Case C‑291/09, Francesco Guarnieri

Requirement non-Belgian nationals to provide security for costs too uncertain and indirect to be regarded as hindering intra-Community trade.

This reference for a preliminary ruling had been made in proceedings between Francesco Guarnieri & Cie, a company governed by Monegasque law established in Monaco, and Vandevelde Eddy VOF, whose registered office was in Belgium, concerning the delivery of and payment for various goods.

Article 851 of the Belgian Judicial Code distinguished between Belgian and non-Belgian nationals on the basis of nationality. It required non-Belgian nationals to provide security for costs where there was no reciprocal arrangement between their State of nationality and Belgium.  d

The referring Court asked whether Articles 28 EC, 29 EC and 30 EC preclude a claimant of Monegasque nationality, who lodged a claim in Belgium for payment of invoices relating to the delivery of “twister-glazen” (glasses) and tea-lights with accessories, from being required, upon application by a defendant of Belgian nationality, to give security for the costs and damages arising from the proceedings which he may be ordered to pay.

The Court pointed out Articles 52 TEU and 355 TFEU did not include in ‘the territorial scope of the Treaties’ the territory of the Principality of Monaco. Furthermore, exclusion from the customs territory of the European Union entailed the inapplicability of the FEU Treaty rules on the free movement of goods (Case C30/01 Commission v United Kingdom [2003]).

However, pursuant to Article 3(2)(b) of Regulation 2913/92, the territory of the Principality of Monaco was to be considered to be part of the customs territory of the European Union. As no customs duty or charge having equivalent effect could, consequently, be applied to trade between Monaco and the Member States, goods originating in Monaco, exported directly to a Member State, must be treated as if they originated in those Member States.

The result of that assimilation to goods originating in Member States was that goods originating in Monaco were covered by the rules of the Treaty on the free movement of goods (see, by analogy, Case 41/76 Donckerwolcke and Schou [1976]).

The Court held that in relation to the question of whether a provision of a Member State, that required any foreign national, such as Monegasque nationals, to provide security pending judgment when he sought to bring proceedings against a national of that Member State, although such a requirement was not imposed on nationals of that State, constituted a hindrance to the free movement of goods, all trading rules enacted by Member States, that were capable of hindering, directly or indirectly, actually or potentially, intraCommunity trade, were to be considered to be measures having an effect equivalent to quantitative restrictions (see, to that effect, Case 8/74 Dassonville [1974] and Case C421/09 Humanplasma [2010]).

However, a national rule, such as that relating to cautio judicatum solvi under Article 851 of the Judicial Code, was purely procedural and its purpose was not to regulate trade in goods. Further, its application depended not on the origin of the goods in question, but on two cumulative conditions, namely, first, that a dispute must arise subsequent to the conclusion of a contract that lead to litigation before the Belgian courts and, second, that any such action must involve a Belgian national as defendant who choose to avail himself of the provision in question.

The Court admitted that a measure of that sort had the effect of making traders wishing to bring proceedings subject to different procedural rules according to whether or not they had the nationality of the Member State concerned.

Nevertheless, the possibility that nationals of other Member States would therefore hesitate to sell goods to purchasers established in that Member State who had the nationality of that State was too uncertain and indirect for that national measure to be regarded as liable to hinder intra-Community trade (see, by analogy, Case C69/88 Krantz [1990]; Case C379/92 Peralta [1994]; Case C96/94 Centro Servizi Spediporto [1995]; and Case C412/97 ED [1999].

The causal link between the possible distortion of intra-Community trade and the difference in treatment at issue was therefore not established.

Article 34 TFEU therefore did not preclude a national measure such as that established by Article 851 of the Judicial Code.