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The EFTA Court gives binding decisions on direct actions brought by ESA, or another EEA/EFTA State, but also has a role in securing the uniform interpretation of EEA law in the EEA/EFTA States by issuing advisory opinions at the request of their national courts. This, together with its function as an international court of law, argues for powers to create authoritative judge-made law, in a way comparable to the ECJ. However, the situation of the EFTA Court is more complex regarding several factors. This Chapter discusses the authority of EFTA Court rulings and case-law, in particular in relation to the preliminary reference procedure provided for by Article 34 SCA, while also touching up the standing of the Court in its relation with the EEA/EFTA States and the EU.
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Some parts of this Chapter are based on earlier publications, cf. in particular ‘On the Authority of Advisory Opinions’ (2010) and ‘Judicial Homogeneity in the European Economic Area and the Authority of the EFTA Court (2011).
Article 5 of the French Civil Code of 1804 famously explicitly prohibits judges from deciding case by expressing general provisions or rules.
Interestingly, express recognition of judge-made law in this sense is to be found in the EEA Agreement. Cf. in particular Article 6 concerning the role of ECJ case-law for the interpretation of the Agreement and Article 105 concerning possible differences in case-law between the ECJ and the EFTA Court.
In the words of Kanninen ( 2014), p. 13: “The competence with which the court is invested by treaties and other legal means is not enough. A court makes it name by the quality of its judgements and the conduct of its proceedings. […] For a small and totally new court, it is therefore particularly important from the start to show that it meets expectations.”
Cf. indent 3 of the preamble to SCA.
Interestingly, the EFTA Court’s practice of referring to ECJ case-law seems to be based on the general principle of Homogeneity (or ‘Judicial Homogeneity’), rather than Art. 6 EEA and Art. 3 SCA. This is discussed further in Sect. 5.3 below.
The precise normative force of case-law is relative to each and every legal system. Arguably, no system provides for the absolute authority of case-law, not even systems which formally adhere strictly to the principle of stare decisis. Thus, a situation where a court should not base its decision on a precedent or established case law can never be entirely excluded. For a thorough philosophical discussion of authority, normativity and reasons, reference is made to the extensive writings of J. Raz. For a recent statement of Raz’s views, cf. Between Authority and Interpretation, Oxford 2009, Chapter 8, ‘Reasoning with Rules’.
It may, for instance, be the case that national law does not allow the national court to follow an advisory opinion, one well known example being the Finanger case, where the Supreme Court of Norway (Rt. 2000, p 1811) was unable to implement the advisory opinion of the EFTA Court (E-1/99,  EFTA Ct. Rep.119). This, of course, does not mean that the advisory opinion has no normative effect in the reasoning of the Court but only signifies that there are other overruling factors. Accordingly, the EFTA Court advisory opinion did have normative effects in the aftermath of the judgement when the claim for damages was decided, cf. Finanger II (Rt. 2005, p 1365). Another example is Karlsson (E-4/01,  EFTA Ct. Rep. 240) where the EFTA Court expressed itself on the conditions of State liability. However, Icelandic courts concluded that the applicant had not succeeded in proving any loss of profit (Icelandic Supreme Court, case 120/2006 15 February 2007).
Cf. Paragraph 6 in a Joint Declaration from the Ministerial meeting between EFTA and EC Ministers and the Commission on 19 December 1989 in Brussels. See the 29th Annual Report of the European Free Trade Association.
This aspect of the EEA judicial mechanism still has some repercussions with regard the question whether, and to what extent, advisory opinions are to be considered a source of EEA Law, cf. Sect. 5 below.
For a critical discussion on the impact of the opinion on the EFTA Court, see Baudenbacher ( 2007).
In the conflict resolution procedure, the ECJ is nevertheless given a superior role by virtue of Art. 111(3) EEA concerning the possibility of acquiring the Court’s opinion on the interpretation on the issue in question. If the EFTA States oppose requesting such an opinion, the consequences may be safeguard measures or a suspension of a part of the Agreement.
Cf. Article 27 SCA.
Article 34 SCA states the following: (1) The EFTA Court shall have jurisdiction to give advisory opinions on the interpretation of the EEA Agreement. (2) Where such a question is raised before any court or tribunal in an EFTA State, that court or tribunal may, if it considers it necessary to enable it to give judgment, request the EFTA Court to give such an opinion. (3) An EFTA State may in its internal legislation limit the right to request such an advisory opinion to courts and tribunals against whose decisions there is no judicial remedy under national law.
No EFTA State has made use of this possibility. From a constitutional viewpoint this would raise questions for, at least, some EFTA States (cf. e.g. the views expressed in the preparatory documents to the Icelandic EEA Act—The Official Journal of Althingi A 1991–1992, Document No 1).
Without dwelling on the subject, I believe it is fair to say that in EU law, justifications based on practice or custom have generally not been well received. Furthermore, in the case of the EEA, the aims of the Agreement and its reference to individuals and their rights would be hard to unite with such an interpretative method.
The EFTA Court has ever since its ruling in Case E-1/94, Restamark [1994–1995] EFTA Ct. Rep. 15 noted that the wording of Article 34 SCA is in essential parts identical to the said article.
Cf. 4th Recital of the EEA Preamble.
See e.g. Case E-15/10, Posten Norge  EFTA Ct. Rep. 246, paragraphs 108–110.
The EEA is based on the premise that it is does not entail transfer of legislative powers which prevents the applicability of the principles of direct effects and supremacy. If there was ever any ambiguity concerning this, the issue was clarified in Criminal Proceedings Against A (Case E-1/07, EFTA Ct Rep  246, cf. paragraph 40).
Cf. e.g. Case E-9/97, Sveinbjörnsdóttir  EFTA Ct. Rep. 95 and Case E-2/03, Ásgeirsson  EFTA Ct. Rep 185).
Ásgeirsson, paragraph 28.
Posten Norge, ( supra note 20) and Case E-11/12 Koch EFTA Court Reports  272, at paragraph 117). Effective judicial protection may be considered a corollary to the effective and uniform application of EEA rules. However, from a rights-based perspective, the principle encapsulates the right to access to justice and to a fair hearing. In Case E-2/02 Bellona EFTA Ct. Rep  52, the EFTA Court stated that access to justice constitutes “an essential element of the EEA legal framework which is, however, subject to those conditions and limitations that follow from EEA Law”. In Ásgeirsson ( supra note 23) the EFTA Court specifically found that ’the preliminary reference procedure established under Article 34 SCA must be interpreted in the light of Article 6(1) ECHR’. It may be added that the Court has also referred to Article 47 of the EU Charter of Fundamental Rights (see Posten Norge and Case E-4/11 Arnulf Clauder  EFTA Ct. Rep. 216, at paragraph 49).
For a recent statement, see Koch O, supra note 24, at paragraph 61.
Ásgeirsson, supra note 22, at paragraph 24.
The sentence is borrowed from Lenaerts ( 2007), pp 1625–1658. It may be noted that similarly to the ECJ, the EFTA Court has also made a direct a link between “access to justice as an essential element of the EEA legal framework” and the question of locus standi in direct action cases. Cf. Bellona, ( supra note 24). The fundamental difference with regard to judicial protection remains, of course, the fact that the EFTA Court is not competent to rule on the validity of EU acts incorporated to the Annexes of the EEA.
Cf. e.g. Norberg et al. ( 1993), p. 99.
In particular, this has been established by the EFTA Court in relation to the obligation of national courts to interpret national law as far as possible in conformity with EEA Law. Cf. Criminal proceedings against A, supra note 21, paragraph 39.
Case 33/76, Rewe-Zentralfinanz  ECR 2161, at paragraph 5.
Cf. e.g. ECJ Opinion 1/91  ECR I-6079, at paragraph 61.
This characteristic implies that the preliminary ruling system does not, strictly speaking, entail a transfer of judicial powers. Hence the ultimate authority to rule on legal rights and obligations within the national jurisdiction remains with the national judiciary irrespective of a preliminary ruling addressing a legal question pertaining to the case.
The possibility of an action against the State for damages, or even a direct action, does not, of course, endow the preliminary ruling with direct effect. The preliminary ruling can constitute grounds in a subsequent case based on State liability inasmuch it bears witness to a breach to EU Law. However, the outcome of this case is also, ultimately, subject to the national court’s assessment. In any event, the situation with regard to State liability is here, by large, the same under EEA Law as under EU Law.
The Commission is not regarded as being under an obligation to act upon a complaint concerning Member States’ alleged infringement to EU which would be a prerequisite for the standing of an individual.
The EFTA Court has, by now, an established practice of following its own case-law and treating it as binding upon itself. Although there are few exceptions to this (cf. in particular L´Oreal) it cannot be inferred that the case-law of the court, including advisory opinions, have no normative force and, accordingly, no power of predictability. Joined Cases E-9/07 and E-10/07,  EFTA Ct. Rep 259) are discussed in Sect. 5.3.
Case E-6/01, CIBA  EFTA Court Reports 281.
In this case, an international court is given the opportunity to have a direct input on the interpretation of rules of International law within the framework of national proceedings. The international court is, however, neither deciding on facts nor on the final legal outcome of the case. The final say about rights and obligations within the national jurisdiction therefore remains in the hands of the national judge.
For completeness, it should be recalled that although EU Law claims absolute direct effect and supremacy this claim is not accepted without reservations in the Members States’ systems.
Cf. ‘On the Authority of Advisory Opinions’, supra note 1.
See e.g. Temple Lang ( 2012).
Reference is made to the contributions of John Temple Lang, Siri Teigum and Martin Johansson in a conference organised by the EFTA Court in Luxembourg on 17 June 2011. Their conference papers are published in Judicial Protection in the European Economic Area (EFTA Court ed.), German Law Publishers, Stuttgart 2012. I also refer to a paper published in Icelandic by Einarsdóttir ( 2012).
Case E-18/11, Irish Bank  EFTA Ct. Rep 592, at paragraph 57.
Ibid., at paragraph 58.
Case E-3/12, Jonsson  EFTA Ct. Rep. 136, at paragraph 60.
Cf. also Order of the Court in Hob vín III at para 11 where the Court notes ‘the different legal situation concerning courts against whose decisions there is no remedy under national law’.
Cf. e.g. Fredriksen ( 2014), pp. 11–37. After mentioning that some authors argue for an obligation to refer under Article 3 EEA and the principle of effective judicial protection, Fredriksen states: ‘Still, a clear majority of EEA commentators are of the opinion that even though the national courts of the EFTA States ought to refer more cases to the EFTA Court, they are not legally obliged to do so.’(p 3). As in earlier writings of Fredriksen his conclusion seems to be purely based on the text of Article 34 SCA. Furthermore, he seems to be of the view that in spite of the absence of a legal obligation, there exists some sort of moral or policy obligation incumbent on national courts in this respect. At the end of the day the disagreement here may not concern the (practical) question ‘whether or not to refer?’ but rather whether this obligation can (theoretically) be labelled as ‘legal’.
Fredriksen ( 2014) takes a different view and cites various cases where he considers that the Supreme Court of Norway ‘might have’ made a referral to the EFTA Court (although there was no motion to this effect on behalf of the parties) but did not. The mere fact that the possibility of referral was not even considered demonstrates in his view that the Supreme Court is of the opinion that there is no obligation to refer unresolved questions of EEA law to the EFTA Court. Whatever can be said about the merits of this argument the fact remains that this view has never been formally presented by the Supreme Court or any other court in the EEA/EFTA for that matter. Whether these cases show that there is limited interest within the Supreme Court of Norway to refer questions to Luxembourg unless pressed to do so, is a different question.
See supra note 47.
In a judgment of 24 February 2004 (Case 375/2004) the Icelandic Supreme Court interpreted Directive 2001/23/EC on the approximation of the laws of the Member States relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses without obtaining advisory opinion of the EFTA Court. Referring to the case-law of the EFTA Court and the ECJ, ESA found this interpretation to be incorrect and issued a reasoned opinion on 24 February 2010. As consequence Icelandic law was amended and clarified. Another example of the Supreme Court of Iceland arguably ‘getting it wrong on its own’ is the judgement of 20 December 2005 in Kolbeinsson I (Case 246/2005) concerning the interpretation of EEA rules concerning worker’s safety which lead to an action against the Icelandic State for damages for wrongful implementation of these rules. Under these second proceedings a request was made for an advisory opinion to the EFTA Court. Cf. judgement of the Supreme Court of 21 February 2013(case 532/2012) and EFTA Court judgement in Kolbeinsson (Case E-2/10, [2009-2010] EFTA Ct. Rep. 234).
Ólafur Ísberg Hannesson and I discuss this briefly in: ‘State Liability in EEA Law’ ( 2013), pp. 182–184.
Whatever one might think, for instance, of the American Supreme Court in the landmark decision Brown v. Board of Education (347 U.S. 483 – 1954) where prior case law was overturned, it would be difficult to deny that the decision, as such, was based on important considerations of justice (i.e. the abolition of racial discrimination).
From the field of EU Law, the case of Keck (Joined cases C-267/91 and C-268/91, ECR  I-6097), concerning the interpretation of (now) Article 30 TFEU, is probably the most well-known example of the ECJ explicitly overturning its case-law. On the other hand, the case of Internationale Handelsgesellschaft (Case 11/70,  ECR 1125), concerning fundamental rights, can be taken as an example where the Court moved away from its earlier case-law without expressly reversing it (cf. Stork, case 1/58,  ECR 43).
A more pragmatic reason for adherence to stare decisis is, of course, to reduce the number of applications and the work-load of the judicial system.
Cf. e.g. the doctrine of per incuriam in Anglo-Saxon Law. Factors advocating for the following of a precedent will usually also play a role in the interpretation of a precedent and whether a precedent is construed narrowly or broadly. In systems where the principle of stare decisis is recognised, a strict interpretation of a precedent may equal the precedent becoming virtually void of any normative effects for future cases, albeit without being formally reversed.
Fredriksen ( 2010), pp. 481–499 (496).
L'Oréal Norge, supra note 35.
Case E-2/97, Maglite  EFTA Ct. Rep. 129.
Case C-355/96, Silhouette  ECRI-4799, Case C-173/98 Sebago  ECR I-4103.
Cf. paragraph 29 of the judgment.
In Maglite, the EFTA Court the EFTA Court referred to Article 2 of Protocol 28 to the EEA Agreement which stated that the provision was to be interpreted “without prejudice to future developments of case-law” and noted that the existing case-law of the ECJ at the time of the signature of the EEA rule did not oblige the Member States to give up the principle of international exhaustion, nor did this follow from later case-law of the Court.
Certain language of Silhouette could be understood to the effect that the ECJ was also ruling on the question of exhaustion within the EEA/EFTA. However, the EEA question was not referred to the ECJ; nor did the ECJ address the issue in any deliberate manner. In any event, L’Oréal is clearly not based on the premise that the question had already been answered by the ECJ.
Cf. Skouris ( 2005), p 125.
Thus Sveinbjörnsdóttir ( supra note 22), where the principle of EFTA State liability was laid down, is clearly not based on the ‘Francovich case-law’ of the ECJ but rather on the aim of homogeneity as such. Therefore, after Sveinbjörnsdóttir, the question arose as to whether the conditions of State liability were identical in all respects under EEA Law as under EU Law (cf. Case E-4/01, Karlsson  EFTA Ct. Rep. 240, at paragraph 30).
The ECJ has referred to the EFTA Court case-law on EFTA State liability as settled EEA Law on at least two occasions. See the ruling of the General Court in Opel Austria (case T-115/94,  ECR II-39) and ruling of the ECJ in Rechberger, case C-140/97,  ECR I-3499.
Cf. L´Oreal ( supra note 35), paragraph 28.
Some writers have considered it ‘paradoxical’ for the EFTA States not to subject their national courts directly to the ECJ. Cf. e.g. article by Fredriksen ( 2011), p. 20.
If a question were to be referred to the EFTA Court again in the same proceedings, it would be dismissed, cf. CIBA (supra note 36). Similarly, according to Article 97(3) of the Rules of Procedure, a question which is manifestly identical to a question upon which the EFTA Court has already ‘ruled or given an opinion’ may simply be answered with reference to the earlier judgement’.
Cf. Case 283/81, CILFIT ECR  3415.
Cf. e.g. Skouris ( 2005).
This is, of course, presuming that an EFTA State has not subjected its courts to preliminary rulings of the ECJ pursuant to Art. 107 EEA.
For discussion, cf. Hannesson ÓÍ and Magnússon S, supra note 51.
Cf. e.g. Rechberger, supra note 65.
In 2006 the Supreme Court of Norway decided to stay proceedings concerning the legality of the Norwegian gaming monopoly until a decision by the EFTA Court in a case brought by ESA against Norway concerning the same subject-matter had been delivered. The direct action of ESA may be seen as a reaction against the decision of the Supreme Court not to refer the case to the EFTA Court (cf. HR-2005-160-U). By its decision to stay the proceedings, the Supreme Court avoided a situation where its judgement might have been found to contradict EEA Law as interpreted by the EFTA Court. In its decision to stay the proceedings the Supreme Court (i.e. the Court’s Appeal Board) stated: ‘The EFTA Court, which in infringement proceedings can both assess the evidence and apply the law, is the body that irrevocably determines whether the contested Norwegian legislation is in conflict with Norway’s obligations under the EEA Agreement. Now that it has been decided to bring the issue before the EFTA Court, it falls to the EFTA Court to provide authoritative answer to the question of EEA law that exist in the case before the Supreme Court. The majority considers that under these circumstances it is most compatible with the enforcement system within the EEA that the assessment by the Supreme Court must give away.’ (Rt. 2005 6. 1598, translation by Poulsen TC).
Fredriksen HH discusses in detail two Norwegian Supreme Court cases, Personskadeforbundet (Rt. 2012, p. 1793) and STX (Rt. 2013 p. 258) and argues that in both instances a referral to the EFTA Court would have been appropriate. The former case, concerning the conditions for State liability, did not present the Court with conflicting case-law but rather the question whether EFTA Court case-law (arguably in view of subsequent ECJ case-law) was sufficiently clear with regard to the facts of the case. In the latter case, the Supreme Court openly expressed scepticism as to the correctness of an advisory opinion by the EFTA Court obtained by the Appeal Court in the same proceedings. However, the Court did not conclude its findings on these reasons which are therefore not considered to constitute ratio decidendi of the ruling. Tomas Poulsen takes the view that the Supreme Court ‘chose not to deviate from the EFTA Court’s advisory opinion [despite its scepticism]. Therefore, one could argue that the Supreme Court accorded the EFTA Court’s advisory opinion precedential value.’ ( supra note 47, at p. 270).
In STX (supra note 75) the Supreme Court of Norway openly expressed scepticism about an advisory opinion of the EFTA Court. However, this scepticism did not affect the outcome of the case which may be the reason why ESA has still not pursued the case after having sent Norway a letter of formal notice on 25 October 2016.
Although Fredriksen HH disagrees with me on the obligation, incumbent on the highest courts of the EEA/EFTA States, to obtain an advisory opinion, he seems to agree with this point ( supra note 47).
See in particular the ruling of the Supreme Court of Norway in Finanger ( supra note 8).
Supreme Court of Norway in STX ( supra note 75, paragraph 94).
Irish Bank ( supra note 42, at paragraph 57).
For analysis of the Icelandic and Liechtenstein systems, cf. Ungerank and Magnusson (2016), supra note 47.
In STX ( supra note 75) the Supreme Court of Norway expressed scepticism about the advisory opinion of the EFTA Court but this did not affect the outcome of the case.
Fredriksen ( 2011).
Ibid. Such reluctance can also be found in the case-law of the Supreme Court of Iceland, in particular in certain earlier cases, cf. e.g. Magnússon at supra note 47.
Cf. supra notes 47 and 81.
Norway did not implement decision by the EFTA Court in case E-2/07  EFTA Ct. Rep. 280 ( Widower Pension Rights) which resulted in a new action against Norway by ESA (see Case E-18/10 EFTA Ct. Rep. 202). However, this was due to negligence by the State which did not object to its obligation to comply with the judgment.
This was due to the fact that, at the time, priority claims were expected to be paid well above 90%. As things turned out, there were enough assets in Landsbanki to pay all priority claims which, with benefit of hindsight, meant that the whole Icesave dispute was in fact frivolous.
Article 6.2, indent iii of the draft-agreement, available at http://www.althingi.is/altext/139/s/0546.html.
In Icesave (Case E-16/11  EFTA Ct. Rep. 4) which was a direct action, the Commission decided to intervene. Contrary to what is the case under the EU Court’s Statute, the Commission (as well as the states) can choose between intervening in a direct action before the EFTA Court or to participate as observers (by submitting written and/or oral observations), cf. Art. 20 of the EFTA Court Statute.
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