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
- Whether the CJEU had jurisdiction to interpret Treaty of Rome provisions in cases involving conflicting national legislation.
- Whether EU law, founded on the Treaty of Rome, has precedence over subsequent unilateral national legislation of a member state.
- 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.