In the incident of incompatibility between domestic and EC legislation, the EC law shall have the supremacy.
The principle of priority of Community law allows the inapplicability of national law when it is incompatible with Community law because only in this way the obligation to apply Union lawfully is fulfilled. Consequently, federal courts are allowed to exclude a domestic law inconsistent with EU law.
This historical case law was the first to recognise that the courts had the power to restrict the application of an act of the Parliament pending trial. Furthermore, due to this judgment, a law considered contrary to the Community law was repealed.
The European Court of Justice understood that the full effectiveness of Community law would be impaired if a rule of national law could prevent a court from granting interim relief to ensure the full significance of the judgment to be given on the existence of the rights claimed under Community law.
In this preliminary ruling, the European Court of Justice was asked questions concerning the interpretation of Community law relating to the extent of the power of national courts to grant interim relief where rights claimed under Community law are at issue.
In the main proceedings, the Secretary of State for Transport by Factortame Ltd and other companies incorporated under the laws of the United Kingdom, and also the directors and shareholders of those companies, most of whom are Spanish, were affected by a British legislative change (Section 14 of the Merchant Shipping Act 1988 and the Merchant Shipping) that supposed the creation of a new Register in which only British fishing vessels could register and as long as most of its owners are of British nationality.
The Spanish fishing company argued that the United Kingdom had violated European Community law since this legislation required that the owners of the vessels should be British to be registered in the United Kingdom.
Those vessels were about to be deprived of the right to engage in fishing from 1 April 1989. For this reason, the companies in question challenged the compatibility of Part II of the 1988 Act with Community law. They applied for interim relief until final judgment was given on their application for judicial review.
The Divisional Court of the Queen’s Bench Division) ordered the provisional suspension of the application of Part II of the 1988 Act and the 1988 Regulations. However, the Secretary of State for Transport appealed against this order holding that under national law, the courts had no power to suspend the application of Acts of Parliament by way of interim relief.
In response, the ECJ ruled that Community law must be interpreted as meaning that a national court which, in a case before it concerning Community law, considers that the sole obstacle which precludes it from granting interim relief is a rule of federal law must set aside that rule, and that, therefore, it is up to the national courts, in the application of the principle of cooperation established in Article 5 of the EEC Treaty, to guarantee the legal protection that people derive from the direct effect of the provisions of Community law.
Read the whole case summary here
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