European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

Where a compatible interpretation is not possible, the national court must hold the conflicting national rule inapplicable . In effect, the combination of the principles of direct effect and precedence of European law imposes that the national court shall give full effect to European law, if necessary by refusing of its own motion to apply any conflicting provision of national law, even if adopted subsequently, and it is not necessary, for the ECJ, to request or award the prior setting aside of the national law by legislative or other constitutional means .

Whether the European rule derives from the Treaty , a regulation , a directive  or an individual decision by the Commission , the national courts must protect it by challenging the application of any incompatible law, even adopted subsequently. The principle also applies to purely procedural European rules which grant no right to individuals: internal technical standards cannot be relied upon as against an individual before the national court where they have been adopted in breach of the procedural requirements of a directive . 

The duty to set aside national rules that are inconsistent with European law is on the national courts or administrative authorities . However, a national court, hearing a dispute between private persons, which finds that it is unable to interpret the provisions of its national law that are contrary to a provision of a directive that satisfies all the conditions required for it to produce direct effect in a manner that is compatible with that provision, is not obliged, solely on the basis of EU law, to disapply those provisions of national law and  to extend the possibility of relying on a directive to the sphere of relationships between private persons . It applies to substantive or procedural provisions , pre-existent or adopted outside the frame set by the European rule, where that European rule leaves discretion to Member States for its transposition . 

Case 157/86 Murphy v An Bord Telecom Eireann [1988] ECR 673, LawLex200900001579JBJ; vice versa, where the claim for disapplying a provision of national law is likely to challenge the discretion left to the Member State, the court may, as a subsidiary matter, interpret the national provisions in the light of the wording and purposes of the directive, C-111/97 EvoBus Austria v Niederösterreichische Verkehrsorganization [1998] ECR I-5411, LawLex200900000374JBJ.

Case 106/77, Amministrazione delle finanze dello Stato v Simmenthal [1978] ECR 629, LawLex200700001337JBJ.

Case C-72/95 Kraaijeveld and others [1996] ECR I-5403, LawLex200900001162JBJ; Case C-435/97 WWF and others [1999] ECR I-5613, LawLex200900000807JBJ.

Without the Member States being required to take all measures constitutionally appropriate to repeal that rule, Case 48/71 Commission v Italy [1972] ECR 529, LawLex200900001955JBJ.

Case 84/71 Marimex v Ministero delle finanze [1972] ECR 89, LawLex200900001952JBJ.

Case 152/84 Marshall v Southampton and South-West Hampshire Area Health Authority [1986] ECR 723, LawLex200900001573JBJ; C-62/93 BP Soupergaz v Greek State [1995] ECR I-1883, LawLex200900001086JBJ; C-356/05 Farrell [2007] ECR I-3067, LawLex200900000475JBJ.

Case 130/78 Salumificio di Cornuda [1979] ECR 867, LawLex200900001532JBJ.

Case C-194/94 CIA Security International v Signalson and Securitel [1996] ECR I-2201, LawLex200900002133JBJ and C-443/98, Unilever [2000] ECR I-7535, LawLex200700001658JBJ: as regards Articles 8 and 9 of Directive No 83/189 of 28 March 1983; Compare C-16/05 Tum and Dari [2007] ECR I-7415, LawLex200900000631JBJ: A standstill clause contained in an association agreement, which prohibits Member States from adopting new restrictions on the exercise of the freedom of establishment, does not operate in the same way as a substantive rule which renders inapplicable the relevant substantive law it replaces, but as a quasi-procedural rule which stipulates, ratione temporis, which provisions of a Member State's legislation must be referred to for the purposes of assessing the position of a national of the non-member country who wishes to exercise freedom of establishment in that Member State.

For a municipality, Case 103/88 Fratelli Costanzo v Comune di Milano [1989] ECR 1839, LawLex200900001440JBJ.

Case C-122/17 David Smith, Judgment of 7 August 2018, LawLex201900001258JBJ.

Case C-118/00 Larsy [2001] ECR I-5063, LawLex200900000402JBJ.

185. Inapplicability of contrary national rules