## Facts

- An Italian wine dealer sold Italian liqueur wines to an Italian purchaser for export to France.
- The parties’ contracts included clauses allocating the economic burden of any taxes allegedly contrary to European Community law and were drafted to make that burden the subject of litigation in Italy.
- French authorities imposed a consumption tax when the wine entered France; the seller ultimately bore the cost and sought reimbursement from the purchaser under the contractual clause.
- Rather than challenge the French tax through available remedies in France, the parties structured the transaction and ensuing Italian litigation to trigger a preliminary reference seeking a ruling on the compatibility of the French tax with EEC Treaty provisions.

## Issues

1. Whether the Court of Justice may answer questions referred for a preliminary ruling when the underlying national proceedings are a contrived, non-adversarial action designed to obtain an abstract ruling on another Member State’s tax system.
2. Whether the reference was admissible under Article 177 EEC given the parties’ alignment and the deliberate contractual setup to induce the reference.

## Decision

- The Court of Justice held it lacked jurisdiction to answer the questions and declared the reference inadmissible.
- The Court declined to address the substantive Treaty questions concerning the alleged incompatibility of the French tax with Articles 92 and 95 EEC.
- The Court reasoned that Article 177 EEC exists to assist national courts in resolving genuine disputes, not to provide advisory opinions in proceedings engineered by aligned private parties to invalidate another Member State’s measures.
- The Court emphasized that accepting such arranged litigation would jeopardize the overall system of legal remedies by enabling litigants to bypass ordinary national procedures and forum shop through another Member State’s courts.

## Legal Principles

- The preliminary ruling procedure is limited to supplying interpretations of Community law necessary for national courts to decide genuine disputes pending before them.
- The Court of Justice may refuse to answer a reference where the main proceedings are artificial or “friendly” and are used as an expedient to obtain an abstract ruling on the validity or compatibility of another Member State’s legislation.
- The Court has an independent responsibility to police the proper use of the preliminary ruling mechanism, even when a national court has formally referred questions.
- The Treaty’s remedial structure is undermined when parties seek to avoid available remedies in the Member State whose measure is challenged by manufacturing litigation elsewhere to secure an interpretive ruling.

## Conclusion

The Court of Justice dismissed the reference because the parties constructed a non-adversarial dispute to procure a preliminary ruling on the legality of a French tax, confirming that the preliminary ruling mechanism is reserved for resolving genuine disputes and cannot be used to obtain advisory review through arranged private litigation.


Foglia v. Novello (Foglia I), Case 104/79, 1980 E.C.R. 745 (E.C.J. 1980)