Plea of illegality (art.

277 TFEU)
Action for to act: requirements (art. 265 TFEU)

Inuit-1 Case discusses the General Regulation (Reg. 1007/2009). Inuit-2 Case discusses the implementing act
(Regulation 737/2010), together with the general regulation.

PLEA OF ILLEGALITY: consists of a statement that a certain act is illegal and should be inapplicable.
- Action for annulment has a time limit: 2 months. POI gives the parties an opportunity later on when they
discover when a certain act is illegal, to contest it, even after 2 months have passed.
What are the requirements?
-> Art. 277 TFEU:
1) Standing: Any party. Very open, broad notion of standing.
2) Must be in proceedings.
3) Must concern an act of general application, which must be adopted by a Union institution, body or agency.
4) Must be at issue.
5) Grounds for review specified in art. 263 to found arguments why a certain act is illegal.

1. Standing. Anyone can use this article. Institutions, legal and natural persons.
2. It must be in proceedings. There must be a direct action before the ECJ in which the plea of illegality is
being used. For the direct action, you can think of some possibilities:
a) Art. 263 procedure: General regulation -> Implementing Act. Parties dispute an implementing act, they have
standing in relation to this implementing act (Special Standing Test). In this procedure, POI can be used against
the underlying general regulation. So POI can be used against the general regulation upon which the
implementing act is disputed.
In the annulment procedure, persons wouldn't have a standing because the general regulation does not concern
them individually.
b) Art. 265 procedure-1:
There is a general regulation, and based upon it there is an obligation EU institution to act. Let's say the
institution doesn't act. There comes the failure to act. Institution states "no, there is no obligation to act, because
the general regulation is illegal". So the institution uses POI as its defence in relation to the statement of the
claiming parties that there is an obligation to act for the institution.
c) Art. 265 procedure-2: There is a general regulation, but there is no obligation to act following from it. An
individual doesn't agree and wants to dispute the way there is no obligation for the EU obligation to act and it
starts action under Art. 265; but it also directly attacks the general regulation, upon which there is no obligation
to act. In this case it is the natural/legal person (claimant party) which uses POI against the general regulation as
well. So it uses Arts. 265 and 277 simultaneously.
d) Art. 268/340 procedure (Claim for damages):
When Actions of an EU institution have led to damages, the damaged party can bring the claim for damages.
EU institution tries to justify its action using a general regulation. In that case the claimant may also start
proceedings and use POI in the action for damages. So in this case they say the actions of the EU institution are
illegal, and the general regulation is also illegal.

3. Act of general application

Act of individual application cannot be used in relation to the POI. Objection of illegality cannot be brought.
Why? Because normally, in acts of individual application it's much more easier for people to prove that they
have standing. Therefore the use of the plea of illegality is restricted to acts of general application.
 4. Adopted by an institution, body, office or agency of EU.
This notion is very broad. This means that any act of general application adopted by these can be used in POI.

5. The act must be at issue.

This is an important requirement because it means that you cannot use the POI in an annulment procedure or
in an action for failure to act, against any act of general application. There must be a link between the act of
general application and the act which is being disputed. There must be a connection between the disputed act
and act of the general application.

6. Grounds for review.

Within Art. 263. It's important to view whether for instance essential procedural requirements are used because
in that case ECJ can of its own motion [...].

Inuit Case:
We have the Gen. Reg., and we have implementing acts. Special Standing Test: whether it is a regulatory act
(it is) which is of direct concern (it is, because it changes legal situation and does not leave discretion) and does
not entail implementing measures (Art. 9 of the Regulation 737/2010, where we can see if these are
implementing measures or not: "Each MS shall designate [...]" Probably these tasks can be seen as
implementing measures).
So the parties wouldn't have had standing. Yet the General Court didn't look at standing at all. It directly
discussed the arguments brought before it. It's strange that it didn't look at the standing of the parties, because
they should have had standing, otherwise they couldn't have brought forward the POI. Why didn't the Court
look at it? If a claim is clearly unfounded, then economics of the procedure, the Court can discuss directly the
arguments brought by the parties. The Court will do so to clear any possible misunderstanding about the
regulation. So there will not be any other parties who will bring claims in another procedure. So for the
economics of the procedure, it's better for the Court to discuss the arguments so that everyone knows.

PURPOSE OF POI
1) Time limit is Art. 263 is so short, it's impossible to contest the legality of acts. There is also a need and right
for legal certainty.
2) Natural and legal persons often do not have standing and are not able to bring forward an objection against
illegal act of the EU. POI broadens the scope for NS & LS to discuss the EU regulations.

EFFECTS OF ANNULMENT PROCEEDINGS AND POI

Art. 264 TFEU
- the act of general application is declared void, partially or wholly
- effects inter-partes (it's only void for the parties, but in relation to third parties, the act still exists and brings
legal consequences for them)
- the court may limit effects in time. Normally when Court gives decision, the annulment takes effect not from
the day of the judgment but it is assumed to be void all the time. So anyone can bring action for damages.
But in certain cases the Court may limit it. Example: Case C-14/06 and C-295/06, EP and Denmark v.
Commission, para 85 and 86. In this case Court considered that for the interest of undertakings and for their
need to adjust a revised policy, it was necessary to limit the effects of the judgment. In order to protect the
interests of the undertakings, the effects of the judgment of the Court was limited, not taking effect until a
certain date.
 The effects are inter partes, but it seems like a big thing because it means that third parties are still bound by
the illegal provision/act as such, because they were not parties to the dispute. But you must think that the EU
institution will not apply a provision which is illegal to third parties. EU institution itself will not such an illegal
provision, and of course third parties could always (if it would be applied) contest themselves the illegality of a
certain provision/act. So yes, the fact is only inter partes, but in practice, the effect is much broader than only
inter partes.

These are the effects, but this is not all. There must be taken a new measure, or the measure must be changed
by the EU institution. This we can find in Art. 266 TFEU. It states the following:
1) Obligation (for the EU institution) to take necessary steps:
- to eradicate the effects of the measure found void &
- to restore the applicant in its original position prior to the legality.
It may seem nice that the EU institution is obliged to take necessary steps and to come up with a new measure
or change the original act and come up with a new provision in the act, but in practice it works different.
Because an EU institution may consider whether or not to appeal against the decision of the general court. And
if the EU institution decides to start an appeal procedure before the ECJ, in that case the declaration of the act
being void does NOT take effect as long as the appeal procedure is still going on. This is enshrined in Art. 60 of
the Statute ("by way of derogation [...]").
Article 60 of the Statue the judgment of the ECJ containing the annulment or the declaration that certain
provisions/act is being wholly or partially void, it doesn't take effect until the time for appeal procedure has
elapsed (if there was no appeal), or after the appeal procedure has ended and the ECJ has given its statement.
Case: Zaak T-220/08, İşçi Partisi (Turkish Labour Party) v Council and Commission, para 13.

...
THE FAILURE TO ACT (Art. 265)
-> What are the requirements?
1) A Union institution (EP, European Council, Council, Commission, European Central Bank), body, office or
agency must have failed to act (par 1);
2) They were under a duty to act (par 1);
3) Standing (para 1 and 3):
- privileged persons: MS and EU;
- non-privileged: any natural and legal persons (non-privileged).
4) The institution/etc must have first been called upon to act. (para 2);
5) It failed to act within 2 months after being called upon to act )(para 2);
6) Within a further period of two months after the elapse of the period of 2 months following the exhortation
of the institution to act (para 2).

1 -> Very broad notion. Applies to all EU institutions/etc.

2 -> Must be taken together with the first requirement. So there must be an infringement of the treaties for
non-acting. There is a duty to act.
If we take Art. 101 in relation to stop undertakings making price decision together with other companies,
which would be infringement of competition rules. Is there any duty for the Commission to undertake action? -
> YES. It follows from Regulation 1/2013 and 773/2004. So where in an infringement procedure the
Commission is not obliged to take action, here it is obliged. If it does not so, the companies may start Failure to
act proceedings.
 3 -> Standing. There are no special requirements for privileged persons. But for non-privileged persons, it is
stated in Art. 265 (last para) that if the EU institution/etc failed to address to that person. How is this notion
"addressed to that person" applied? Case-law: ECJ it means "addressed to him or of direct and individual
concern to that person"
This is because Failure to act is the complement procedure to the action for annulment. If EU institution fails
to act and it is of importance to the individual that the EU institution takes an action, the individual also would
want to annul the decision of the EU institution.
Case: C-68/95, T. Port, para 59. (read the paragraph !!!).

These acts are other than recommendations or opinions. These acts must have binding effect.
Case: T-292/09, Muhamad Mugraby v Council and Commission, para 34, 35, 36. Mugraby asked the
Commission and the Council to stop aid being paid to Lebanon. He is a lawyer in Lebanon and criticised the
judicial system in Lebanon and therefore he was being harassed and deprived of certain fundamental rights by
Lebanese authorities. He thought depriving them of EU aid would be a good come-back. He started proceedings
against the Commission (and Council) under Art. 265. He asked the Commission to take the recommendation
(to stop EU aid to Lebanon) to the Council. Council refused, stating based upon the Lebanon-EU agreement,
there was no reason to stop the aid, so Mugraby asked the Commission to recommend to the Council to stop
paying aid. In this case, ECJ considered that the action for failure is contingent on the institution concerned
being under an obligation to act. There is a direct link between the failure to act and the duty to act. If there is
no duty, then Art. 265 is not possible. Plus, the recommendation is NOT legally binding and not a prerequisite
for the Council to take measures to suspend aid, and therefore cannot be a subject for Art. 265.
We can conclude that in case the proposition is required (such as in legislative procedure) then the
Commission is the only one who can come up with proposals. If the Commission refuses and doesn't come up
with proposals, in that case Art. 265 is possible, even though proposal is not a legally binding act. Because
without a proposal, the other institutions cannot act, so it is a prerequisite for a directive or regulation or
whatever, and therefore the non-action of the Commission can lead to Art. 265.

4 -> Institution was first called upon to act by the applicant.

Two actions of the complainant:
1) You must let the failing institution or agency know that by not acting they are infringing the treaties. You
must send a letter asking them to act or to take action.
2) If there is no reaction, then you must send formal notice to the failing institution they are infringing that
they are infringing EU treaties or secondary EU law, stating also the reasons why you think the institution is
failing to act. I.e. only after a reasonable period of time, and the institution doesn't react or states that there is no
reason without this statement legally binding effect which can be subject to a procedure of annulment, then in
that case there must be a formal notice to the failing institution that they are obliged to act.
This letter of formal notice is important because it also determines the scope of the dispute before the ECJ. It
states the topics. If this letter has been sent to the failing institution, from that moment on starts the two-months
period of time. If after the elapse of this period they don't act, you have 2 months to start action for failure to
act.

...
The object of the infringement procedure is the failing MS, whereas the legal or natural person is asking for
the infringement procedure to be taken.
...
 ACTION FOR FAILURE TO ACT: EFFECTS
- Art. 266 TFEU:
a) the required measure/decision is taken (by the EU institution/etc). The complainant is helped and gets what
it wants.
But it is of course also possible that EU institution doesn't take any measures, but:
b) it may adopt a measure/decision other than that has been requested for. In that case the failing institution
ends the failure to act, because it has adopted decision, only it's not the decision the complainant has asked for.
c) the requested measure/decision is rejected.
The complainant sees if he can get this rejection annulled by the ECJ.

PROBLEMS WITH ACTION FOR FAILURE TO ACT:

1) This procedure doesn't always give the complainant what it is asking for.
2) Action for failure to act is only open as long as the EU institution has failed to act. If during this failure to
act action before the ECJ, the failing institutions adopt one of these 3 decisions, in that case there is no more
failure to act on behalf of it, and therefore there is no longer any need to continue the action for failure to act.
3) If the EU institution appeals, the appeal has no suspensory effect. So this is different from the annulment
procedure.
4) The scope of the Court's judgment is still limited (as we see in the Denmark case). The General Court (<-
plays more important role in the Art. 265, applies itself more) cannot give directions to an EU institution in
relation to what act to adopt. So the scope of the decision of the Court stating or affirming that there is a failure,
it remains a declaration. And The Court cannot give declaration in relation to the content/form/etc of the
measure for the EU institution to adopt.
 1. Can an action on the basis of Article 265 TFEU be instigated if the act to be adopted is a non-binding one?
Non-binding act? Natural or person cannot instigate failure to act for an act that is a recommendation or
opinion. So in a broader sense they cannot ask for a soft law.
The article says nothing about these limitations for the other actors, so the action can be used to ask for a non-
binding act.

STUDY QUESTIONS 2
A MS who had the possibility to challenge a general act under 263 TFEU should not be allowed to challenge
this act under 277 TFEU.
False
The illegality could be shown after the 2-month period, so if you wouldn’t allow a MS to use the plea of
illegality that would mean that to indirectly have an act annulled, MS could only use the annulment procedure.

Pursuant to Article 277 TFEU, “Notwithstanding the expiry of the period laid down in Article 263, sixth
paragraph, any party may, in proceedings in which an act of general application adopted by an institution, body,
office or agency of the Union is at issue, plead the grounds specified in Article 263, second paragraph, in order
to invoke before the Court of Justice of the European Union the inapplicability of that act.”
22 It follows from that article that a Member State may, in the course of legal proceedings, challenge the
legality of a regulation against which it has not brought an action for annulment before the expiry of the time-
limits laid down in the fifth paragraph of Article 230 EC. It should be pointed out in that regard that since the
right of the Member States to bring an action for annulment of a regulation is not limited, the plea of
inadmissibility raised by the Council and the Commission – to the effect, essentially, that a Member State may
not plead the illegality of a regulation after the expiry of the abovementioned time-limits if it could have sought
the annulment thereof within those time-limits – would mean, if accepted, that Member States do not have the
right to query, in the course of legal proceedings, the legality of a regulation in order to invoke its
inapplicability before the Court. As the Advocate General points out in paragraph 61 of his Opinion, since such
an approach would constitute an infringement of the terms of Article 241 EC which gives that right to ‘any
party’ (see Case C-11/00 Commission v ECB [2003] ECR I-7147, paragraph 76), the plea of inadmissibility
must be rejected.

If accepted, this would mean that Member States do not have the right to query, in the course of legal
proceedings, the legality of a regulation in order to invoke its inapplicability before the Court.