Freedom to provide maritime transport services – The judgment in Case C-83/13 Fonnship

The Court of Justice (“the Court”) has given its judgment in Case C-83/13 Fonnship A/S v Svenska Transportarbetareförbundet and Others today. The case concerned the question whether a vessel flying a third-country flag (Panamanian in this case) can benefit from the freedom to provide maritime transport services on the basis of Regulation No 4055/86 on the freedom to provide maritime transport services (“the Regulation” or “Regulation No  4055/86).

The factual background of the case could be summarised as follows: Fonnship is a Norwegian company. Between 2001 and 2003, it owned a vessel which flew the Panamanian flag, the M/S Sava Star. The vessel principally sailed between States that are parties to the EEA Agreement. Its crew was Polish and Russian. Fonnship was the crew’s employer.
According to Fonnship, the crew members’ wages were governed by a collective agreement concluded between Fonnship and a Russian trade union. In October 2001, when the vessel lay at the port of Holmsund (Sweden), a Swedish trade union being of the opinion that the wages of the Sava Star crew were not equitable, called on Fonnship to enter into a collective agreement approved by the International Transport Workers’ Federation. Since Fonnship rejected that demand, industrial action took place to prevent the loading and unloading of that vessel. Some days later, a collective agreement was signed by Fonnship and the Swedish trade union despite the crew members’ protests. The vessel was subsequently able to leave the port of Holmsund.
In February 2003, the Sava Star lay in port at Köping (Sweden). At that time, the 2001 Agreement had expired. After industrial action had been taken by another Swedish trade union, a new collective agreement was signed despite the crew members’ protests. The vessel was subsequently able to leave the port.
Fonnship brought legal proceedings against the trade unions before the Labour Court in Sweden seeking an order that they repay it the economic loss caused by the interruption in the provision of services caused by the two industrial actions. One of the trade unions brought legal proceedings against Fonnship before the same court seeking an order that Fonnship pay them damages for breach of the 2001 Agreement.

Question referred:

Against this background, the national court asks the Court of Justice whether EU/EEA law must be interpreted as meaning that a company established in a State that is a party to the EEA Agreement which is proprietor of a vessel flying the flag of a third country may rely on the freedom to provide services where it provides maritime transport services from or to a State that is a party to the EEA Agreement.

Judgment of the Court:
The Court starts by recalling that Article 1 of Regulation No 4055/86 identifies two categories of persons who enjoy, under certain conditions, the freedom to provide maritime transport services: (i) nationals of a State that is a party to the EEA Agreement who are established in the EEA and (ii) nationals of a State that is a party to the EEA who are established in a third country, as well as shipping companies established in a third country and controlled by nationals of a State that is a party to the EEA Agreement.
By including in the rationae personae scope of the Regulation the nationals of a Member State established in a third country or controlling a shipping company there, the EU legislature wished to ensure that a significant part of the commercial fleets owned by nationals of a Member State come under the liberalisation of the shipping industry established by that regulation, so that Member States’ shipowners could better face the restrictions imposed by third countries, the Court continues. However, the legislature indeed intended to set out the requirement of a sufficient connection before the Regulation is applicable. And the Court stresses that when this sufficient connection is not present, companies established in third countries providing maritime transport services to EEA States should not benefit from the freedom to provide services.
The Court finds that the absence in Article 1(1) of a requirement concerning the registration or the flag of the vessel for the nationals of a State that is a party to the EEA Agreement who operate from an establishment situated in the EEA shows that the legislature considered that that category of persons displays in itself a sufficiently close connection with the law of the EEA to be included in the scope ratione personae of that regulation. This is distinguished from the situation of Article 1(2) of the Regulation where this connection is established by the registration of a vessel in a Member State according to its legislation for nationals of Member States established outside the [Union] and for shipping companies established outside the [Union] and controlled by nationals of a Member State.
Thus, the Court found that it is necessary to ascertain whether that national or that company may be considered to be a service provider, in cases where a national of a State that is a party to the EEA Agreement who is established in the EEA or a company established in the EEA rely on Article 1(1) of Regulation No 4055/86 in a dispute relating to the question whether maritime transport services carried out using a vessel flying the flag of a third country fall within the scope of the freedom to provide services.
It is for the national court to assess the facts of the case and find whether Fonnship is the service provider in the case in the main proceedings.
Assuming that its assessment shows that Fonnship is the actual provider of the maritime transport services at issue in the disputes in the main proceedings and, since it is not disputed that the persons for whom the services were intended were, in this case, established in a Member State which is a party to the EEA Agreement other than the Kingdom of Norway, the referring court would be led to conclude that that company falls, for the purposes of the outcome of those proceedings, within the scope ratione personae of Regulation No 4055/86, pursuant to Article 1(1) thereof.
In that case, any restriction which, without objective justification, is liable to prohibit, impede or render less attractive the provision of those services must be declared incompatible with EU law. Where it is applicable, Regulation No 4055/86 transposes, in essence, the rules of the treaty relating to the freedom to provide services and the case-law including the judgment in Case C-341/05 Laval un Partneri  relating to the compatibility of industrial action with the freedom to provide services.
Thus, the Court concluded that a company established in a State that is a party to the EEA Agreement and which is proprietor of a vessel flying the flag of a third country, by which maritime transport services are provided from or to a State that is a party to the EEA Agreement, may rely on the freedom to provide services, provided that it can, due to its operation of that vessel, be classed as a provider of those services and that the persons for whom the services are intended are established in States that are parties to the EEA Agreement other than that in which that company is established.

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