Referral for a Preliminary Ruling of the European Court of Justice from an Arbitration Court19/06/05 / cata_european-union-news

The judgment of the European Court of Justice in Denuit and Cordenier (C-125/04) of 27 January 2005

The case developed out of a dispute between tourists and a travel agency regarding the price of tourist package services. Under the arbitration clause of the initial agreement between the parties, the tourists brought their claims before a Belgian arbitration court.

It is important to note that under Belgian laws a national court may not decide in a dispute between parties which agreed to make it subject to arbitration.

The arbitration court was of the opinion that the outcome of the dispute was partly depending on the interpretation of specific provisions of Community law and thus stayed the proceedings and referred to the European Court of Justice (hereinafter the “ECJ”) for a preliminary ruling pursuant to Article 234 of the EC Treaty.

Preliminary rulings may be requested, as the EC Treaty stipulates, by “any court or tribunal of a Member State”. However, according to the ECJ, the Belgian arbitration court adjudicating on tourism-related claims may not qualify as a national court or tribunal and thus will not have the standing to refer for preliminary rulings.

The ECJ explained that a number of factors would be taken into account when assessing whether a specific body may formulate requests for preliminary rulings. Specifically, the ECJ will need to satisfy itself that the body concerned is established by law and is permanent, its jurisdiction is compulsory, its procedure isinter partes, it applies rules of law and it is independent.

Under that doctrine, an arbitration court will not be considered a court or a tribunal within the meaning of Article 234 of the EC Treaty when parties do not have a legal or factual duty to refer their dispute to that court 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.

The ECJ admitted that, due to the arbitration agreement indicated above, an ordinary Belgian court would obligatorily decline any submissions from the parties as inadmissible. However, as the ECJ made clear, that does not suffice to hold the jurisdiction of the arbitration court indicated by the parties obligatory since, should there be no arbitration clause in the agreement of the parties, they would be able to bring their case before an ordinary Belgian court.

The judgment appears to confirm the established case law of the ECJ under which arbitration courts will not usually be able to refer to the ECJ for a preliminary ruling. Hence parties to private agreements should be aware that, whereas taking advantage of the benefits offered by arbitration in commercial matters, that may however be unable to request the arbitration court to ask guidance from the ECJ on Community aspects of their claims.