Costa v ENEL [1964] ECR 585

Facts

• Flaminio Costa, an Italian citizen and shareholder in Edisonvolta, challenged the nationalization of Edisonvolta by the Italian government, which formed ENEL.
• Costa refused to pay his electricity bill to ENEL, arguing that the nationalization law conflicted with provisions of the Treaty of Rome.
• He claimed that Treaty provisions should take precedence over the Italian law on nationalization.
• The dispute reached the Italian courts, which referred questions on interpreting the Treaty of Rome to the Court of Justice of the European Union (CJEU).
• The Italian government contested the CJEU's jurisdiction, maintaining that Italian courts were subject to domestic law and that national legislation should override Treaty provisions.

Issues

1. Whether the CJEU had jurisdiction to interpret Treaty of Rome provisions in cases involving conflicting national legislation.
2. Whether EU law, founded on the Treaty of Rome, has precedence over subsequent unilateral national legislation of a member state.
3. Whether national courts must disapply national law conflicting with directly applicable EU law provisions.

Decision

• The CJEU confirmed its jurisdiction to decide preliminary references from national courts on interpreting the Treaty of Rome, even in the face of conflicting national law.
• The Court held that European Community law, once integrated by member states, cannot be overridden by later national legislation.
• The Court recognized that the Treaty of Rome established a new legal order directly effective within member states.
• Member states, by joining the European Community, voluntarily limited their legislative sovereignty and accepted the primacy of EU law.
• The Court found that the principle of lex posterior derogat legi priori (the later law repeals the earlier) does not apply when national law contradicts EU law.

Legal Principles

• EU law has supremacy over any conflicting national legislation.
• EU law is directly applicable within member states and does not require further national enactment to be effective.
• National courts must uphold EU law and set aside any national statutes that conflict with it.
• By ratifying EU treaties, member states voluntarily restrict their legislative authority in areas governed by EU law.
• The preliminary reference procedure guarantees uniform interpretation and application of EU law by all member states' courts.

Conclusion

Costa v ENEL established the supremacy and direct effect of EU law within member states, mandating that national courts disapply conflicting national provisions. This judgment created a fundamental limitation on member state legislative autonomy where EU law is applicable.