Asbl Bureau Belge des Assureurs Automobiles v Adriano Fantozzi and SA Les Assurances populaires (116/83)

I —Facts and procedure

On 21 August 1976, at Athis in Belgium, the car belonging to Mr Fantozzi, a Belgian national, which was insured against physical damage with Assurances Populaires in Belgium, was damaged through the established negligence of the driver of a stolen car which was registered in France. Civil liability in respect of that vehicle was covered by an insurance policy underwritten by Assurances Mutuelles of Niort (France). That company however refused to accept liability, relying on the terms of its policy which exclude theft from accident cover. Mr Fantozzi and Assurances Populaires therefore had recourse against the Bureau Belge des Assureurs Automobiles [Belgian Motor Insurance Bureau, hereinafter referred to as “Bureau Belge”] and requested the Tribunal de Première Instance [Court of first instance], Mons, to order it to pay damages in respect of the loss which they had sustained. The Tribunal allowed that claim by a judgment of 26 January 1979.Bureau Belge appealed against that judgment maintaining that the Tribunal had incorrectly interpreted the Law of 4 July 1972 amending Article 2 (2) of the Law of 1 July 1956 on compulsory insurance against civil liability in respect of motor vehicles.The Cour d'Appel [Court of Appeal], Mons, noted that that national provision had been adopted pursuant to Directive 72/166, whereby a more favourable status was to be granted to vehicles normally based within the territory of a Member State. Such vehicles were to be admitted into Belgium without an international insurance certificate, on condition that the bureau appointed for that purpose guaranteed the settlement, in accordance with the provisions of Belgian law, of the claims of persons to whom damage was caused in Belgium by such vehicles, irrespective of whether the obligation to effect insurance was complied with. Article 2 (2) of the aforementioned directive also provided for the conclusion of an agreement between the six national insurers' bureaux “under the terms of which each national bureau guarantees the settlement, in accordance with the provisions of its own national law on compulsory insurance, of claims in respect of accidents occurring in its territory caused by vehicles normally based in the territory of another Member State, whether or not such vehicles are insured”. The agreement provided for by that directive was concluded on 16 October 1972. Finding that the provisions of Community law in question had been interpreted differently by the Belgian and French courts, the Cour d'Appel, Mons, referred the following question to the Court of Justice for a preliminary ruling:“Does it follow from the rules of Community law that the duty imposed on national insurers' bureaux includes the duty to pay compensation for damage caused in the territory of one Member State of the EEC by a vehicle normally based in the territory of another Member State of the EEC if the driver of the vehicle acquired it by theft or duress?”The order for reference was registered at the Court on 24 June 1983.Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted on 14 September 1983 by the Government of the French Republic, represented by Jean-Paul Costes, a member of the general secretariat of the Inter-ministerial Committee for Questions of European Economic Cooperation, acting as Agent; on 20 September 1983 by the United Kingdom, represented by C. P. J. Muttukumaru of the Treasury Solicitor's Department, acting as Agent; and on 21 September 1983 by the Government of the Italian Republic, represented by Pier Giorgio Ferri, Avvocato dello Stato.Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry and to assign the case to the Second Chamber.

II —Summary of written observations submitted to the Court

The Government of the French Republic refers to the observations which it submitted in Case 64/83. It first observes that, pursuant to the principles set out in the directive itself, it is clear that the abolition of insurance checks at the frontier is linked to the fundamental guarantee, offered to a Member State into whose territory vehicles normally based in other Member States enter, that the victims of any damage caused by a vehicle will be compensated in accordance with the national law of the State upon whose territory the accident occurs, on the basis of an agreement between the national insurance bureaux, irrespective of whether such vehicles are insured.The provisions of national law envisaged by the directive are those relating to the settlement of accident claims; more precisely, the provisions relating to the settlement of such claims within the limits of the compulsory insurance required by the Member State on whose territory the accident occurs, regard being had to the scope of such legislation, but without consideration of the exceptions from the cover which may be included in the contract under the relevant law.That interpretation is in accordance with the principle of the directive; it predominated in the drafting of the relevant legislation on the subject. That was why the French Law of 21 December 1972 extended the territorial jurisdiction of the Fonds de Garantie Automobile [Motor vehicle guarantee fund] in order to enable it to meet the cost of compensation in respect of accidents caused abroad by uninsured vehicles registered in France, such compensation having previously been paid by the national bureau of the country where the accident occurred; by way of reciprocation, the Fonds de Garantie Automobile is not required to compensate the victims of accidents caused in France by uninsured vehicles registered in another Member State.The French Government emphasizes that any other interpretation would deprive the directive of part of its purpose: the victims of accidents caused in France by vehicles registered in other Member States, in circumstances where a French insurer might be able to resist a claim, would be at risk of receiving compensation for the damage suffered neither from the Fonds de Garantie Automobile nor from the Bureau Central Français, acting on behalf of its counterpart in the State in which the vehicle was registered.The United Kingdom first points out that Article 2 (2) of Directive 72/166 does not impose a duty, but merely specifies when the provisions of the directive other than Articles 3 and 4 are to take effect, that is if and when the nine national bureaux of the Member States conclude an agreement in accordance with the provision in question.The United Kingdom further remarks that the supplementary agreement between national bureaux of 16 October 1972 is not an act of an institution of the Community and that therefore the Court does not have jurisdiction to interpret the effect of that agreement. The Court should therefore confine itself to intepreting Article 2 (2) of the directive.In that regard, the United Kingdom points out that Directive 72/166 does not require any degree of harmonization of the Member States' national laws on compulsory insurance. The directive was adopted against the background of the green card system, which envisages the settlement of claims required to be covered by compulsory insurance in accordance with the law of the Contracting State where the accident giving rise to the claim occurs. The words “in accordance with the provisions of national law on compulsory insurance” in Article 2 (2) therefore refeito “the laws of the Member State on compulsory insurance where the accident giving rise to the claim occurs.” If those laws do not require insurance in certain circumstances, in particular in the case of theft of the vehicle, then claims arising out of the use of the vehicle in those circumstances are outside the scope of the agreement envisaged by the directive.Consequently, the United Kingdom suggests that the Court should answer the question submitted by the national court as follows:“Article 2 (2) of the directive as amended does not itself impose an obligation on the national bureaux of the Member States but it envisages that the national bureaux of the Member States would conclude an agreement guaranteeing settlement of claims arising out of the use of a vehicle required, by the law of the Member State where the accident occurs, to be covered by insurance and this would include claims in respect of a vehicle acquired by theft or duress if the national law of the Member State where the accident occurs requires claims arising out of the use of a vehicle acquired by theft or duress to be covered by compulsory insurance.”The Italian Government states that Article 2 of the agreement betwen the national insurance bureaux of 16 October 1972 states that when a vehicle normally based in the territory of one Member State enters the territory of another Member State and is there subject to compulsory third-party insurance, the “owner, use and/or driver shall be deemed to be insured within the meaning of the uniform agreement between bureaux and to be holders of a valid certificate of insurance issued by the bureau responsible for the territory in which such vehicle is normally based ...”Article 1 (e) of the uniform agreement between bureaux provides that a policy of insurance issued to an insured to cover liability arising out of the use of a vehicle “shall be deemed to be a policy giving exactly the indemnity required by the compulsory motor insurance law of the country in which an accident occurs”.Being of the view that Article 2 of Directive 72/166 should be interpreted in the light of the supplementary agreement of 16 October 1972 and of the uniform agreement, the Italian Government maintains that the national bureau which deals with the claim is bound to act in the same way as the national insurers and therefore becomes guarantor in the conditions laid down by its own national legislation on compulsory insurance. The Community provision should therefore be interpreted as referring to the whole of the system of compulsory insurance in force in a country and not, in the limited sense, as referring only to the legal ceilings which are laid clown or to other particular conditions.Consequently, the Italian Government suggests that the question submited should be answered as follows:“The ‘provisions of its own national law on compulsory insurance’ mentioned in Article 2 (2) of Council Directive 72/166/EEC of 24 April 1972 refer to the whole system of compulsory insurance in force in each country; those conditions include that relating to the effectiveness or otherwise of the guarantee of insurance for claims arising out of the use of a vehicle which the driver acquired by theft or duress.”

III —Oral procedure

Asbl Bureau Belge des Assureurs Automobiles, represented by Mr Omneslaghe, of the Brussels Bar, the United Kingdom, represented by Mr Bellis of the Treasury Solicitor's Department, and the Commission of the European Communities, represented by J. Delmoly, acting as Agent, presented oral argument at the sitting on 12 April 1984.Asbl Bureau Belge des Assureurs Automobiles, expressed the opinion that the question referred to the Court is not really answered by the decisions given by it in related fields, particularly the judgment of 9 February 1984 (Case 64/83, Bureau Central Français ν Fonds de Garantie Automobile. [1984] ECR 689).Bureau Belge stated that the directive in question sought to attain a modest objective of an essentially psychological character: that every European citizen could move from one Member State to another without being obliged to show a certificate of insurance.To attain such an objective, three intermediate objectives had to be achieved :Insurance against civil liability in respect of the use of motor vehicles had to be made compulsory;Such compulsory insurance had to be made to cover accidents caused anywhere in the Community;Vehicles normally based outside a Community country had to be prevented from entering it unless civil liability was insured against in the entire territory of the Community.An additional element in the form of the insurers' bureaux was added to help motorists involved in accidents outside their country. These bureaux, set up in the six Member States of the period, were to guarantee settlement of claims in the territory of the State in which they had been established in accordance with the provisions of the national law in question.In the view of Bureau Belge, the Court has no jurisdiction to interpret the contractual terms of the agreement between the insurers' bureaux and must confine its interpretation to the meaning of Article 2 (2) of the directive.Having stated that the agreement between the insurers' bureaux had been concluded in accordance with the provisions of the directive, Bureau Belge considered the contested provision. In its view, the position of the French Government and of Mr Fantozzi, who argue that Bureau Belge is obliged to provide cover, implies that the words “in accordance with the provisions of its own national law” lose all meaning. In fact, that expression means that Bureau Belge is obliged to act only in so far as Belgian national law imposes an obligation to insure, even if the driver did not take out such compulsory insurance.That analysis is reinforced by the new Community directive on this subject adopted on 30 December 1983.Consequently, Bureau Belge suggests that the answer to be given to the Cour d'Appel, Mons, should be as follows:“Article 2 (2) does not of itself create any obligation on the part of the insurers' bureaux; such an obligation derives exclusively from the agreement. In using the expression ‘in accordance with the provisions of its own national law’, the Community legislature was referring to the entire body of rules dealing with compulsory insurance in each country, and consequently, if those rules exempt from compulsory insurance cover vehicles which have been stolen or of which possession has been obtained by fraud, that exemption must also apply to the obligations undertaken by the national bureaux by virtue of the agreement.”The Commission considers essentially that the reply to be given to the question raised by the Cour d'Appel, Mons, should be identical to that given by the Court on 9 February 1984 in Case 64/83, (Bureau Central Français ν Fonds de Garantie Automobile), that is to say, that regard should be had to the national law of the State in which the accident occurred.The Commission adds that the second directive of 30 December 1983, applicable from 31 December 1987, will modify the existing system by removing the possibility of pleading theft against a third-party victim but allowing Member States, by way of derogation, to provide for a national formula which nonetheless eliminates all risk of disputes and legal proceedings at international level.The Advocate General delivered his opinion at the sitting on 12 April 1984.

Costs