6/64 Costa v ENEL [1964] ECR 585

• This case was concerned with the nationalisation of the Italian electricity industry, whose bills Costa refused to pay in protest (he had a stake in the private energy firm) since he said its creation breached EU law.

• The Italian Constitutional court said that subscription to the EC was an ordinary law, subject, like any other, to repeal.

• The ECJ ruling overturned this, saying:

  1. That upon the EEC Treaty coming into force a “new legal order” came to exist, which caused EC law to enter into domestic law and that domestic courts are “bound to enforce” it, and,

  2. That “transfer from [member states’] domestic legal systems to a Community legal system” meant a loss of sovereignty and hence any subsequent act made in breach of EC law would be ineffective, since EC law would prevail.

ECJ

• To allow national laws to be effective even when they conflict with EC law would frustrate the aim of creating a truly common market.

• It is implied that EC law is supreme over national law: otherwise it would be meaningless to say that regulations are binding and directly applicable (Article 249) as national legislation could just nullify its effects.

• Law stemming from the treaty is an “independent source of law”.

  • This ruling established that member states couldn’t deviate from EC treaties without prior permission.

  • It also established that national high courts couldn’t determine incompatibility of national and EC law without consulting ECJ.