Directive 2009/73 concerning common rules for the internal market in natural gas lays down various obligations which EU Member States have to transpose into national law, and with which undertakings active in the gas sector have to comply. This directive has recently been amended by Directive 2019/692, notably in order to extend its scope of application to gas transmission lines “between a Member State and a third country”.
This prompted Nord Stream 2, a company responsible for the planning, construction and operation of the offshore gas pipeline of the same name, to file annulment proceedings against Directive 2019/692 before the General Court of the EU. Indeed, the Nord Stream 2 pipeline consists of two gas transmission lines which will ensure the flow of gas between Vyborg (Russia) and Lubmin (Germany). Therefore, the extension by Directive 2019/692 of the scope of application of Directive 2009/73 results in additional obligations for Nord Stream 2.
In its order of 20 May 2020, the General Court dismissed Nord Stream 2’s action as inadmissible on the grounds that this company had failed to demonstrate that it was “directly” concerned by Directive 2019/692, as required by Article 263 TFEU. Indeed, in the General Court’s view, the concrete obligations to be imposed on Nord Stream 2 instead depend on the transposition measures to be adopted at national level. In addition, the national authorities have a wide margin of discretion in granting derogations from the imposition of certain obligations laid down in Directive 2009/73.
Nord Stream 2 appealed against this order. On 12 July 2022, the Court of Justice of the EU, sitting in Grand Chamber, overruled the General Court’s decision.
In its judgment, the Court of Justice underlined, in substance, that the General Court’s reasoning amounts to excluding directives from the scope of acts likely to be challenged in annulment proceedings in accordance with Article 263 TFEU, which is contrary to the Court’s case law.
In the Court’s view, the contested directive has the consequence of subjecting the operation of Nord Stream 2 to the rules provided for in Directive 2009/73, thus rendering applicable the specific obligations that it lays down. The fact that transposition measures are required in the light of the type of act at issue (a directive) is irrelevant in this respect, only to the extent that the Member State concerned has no discretion capable of preventing such obligations from being imposed on Nord Stream 2 and, therefore, of calling into question the direct nature of the link between the directive at issue and the imposition of such obligations.
In this regard, the Court of Justice considered that the General Court had failed to examine whether the derogations and exemptions laid down in the directive were capable of applying to Nord Stream 2 and whether the directive at issue allowed the Member State concerned a margin of discretion in its implementation as regards Nord Stream 2. Therefore, the Court of Justice carried out this verification and concluded that Nord Stream 2 did not satisfy the conditions laid down in Directive 2009/73 allowing the national authorities to grant it a derogation or exemption. Since national authorities do not have any discretion as regards the possibility of granting such exemptions or derogations in violation of this directive, there is a direct link between the entry into force of Directive 2019/692 and the imposition on Nord Stream 2 of the obligations laid down by Directive 2009/73.
As a consequence, the Court decided that the General Court had erroneously ruled that Nord Stream 2 was not directly concerned by the provisions of Directive 2019/692.
Furthermore, the Court of Justice observed that, since Nord Stream 2 was the only undertaking likely to be concerned by the extension of the scope of application of Directive 2009/73 without being eligible for a derogation or exemption under the provisions of this directive, it was also individually concerned by the derogation rules laid down in Directive 2009/73 as amended by Directive 2019/692.
Therefore, the Court of Justice declared Nord Stream 2’s appeal admissible to that extent and referred the case to the General Court.
This case shows that the fact that national authorities have a certain freedom in the implementation of the obligations laid down in a directive does not necessarily lead to the absence of “direct concern” of litigants by the provisions of said directive. It is only when the question of whether (and not how exactly) the legal situation of these litigants will be adversely affected depends on decisions to be adopted by national authorities that such litigants may be found to be without locus standi to challenge the directive at issue in the General Court.
When it is clear that, regardless of the manner in which national authorities will exercise their powers, additional obligations will be imposed on a person as a result of the adoption of an act of the Union, that person should not be forced to challenge the (most certainly adverse) decisions to be taken by Member States’ authorities in the national courts, in the hope that these courts will refer questions to the Court of Justice for a preliminary ruling. As Advocate General Michal Bobek pertinently pointed out in his opinion, the “complete system of legal remedies and procedures” designed to ensure judicial review of European Union acts “is not meant to be a lengthy obstacle race for applicants”.
For further information about this case and/or for general legal advice relating to EU litigation, please contact Pierre de Bandt or Raluca Gherghinaru.