Fontaine SA, Garage Laval SA, Fahy SA, Renault Lyon Ouest FLB Automobiles SA, Diffusion Vallis Auto SA and Horizon Sud SA v Aqueducs Automobiles SARL. [1997] EUECJ C-128/95 (20 February 1997)

Judgment 1 By judgment of 2 January 1995, as rectified by judgment of 7 February 1995, received at the Court on 18 April 1995, the Tribunal de Commerce (Commercial Court), Lyons, referred to the Court for a preliminary ruling under Article 177 of the EC Treaty three questions on the interpretation of Commission Regulation (EEC) No 123/85 of 12 December 1984 on the application of Article 85(3) of the EEC Treaty to certain categories of motor vehicle distribution and servicing agreements (OJ 1985 L 15, p. 16). 2 Those questions have been raised in unfair competition proceedings brought by the companies Fontaine, Garage Laval, Fahy, Renault Lyon Ouest FLB Automobiles, Diffusion Vallis Auto and Horizon Sud (`the plaintiffs') against the company Aqueducs Automobiles. 3 The plaintiffs, established in the French département of the Rhône, are exclusive concessionaires for Audi, Ford, Peugeot, Renault and Volkswagen motor vehicles. 4 Aqueducs Automobiles, established in the same département, purchases, by way of parallel imports, new vehicles of various makes which have been registered for less than three months or have covered less than three thousand kilometres, and resells them in France as an independent dealer. It possesses a stock of such vehicles and advertises them for sale. 5 The plaintiffs took the view that Aqueducs Automobiles, which does not belong to the distribution network of any motor manufacturer and is not an authorized intermediary within the meaning of Article 3(11) of Regulation No 123/85, was engaging in unfair competition against the exclusive concessionaires for the makes concerned. They therefore brought proceedings on 1 April 1994 before the Tribunal de Commerce de Lyon, seeking in particular an order requiring Aqueducs Automobiles to cease its activities as an independent reseller of new vehicles, prohibiting it from maintaining a stock of such vehicles and advertising them for sale, and requiring it to pay damages for the loss suffered by the concessionaires. 6 In support of their action, the plaintiffs rely on Regulation No 123/85. They maintain that a reseller of motor vehicles who does not belong to a distribution network for a particular make and who acquires vehicles by way of parallel imports may pursue his activities only as an authorized intermediary within the meaning of Article 3(11) of Regulation No 123/85 and subject to the conditions stated in Commission Notice 91/C 329/06 of 4 December 1991 entitled `Clarification of the activities of motor vehicle intermediaries' (OJ 1991 C 329, p. 20). They claim, in particular, that the agent should act only for the account of a purchaser and final user and that he must not keep a stock of vehicles or create confusion in the mind of the public by giving the impression, particularly in his advertising, that he is a reseller. They further claim that Regulation No 123/85 precludes a trader from simultaneously carrying on business as an authorized intermediary and as an independent reseller. 7 The plaintiffs also maintain that, contrary to what is claimed by Aqueducs Automobiles, the vehicles it sells are not to be regarded as second-hand vehicles simply because their odometer is no longer registering zero. Under French rules, vehicles are regarded as new if they are sold within three months of their initial registration or have covered less than three thousand kilometres. Indeed, those criteria have even been widened, since their initial adoption, to six months and six thousand kilometres, with a view to impeding parallel sales of motor vehicles. 8 For its part, Aqueducs Automobiles considers that Regulation No 123/85 governs only relations between motor manufacturers and their concessionaires. Consequently, it does not concern the activities of, or advertising by, independent traders; nor does it prohibit such an undertaking from simultaneously carrying on the businesses of independent reseller and authorized intermediary. 9 Taking the view that the resolution of the dispute before it depended on the interpretation of Community law, the Tribunal de Commerce de Lyon decided to stay proceedings and to ask the Court to give a preliminary ruling on the following questions: `1. Is there a prohibition of parallel imports otherwise than on the basis of an authority given to an agent who is a provider of services and consequently by a purchase and resale transaction? 2. Is an independent dealer prohibited from acting as a provider of services as a free agent, and at the same time as a dealer inter alia carrying out parallel imports? 3. Is an independent dealer prohibited from selling new vehicles and what is, in any event, the definition of "new vehicle" and "second-hand vehicle"?' 10 Following delivery of the judgment in Case C-309/94 Nissan France and Others [1996] ECR I-677, the Tribunal de Commerce de Lyon considered that there was no longer any need for an answer to the first two questions. However, it decided to maintain its reference for a preliminary ruling on the third question. 11 That question is in two parts. First, the national court is asking, essentially, whether Regulation No 123/85 is to be interpreted as precluding a trader who is neither an approved reseller in the distribution network of a manufacturer of a particular make of motor vehicle nor an authorized intermediary within the meaning of Article 3(11) of that regulation from undertaking parallel imports and operating as an independent reseller of new vehicles of that make. Second, it asks the Court to define the term `new vehicle' for the purposes of applying Regulation No 123/85 and the criteria by which such a vehicle is to be distinguished from a second-hand vehicle. 12 As regards the first part of that question, it must be recalled that Regulation No 123/85 has previously been interpreted by the Court in its judgment in Nissan France and Others, cited above, with regard to parallel imports of motor vehicles and their resale by an independent trader in a sector covered by an exclusive distribution agreement between the manufacturer of a particular make of motor vehicles and one of its concessionaires. 13 In that judgment, the Court held that Regulation No 123/85, in accordance with the function assigned to it in relation to the application of Article 85 of the Treaty, concerns only contractual relations between suppliers and their approved distributors and specifies the conditions under which certain agreements between them are lawful having regard to the competition rules of the Treaty (paragraph 16). 14 It is thus concerned only with the content of agreements which parties tied to a distribution network for a specified product may lawfully conclude having regard to the rules of the Treaty prohibiting restrictions affecting normal competition within the common market (judgment in Nissan France and Others, paragraph 17). 15 Since, therefore, it confines itself to stating what the parties to such agreements may or may not undertake to do in relations with third parties, that regulation does not, in contrast, serve to regulate the activities of such third parties, who may operate in the market outside the framework of distribution agreements (judgment in Nissan France and Others, paragraph 18). 16 Thus, the provisions of that exempting regulation cannot affect the rights and obligations of third parties in relation to contracts concluded between vehicle manufacturers and their concessionaires, in particular those of independent dealers (judgment in Nissan France and Others, paragraph 19). 17 The Court concluded from this that Regulation No 123/85 could not be interpreted as prohibiting a trader who is outside the official distribution network for a given make of motor vehicle and is not an authorized intermediary within the meaning of that regulation from acquiring new vehicles of that make by way of parallel imports and independently carrying on the business of marketing such vehicles (judgment in Nissan France and Others, paragraph 20). 18 Consequently, the Court ruled in Nissan France and Others that Regulation No 123/85 must be interpreted as not preventing a trader who is neither an approved reseller in the distribution network of a manufacturer of a particular make of motor vehicle nor an authorized intermediary within the meaning of Article 3(11) of that regulation from undertaking parallel imports and operating as an independent reseller of new vehicles of that make. 19 For the same reasons, a similar answer must be given to the first part of the third question referred for a preliminary ruling by the Tribunal de Commerce de Lyon. 20 In view of that answer, the second part of the third question referred by that court has become devoid of purpose. 21 As the Advocate General observes in points 12 to 15 of his Opinion, since Regulation No 123/85 does not govern parallel imports of motor vehicles and their resale by independent dealers, there is no point in defining, for the purposes of applying that regulation, whether vehicles forming the subject-matter of such transactions are new or second-hand where, as in the case before the national court, Regulation No 123/85 is in any event inapplicable. 22 In those circumstances, there is no need to give an answer to the second part of the third question referred for a preliminary ruling. 23 In view of all the foregoing considerations, the answer to the third question must be that Regulation No 123/85 is to be interpreted as not preventing a trader who is neither an approved reseller in the distribution network of a manufacturer of a particular make of motor vehicle nor an authorized intermediary within the meaning of Article 3(11) of that regulation from undertaking parallel imports and operating as an independent reseller of new vehicles of that make. Costs 24 The costs incurred by the French Government and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court. On those grounds, THE COURT (Second Chamber), in answer to the question referred to it by the Tribunal de Commerce de Lyon by judgment of 2 January 1995, hereby rules: Commission Regulation (EEC) No 123/85 of 12 December 1984 on the application of Article 85(3) of the EEC Treaty to certain categories of motor vehicle distribution and servicing agreements is to be interpreted as not preventing a trader who is neither an approved reseller in the distribution network of a manufacturer of a particular make of motor vehicle nor an authorized intermediary within the meaning of Article 3(11) of that regulation from undertaking parallel imports and operating as an independent reseller of new vehicles of that make. © European Communities, 2001 All rights reserved BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII