The Flemish Community cannot impose the use of the Dutch language in cross-border invoices (Judgment of the Court of Justice of the European Union of 21 June 2016 in Case C-15/15 (New Valmar BVBA v. Global Pharmacies Partner Health Srl).

Contribution of Marinus Vromans to the Consulegis Litigation Geroup Newsletter Autumn 2016

4 official languages in Belgium

Belgium comprises four linguistic regions: the French-speaking, the Dutch speaking, the bilingual region of Brussels-Capital and the German speaking region. Under the Belgian Constitution each federal unity, such as Flanders, shall regulate the use of languages for: … relations between employers and their staff, as well as company acts and documents required by the law and by regulations.

Flemish Decree on the use of languages

This Decree applies to natural and legal persons having an established place of business in the Dutch speaking region and shall regulate the use of languages with regard to relations between employers and employees and with regard to company acts and documents required by law. The Decree provides that documents or acts which infringe its provisions shall be null and void. Nullity shall be determined by the courts of their own motion.

New Valmar BVBA (Belgium)/Global Pharmacies Partner Health Srl (“GPPH”) (Italy)

New Valmar Belgium brought an action before the commercial court of Ghent seeking an order requiring GPPH Italy to pay to it a seven of approximately 234,192 Euro in settlement of various outstanding invoices.  GPPH  Italy submitted as a defence, that the invoices at issue infringed the public policy rules of the Flemish language degree and were therefore null and void. In fact the invoices were set out in a language other than Dutch, namely in Italian (the language of the recipient of the invoices!) even though New Valmar is established in the Dutch speaking region of Belgium. The Commercial Court of Ghent submitted a request for a preliminary ruling to The ECJ on the compatibility of the Flemish Language Decree with European law.

Judgment of 21 June 2016 by the European Court of Justice

After recalling its judgment of 16 April 2016 in LAS (C-202/11) on the incompatibility of the Flemish language requirements in social documents related to employment agreements with cross-border aspects with article 45 TFEU (freedom of movement of workers), the court analyzed the Flemish language requirements on cross-border invoicing under article 35 TFEU (prohibiting measures having an effect equivalent to quantitative restrictions on exports).

The court ruled, that even the Flemish language requirement is applicable to all traders active in the national territory and there is no discrimination on nationality, it can be considered to be a measure having an equivalent effect to a quantitative restriction on exports, if the actual effect of the legislation is nonetheless greater on goods leaving the market of the exporting member state than on the marketing of goods in the domestic market of that member state.

Legislation, like the Flemish Decree, even if it concerns the language version in which the details on the invoice – not the content of the underlying contractual relationship-must be drawn up, produces because of the legal and certainty it creates, restrictive effects on trade which are likely to turn the initiation or continuation of contractual relationships with undertaking established in the Dutch speaking region of the kingdom of Belgium.

The court therefore concluded that the Flemish language requirements for cross-border invoices constitute a restriction falling within the scope of article 35 TFEU and are therefore prohibited.

It is now for the commercial court of Ghent to render its judgement, taking into account the judgement by the European Court of Justice.