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German Gaming Law updated No. 35 |
Newsletter on Betting and Gambling Law
No. 36 of 4 July 2006
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The Impact of Community Law for Administrative Procedures – Ignorance, Misunderstandings and Perversion of Justice
by attorney-at-law Martin Arendts, M.B.L.-HSG
As we already mentioned in edition Nr. 32 of our newsletter “German Gaming Law updated”, the Federal Constitutional Court, in its sports betting decision of 28 March 2006 (case-no. BvR 1054/01), exclusively examined the case on the basis of (German) Constitutional Law. Referring to the concurrent examination of the justification of the state monopoly with Community Law, the court affirmed the lack of justification of the limitation of basic freedoms granted by Community Law, in particular the freedom of establishment guarantee crucial for providing cross-boarder betting services.
Despite the court’s reference to the significance of Community Law, many German authorities and courts still ignore the relevant Community Law provisions. The Administrative Court of Halle for example, completely mistaking the legal situation, ruled that Community Law was not directly applicable but would first have to be implemented in national law (which is only true for Community Directives, but surely not for basic freedoms). Other administrative courts are of the opinion, that the state sports betting monopoly is suddenly in conformity with Community Law thanks to the requirements set forth by the Federal Constitutional Court (so for example the administrative court of Gelsenkirchen). Nonetheless, the court then neither examines the actual implementation (which is crucial to Community Law) nor does it examine the exceeding requirements set forth by Community Law (Non-discrimination of operators or bookmakers from other EU-member states, violation of rules of competition of the EC-Treaty by establishing an illegal trust of the so called German Lotto- and Toto-Block etc.).
In part the administrative courts’ attitude abuts on perversion of justice, for example in case they establish a violation of Community Law but at the same time, in a legally absolutely untenable way, deny the consequence resulting from this violation, that is the inapplicability of the relevant national provision in violation of Community Law. The decision of the Administrative Court of Appeal of North-Rhine Westphalia (decision of 28 June 2006, case-no. 4 B 961/06) is an extreme example thereof. The Administrative Court of Appeal cites the ECJ’s Gambelli-decision and rightly declares, that the current legal situation is in violation of the freedom of establishment guarantee and the freedom to provide services guarantee. Then it refers to a decision of the ECJ of 1978 stating the Member States’ obligation not to apply national provisions in violation of Community Law, which has meanwhile become established practice of the court. The court’s 4th senate does not like the result. He believes to have discovered an “unacceptable loophole in the law”. Referring to an alleged “Principle of Legal Certainty” the Administrative Court of Appeal believes to have the right to suspend the primacy of basic freedoms (which is clearly contrary to the established practice of the ECJ as the only competent court for the interpretation of Community Law).
The Administrative Court of Appeal’s incomprehensive turnaround comes even more surprising as it had the ECJ’s General Attorney’s final motion in the joint case of Placanica and others at hand. This motion clearly shows, that a “legal loophole” simply does not exist. Instead an efficient control in the county of origin is sufficient. A further control in the receiving state in not necessary. The alleged threat to “important public interests” invoked by the Administrative Court of Appeal is therefore only pleaded as an excuse. The court believes to have the right to cancel the established practice of the ECJ for more than 40 years (see for fundamentals: ECJ, case-no. 6/64 (Costa ./. Enel), Slg. 1964, 1251 and following and ECJ, case-no. 103/88 (Fratelli Constanzo), Slg. 1989, 1839 and following). The Federal Court of Justice has repeatedly and unconditionally recognised the primacy of Community Law in respect of simple German law (see for fundamentals: Federal Constitutional Court (BVerfG 31, 145, 173 and following). According to the established practice a legal situation in conformity to Community Law has to be established immediately.
The decision becomes a scandal in view of the numerous motions for partiality that had already been filed against the 4th senate of the Court of Appeal and the court’s widespread press release, in which he declared the decision to be “final and unappealable” as well as authoritative for all of the other more than 200 parallel cases. Many public authorities used the remarks of the press release to announce the immediate execution of the prohibition orders and not to wait for further court decisions despite the many applications for protection under Art. 80 par. 5 Federal Administrative Procedural Act (VwGO). This way effective legal protection as guaranteed by the Constitution is abolished, which should not be a court’s mission. This way one “produces” Community Law related claims for damages in hundreds of cases as the decision knowingly and evidently violates Community Law itself (which is even assumed by the Administrative Court himself). The state of North-Rhine Westphalia will presumably be charged with claims reaching millions of Euros as another fundamental decision of the ECJ is expected by the end of the year (joint case Placanica and others). Due to neglecting Community Law Germany has bad cards in the upcoming proceeding for violation of the EC-Treaty regarding Germany’s sports betting market foreclosure. |
