Points of law

The European Commission presents herewith on behalf of the European Union, a contribution
on its practice regarding lawsuits in third countries.

It should be recalled that as a result of the entry into force of the Lisbon Treaty, the European
Community has been replaced and succeeded by the European Union.

The European Commission is regularly informed of lawsuits brought before foreign local
jurisdictions in non- EU countries ('third countries' in EU parlance), including of summonses
for its staff to appear in local judicial or administration proceedings or to provide testimony in
such proceedings. The addressees of these judicial documents can vary: some are directed
against the European Community as an organisation (now: the European Union) and/or
against the European Commission as an institution, and/or the Delegation of the European
Commission in the third country (now: the EU Delegation), or even against named
Commission staff working in such delegations.

In many instances the lawsuits relate to claims of private parties concerning the execution of
programmes of financial and technical assistance which the EU provides to non-EU
countries. In such cases the EU can often rely on express provisions regarding jurisdictional
immunity laid down in agreements with the host state regarding the establishment of the EU
delegation and in the relevant framework agreement concluded by the EU with the
beneficiary non-EU state regarding the provision of financial and technical assistance.
Immunity from jurisdiction is also explicitly provided for in cases where, on the basis of the
EU's Common Foreign and Security Policy (CFSP), an EU mission deployed in a third
country is covered by a Status of Forces Agreement (SOFA) or Status of Mission Agreement
(SOMA).

Insofar as such lawsuits are deemed to concern the European Union itself, immunity of
jurisdiction will be invoked on the grounds that the Union is an international organisation
benefiting in non-EU countries from the general rule of international law regarding the
jurisdictional immunity of international organisations. This means that unless the Union has
expressly waived its immunity, it should be exempted from the local jurisdiction of municipal,
judicial or administrative authorities and therefore should not be subject to suits, claims or
enforcement proceedings in these domestic forums.

In any event, the European Union's claim of jurisdictional immunity is based on the rule of
general (customary) international law which recognises that like States, international
organisations are exempted from the local jurisdiction of municipal judicial or administrative
authorities and therefore are not subject to suits, claims or enforcement proceedings in such
domestic forums. The immunity invoked is based on the principle of functionality: i.e.,
immunity that encompasses all acts needed for the execution of the official functions and
activities of the organisation. Therefore, the foregoing applies, in the view of the European
Commission, even in the absence of express provisions laid down in international treaties
and even when not expressly provided for in municipal law.

In cases where such jurisdictional immunity will need to be invoked in foreign local courts or
administrative tribunals, the European Commission will via the EU delegation respond by
way of Note Verbale, informing the Ministry of Foreign Affairs of the non-EU country
concerned that it invokes immunity from jurisdiction. In such a Note Verbale the delegation
will also usually ask the Department of Foreign Affairs to take the appropriate steps to
confirm with local courts that immunity is invoked. Where considered necessary or useful
local counsel will be appointed to follow the proceedings and/or for to invoke jurisdictional
immunity on behalf of the EU and/or its staff.

The European Commission knows of no case in which non-EU courts have pronounced
expressly on questions relating to the jurisdictional immunity of the EU. Put differently, there
is no indication that there is a single instance in which a non-EU court has denied the
jurisdictional immunity of European Union (or its predecessor, the European Community)
from legal process.

For the sake of completeness, it should be noted that the European Union's legal system
provides alternative remedies to which parties that have claims against it, can have recourse.
These alternative remedies are available irrespective of the nationality of the party concerned
and irrespective of where the challenged Union activity took place.

With regard to disputes based on contractual claims, Article 340, first paragraph of the Treaty
on the Functioning of the European Union provides that the contractual liability of the Union
shall be governed by the law applicable to the contract in question. The underlying contract
will normally determine the applicable dispute settlement procedure. One should distinguish
between cases where the implementation of EU external aid projects or programmes is
executed on a centralised basis, with the European Commission acting as contracting
authority, and cases where it is executed on a decentralised basis, with the administration of
the beneficiary third state acting as contracting authority. The clauses of the external aid
contracts in which the European Commission is the contracting authority either designate a
court in the EU (usually the Belgian courts in Brussels) as competent court for any
contractual dispute or provide for arbitration. The contract, as a rule, encourages the parties
to the contract to previously resolve the dispute amicably.

With regard to disputes based on non-contractual claims, Article 340, second paragraph of
the Treaty on the Functioning of the European Union provides in the case of non-contractual
liability, that the Union shall, in accordance with the general principles common to the laws of
the Member States, make good any damage caused by its institutions or by its servants in
the performance of their duties. According to Article 268 of the Treaty on the Functioning of
the European Union, the Court of Justice of the European Union has exclusive jurisdiction in
disputes relating to compensation for damages in the case of non-contractual liability
(in accordance with Article 256 (1) of the TFEU, this jurisdiction is exercised by the
General Court [new name for the Court of First Instance]). In accordance with Article 46 of
the Statute of the Court of Justice, proceedings in matters arising from non-contractual liability
shall be barred after a period of five years from the occurrence of the event giving rise thereto.

This system of judicial protection of citizens and companies according to Union law is
completed with the exclusive jurisdiction of the Court of Justice of the European Union, in
accordance with Articles 263 and 265 of the Treaty on the Functioning of the European
Union to decide on the legality of acts of the European institutions ( the jurisdiction of the
Court is however excluded with respect to acts adopted under the CFSP provisions, with
certain limited exceptions) that produce legal effects (or for failure to act). Any natural or legal
person (whatever his nationality or residence) may institute proceedings against a decision
addressed to him or which is of direct and individual concern.

Specific provision(s) of the document

Sources

Additional information (explanations, notes, etc.)