OPINION OF MR REISCHL — CASE 13/78 SOCIÉTÉ GÉNÉRALE ALSACIENNE DE BANQUE / KOESTLER

Mr President,

Members of the Court,

The defendant in the main anion, out of which this refence for a preliminary ruling has arisen, was from 1968 Director of Administration in the German-French Military Scientific Research Institute in Saint-Louis (Haut-Rhin) where he resided from 1 July 1968 to 28 July 1973.

While the defendant was resident in France the plaintiff carried out stock exchange time-bargains on his behalf by passing on the defendant's relevant buying and selling orders to its stockbrokers on the Paris Stock Exchange. On settling day the shares which had been bought or sold were not in fact taken up or transferred and neither was the whole of the purchase price paid nor was the whole of the selling price collected; on the contrary only the difference between the agreed share prices and the actual share prices on settling day was accounted for. The gains and losses arising out of these transactions were credited or debited to an account kept for him by the plaintiff. The plaintiff granted the defendant credit by way of overdraft in connexion with the time-bargains and the keeping of the said account.

The plaintiff in the action which it brought on 22 May 1975 before the Landgericht (Regional Court) Bonn claimed payment of the differences due to it by the defendant on 31 January 1975 in this account amounting to FF 852620.39. In its judgment of 13 January 1977 that court decided that the sum of FF 473937.47 attributable to the time-bargains was not actionable, because such a claim is barred by the plea that the contract was an agreement to pay differences (Differenzeinwand) which is found in Article 52 et seq. of the Börsengesetz (Law relating to stock exchanges and commodity markets) and in Articles 762 and 764 of the Bürgerliches Gesetzbuch (Civil Code).

The Oberlandesgericht Köln (Higher Regional Court, Cologne) on appeal by the plaintiff upheld in substance by its default judgment of 11 August 1977 the judgment of the Landgericht (Regional Court) Bonn on the grounds that the plea that the contraa was an agreement to pay differences (Differenzeinwand) under the German law applicable to stock exchange time-bargains according to Article 30 of the Introductory Law to the Bürgerliches Gesetzbuch (Civil Law) (ordre public) [public policy] is valid even if, as in the present case, French law, which does not recognize such a plea, applies. After the defendant had appealed against this default judgment the Oberlandesgericht Köln by its order of 23 January 1978 stayed proceedings and referred the following questions to the Court of Justice for a preliminary ruling:

My opinion on these two questions is as follows:

I —. The first question which in my view must be considered is whether in this case there is a service within the meaning of Article 59 et seq. of the EEC Treaty and what such a service consists of.

1. Since services are provided by banks as a general rule in conjunction with movements of capital when banking transactions are carried out, the relationship of the provisions of the EEC Treaty on the free movement of services to those relating to the free movement of capiul has from the beginning entailed special demarcation difficulties. Consequently the distinction between ordinary banking services and banking services connected with movements of capital was developed of which only the former are regarded as being services within the meaning of Articles 59 and 60 of the EEC Treaty and subject to the provisions of the chapter on services, whereas banking services connected with movements of capiul according to Article 61 (2) of the EEC Treaty are only to be liberalized in step with the progressive liberalization of movement of capiul. The question whether the banking services are ordinary or connected or simply movement of capiul is in principle determined by deciding whether or not the parties have entered into a contract for the movement of capiul. There is only movement of capiul if the main purpose of the contract is such a movement of capital as is mentioned in the directives on Article 67 of the EEC Treaty; this is the case for example with … short-term and medium-term credits in respect of commercial transactions in which a resident is participating (cf. List A of Annex I to the First Directive of 11 May 1960. Official Journal, English Special Edition 1959-1962, p. 51). The banking services connected therewith (transfers, the collection of interest, etc.) are not regarded as separate service so that the liberalization of these capital movements is only to be effected in accordance with Article 67 of the Treaty.

2. However in my view it is also above all the decisive factor which must be considered as the necessary constituent element for Article 59 et seq. to apply. As I have said the carrying out of stock exchange time-bargains by the plaintiff is an ordinary banking service coupled with a credit. The ordinary banking service itself might be regarded as a completed French domestic transaction which is not decisive, if the defendant — which must in this case be assumed — throughout the entire duration of the time-bargains was presumed to have been resident in France. It might be otherwise where the charges for this ordinary banking service, namely the commission and costs, have not yet been paid. On this point the view can be taken that the defendant's change of residence before the final setdement of the liabilities arising out of the ordinary banking services causes the necessary decisive factor to materialize. It is my opinion that this point need not be decided. For the main action is primarily only concerned with the repayment of the short-term credit which was granted, that is with a capiul movement, which falls within Article 67 and not Article 59 et seq. of the Treaty; however, since the relationship between bank and borrower has to be determined in another Member State, the defendant refers to the original banking service and infers from it that the plaintiffs claim is not actionable. Going to the heart of the matter in this way proves that the carrying out of the time-bargains as an ordinary banking service can not be regarded as a completed French domestic transaction. So even if it is assumed that the defendant was only resident in France and gave all the orders in that country the extension of the original ordinary banking services is sufficient for the business relationship of the parties to be subject to Articles 59 and 60 of the Treaty.

II —. In this case the limiting factor, the compatibility of which with Article 59 et seq. of the EEC Treaty has to be considered, is that a valid civil claim in favour of the plaintiff under French law cannot be enforced in the Federal Republic of Germany, because, although the German courts also acknowledge that it is in principle governed by French law, they apply specific legal rules of substantive German law concerning claims of the kind at issue in this case which are not actionable or concerning Germanordre public [public policy] (Article 30 of EGBGB — Einführungsgesetz zum Bürgerlichen Gesetzbuch [Law introducing the Civil Code]).

1. The system of and the aims sought to be attained by the General Programme can best be seen in the wording of the first paragraph of Title 111 A, Titles B and C and the first paragraph of Title D of the programme. Title III A forbids Any measure which … prohibits or hinders the person providing the services in his pursuit of an activity as a self-employed person by treating him differently from nationals of the State concerned. This is immediately afterwards defined in specific terms. The third paragraph of Title A goes on to say: The like shall apply to provisions and practices which, in respect of foreign nationals only, exclude … the power to exercise rights normally attaching to the provision of services …

2. Again, the last paragraph of Title III A contains a residual provision to this effect. Furthermore any requirements imposed … in respect of the provision of services are also to be regarded as restrictions where, although applicable irrespective of nationality, their effect is exclusively or principally to hinder the provision of services by foreign nationals. It is doubtful whether the retriction in this case constitutes any actual discrimination against foreign nationals as mentioned in this paragraph. My view is that in the provisions of German law relating to stock exchanges and commodity markets no requirement is to be found which is imposed in respect of the provision of services and which hinders foreign nationals exclusively or principally. In so far as transactions on foreign stock and commodity exchanges are open as a result of the German provisions to the objection that they are agreements to pay differences, numerically it is foreign nationals who are of course mainly affected. However the provision in Title III A cannot be understood as stipulating that foreign transactions carried out by foreign nationals and domestic transactions carried out by nationals of the Sute concerned are to be treated on the same footing. On the contrary the fact that that provision was inserted in Tide HI shows that the restrictions which are unlawful must refer to domestic transactions carried out by foreign nationals. This provision does not lay down that the principle of equality of treatment must be generally applied.

3. The recitals in the preamble to and the provisions of Council Directive No 63/340/EEC of 31 May 1963 (Official Journal, English Special Edition 1963-1964, p. 31) on the abolition of all prohibitions on or obstacles to payments for services where the only restrictions on exchange of services are those governing such payments, to which the Commission also referred, show that it is only concerned with certain restrictions under public law — especially those connected with the law relating to foreign trade and foreign exchange control legislation — in respect of payments for services, but not with questions concerning the validity or enforceability under civil law of claims arising under contracts for the provision of services. There is in fact no parallel such as the one which according to its submissions the Commission has been forced to find.

4. The Commission clearly does not seek to apply the provisions of the General Programme and the said directive directly, but is using these provisions merely as circumstantial evidence in order to substantiate its view that the restrictions arising out of German law are incompatible with Article 59 of the EEC Treaty directly on the basis of this provision of the Treaty.

III —. The question whether the application of the German law relating to nock exchanges and commodity markets by means of German private international law may infringe Treaty provisions other than those of Article 59 et seq. might now be raised. Since following the rejection of the preconditions for the application of Article 59 et seq. Article 7 can no longer be invoked there only remains the residual provision in the second paragraph of Article 5 of the EEC Treaty which provides that Member States shall abstain from any measure which could jeopardize the attainment of the objectives of this Treaty.

IV —. To sum up it must be recorded that the application of German Stock Exchange regulations and the German Civil Code by means of German private international law to a case such as the present one does not in itself infringe the prohibition of discrimination in Articles 59 and 60 of the EEC Treaty. Subject to the limits which I have drawn for the interpretation of the German provisions this also applies to Article 5 of the EEC Treaty.

I therefore submit that the questions referred by the court be answered as follows:

1 Translated from the German