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Port of Genoa (ECJ)

Merci convenzionali porto di Genova SpA v Siderurgica Gabrielli SpA
Reference for a preliminary ruling by the Tribunale di Genova
Court of Justice of the European Communities, case C-179/90
Judgment of 10 December 1991

Article 86(1) with Article 82; exploitative abuse; Article 86(2)
Article numbers refer to the 1997 consolidated version of the EC Treaty.

This was a preliminary ruling requested by an Italian court in a dispute between the company organising dock work at the Port of Genoa and an importer of steel in connection with a claim for compensation for delays resulting from an industrial dispute with dock workers. There was an Italian law reserving the organisation of dock work to specific companies and to Italian workers.

The questions from the Italian court were whether Article 86(1) precluded the application of Italian law restrictions on dock work, and whether Article 86(2) could provide a justification based on entrustment with the provision of services of general economic interest.

Article 86(1)

The court ruled that Article 86(1) read in conjunction with the free trade and competition provisions of the Treaty precluded the establishment by a member State of a monopoly over the organisation of dock work; and that victims of such an infringement have a right to remedies enforceable in court.

The analysis under Article 86(1) draws on the same links with Article 82 as in Corbeau. The case confirms that Article 86(1) prohibits the State from facilitating what would be exploitative abuse through a grant of exclusive rights (the corresponding abuse in Corbeau was in the form of an unfair restriction on competition).

The court also found that Article 86(1) read in conjunction with Articles 28-30 (free trade) would preclude the grant of these exclusive rights.

Article 86(2)

The court's reasoning on the application of Article 86(2) was as follows:

25. In its second question the national court is in essence asking whether Article 86(2) of the Treaty must be interpreted as meaning that a dock-work undertaking and/or company in the situation described in the first question must be regarded as being entrusted with the operation of services of general economic interest within the meaning of that provision.

26. For the purpose of answering that question it should be borne in mind that in order that the derogation to the application of the rules of the Treaty set out in Article 86(2) thereof may take effect, it is not sufficient for the undertaking in question merely to have been entrusted by the public authorities with the operation of a service of general economic interest, but it must be shown in addition that the application of the rules of the Treaty obstructs the performance of the particular tasks assigned to the undertaking and that the interests of the Community are not affected (see the judgments in Case 311/84 CBEM v Compagnie Luxembourgeoise [1985] ECR 3261, paragraph 17, and in Case C-41/90 Hoefner, cited above, paragraph 24).

27. In that respect it must be held that it does not appear either from the documents supplied by the national court or from the observations submitted to the Court of Justice that dock work is of a general economic interest exhibiting special characteristics as compared with the general economic interest of other economic activities or, even if it were, that the application of the rules of the Treaty, in particular those relating to competition and freedom of movement, would be such as to obstruct the performance of such a task.

28. The answer to the second question should therefore be that Article 86(2) of the Treaty must be interpreted as meaning that a dock-work undertaking and/or company in the position described in the first question may not be regarded, on the basis only of the factors set out in that description, as being entrusted with the operation of services of general economic interest within the meaning of that provision.

The Telemarketing and Hoefner preliminary rulings cited as authority do not appear to provide a basis for the particular wording used in paragraph 26:

the development of trade must not be affected to such an extent as would be contrary to the interests of the Community”.

Whilst these issues were probably of no relevance to the Italian court in the specific case, the departure from precedent and from the logic of the judgment in the wording of paragraph 26 has created a risk that the text quoted on its own would give a false impression that the applicability of Article 86(2) depends on whether the application of the Treaty in general would make it impossible to deliver the relevant public service. This would conflict with the logic of the judgment and authorities, under which Article 86(2) is a ground of justification for conduct that would otherwise be prohibited under the treaty, and only acts as a justification in so far as the specific conduct in question is necessary to deliver the public service.

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Last changed by Franck at 12:35 PM on Thursday 19 October 2006.

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Reckon Open "Port of Genoa" 2006-10-19T12:35:55
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