The problem in this case is twofold. First, what is to be done where EU legislation sets a deadline but the language versions of the legislation are said to diverge? Second, even if the EU legislation sets a date, then can its legal effect still be interpreted away with the aid of national procedural law?
Root crops, like carrots, are prone to fungal attack. To protect their carrot crops, farmers might use a fungicide like ‘Core’.The problem is that this fungicide contains difenoconazol. Because this chemical does not dissolve in water, it leaves residues on the plants and in the soil. Consequently, the use and licensing of Core is subject to the EU’s ‘plant protection products’ legislation.
Although the main EU plant product legislation is Directive 91/414/EEC (OJ  L230/1), the relevant legislative framework has since evolved. For the purposes of this case, the key point is that every plant protection product containing difenoconazol is now subject to periodic review, and reauthorisation.
Core’s license holder is a company called Sharda Europe. Their problem is that they currently do not hold a legally valid license. This is because the company missed the EU deadline for the reauthorisation, and the Spanish courts have subsequently declared void the plant protection product certificate which Sharda Europe already held in respect of Core.
At the Spanish Supreme Court
Although the reauthorisation deadline was 31 December 2008, and that deadline was enshrined in EU legislation, Sharda Europe now claim that that deadline does not apply as a matter of EU law.
According to Sharda Europe, that date is still subject to national laws and national procedural law. As a result, the legal effect of missing the EU legislation’s deadline is not fatal to their plant protection product license; in particular, the company can still rely on Spanish procedural law in respect of, for example, force majeure.
The starting point for the judges at the Spanish Supreme Court was Article 3 of the EU Commission’s Directive 2008/69/EC (OJ  L172/9), amending the earlier 1991 Council Directive, which provides:
1. Member States shall in accordance with Directive 91/414/EEC, where necessary, amend or withdraw existing authorisations for plant protection products containing the active substances listed in the Annex as active substances by 30 June 2009.
By that date they shall in particular verify that the conditions in Annex I to that Directive relating to the active substances listed in the Annex are met, with the exception of those identified in part B of the entry concerning that active substance, and that the holders of the authorisations have, or have access to, dossiers satisfying the requirements of Annex II to that Directive in accordance with the conditions of Article 13 of that Directive.
2. By way of derogation from paragraph 1, for each authorised plant protection product containing one of the active substances listed in the Annex as either the only active substance or as one of several active substances all of which were listed in Annex I to Directive 91/414/EEC by 31 December 2008 at the latest, Member States shall re-evaluate the product in accordance with the uniform principles provided for in Annex VI to Directive 91/414/EEC, on the basis of a dossier satisfying the requirements of Annex III to that Directive and taking into account part B of the entry in Annex I to that Directive concerning the active substances listed in the Annex. On the basis of that evaluation, they shall determine whether the product satisfies the conditions set out in Article 4(1)(b), (c), (d) and (e) of Directive 91/414/EEC.
Following that determination Member States shall:
a) in the case of a product containing one of the active substances listed in the Annex as the only active substance, where necessary, amend or withdraw the authorisation by 31 December 2013 at the latest; or
b) in the case of a product containing one of the active substances listed in the Annex as one of several active substances, where necessary, amend or withdraw the authorisation by 31 December 2013 or by the date fixed for such an amendment or withdrawal in the respective Directive or Directives which added the relevant substance or substances to Annex I to Directive 91/414/EEC, whichever is the latest.
Despite the deadline being 31 December 2008, Sharda Europe submits that that obligation must be read together with Recital 7, which it believes to contain a derogation to the deadline:
7. Without prejudice to the obligations defined by Directive 91/414/EEC as a consequence of including an active substance in Annex I, Member States should be allowed a period of six months after inclusion to review existing authorisations of plant protection products containing the active substances listed in the Annex to ensure that the requirements laid down by Directive 91/414/EEC, in particular in its Article 13 and the relevant conditions set out in Annex I, are satisfied. Member States should vary, replace or withdraw, as appropriate, existing authorisations, in accordance with the provisions of Directive 91/414/EEC. By derogation from the above deadline, a longer period should be provided for the submission and assessment of the complete Annex III dossier of each plant protection product for each intended use in accordance with the uniform principles laid down in Directive 91/414/EEC.
Not only is Sharda Europe suggesting that a Recital created an exception to the rule in the Directive, but the lawyer for the Spanish State was adding to the legal uncertainty.
Believing the English and French versions of the EU Commission Directive to say one thing, and the Spanish version say something else – a divergence which it was claimed was also present in a similar piece of EU chemicals legislation – the Spanish State’s lawyer was wanting a preliminary reference to the CJEU.
Faced with such legal uncertainty, and the fact that both Sharda Europe and one of its commercial rivals, Syngenta (who were also involved in the litigation) were also wanting the case to be heard by the CJEU, the Spanish Supreme Court decided to make a preliminary reference.
According to the Curia website, the Spanish Supreme Court has asked:
1. As there is divergence between the different language versions of Article 3(2) of Commission Directive 2008/69/EC […] of 1 July 2008 and a possible discrepancy with Recital 7 of the preamble to the Directive, the following question is referred to the Court of Justice:
Is the date 31 December 2008 in Article 3(2) of Commission Directive 2008/69/EC of 1 July 2008, in its Spanish version, to be understood as the expiry of the deadline for the Member States to carry out a re-evaluation, or as the final date for inclusion in the list in Annex I of Directive 91/414/EEC […] of the active substances which must be re-evaluated, or as the final day for submitting the corresponding application for inclusion?
2. Is the expression ‘by 31 December 2008 at the latest’ in Article 3(2) of Directive 2008/69/EC a fixed deadline on account of the aim pursued by the system established by Council Directive 91/414/EEC of 15 July 1991, and does it preclude the Member States from extending it, with the result that it is calculated according to that directive?
3. If it is understood that the deadline may be extended, may it be extended for objective reasons of force majeure or may the Member States, to which the mandate in Article 3 is addressed, extend it in accordance with the conditions and requirements of their national legislation?
The lead judge in this case was Judge Díez-Picazo, an expert in EU constitutional and administrative law. He has already made preliminary references to the CJEU, see for example, Case C-470/14, EGEDA – will a state-financed ‘private copy’ scheme deliver fair compensation?
However, this preliminary reference appears a little odd. To start with, it is not clear why Question 3 refers to force majeure because it looks like the referring order explains that the judge at first instance had found that Sharda Europe had not proved its claim on that specific point.
Equally, it is not clear to me how a Recital could give rise to an exception when the legally binding body of the Directive says nothing about an exception. In that respect, it might be recalled that the issue of the legal status of a Recital not reflected in a Directive is already at issue in another preliminary reference; see further, Case C-31/16, Visser Vastgoed – planning on EU services law and not a purely internal situation.
Further, it seems odd that the Spanish Supreme Court seems to have accepted that there was a difference between the various language versions of the EU legislation but it has made no attempt to follow the CJEU’s approach as to what to do when language versions diverge. In that context, it is worth noting that the CJEU’s ‘divergent language versions’ approach has had its latest iteration in Breitsamer earlier on this week.
For the rest, readers interested in the Sharda Europe preliminary reference might also look out for a similar preliminary reference, Case C-325/16, Industrias Químicas del Vallés. According to the Curia website, the questions asked in that reference read:
1. Is the deadline set in Directive 2010/28/EU […] by the use of the phrases ‘by 31 December 2010’ in Article 3(1) and ‘by that date’ in the second paragraph of Article 3(1), which also refers to 31 December 2010, in conjunction with the period of six months referred to in Recital 8 of the preamble to Directive 2010/28/EU, a mandatory time-limit by virtue of the purpose sought by the system established by Council Directive 91/414/EEC […] of 15 July 1991, and not susceptible of extension by the Member States, such that it must be calculated exclusively in accordance with the directive?
2. In the event that it is held that the time-limit is capable of extension, is the decision concerning such an extension to be taken without regard to any specific procedural rules concerning applying for and granting the extension or does it fall within the competence of the Member States, which must decide the question in accordance with domestic legislation since they are the addressees of the provisions establishing the procedure under Article 3(1) of the directive?
Finally, the potential significance of the cases involving Sharda Europe and Industrias Químicas del Vallés might not be restricted to the reauthorisation of fungicides in the EU but might extend to international trade. For example, there also has been a recent application made to the EU to approve of the use of difenoconazol in Brazil’s production of papayas.
Update – 13 November 2016
A preliminary reference from the High Court of England and Wales has just arrived at the CJEU, and it too concerns whether companies can get around EU regulatory rules by relying on national law; see further, Case C-567/16, Merck Sharp – SPC Lazarus law.
Update – 5 December 2016
According to the Curia website, there is another SPC plant protection product case pending at the CJEU; it is Case C-492/16, Incyte Corporation in which the Hungarian Fővárosi Törvényszék has asked:
1. Must Article 17(2) of Regulation (EC) No 1610/96 of the European Parliament and of the Council of 23 July 1996 concerning the creation of a supplementary protection certificate for plant protection products […] be interpreted as meaning that ‘the date of the first authorization to place the product on the market in the Community’ is incorrect in an application for a supplementary protection certificate, within the meaning of that regulation and of Regulation (EC) No 469/2009 of the European Parliament and of the Council of 6 May 2009 concerning the supplementary protection certificate for medicinal products, […] where that date was determined without taking account of the Court of Justice’s interpretation of the law in the judgment in Seattle Genetics (Case C-471/14), with the result that it is appropriate to rectify the date of expiry of the supplementary protection certificate even if the decision to grant that certificate was made prior to that judgment and the time limit for appealing against that decision has already expired?
2. Is the industrial property authority of a Member State which is entitled to grant a supplementary protection certificate required to rectify, of its own motion, the date of expiry of that certificate in order to ensure that that certificate complies with the interpretation of the law set out in Case C-471/14?