On 9 August 2024, the EFTA Court delivered its judgment in Case E-10/23, X v Finanzmarktaufsicht in a request for an advisory opinion that had been submitted to the EFTA Court by the Appeals Board of the Financial Market Authority of Liechtenstein (Beschwerdekommission der Finanzmarktaufsicht). In the case, it confirmed that it has the necessary jurisdiction to interpret the Surveillance and Court Agreement, and also confirmed the right of lower instance bodies to refer cases to the EFTA Court.
Questions referred to the EFTA Court
Two major questions of constitutional importance for the EFTA pillar of the EEA were asked here.
First, whether the EFTA Court has jurisdiction to interpret the Surveillance and Court Agreement (SCA), given that Article 34 SCA which provides for the request for an advisory opinion procedure only refers to the EEA Agreement, and not the SCA.
Second, was the power of lower instance bodies to make such requests when higher instance national courts have also adjudicated on the same subject matter, where the lower instance body believes an advisory opinion of the EFTA Court is needed.
Or, as the referral put it,
- Is the EFTA Court competent to interpret the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice of 2 May 1992 (SCA)?
- If Question 1 is answered with ‘yes’: Must Article 34 SCA be interpreted as meaning that a request to the EFTA Court for an advisory opinion is permitted also where, although the referring court considers the question on the interpretation of the EEA Agreement necessary in order to give its decision, this legal question has, however, in an earlier set of proceedings in the same procedure already been answered, in accordance with national procedural law, by a higher-ranking court with binding effect?
Beyond these questions, the case was actually, on substance, about Article 53 of Directive 2013/36 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, but that will be let overlooked for now, with analysis focusing on the first two questions.
Answer to the first question – jurisdiction of the EFTA Court to interpret the SCA
In answering the first question, the EFTA Court stated that it,
‘must be understood as asking whether the Court has jurisdiction to give an advisory opinion on the interpretation of the SCA pursuant to the first paragraph of Article 34 SCA given that that provision only explicitly refers to the EEA Agreement‘ (para. 33).
The absolute answer that the EFTA Court gave was in the affirmative. As it put,
‘It follows from the structure and logic of the SCA that the Court is endowed with the competence to interpret the SCA, which, inter alia, lays down the Court’s jurisdiction and includes the Statute of the Court‘ (para. 34).
Further,
‘the Court may, in the spirit of cooperation with national courts and tribunals, provide them with all the guidance that it deems necessary’, and ‘and it does not preclude the Court from providing the referring courts with all the elements of interpretation of EEA law which may be of assistance in adjudicating in the cases pending before them‘ (para. 35)
The reasoning from there, however, was more cautious, in that the EFTA Court pointed to the fact that the SCA was mandated to exist, in some form or another, by Article 108 EEA, and that the SCA mentions Article 108 EEA in return, thereby indicating that the SCA was the EFTA-EEA states intention, therefore, to fulfil that obligation under Article 108 EEA.
In other words, jurisdiction in regards to SCA is quite explicit, but other international agreements (such as Schengen, Surrender Agreements (replicating the European Arrest Warrant) and the Lugano Convention) would not fit, for now, within the jurisdiction of the EFTA Court.
There is some contemplation, albeit at a formative stage for now, of extending the jurisdiction of the EFTA Court, in line with broader reforms of the judicial pillar of the EFTA pillar of the EEA (See Butler (2024) and Blanchet (2024) in the EFTA Court’s 30th Anniversary volume, just published).
Answer to the second question – power of lower instance bodies to make requests for advisory opinions
The EFTA Court began here by states that,
‘It is solely for the national court or tribunal before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for an advisory opinion in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court‘ (para. 43).
And,
‘in the event of conflict between implemented EEA rules and national statutory provisions, individuals and economic operators must be entitled to invoke and to claim, at the national level, any rights that can be derived from provisions of the EEA Agreement as being, or having been made, part of the respective national legal order, if they are unconditional and sufficiently precise‘ (para. 45).
Not unusual there so far, but here came the kicker:
‘a rule of national law whereby a court is bound on points of law by the rulings of a superior court cannot prevent a national court, where appropriate, from using its discretion to request an advisory opinion from the Court‘ (para. 47).
And in conclusion therefore,
‘a national court or tribunal is permitted under Article 34 SCA to request an advisory opinion from the Court, although a legal question, which is the subject of the request for an advisory opinion, has already been answered in an earlier set of proceedings by a higher-ranking national court with binding effect in accordance with national procedural law‘ (para. 48).
However merited and correct that the EFTA Court’s ruling here was, there was some broader analysis that the EFTA Court missed an opportunity to analogise here vis-a-vis the equivalent case-law in the EU pillar of the EEA, as developed by the Court of Justice of the European Union (CJEU) under the reference for a preliminary ruling procedure.
There is the well-known Cartesio judgment, followed up by the I.S. judgment, were two important cases about no appeals against lower instance national courts making references for preliminary rulings, the broader point of those two judgments (and the general trend of the case-law (see Butler and Cotter (2020), and Butler (2021)) and reading between the lines, the premise is clear: the reference for a preliminary ruling procedure is for all courts and tribunals lawfully constituted. That is to say, both lower instance national courts and higher instance national courts.
And that is what was being asked here in Case E-10/23, X v Finanzmarktaufsicht – a lower instance body in the EFTA pillar – seeking some shielding from higher instance bodies within the national legal order. It got it from the EFTA Court, but without a lot of wider analysis.
Judgment
The judgment of the EFTA Court in Case E-10/23, X v Finanzmarktaufsicht, delivered on 9 August 2024, is available here.