In ‘CityRail a.s. vs. Správa ~eleznic', the Court of Justice of the European Union (the ‘‘CJEU'') held that the Czech Office for Access to Transport (the ‘‘Authority'') is not considered to fall under the classification of the concept of a ‘court of tribunal' within the context of Article 267 of the Treaty of the Functioning of the European Union (the ‘‘TFEU'') and is therefore precluded from making a preliminary reference to the CJEU.

By way of background, the dispute at hand concerned on the one hand, CityRail a.s. a railway undertaking established in Czech Republic (‘‘CityRail''), and on the other hand, Správa ~eleznic, a railway infrastructure manager in the Czech Republic (‘‘Správa''). In line with its obligations and responsibilities as an infrastructure manager and operative of service facilities under Directive 2012/34/EU of the European Parliament and of the Council of 21 November 2012 establishing a single European railway area Text with EEA relevance (the ‘‘Directive''), Správa published a network statement under Article 3(26) of the Directive.

As one of the stakeholders directly affected by the network statement drawn up by Správa, CityRail brought proceedings against Správa before the Authority, alleging that the network statement that it  published ran contrary to the provisions of the Directive. The Authority was established under Article 55 of the Directive as the single national regulatory body for the rail sector and was tasked, inter alia, with monitoring competition in the rail services markets' and to review, in that context, the decisions taken by the stakeholders in the railway sector. The Authority was also vested with the power of considering any complaints brought before it, and where appropriate, taking those measures necessary to correct discrimination against applicants, market distortion and any other undesirable developments in these markets.

Uncertain on the way that the grievances brought forward by CityRail should be addressed, the Authority stayed the proceedings before it and requested the CJEU to clarify certain matters relating to the interpretation of Article 288 TFEU and Articles 3, 27 and 31 of the Directive.

In this context,the Authority was availing itself of the preliminary reference procedure, an essential tool, emanating from Article 267 TFEU which was designed to ensure consistency and uniformity in the application of EU law, by actively encouraging cooperation with national courts and allowing the interpretation and validity of EU law to fall solely within the CJEU's jurisdiction. Consistent and uniform interpretation and application of EU law is also essential across the Member States to reduce distortions of competition and promoting economic efficiency.

In making the request for a preliminary reference, the Authority principally outlined the reasons as to why it should be considered as ‘court' within the context of Article 267 TFEU. The procedure under Article 267 TFEU is a tool that is reserved only for a body that is considered to be a ‘court or tribunal' and this concept is a matter which must be interpreted strictly in line with EU law, and not considering national contexts of different Member States. Whether it qualifies as a ‘court or tribunal' under national law, is not determinate.

To this end, the CJEU has developed a criterion, commonly known as the Goebbels Criteria to help identify what constitutes a ‘court or tribunal'. This criterion includes various factors such as whether the body is established by law, whether it is permanent, whether its jurisdiction is compulsory, whether its procedure is inter partes, whether it applies rule of law and whether it is independent.

The Authority held that it fulfils the Goebbels Criteria since, it is established by national legislation as the central administrative authority, meaning that it is a permanent body established at law, it is independent in the exercise of its powers, and is not subject to the review of the executive. It also applies the rule of law in ensuring that both parties are heard, and its jurisdiction is compulsory.

The CJEU, in deciding whether the Authority was to be classified as a ‘court' referred to the Goebbels Criteria  and held that simply satisfying this criterion is not enough. For a national court to be able to refer a case to the CJEU, it must also have a case pending before it and if it is called upon to give judgement in proceedings intended to lead to a decision of a judicial nature. This point is particularly important in the context of administrative authorities who although are by their very nature independent, and satisfy the Goebbels Criteria, the activity of regulating the sector and supervising the markets is essentially administrative in nature and they hold powers which are unrelated to those conferred to courts. The CJEU effectively clarified that the concept of a ‘court or tribunal' would only be fulfilled if the body in question fulfils both a structural limb, and a functional limb.

The CJEU held that the Authority is wrong to assume that, insofar as it satisfies the criterion, it would automatically be classified as a ‘court or tribunal' under Article 267. A body exercising both an administrative and judicial function can only be a ‘court or tribunal' under Article 267 TFEU when the functions of a judicial nature that it exercise are objective and strictly separate from the functions of an administrative nature. Lastly, the CJEU further held that the concept of ‘court or tribunal' within the meaning of Article 267 TFEU, by its very nature, can designate only an authority acting as a third party in relation to the authority which adopted the decision forming the subject matter of the proceedings.

The CJEU noted that, in the present case, the fact that the Authority has powers to initiate proceedings ex officio, and the power to investigate irregularities discovering during those proceedings on its own initiative, are both factors that strongly suggest that the Authority was acting in its administrative capacity, as opposed to a judicial one. It further transpired that the Authority's decisions may be subject to judicial review and in such cases, the Authority would have the status of a defendant. This meant that the Authority would not have third party status in relation to the subject matter of the dispute, meaning that it was falling short of fulfilling another essential requirement to be classified as a ‘court or tribunal' under Article 267 TFEU.

Lastly, the CJEU held that from the analysis carried out, it is presumptuous that the Authority expects to be classified as a ‘court or tribunal' given that the functions that it is carrying out are clearly of an administrative nature, where on the other hand, a body carrying out both functions of a judicial and administrative nature may only be classified as a ‘court or tribunal' where the judicial functions it exercise are objectively and strictly separate from its administrative functions. In view of the foregoing considerations, the CJEU held that the Authority cannot be regarded as a ‘court or tribunal' within the meaning of Article 267 TFEU, rendering the request for a preliminary ruling as inadmissible.

This case served as a timely reminder of what constitutes a ‘court or tribunal' within the context of Article 267 TFEU, whilst also recalling the ever-growing importance that the preliminary reference procedure serves under EU law.

This article was first published in the Malta Independent.

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