Preliminary References to the CJEU from German Courts

What preliminary references are

EU law is applied mainly by national courts. To ensure that it is interpreted uniformly across the Member States, Article 267 of the Treaty on the Functioning of the European Union (TFEU) provides for preliminary references: national courts may – and in some cases must – refer questions on the interpretation of the Treaties and on the validity and interpretation of acts of EU institutions to the Court of Justice of the European Union (CJEU). The procedure is a dialogue between courts: the national court suspends its proceedings, the CJEU answers the questions, and the national court then decides the case applying that answer.

German courts are among the most frequent referring courts. Many landmark judgments for business started as preliminary references from Germany – on data protection, VAT, competition law, consumer protection, employment law and energy regulation. For companies, preliminary references matter in two ways: they can be used to challenge German rules that conflict with EU law, and they can transform a domestic dispute into a precedent with EU-wide effect.

This article explains when German courts may and must refer, the exceptions, the consequences of a wrongful refusal, how parties can influence a reference, and what to expect in terms of timing and procedure.

The right and the duty to refer

Lower courts: a right to refer

Any court or tribunal of a Member State may request a preliminary ruling if it considers a decision on the question necessary to enable it to give judgment. This includes local and regional courts, labour and social courts, tax courts, administrative courts and, in some cases, specialised bodies such as the procurement chambers, which the CJEU has accepted as courts for this purpose. Arbitral tribunals established by private agreement are generally not courts within the meaning of Article 267 TFEU and cannot refer.

Courts of last instance: a duty to refer

Where a question is raised before a court against whose decisions there is no judicial remedy under national law, that court must refer it. In Germany, this typically means the federal supreme courts – the Federal Court of Justice (BGH), the Federal Administrative Court (BVerwG), the Federal Fiscal Court (BFH), the Federal Labour Court (BAG) and the Federal Social Court – but also lower courts in cases where no appeal is available, for example because the value in dispute is too low or leave to appeal was refused.

Validity questions

National courts can find that an EU act is valid, but they cannot declare it invalid. Only the CJEU has that power, so any court that has serious doubts about the validity of an EU act must refer the question. Interim relief can be granted in the meantime under strict conditions: the court must have serious doubts about validity, refer the question, show urgency and serious and irreparable damage, and take due account of the interests of the Union. For companies challenging EU regulations indirectly through national implementing measures, this route is often the only practical way to obtain a ruling on validity.

The CILFIT exceptions

Even courts of last instance need not refer in three situations established in CILFIT (CJEU, judgment of 6 October 1982, C-283/81) and refined in Consorzio Italian Management (CJEU, judgment of 6 October 2021, C-561/19):

In Consorzio Italian Management, the CJEU emphasised that the acte clair exception requires the national court to be convinced that the matter is equally obvious to other courts of last instance in the Member States and to the CJEU, taking into account the characteristics of EU law, its terminology in the various language versions and its context. Divergent case law in other Member States or within the national court system is a strong indicator that the exception does not apply. A court that does not refer must state reasons showing which exception it relies on.

Wrongful refusal: the right to the lawful judge

In Germany, the CJEU is a "lawful judge" within the meaning of Article 101(1) sentence 2 of the Basic Law. A court of last instance that fails to refer in breach of its duty can therefore violate a party's constitutional right to the lawful judge, which the party can raise by way of a constitutional complaint.

The Federal Constitutional Court does not review every misapplication of Article 267 TFEU; it intervenes where the refusal to refer is arbitrary – for example where the court did not consider a reference at all despite doubts, deliberately departed from CJEU case law, or took an untenable view of an open question of EU law.

A wrongful refusal can also have consequences under EU law: the Commission can bring infringement proceedings, and, under the CJEU's case law on state liability, a manifest breach of EU law by a court of last instance can give rise to damages claims against the state. In practice, these remedies are rarely successful, which makes it all the more important to secure a reference during the national proceedings.

How parties can influence preliminary references

Parties cannot oblige a court to refer – the decision belongs to the court. But they have considerable influence over whether and how preliminary references are made:

• Proposing questions: parties can submit draft questions, which courts often use as a starting point. Well-framed questions are abstract, relevant to the outcome and neutral in wording.
• Establishing the facts: the CJEU relies on the facts as set out in the referring decision. Parties should ensure that the relevant facts and national law are fully and accurately described before the reference is made.
• Commenting on the draft: some German courts give the parties the opportunity to comment on the planned questions; parties should use it.
• Written observations: once the reference is made, the parties to the national proceedings, the Member States and the Commission may submit written observations to the CJEU within a fixed period, which cannot be extended.
• Oral hearing: the parties may participate in the hearing, if one is held, and answer questions from the Court.

Other companies affected by the same question cannot intervene in a preliminary reference unless they are parties to the national proceedings. Industry associations sometimes join national proceedings early for this reason, where national procedural law allows.

Preliminary references in practice: typical business areas

Preliminary references are particularly frequent in areas where EU law shapes national rules in detail:

• Tax: VAT, customs and excise duties are harmonised, and the Federal Fiscal Court regularly refers questions on exemptions, input tax deduction and the place of supply. Direct tax cases raise questions under the fundamental freedoms.
• Data protection: questions on the GDPR – for example on fines against companies, damages for non-material harm and employee data – have been referred by many German courts, with far-reaching consequences.
• Competition and state aid: damages actions, leniency documents and the recovery of state aid regularly lead to references.
• Energy regulation: the independence of the regulator, network charges and the treatment of customer installations have been decided by the CJEU following German references, changing German energy law.
• Employment and consumer law: working time, holiday entitlement, fixed-term contracts and consumer credit are classic reference areas.

In each area, a single CJEU judgment can affect thousands of pending cases and contracts. Companies should therefore monitor pending references in their sector – the CJEU publishes them – and consider whether to align their own litigation or compliance strategy with the expected outcome.

Strategic use by companies

Companies sometimes deliberately seek a test case that can lead to a reference, for example by challenging an administrative decision on a point of principle. This requires careful selection: the facts should be clear and representative, the national proceedings should allow the question to reach a court willing or obliged to refer, and the company should be prepared for the publicity that a CJEU case can bring. Coordination with industry associations, which cannot themselves intervene, often takes the form of supporting a representative case.

Timing, costs and procedure

A preliminary reference suspends the national proceedings. The CJEU's own statistics show that preliminary ruling proceedings typically take well over a year on average, with an expedited procedure available only in exceptional cases of urgency and an urgent procedure reserved for certain areas such as freedom, security and justice. In planning litigation, companies should therefore factor in an additional period of around one and a half years or more. Since October 2024, the General Court has jurisdiction for preliminary references in certain specific areas, including VAT, excise duties and the customs code, with the CJEU retaining overall control.

The CJEU does not charge court fees for preliminary references, and costs are decided by the national court as part of its final decision. The language of the case is the language of the referring court, so for German references the proceedings are conducted in German, with translations into all EU languages of the reference and, ultimately, of the judgment.

The CJEU's answer binds the referring court and, in practice, all courts dealing with the same question. Judgments on interpretation generally apply from the date the provision entered into force; the CJEU limits their temporal effect only in exceptional cases. Companies affected by a judgment should therefore check whether it affects past transactions, taxes paid or contracts concluded.

How TRW & Co helps with preliminary references

We advise companies on EU law issues in German proceedings and on preliminary references to the CJEU. We identify EU law arguments early, propose and draft questions for referral, prepare the factual and legal record, and represent clients in written observations and hearings before the Court of Justice. Where a court of last instance refuses to refer, we assess constitutional complaints under Article 101(1) GG. Our work connects with our commercial litigation, tax disputes and antitrust and trade practices and with our article on constitutional complaints by companies. Please contact us. This article is general information and not legal advice.