Secretary of State For Health and Others, Ex Parte Imperial Tobacco Limited and Others, R v.

The central legal question was whether the test to be applied by a national court when considering interlocutory relief to restrain the making or operation of national regulations implementing a Community directive is governed by Community law principles (as articulated in Zuckerfabrik and related authorities) or by domestic principles (as in American Cyanamid and domestic interlocutory practice). The House analysed the relationship between the Directive, the duties of Member States during the implementation period and the role of national courts, with particular reference to the European Communities Act 1972 (section 2(2) and Schedule 1) and relevant Treaty provisions. Several Lords concluded that if it had been necessary to decide the point it would require a reference to the European Court of Justice; others concluded that domestic law governed the decision. Because the European Court of Justice subsequently held the Directive invalid, the House made no substantive order on the appeal and limited costs to two counsel. Key authorities considered included Zuckerfabrik, Factortame (No. 2), American Cyanamid, Foto-Frost and Inter-Environnement Wallonie.

Background and nature of the claim.

The appellants (four tobacco companies) sought judicial review of the Secretary of State's decision to implement Council Directive 98/43/EC (a ban on tobacco advertising and sponsorship) by secondary legislation under section 2(2) of the European Communities Act 1972. They sought interlocutory relief restraining the making or operation of the proposed regulations pending a preliminary reference and the Court of Justice's ruling on the Directive's validity. Turner J. granted an injunction; the Court of Appeal by majority discharged it. The appellants appealed to the House of Lords.

Issues framed by the House.

1. Whether Community law or domestic principles govern the grant of interlocutory relief in proceedings challenging proposed national regulations to implement a Directive before the end of the implementation period.
2. Whether, if Community law is relevant, national courts must apply the criteria in Zuckerfabrik (and related ECJ jurisprudence) or whether domestic tests such as American Cyanamid remain applicable.
3. Whether the House should refer the question to the European Court of Justice if necessary.

Procedure and interlocutory developments.

Turner J. granted leave and ordered a reference to the ECJ. He later granted interlocutory relief restraining implementation pending the ECJ reference. The Court of Appeal (majority) set aside that injunction applying Zuckerfabrik principles. Advocate General Fennelly later advised that the Directive was invalid and the ECJ subsequently annulled it. The Secretary of State offered undertakings and costs limits; the ECJ's eventual ruling made the substantive issue moot.

Court's reasoning and subsidiary findings.

The House divided. Several Law Lords (notably Lord Slynn and Lord Nicholls) considered that Community law was a relevant factor and that, if the point had been necessary for decision, a reference to the Court of Justice under article 234 would have been required; they emphasised the need for a consistent Community-wide approach to interim relief where Community measures are at stake. Other Law Lords (notably Lord Hoffmann and Lord Millett) reached the view that the decision whether to grant interlocutory relief to restrain implementation within the implementation period was primarily a matter of domestic law and that Community law did not require national courts to apply Zuckerfabrik criteria in those circumstances. The House therefore did not authoritatively resolve the dispute between Zuckerfabrik and domestic interlocutory principles because the ECJ decision on the Directive rendered further orders unnecessary.

Relief sought. The appellants sought an interlocutory injunction to restrain implementation of regulations implementing the Directive and a declaration that the Directive was invalid.

No substantive order was made on the appeal; the House limited the appellants' costs in the Court of Appeal and before the House to two counsel. The House declined to authoritatively decide whether national courts must apply Community-law criteria (as in Zuckerfabrik) or domestic interlocutory principles (as in American Cyanamid) when considering interim relief to restrain implementation of a Directive during the implementation period because the European Court of Justice subsequently declared the Directive invalid, making further relief unnecessary. Several Law Lords indicated that, had it been necessary to decide the point, a reference to the ECJ would have been required; others considered domestic law governed the question.

First instance: leave to apply for judicial review granted and reference to the European Court of Justice ordered by Turner J. (2 February 1999); injunction granted by Turner J. (29 October 1999). Court of Appeal: majority set aside the injunction [2000] 2 W.L.R. 834 (Lord Woolf M.R. and Ward L.J. majority; Laws L.J. dissenting). House of Lords: appeal heard and ultimately no substantive order made in light of the Advocate General's opinion and the European Court of Justice's subsequent annulment of the Directive (Case C-376/98, Federal Republic of Germany v Parliament and Council).