The landmark case of Flaminio Costa v ENEL (Case 6/64) is widely regarded as one of the cornerstones of European Union (EU) law. It firmly established the principle of the supremacy of European Community law (now EU law) over the national laws of Member States. This case marked a significant turning point in the legal relationship between Member States and the European legal order, ensuring that EU law prevails in cases of conflict. For UK readers, understanding Costa v ENEL is essential, as it laid the groundwork for the primacy of EU law — a principle that played a significant role in the UK’s own legal history before Brexit.
Background of Costa v ENEL
The case arose in Italy during the early 1960s, when the Italian government decided to nationalise the electricity industry under a newly enacted law in 1962. This move transferred all private electricity companies, including Edisonvolta, into a state-owned entity called ENEL (Ente Nazionale per l’Energia Elettrica).
Flaminio Costa, a Milanese lawyer and shareholder in Edisonvolta, opposed the nationalisation on political and legal grounds. Costa, assisted by his colleague Gian Galeazzo Stendardi, refused to pay his electricity bill to ENEL, arguing that:
- ENEL had not validly taken over his contract with Edisonvolta.
- The nationalisation law conflicted with:
- The Italian Constitution
- The Treaty of Rome (1957), which was the founding treaty of the European Economic Community (EEC).
The case quickly escalated to become a test of whether national law could override European Community law — a question of paramount importance for the future of European integration.
Key Legal Issues
The primary issue in Costa v ENEL was:
“Should European Community law take precedence over the domestic laws of Member States when a conflict arises?”
Specifically:
- Did the Italian nationalisation law violate provisions of the Treaty of Rome, such as those concerning competition, commercial monopolies, and the right of establishment?
- Could Italian courts disregard national laws conflicting with European Community law?
The case also raised procedural questions about the relationship between national courts and the European Court of Justice (ECJ).
Initial Proceedings in Italian Courts
Costa initially brought his case before the Justice of Peace of Milan (giudice conciliatore), seeking referral to both the Italian Constitutional Court and the ECJ. However, the first judge, Antonio Carones, referred the matter solely to the Italian Constitutional Court, which ruled on 24 February 1964:
- Article 11 of the Italian Constitution permitted sovereignty limitations for participation in international organisations, like the EEC.
- However, the Treaty of Rome did not hold any special rank within the Italian legal system.
- As a result, the principle of lex posterior derogat legi priori applied. This principle gives precedence to newer laws over older laws.
Thus, the Italian Constitutional Court concluded that the 1962 nationalisation law prevailed over the earlier Treaty of Rome (1957).
The Referral to the European Court of Justice (ECJ)
Costa did not give up. He refused to pay a second electricity bill and brought the matter before another Justice of Peace in Milan, Vittorio Emanuele Fabbri. This time, the judge referred the case to the ECJ under the preliminary reference procedure (Article 177 of the Treaty of Rome, now Article 267 TFEU).
The Italian government argued that this reference was inadmissible, claiming that national courts were bound to apply national laws, even if they conflicted with EEC law. This argument sought to prevent the ECJ from ruling on the interpretation of the Treaty of Rome.
Judgement of the European Court of Justice (ECJ) in Costa v ENEL
The ECJ’s decision in Costa v ENEL delivered a landmark judgement that shaped the future of European legal integration. The key findings of the Court were as follows:
Supremacy of EU Law
The ECJ firmly rejected the Italian government’s position and established the principle that European Community law holds supremacy over national laws. The Court ruled:
“The Treaty instituting the EEC has created its own legal order, which is binding upon the Member States and integrated into their national legal systems the moment the Treaty came into force.”
- The ECJ explained that the EEC Treaty established a new legal order with its own institutions, powers, and legal principles.
- By signing the Treaty of Rome, Member States had voluntarily limited their sovereign rights in certain areas to ensure the success of the Community.
The Court declared that national laws cannot override Community law because doing so would undermine the legal basis of the Community itself.
Nature of EU Law
The ECJ emphasised that EU law is an independent source of law that cannot be overridden by domestic provisions, regardless of their form or timing:
“A subsequent national law cannot take precedence over a legal order accepted by Member States on a basis of reciprocity.”
The ECJ thus dismissed the Italian Constitutional Court’s reliance on lex posterior derogat legi priori. It held that the special nature of EU law means that it enjoys a unique status and priority over conflicting national measures.
Preliminary Reference Mechanism
The ECJ also affirmed the importance of the preliminary reference procedure under Article 177 of the Treaty of Rome. This mechanism allows national courts to refer questions of EU law interpretation to the ECJ for authoritative rulings.
By doing so, the ECJ ensured that national courts could access consistent interpretations of EU law and resolve conflicts effectively.
Direct Effect of Treaty Provisions
On the substantive legal issues, the ECJ ruled that the Treaty provisions on competition and State aids did not have direct effect. This meant that individuals like Costa could not directly invoke these provisions to challenge national laws.
However, the ECJ provided guidance, leaving it to the referring court to determine whether the Italian nationalisation law violated the provisions on commercial monopolies.
Significance of the Costa v ENEL Judgement
The Costa v ENEL case had profound implications for European and national legal systems, particularly regarding the primacy of EU law:
- Supremacy of EU Law: The ECJ established that EU law takes precedence over conflicting national laws, regardless of whether the national law is earlier or later in time. This principle ensured the uniform application of EU law across all Member States.
- Legal Order of the European Union: The ruling affirmed that EU law forms a unique and autonomous legal order, separate from ordinary international treaties. Member States had transferred part of their sovereignty to the European Community, creating obligations they could not unilaterally override.
- Empowerment of National Courts: National courts were given the power to apply EU law directly and to disapply conflicting national provisions. The preliminary reference mechanism became a vital tool for national courts to ensure consistent interpretation and application of EU law.
- Foundation for Future Integration: The judgement laid the groundwork for subsequent ECJ decisions reinforcing the supremacy of EU law, such as Simmenthal (1978) and Factortame (1990). It also influenced the UK legal system during its membership in the EU, particularly in cases involving conflicts between UK law and EU law.
Impact of Costa v ENEL Judgement on the UK Legal System
For the UK, which joined the EEC in 1973, the principle of EU law supremacy established in Costa v ENEL had significant implications. Notably:
- UK courts, like those in other Member States, were bound to give precedence to EU law over conflicting domestic legislation.
- Cases such as Factortame (1990) illustrated how UK courts applied the principle of supremacy, setting aside provisions of UK law that conflicted with EU law.
- The European Communities Act 1972 incorporated the supremacy of EU law into UK domestic law, creating a fundamental shift in the UK’s constitutional framework.
Following Brexit, the principle of supremacy no longer applies in the UK. However, Costa v ENEL remains a cornerstone in understanding the development of EU law and its influence on the UK’s legal system during its EU membership.
Conclusion
The decision in Costa v ENEL (1964) marked a defining moment in the evolution of European Union law. By establishing the supremacy of EU law over national laws, the ECJ ensured the uniformity, effectiveness, and integrity of the European legal order.
For the UK, while the principle no longer applies post-Brexit, its influence during the UK’s time as an EU Member State was undeniable. The case demonstrates the tension and balance between national sovereignty and supranational legal obligations — a tension that remains relevant for future discussions about legal and political integration in Europe.
The legacy of Costa v ENEL endures, reminding us of the power of legal principles to shape the course of history and the structure of modern legal systems.