Case C-555/13 Merck Canada – Preliminary reference from arbitration panel

The Court of Justice has, by its Order of 13 February 2014 in Case C-555/13 Merck Canada Inc, accepted to answer a question referred by an arbitration tribunal.

Does that order mean the end of  the Court’s traditional rule that an arbitration tribunal is not a “court or tribunal of a Member State” within the meaning of Article 267 TFEU and its case law resulting from Case 102/81 ‘Nordsee’ Deutsche Hochseefischerei [1982] ECR 1095, paragraphs 10 to 12, and Case C-126/97Eco Swiss [1999] ECR I-3055, paragraph 34 ? No, not at all.

In Case C-555/13 Merck Canada Inc the Court of Justice is careful to point out that the arbitration tribunal which referred the question in this case has a certain number of characteristics which mean that it can be considered to be a “court or tribunal of a Member State” as interpreted traditionally.

First, it recalls its settled case-law according to which  in order to determine whether a body making a reference is a court or tribunal for the purposes of Article 267 TFEU, which is a question governed by EU law alone, the Court takes account of a number of 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 rules of law and whether it is independent (Case C-196/09 Miles and Others [2011] ECR I-5105, paragraph 37 and Case C-394/11 Belov unpublished, paragraph 38 ). It also recalls that a conventional arbitration tribunal is not a ‘court or tribunal of a Member State’ where the parties are under no obligation, in law or in fact, to refer their disputes to arbitration and the public authorities of the Member State concerned are not involved in the decision to opt for arbitration nor required to intervene of their own accord in the proceedings before the arbitrator (Case 102/81 ‘Nordsee’ Deutsche Hochseefischerei [1982] ECR 1095, paragraphs 10 to 12, Case C-126/97 Eco Swiss [1999] ECR I-3055, paragraph 34 and Case C-125/04 Denuit and Cordenier [2005] ECR I-923, paragraph 13).

Second, the Court examines the characteristics of the Tribunal Arbitral necessário, the body in Portugal that referred the question in this case. It finds that it meets all of the requirements to be a court or tribunal. Its jurisdiction stems not from the will of the parties, but from Portuguese legislation. This confers compulsory jurisdiction upon the tribunal to determine, at first instance, disputes involving certain industrial property rights. In addition, if the arbitral decision is not subject to an appeal before the competent appellate court, it becomes definitive and has the same effects as a judgment handed down by an ordinary court. Furthermore, the arbitrators are subject to the same obligations of independence and impartiality as judges of the ordinary courts. Lastly, the Tribunal Arbitral necessário observes the principle of equal treatment and the adversarial principle in the treatment of parties and decides on the basis of the Portuguese law on industrial property.

There was just a query about the permanence of the Tribunal Arbitral necessário. The Court notes in that respect that the Tribunal Arbitral necessário may vary in form, composition and rules of procedure, according to the choice of the parties, and that it is dissolved after making its decision. Thus, there could be doubts as to its permanence. However, given that the tribunal was established on a legislative basis, that it has permanent compulsory jurisdiction and that national legislation defines and frames the applicable procedural rules, the Court considers the requirement of permanence also to be met.

As a consequence, the Court of Justice answered the question referred to it by the Tribunal Arbitral necessário. But we leave the substance of the case to the intellectual property boffins….

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