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C-11/70. A Regulation of the CouncilOfTheEU stipulated what amounted to a financial penalty if the holder of a licence for the export of certain goods (maize, in this case) failed to export the permitted amount within a certain time (licence-holders were required to pay a deposit, which was forfeit if the terms of the licence were not met). The claimant German company argued (among other things) that the penalty was out of proportion to the mischief that the Council provision sought to prevent. Proportionality, the company argued, was a fundamental right guaranteed by the German constitution, which ought to be upheld within EC jurisprudence.
Despite the initial reluctance of the ECJ to base decisions on fandamental rights (see EUGeneralPrinciplesOfLaw), in this case the ECJ conceded that it was prepared to recognize fundamental principles inspired by the legal systems of member states (moves by the ECJ in that general direction might be evident in the earlier Stauder case). Despite this recognition, the ECJ held (after an Art. 234 reference -- see PreliminaryReferenceProcedure) that the financial penalities imposed were, in fact, not disproportionate.
When this ruling was returned to the German Administrative Court, that court decided, in the face of the ECJ decision, that the Council provision was disproportionate, and refused to enforce it. This led to a series of further decisions by the Administrative Court (notably Solange I and Solange II) in which that court stated that, so long as the ECJ was prepared to embody fundamental rights in its decisions, it would not challenge them. Nevertheless, the Administrative Court reserved to itself a power to challenge the decisions of the ECJ and the activities of the institutions of the EU.
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