Costa v ENEL [1964]

Case 6/64 Flaminio Costa v ENEL [1964] stands as a landmark decision in the history of the European Court of Justice, establishing the primacy of European Union law (then Community law) over the laws of its member states.

Flaminio Costa, a Milanese lawyer and shareholder of Edisonvolta, opposed the nationalisation of the electricity sector in Italy. When he received an electricity bill from ENEL, the company established by the nationalisation law, he refused to pay, arguing that the nationalisation law violated both the Italian Constitution and the EEC Treaty.

Costa brought the matter before the Justice of Peace of Milan, requesting a referral to both the Italian Constitutional Court and the European Court of Justice. The Italian Constitutional Court ruled that, while the Italian Parliament could pass laws limiting sovereignty to join international organisations like the EEC, such laws did not hold a special rank in the legal hierarchy. The Treaty of Rome, incorporated into Italian law in 1957, was deemed subordinate to the electricity nationalisation law enacted in 1962.

In a subsequent challenge, Costa's case was referred to the European Court of Justice by Justice of Peace Vittorio Emanuele Fabbri, raising questions about the nationalisation law's consistency with the EEC Treaty on various grounds. The Italian government contended that the reference was inadmissible, as the nationalisation statute should prevail even if conflicting with the EEC Treaty.

The European Court of Justice dismissed the inadmissibility plea and emphasised the unique nature of the EEC Treaty, creating its own legal order binding upon member states. The ECJ asserted that community law could not be overridden by domestic legal provisions without undermining its character as community law. The judgment established the principle that EU law is supreme and cannot be displaced by domestic laws.

On the merits, the ECJ held that certain provisions of the EEC Treaty had no direct effect and could not be invoked by individuals against national laws. The court interpreted the right of establishment narrowly and left it to the referring court to determine the consistency of the nationalisation law with the EEC Treaty on commercial monopolies.

The significance of the Costa v ENEL case lies in its establishment of the principle of supremacy in EU law. Although Article I-6 of the proposed European Constitution emphasised this primacy, the constitution was never ratified. The subsequent Treaty of Lisbon (2007) did not include an article on primacy but included a Declaration recalling the Costa v ENEL judgment. French Judge Robert Lecourt later reflected that these decisions merely gave effect to the treaties' commands, reinforcing the supremacy of EU law.
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