Agenciart - Management Artistico (Combating late payment in commercial transactions - Article 2(3) - Concept of an 'undertaking' - Judgment) [2024] EUECJ C-643/23 (14 November 2024)

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( Reference for a preliminary ruling - Directive 2011/7/EU - Combating late payment in commercial transactions - Article 2(3) - Concept of an ‘undertaking’ - Exercise of an independent professional activity - Actor - Agency contract - Order for payment procedure )

REQUEST for a preliminary ruling under Article 267 TFEU from the Tribunal da Relação de Lisboa (Court of Appeal, Lisbon, Portugal), made by decision of 4 July 2023, received at the Court on 26 October 2023, in the proceedings

composed of T. von Danwitz, Vice-President of the Court, acting as President of the Sixth Chamber, A. Kumin (Rapporteur) and I. Ziemele, Judges,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

1 This request for a preliminary ruling concerns the interpretation of Article 2(3) of Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions (OJ 2011 L 48, p. 1).

2 The reference has been made in the course of proceedings between Agenciart - Management Artístico Lda (‘Agenciart’) and CT concerning the payment of a commission claimed by Agenciart under an agency contract.

‘(5) Undertakings should be able to trade throughout the internal market under conditions which ensure that transborder operations do not entail greater risks than domestic sales. Distortions of competition would ensue if substantially different rules applied to domestic and transborder operations.

(10) The fact that the liberal professions are covered by this Directive should not oblige Member States to treat them as undertakings or merchants for purposes outside the scope of this Directive.’

4 Article 1 of that directive, headed ‘Subject matter and scope’, provides, in paragraphs 1 and 2 thereof:

‘1. The aim of this Directive is to combat late payment in commercial transactions, in order to ensure the proper functioning of the internal market, thereby fostering the competitiveness of undertakings and in particular of [small and medium-sized enterprises (SMEs)].

2. This Directive shall apply to all payments made as remuneration for commercial transactions.’

(1) “commercial transactions” means transactions between undertakings or between undertakings and public authorities which lead to the delivery of goods or the provision of services for remuneration;

(3) “undertaking” means any organisation, other than a public authority, acting in the course of its independent economic or professional activity, even where that activity is carried out by a single person;

6 Directive 2011/7 was transposed into Portuguese law by decreto-lei n^o 62/2013 (Decree-Law No 62/2013) of 10 May 2013.

(b) “commercial transactions” means transactions between undertakings or between undertakings and public authorities which lead to the delivery of goods or the provision of services for remuneration;

(d) “undertaking” means any entity, other than a public authority, acting in the course of its independent economic or professional activity, even where that activity is carried out by a single person;

The dispute in the main proceedings and the question referred for a preliminary ruling

8 Agenciart is a commercial company which is active in the art agency sector and in the management of the artistic careers of the actors it represents. CT, an actor, was represented by Agenciart until 30 June 2017.

9 In May 2017, Agenciart negotiated CT’s participation in a soap opera with a television company and a production company, agreeing on the terms and conditions of her engagement. Her participation in that soap opera began in June 2017 and ended at the end of May 2018.

10 For the career management services which it provided to CT in connection with her participation in that soap opera, Agenciart issued an invoice, dated 17 July 2019, for the amount of EUR 19 188.

11 Since that invoice remained unpaid, Agenciart initiated an order for payment procedure against CT, who opposed it.

12 The first instance court, the Tribunal Judicial da Comarca de Lisboa - Juízo de execução de Lisboa (court responsible for attachment proceedings before the District Court, Lisbon, Portugal) upheld the objection to enforcement, taking the view, inter alia, that Agenciart could not sue CT for enforcement under the order for payment procedure on the ground that she was not a commercial undertaking.

13 Agenciart then brought an appeal before the Tribunal da Relação de Lisboa (Court of Appeal, Lisbon, Portugal), the referring court.

14 The referring court states that the scope of the order for payment procedure is defined by the establishment of prior objective and subjective conditions. In the present case, it remains to be ascertained whether the subjective prior condition relating to the status of ‘undertaking’, provided for in Article 3(d) of Decree-Law No 62/2013, is satisfied.

15 In that regard, the referring court notes that that provision defines the concept of ‘undertaking’, as does Article 2(3) of Directive 2011/7, as ‘any organisation … acting in the course of its independent economic or professional activity, even where that activity is carried out by a single person’.

16 Although, according to the referring court, Agenciart is clearly covered by that concept, doubts remain as to whether CT is also covered by it. Prima facie, the fact that she is an actor by profession and that the agency contract which she entered into with Agenciart focuses on promoting her professional activity as a liberal professional support classifying CT as an ‘undertaking’ within the meaning of Article 3(d) of Decree-Law No 62/2013.

17 That said, according to the referring court, CT submits that a proper interpretation of the law and of the concept of ‘undertaking’ does not support the conclusion that a person acts in the commercial sphere through the exercise of an independent economic or professional activity on the sole ground that he or she is an actor when signing a career management contract.

18 CT relies in that regard on the judgment of 15 December 2016, Nemec (C-256/15, EU:C:2016:954), in which the Court examined the interpretation of the concept of ‘undertaking’ within the meaning of the third subparagraph of Article 2(1) of Directive 2000/35/EC of the European Parliament and of the Council of 29 June 2000 on combating late payment in commercial transactions (OJ 2000 L 200, p. 35), now Article 2(3) of Directive 2011/7, as regards natural persons.

19 Thus, according to CT, in paragraphs 33 and 34 of that judgment, the Court held that, in so far as the person concerned must act as an organisation within the framework of an independent economic or professional activity, that requirement means that that person, whatever his or her form and legal status may be under national law, must exercise that activity in a structured and stable manner.

20 In that regard, according to the referring court, the concept of ‘stability’ referred to by the Court does not raise any particular difficulty in the present case. By contrast, that court considers that there is doubt as to what is to be understood by ‘acting as an organisation’ and by the exercise of such an activity ‘in a structured manner’.

21 From that point of view, the judgment of 15 December 2016, Nemec (C-256/15, EU:C:2016:954), concerned a person who held a craftsman’s licence to carry on the activity of turning mechanical parts and welding. The referring court considers that the exercise of such an activity presupposed that, in addition to his or her working capacity and technical knowledge, that person had his or her own premises for the exercise of his artisanal activity, as well as raw materials and tools, that is to say, a structured group of means of production. That distinguishes the situation of such an artisan from that of an actor like CT.

22 In those circumstances, the Tribunal da Relação de Lisboa (Court of Appeal, Lisbon) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Should a natural person who habitually carries on the acting profession on a freelance basis for financial remuneration be categorised as an “undertaking” within the meaning and for the purposes of recital 5 and Article 2(3) of Directive 2011/7 …, even though that person has no organised structure of resources (merely carrying on that activity but having no premises of his or her own, staff or tools or equipment related to the professional activity)?’

23 By its single question, the referring court asks, in essence, whether Article 2(3) of Directive 2011/7 must be interpreted as meaning that a natural person who works, in a self-employed capacity and on a regular basis, in the acting profession in return for remuneration, without, however, having his or her own premises, staff or tools or equipment related to his or her professional activity, is covered by the concept of ‘undertaking’ within the meaning of that provision.

24 According to settled case-law, it is necessary, when interpreting a provision of EU law, to consider not only its wording but also its context and the objectives of the legislation of which it forms part (judgment of 12 October 2023, INTER Consulting, C-726/21, EU:C:2023:764, paragraph 43 and the case-law cited).

25 It should be observed from the outset that, in accordance with Article 1(2) of Directive 2011/7, that directive applies to all payments made as remuneration for ‘commercial transactions’, and that that expression is defined in Article 2(1) of that directive, as meaning ‘transactions between undertakings or between undertakings and public authorities which lead to the delivery of goods or the provision of services for remuneration’.

26 Therefore, contrary to what CT argued in her written observations, the non-transborder nature of a given commercial transaction is irrelevant for the purposes of the application of Directive 2011/7.

27 In addition, under Article 2(3) of Directive 2011/7, ‘undertaking’ means any organisation, other than a public authority, acting in the course of its independent economic or professional activity, even where that activity is carried out by a single person.

28 In that regard, it is apparent from the case-law of the Court that it is not enough for a person to conclude a transaction relating to an economic activity in order for him or her to be an ‘undertaking’ and that transaction to be classified as ‘commercial’, but that it is necessary for that person to be acting as an organisation within the framework of an independent economic or professional activity (see, to that effect, judgment of 15 December 2016, Nemec, C-256/15, EU:C:2016:954, paragraph 33).

29 That requirement means that that person must exercise that activity in a structured and stable manner, so that the activity cannot be limited to an isolated one-off supply, and that the transaction in question must form part of that activity (see, to that effect, judgment of 15 December 2016, Nemec, C-256/15, EU:C:2016:954, paragraph 34).

30 In the present case, as the referring court notes, it is common ground that the contractual relationship between Agenciart and CT gave rise to a supply of services for remuneration and that Agenciart must be classified as an ‘undertaking’. By contrast, as regards the question whether CT must also be classified as an ‘undertaking’, the referring court’s doubt relates to the fact that, even though CT works, in a self-employed capacity and on a regular basis, in the acting profession in return for remuneration, she does not have an organised structure of resources, inasmuch as she merely carries out that activity without having her own premises, staff or tools or equipment related to her professional activity.

31 In that regard, first of all, in so far as Article 2(3) of Directive 2011/7 refers, for the purposes of the definition of the concept of ‘undertaking’, to ‘any organisation … acting in the course of its independent … professional activity’, it should be noted that a natural person who works, in a self-employed capacity and on a regular basis, in the acting profession in return for remuneration exercises an ‘independent professional activity’ within the meaning of that Article 2(3). Furthermore, it is also apparent from the wording of Article 2(3) of that directive that the fact that the activity concerned is carried out by only one person is irrelevant in that context.

32 Next, as regards the requirement to act as an ‘organisation’ ‘within the framework of’ an independent professional activity, it is apparent from the case-law referred to in paragraph 29 of the present judgment that the activity in question must be carried out ‘in a structured and stable manner’.

33 It cannot be inferred either from the wording of Article 2(3) of Directive 2011/7 or from that case-law that classification as an ‘undertaking’, within the meaning of Article 2(3) of that directive, depends on the person concerned, who, it is not disputed, carries out his or her activity on a regular basis, having an organised structure such as his or her own premises, staff and tools or equipment used for that activity. Indeed, in certain sectors, tangible or intangible assets are reduced to their most basic since the activity is essentially based on manpower (see, by analogy, judgment of 10 December 1998, Hernández Vidal and Others, C-127/96, C-229/96 and C-74/97, EU:C:1998:594, paragraph 27).

34 Lastly, in so far as the transaction must be ‘within the framework of’ the activity concerned, CT’s interpretation that, although an actor must, as a liberal professional, be classified as an ‘undertaking’ for the purposes of Directive 2011/7 when he or she enters into a contract with a television station, he or she does not act as such when entering into an agency contract such as that at issue in the main proceedings cannot be accepted.

35 It must be held that entering into an agency contract is, for a person in the acting profession, part of that person’s professional activity and is closely linked to that activity, since, if that person did not pursue that profession, the conclusion of such an agency contract, which specifically consists of the promotion and management of that activity, would necessarily be devoid of purpose.

36 That interpretation is supported by the context of Article 2(3) of Directive 2011/7 and by the purpose pursued by that directive. In that regard, in the first place, it follows from Article 1(1) of that directive that the aim of that directive is to combat late payment in commercial transactions, in order to ensure the proper functioning of the internal market, thereby fostering the competitiveness of undertakings and in particular of SMEs. In the second place, it is pointed out, in recital 10 of Directive 2011/7, that the liberal professions are covered by that directive, as ‘undertakings’.

37 In view of all the foregoing considerations, Article 2(3) of Directive 2011/7 must be interpreted as meaning that a natural person who works, in a self-employed capacity and on a regular basis, in the acting profession in return for remuneration, without, however, having his or her own premises, staff or tools or equipment related to his or her professional activity, is covered by the concept of ‘undertaking’ within the meaning of that provision.

38 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Article 2(3) of Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions

must be interpreted as meaning that a natural person who works, in a self-employed capacity and on a regular basis, in the acting profession in return for remuneration, without, however, having his or her own premises, staff or tools or equipment related to his or her professional activity, is covered by the concept of ‘undertaking’ within the meaning of that provision.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Agenciart - Management Artistico (Combating late payment in commercial transactions - Article 2(3) - Concept of an 'undertaking' - Judgment) [2024] EUECJ C-643/23 (14 November 2024) URL: http://www.bailii.org/eu/cases/EUECJ/2024/C64323.html Cite as: ECLI:EU:C:2024:959, EU:C:2024:959, [2024] EUECJ C-643/23

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