Article 13, to take the view that the provision of the additional services in question would, by providing further choice for the public, be likely to improve the provision of services both in quality and quantity.

J. C. Moitinho de Almeida

Judge-Rapporteur

1 Language of the Case: Dutch.