What was the relationship between the Factortame case and the Treaty of Rome 1957?

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The Factortame case involved the legislative discretion of a Member State, namely the UK, to address an issue which was deemed detrimental to their citizens. Such resulted in a lengthy litigation due to objections to the implementation of the Merchant Shipping Act 1988.

Questions:

  • What was the relationship between the Factortame case and the Treaty of Rome 1957?
  • In consideration of such relationship and the impact thereof on Member States, what was the significance of the Factortame case? The Factortame litigation concerns companies with Spanish interests who had previously enjoyed fishing rights entitling them to fish against UK quotas under the Common Fisheries Policy

Rights enjoyed under the Merchant Shipping Act 1894 became invalid on introduction of the Merchant Shipping Act 1988 which required owners of vessels fishing in UK waters to reside in the UK and that 75% of ownership of shipping vessels were required to be held by British citizens or companies. Registration of vessels under the Merchant Shipping Act 1894 would become invalid as of 01 April 1989 and re-registration would be required.

Many previously registered vessels were not able to comply with the requirements; such decrease in trade would have a detrimental effect on the fishermen economically and socially.

In 1976 the EEC required Members to ensure equal access to and use of fishing grounds under their jurisdiction for fishing vessels belonging to a Member State registered in Community territory.

In 1977 the UK, declared a 200 mile Exclusive Economic Zone around the EEC. 

An agreement between Spain and the ECC instituted a quota allowed for catches of each party in the fishing grounds of the other party and a licensing system for such authorized vessels.

The Spanish were accused of quota hopping, thus the British Fishing Boats Act 1983; the Spanish could not land their catch in the UK.

Such Act became ineffective when Spain joined the EEC.  Spanish fishing vessels were able to fish in UK waters, if prevented they could institute a claim against the UK.

Due to controls implemented being insufficient in terms of fishing quotas and concerns with the CFP, in that it represented a derogation from many principles on which the EEC was based and that the UK felt that they were losing sovereignty to Brussels, brought about the Merchant Shipping Act 1988.

The owners of the fishing vessels objected to the Act, stating that it was contrary to the Treaty under Articles 7, 52, 58 and 221..

Factortame I

A preliminary ruling was sought as well as an order preventing the Secretary of State from enforcing re-registrations and allowing registration under the 1894 Act to remain active.

In June 1990, the ECJ held that, as per Article 5 of the Treaty, a national court is to ensure the legal protection which persons derive from the direct effect of provisions of Community law.

Thus, interim relief is to be granted pending a ruling from the ECJ as to whether a conflict exists. The ECJ added its objection both to the domicile and to the residence conditions.

Thus, in terms of Section 2(4) of the ECA 1972, Part II of the Merchant Shipping Act 1988 is to be construed and take effect subject to directly enforceable Community rights and those rights are, by section 2(1) of the ECA 1972, to be recognised and available in law, and enforced, allowed and followed accordingly. In October 1990 the House of Lords granted such interim relief as per the ECJ’s ruling and in order to avoid any further loss to the Appellant; and in terms of Section 37 of the Supreme Courts Act of 1981. Thus the Court set aside a national procedural rule. Prior to such the House of Lords was of the opinion that they lacked jurisdiction in that they did not have the power to set aside a national law as such would be in contravention of Parliament.

 The issue of the supremacy of directly effective Community law in national courts was settled as per above in that the interim injunction was granted based on the direct effect which the application of the Act 1988 would have, the final judgment effectively proved the need for such interim relief and as such, a precedent was set, it made constitutional history as it was accepted that every statute is intended to comply with European law. Thus the constitutional factors addressed in the Factortame litigation was that of the Courts being able to firstly provide protection based on an alleged breach of Community law; secondly granting of an interim injunction against the Crown and the conditions which would allow such to be granted. Such is the significance of the Factortame litigation, more specifically in terms of Parliamentary Sovereignty.

It is evident that Parliaments of Member States are no longer fully in power to make and enforce law. The supremacy of EC law is inherent within the nature and spirit of the Treaty. Moreover, Community law is supreme where applicable, that is parliamentary supremacy of a Member State is not always affected by Community law. However, there are limitations of such supremacy. It is evident in the Factortame cases that Member States have limited their sovereign rights. Moreover, Lord Bridges’ speech reaffirms such limitation ³«whatever limitation of its sovereignty Parliament accepted when it enacted the European Communities Act 1972 was entirely voluntary.´ In the matter of Internationale Handelsgesellschaft mbH v Einfuhr [1970] it was established that the validity of a Community measure or its effect within a Member State cannot be affected by allegations that it runs counter to either fundamental rights as formulated by the constitution of that State or the principles of a national constitutional structure.

Arguments presented by Sir William Wade indicated that a revolution had taken place.However, in Maccarthys Limited v Smith [1979] it is presumed that Parliament passes an Act ensuring that all requirements of the Treaty are met, if such requirements are deliberately repudiated by Parliament, Lord Denning felt that it would be the courts duty to follow the statute passed by Parliament; however, in that such was not deliberate the court was obligated to give priority to the Treaty.

Such is indicative of what took place in the Factortame case as in order to satisfy Community Law with regards to fishing quotas, the Merchant Shipping Act 1988 breached other requirements of the Treaty.Thus, Community law is supreme over the national law of the member states, including the fundamental norms of their national constitutions, where applicable. Such doctrine of supremacy developed from the following cases Van Gend en Loos [1963]; Costa v ENEL[1964]; Internationale Handelsgesellschaft [1970] ECR 1125; Simmenthal [1978] ECR 629; Factortame [1990] and Brassiere du Pechier and Factortame (No 4) [1996].

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Moreover, Clause 18 of the European Union Bill 2010/11 provides a statutory confirmation in terms of maintaining the balance between the supremacy of Community law (now referred to as EU law) in matters of substantive law and the supremacy of the UK Parliament in establishing the legal framework within which EU law operates. Thus in terms of the supremacy of Parliaments of Member States in terms of Community law, one can argue that such is compromised, however in a positive light; one can say that supremacy is ‘shared´.

Factortame II

In July 1991 the ECJ ruled it is contrary to the provisions ...

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