In Federconsorzi and Liquidazione giudiziale dei beni ceduti ai creditori della Federconsorzi (Federconsorzi), C-104/14, EU:C:2015:125, the Court of Justice of the EU (CJEU) has addressed a rather obscure issue of succession of exemptions to comply with EU Directives that I find interesting. In my view, the underlying issue is one of good faith and estoppel related to the case law on anticipatory effect of Directives [such as Inter-Environnement Wallonie and Mangold; see M Klamert, The Principle of Loyalty in EU Law, Oxford Studies in European Law (Oxford, OUP, 2014) 76-77], although the CJEU has reached a different solution in Federconsorzi.
The preliminary reference sent by the Corte suprema di cassazione (Italy) concerned certain difficulties in the transition from the implementation of Directive 2000/35 to that of Directive 2011/7, both of them on combating late payment in commercial transactions, regarding Italian legislation modifying the interest on a
debt predating those directives to the detriment of a State creditor.
Due to Italian post-WWII mechanisms to ensure supply of certain agricultural products that were in place until 1967, a large number of agricultural cooperatives held a significant volume of credit against the State (about €512 mn) due to the management of that centralised supply of cereals and other agri-food products. That debt was assigned to Federconsorzi (now in liquidation) in 1999 as part of a broader reform of the legislation applicable to agricultural cooperatives. The applicable 1999 legislation determined that the credits held by Federconsorzi against the State "up to 31 December 1997, shall be satisfied by
the allocation [...] of government securities by the
Minister for the Treasury, the Budget and Economic Planning".
In simple terms, Federconsorzi's claim is that both the 2003 and the 2012 reforms impose a detriment on the State creditors by setting too low interest rates on debts accrued after 1995, which would run contrary to (both the 2000 and 2011) EU rules on combating late payment in commercial transactions. The difficulty from a technical perspective is that Italy opted to limit the temporal effects of both Dir 2000/35 and Dir 2011/7 in their respective transpositions, so that the rules derived from Dir 2000/35 did not apply to contracts concluded before 8 August 2002, and those transposing Dir 2011/7 only apply to transactions concluded on or after 1 January 2013.
The most interesting point is thus to determine whether the legally-mandated changes (ie reduction or cap) of the interest rates applicable to credits derived from pre-existing contracts with Federsconsorzi, but which were enacted in the period of effectiveness of the rules transposing Dir 2000/35 (both of them happened between 8 Aug 2002 and 1 Jan 2013) and one of them during the period for transposition of Dir 2011/7, are contrary to EU law--implicitly, at least in the second case, on the basis of the latter's anticipatory effect.
The reasoning followed by the CJEU to reach this conclusion deserves some closer look. According to the CJEU,
31 ... the option for a Member State, when transposing Directive 2000/35, of excluding contracts concluded before 8 August 2002, as the Italian Republic did [...] is expressly provided for in Article 6(3)(b) of that directive and, when exercised, that option has the effect of rendering all the provisions of that directive inapplicable ratione temporis to those contracts.
32 Furthermore, modifications to the disadvantage of a creditor of the State, made by a legislative act adopted during the period prescribed for transposition of Directive 2011/7, of the interest on a debt arising from the performance of a contract concluded before 16 March 2013 may not in any event be regarded as being capable of seriously compromising the attainment of the objective pursued by that directive (see judgment in Inter-Environnement Wallonie, C‑129/96, EU:C:1997:628, paragraph 45), as Article 12(4) of that directive gives Member States the option of excluding contracts concluded before that date, and the Member State concerned could therefore consider exercising that option.
33 Consequently, it does not follow from the obligation to transpose Directive 2011/7, nor can it be inferred from Article 12(3) of that directive, allowing Member States to retain or adopt provisions more favourable to the creditor than the provisions necessary to comply with that directive, or from Article 7 of that directive, on abusive agreements, terms or practices, that a Member State which has made use of the option under Article 6(3)(b) of Directive 2000/35 may not modify, to the detriment of a creditor of the State, during the period prescribed for transposition of Directive 2011/7, the interest on a debt arising out of the performance of a contract concluded before 8 August 2002, without prejudice, however, to the possibility of there being remedies under domestic law against such a modification (C-104/14, paras 31-33, emphasis added).
That could easily be squared with the Inter-Environnement test of compromising the objective pursued by the Directives, given that it originally was to "prohibit abuse of freedom of contract to the disadvantage of the creditor. Where an agreement mainly serves the purpose of procuring the debtor additional liquidity at the expense of the creditor ... these may be considered to be factors constituting such an abuse" (rec 19 Dir 2000/35), and did not change later (if not to stress the objective to avoid abuses) with its 2011 rewording: "[t]his Directive should prohibit abuse of freedom of contract to the disadvantage of the creditor. As a result, where a term in a contract or a practice relating to ... the rate of interest for late payment ... is not justified on the grounds of the terms granted to the debtor, or it mainly serves the purpose of procuring the debtor additional liquidity at the expense of the creditor, it may be regarded as constituting such an abuse" (rec 28 Dir 2011/7, emphasis added).
Consequently, I think that once again the CJEU has taken an easy way out in order to provide legal certainty to Member States at the expense of substantive compliance with EU law.
