CJEU Rules on Interpretation of Foreign Law Implementing EU law

On May 19, the CJEU (Grand Chamber, judge F. Biltgen as rapporteur), made public its judgment in case C-350/24, Crédit Agricole Corporate & Investment Bank SA, upon referral by the French Cour de Cassation. The importance of the decision for PIL cannot be ignored, thus this post reproducing the main points of the reasoning of the Court.

The appellant in the main proceedings was employed by Crédit Agricole Corporate & Investment Bank SA (CACIB) under a contract of employment concluded on 17 January 2007 and governed by United Kingdom law.

On 23 September 2013, taking the view that she had suffered discrimination on grounds of her sex and psychological harassment, the appellant in the main proceedings brought an action before a conseil de prud’hommes (Labour Tribunal, France) seeking payment of various sums in respect of performance of that employment contract and by way of compensation.

By judgment of 26 June 2019, the conseil de prud’hommes dismissed the claims. The appellant contested the judgment before the cour d’appel de Versailles (Court of Appeal, Versailles, France), which, by its judgment of 27 May 2021, held that the appellant had not demonstrated the existence of discrimination or discriminatory harassment and retaliation, within the meaning of the Equality Act 2010, which transposes Directive 2006/54 into United Kingdom law.

The appellant brought an appeal on a point of law against that judgment before the Cour de cassation (Court of Cassation, France). She complains that the judgment of the cour d’appel de Versailles contains an interpretation of United Kingdom law applicable to the dispute in the main proceedings which is not in conformity with EU law, in particular Directive 2006/54.

The French Cour de Cassation referred these questions to the Court of Justice:

‘(1)        Must the [Withdrawal Agreement] be interpreted as meaning that United Kingdom legislation transposing Article 19 of [Directive 2006/54] must be regarded as legislation of a Member State transposing a directive, by a court giving its ruling after the end of the transition period, where the facts are prior to that date and/or the proceedings were brought before that date?

(2)         Must Article 288 TFEU be interpreted as meaning that a [court of a Member State,] hearing a dispute between individuals, which is obliged to apply the law of another Member State, must interpret the provisions of that law in conformity with a directive, without this being precluded by the principle of mutual trust?

(3)         If the [court of a Member State] considers that it is impossible to interpret those provisions in conformity with the directive, must it disapply [the law of that other Member State], as it would do with its own national law, where a general principle of EU law or a provision of primary law, as given concrete expression in a directive, is at issue?‘

After concluding that Article 19 of Directive 2006/54 remains applicable to the main dispute even after the end of transition period referred to in Article 126 of the Withdrawal Agreement, the Court of Justice addressed the second question, whereby the referring court asks, in essence, whether Article 288 TFEU must be interpreted as meaning that, where a court of a Member State interprets and applies the law of another Member State which implements a directive, it is required, as it is when interpreting and applying its own law, to observe the principle that national law must be interpreted in conformity with EU law.

The short answer is ‘yes’, on the basis of the primacy principle:

‘84          Where a court of a Member State, hearing a dispute between individuals, is called upon to apply the legislation of another Member State implementing a directive, it is required, in compliance with the general principles of law, to interpret the provisions of that legislation in conformity with EU law.

[…]

87          It follows that, in the context of a dispute such as that in the main proceedings, where, under the rules of the Rome Convention, which the Rome I Regulation replaced, the courts of a Member State seised of a dispute must apply the law of another Member State, they are required to observe, as regards the law of that other Member State, the principle that national law must be interpreted in conformity with EU law.‘

However, the Court of Justice continues, moving to the ‘principle of mutual trust’ which provides a reason to consider (presume, save in exception circunstances) that all Member States comply  with EU law:

’88          It should be added that the application of the principle that national law must be interpreted in conformity with EU law, in so far as it seeks to ensure that decisions given by the authorities and courts of the Member States are consistent with EU law, contributes to observance of the principle of mutual trust between the Member States, the latter principle being, in EU law, of fundamental importance (Opinion 2/13 (Accession of the European Union to the ECHR) of 18 December 2014, EU:C:2014:2454, paragraph 191).

89          That principle of mutual trust requires each of the Member States, save in exceptional circumstances, to consider all the other Member States to be complying with EU law (…). It follows that a court of a Member State which interprets a provision of the law of another Member State in conformity with EU law is merely doing what it is entitled to presume, in accordance with the principle of mutual trust, the courts of that other Member State would do if they were called upon to interpret that provision.‘

The Court infers therefrom consequences on how to proceed regarding the ascertainment of foreign law (of a Member State, as regards EU law):

‘90          Consequently, the principle of mutual trust imposes on the courts of the Member States a duty of trust as regards the correct application, in the other Member States, of EU law. In particular, where those courts apply the law of another Member State, in a dispute in civil and commercial matters, under the rules of the Rome Convention, which the Rome I Regulation replaced, they endeavour, in accordance with the principles applicable to the powers and obligations of the court of the forum, to investigate the content of the law of that other Member State and the interpretation given to it by the courts of that other Member State and must presume that that law and that interpretation are in conformity with EU law.’

It also provides indications as to how to proceed (cooperation – maybe, more appropriate, resorting to the EJN-civil, see Council Decision of 28 May 2001 establishing a European Judicial Network in civil and commercial matters) in case of doubt:

‘91          Thus, if the courts of a Member State have serious doubts as to whether the legislation of another Member State is in conformity with a directive which it transposes, those courts must satisfy themselves as to the interpretation to be given to that legislation by using, where appropriate, the mechanisms for judicial cooperation, in particular the mechanisms for obtaining information on foreign law, such as the European Judicial Network set up by Council Joint Action 98/428/JHA of 29 June 1998 (OJ 1998 L 191, p. 4), or the European Convention on Information on Foreign Law of 7 June 1968 (United Nations Treaty Series, Vol. 720-II, No 10346, p. 147).‘

Which, of course, comprise as well the possibility to refer requests or preliminary rulings to the Court of Justice:

‘92          If doubts remain, those courts also have the option, or even the obligation, depending on the circumstances, to request a preliminary ruling from the Court. Indeed, the Court has held that, where there are questions intended to enable a court of a Member State to determine whether provisions of another Member State are compatible with EU law, the Court may provide the criteria for the interpretation of EU law which will enable a court of a Member State to resolve the legal issue before it (…)‘

The consequences for the Cour de Cassation are also addressed:

‘97      In accordance with the settled case-law of the referring court mentioned in the order for reference, ‘courts adjudicating on the substance have absolute discretion in applying and interpreting foreign law’. It is apparent, moreover, from the documents before the Court that the task of a court hearing an appeal on a point of law is limited to reviewing defects in the statement of reasons and distortion of foreign law, with the result that that task is limited to reviewing whether the courts adjudicating on the substance have investigated the content of that law, without being empowered to criticise errors in the interpretation or application of that law.

98          At the hearing before the Court, the French Government stated that, although, according to the settled case-law of the referring court, that court classifies the law of another State as a ‘rule of law’, it treats that law as a factual matter, with the result that, when it is seised, in the context of an appeal on a point of law, of a dispute coming under that foreign law, its review of whether the courts adjudicating on the substance have applied that foreign law in conformity with EU law is limited.

99          Consequently, it is apparent that, where the referring court is seised of a dispute between individuals coming under the law of another Member State or of a State treated as such, the possibility of reviewing, in the context of an appeal on a point of law, whether the courts adjudicating on the substance have applied that law in conformity with EU law is also limited.‘

And further:

‘101 […] the review carried out by a court hearing an appeal on a point of law in response to a plea alleging that a lower court or tribunal has interpreted the law of another Member State in breach of a directive cannot be limited solely on the ground that, as a general rule, that court or tribunal treats foreign law as a factual matter. That review must relate to whether the lower court has complied with the obligation to interpret in conformity with the result prescribed by the directive, which, as is apparent from paragraphs 84 and 94 of the present judgment, exists irrespective of whether the law to be interpreted is that of the forum or of another Member State.‘