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07 August 2013
Zurich Airport is situated 15 kilometres from the German border. All flights landing in Zurich from the north or north west must use German airspace while landing.
The use of German airspace for approaching and leaving Zurich Airport was governed by a bilateral agreement between Switzerland and Germany (September 17 1984). Germany terminated the agreement following implementation problems.
On October 18 2001 Germany and Switzerland signed a new agreement, which has not been ratified.
In 2003, in order to reduce the noise to which the local population was exposed, Germany adopted unilateral measures prohibiting flight at low altitude over German territory close to the Swiss border between 9pm and 7am on weekdays and between 8pm and 9am on weekends and public holidays.(1) As a result, the landing approaches to the airport from the north and north west, previously used as the main approaches, were no longer possible during those periods. Moreover, aircraft taking off to the north during those periods had to make a detour until they had reached the prescribed minimum flight altitude before entering German airspace.
Although Switzerland is not a member state of the European Union it nevertheless lodged a complaint with the European Commission requesting that it prohibit Germany from applying these measures. In Switzerland's view, the measures were contrary to the EC-Switzerland Air Transport Agreement, which it had entered into with the European Community(2) and the Market Access Regulation (2408/92)(3) (now Regulation 1008/2008), which at the time was part of the bilateral acquis.
However, on December 5 2003 the commission decided that Germany could continue to apply the measures.(4)
On September 9 2010 the General Court (an independent court attached to the European Court of Justice (ECJ)) dismissed the action for annulment brought by Switzerland against the commission's decision.(5)
Following this, Switzerland brought an appeal before the ECJ, seeking to have the General Court's judgment set aside and the commission's decision annulled.
The ECJ noted(6) that the Air Transport Agreement, which forms part of a series of seven sectoral agreements between the same contracting parties, was signed on June 21 1999 after Switzerland's rejection on December 6 1992 to join the Agreement on the European Economic Area. And that, as a result, Switzerland did not subscribe to the European project of an economically integrated entity with a single market based on common rules between its members, but chose the route of bilateral arrangements.(7)
According to the ECJ, the interpretation given to the provisions of EU law concerning the internal market - including the freedom to provide services - cannot be applied automatically by analogy to the interpretation of the Air Transport Agreement, unless there are express provisions to that effect laid down in the agreement itself.(8)
The ECJ stated that the agreement does not contain any specific provision that would enable the air carriers concerned to benefit from the provisions of EU law on the freedom to provide air transport services. It therefore found that the freedom to provide services does not apply in the context of the agreement.(9)
Consequently, the ECJ held that the commission did not infringe, by the contested decision, the principle of the freedom to provide services. Likewise, it found that there was no violation of the principle of proportionality, which is inherent in the freedom to provide services.(10)
Further, the ECJ stated that pursuant to the agreement the grant of traffic rights to EU and Swiss air carriers between any point in Switzerland and any point in the European Union is subject to the Market Access Regulation, which does not allow for taking account of possible rights of the airport operator and persons living near the airport. When examining the German measures the commission and the General Court were right to disregard the interests of the airport operator and persons living near the airport.(11)
The remaining question was whether the German measures discriminated against Swiss air carriers, in particular Swiss International Air Lines (Swiss), therefore violating the principle of non-discrimination explicitly laid down in the agreement.(12)
While it was not alleged that the German measures made any direct distinction on the basis of the nationality or identity of carriers, Switzerland took the position that the German measures amounted to an indirect discrimination on grounds of nationality.
In the prior proceedings before the General Court Switzerland argued that Germany applied different treatment to Zurich Airport, and thereby to the airline Swiss - which uses it as the hub of its hub-and-spoke network - from that applied to German airports, in particular Munich and Frankfurt - which are used by the German airline Lufthansa as hubs for its hub-and-spoke network.(13)
The General Court nevertheless found that the different treatment was justified because the German area overflown by aircraft approaching Zurich is an important tourist destination and as such particularly vulnerable to noise emissions.(14) The General Court added that unlike the situation in relation to Munich and Frankfurt airports, Germany has no authority over Zurich Airport and cannot impose any modification of its method of operation on it for the purpose of reducing noise above German territory. According to the court, that difference constitutes a second consideration capable of justifying the adoption of the measures at issue in regard solely to Zurich Airport.(15)
In the appeal proceedings before the ECJ, Switzerland could only argue points of law. However, the General Court's decision on the issue of indirect discrimination turned essentially on the facts of the case. The General Court had exclusive jurisdiction to find and appraise relevant facts and to assess the evidence. The appraisal of those facts and assessment of that evidence thus did not, save where they distort the evidence, constitute a point of law which was subject to review by the ECJ on appeal.(16)
Against that background Switzerland was unable to convince the ECJ that the General Court's assessment on whether there was indirect discrimination was made on the basis of distorted evidence or errors of law.(17)
The ECJ dismissed Switzerland's appeal.
The judgment comes as unfortunate news to Zurich Airport, Swiss and persons living near Zurich Airport (who are more exposed to aircraft noise than those living in southern Germany). However, the decision does not mark the end of the dispute relating to the approach to Zurich Airport and aircraft noise in southern Germany. It is to be hoped that instead of unilateral measures a bilaterally negotiated solution can be found. In July 2012 Swiss and German ministers reached an agreement involving a set of give-and-take exchanges designed to allow Zurich Airport's development, while giving its neighbours in Germany some peace from traffic noise. However, the agreement is not yet in force and it remains to be seen whether it will be accepted politically, particularly in Germany.
From a legal viewpoint, the decision is unprecedented in more than one respect. In particular, it was the first action for annulment brought by Switzerland before the judicature of the European Union. As Advocate General Jääskinen stated in his opinion, the case could have provided the ECJ with the opportunity to give a ruling on the question of whether non-member states with a particular legal relationship with the European Union may bring actions seeking the annulment of an act adopted by an EU institution before the EU judicature and, if so, on what conditions.(18)
However, the ECJ did not answer that question and ruled at the outset on the substance of the case. Given the ECJ's silence on the admissibility of Switzerland's appeal, one can only speculate whether the ECJ accepted implicitly Switzerland's locus standi in cases concerning the Air Transport Agreement, or whether the ECJ refrained from making a statement which could have been taken as a position in the current discussion on further institutional arrangements between the European Union and Switzerland.
On the substance of the case the ECJ's message is clear. Given that Switzerland is not a member state, the freedom to provide services (within the meaning of EU law) does not apply in the context of the agreement. That agreement is not backed up by an encompassing internal market law intended to overcome all obstacles that hinder market access; the regime under the agreement clearly falls short of the much more comprehensive regime on market access under EU law.
The ECJ will likely choose an analogous approach in future cases when deciding on market access on the basis of bilateral agreements with non-EU member states. The decision could then become relevant to industries other than the aviation industry.
(1) 213th Regulation, January 15 2003, for the implementation of German air traffic regulations establishing procedures for instrument-guided landings and take-offs at Zurich Airport, amended April 4 2003.
(12) Article 3 of the EC-Switzerland Air Transport Agreement provides: "Within the scope of this Agreement, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited".
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