90

国際私法年報第17号(2015)

CorporationsinEuroPeanPrivatelnternationalLaw
FromCase‑LawtoCodification？
JanvonHEIN＊

Profbsso,･ofCivil,Comparativea,,dPrivateln[ernationalLaw

at theUniversityofFreiburg(Germany)

Introduction

Determiningthelawapplicabletocompanies isoneofthemostwidelydebatedandpracticallyimportantchallenges fb'･private intemational lawasatool fbrregionaleco‑
nomicintegration.AnyfEderalorsemi‑fbderalsystemisconftontedwiththequestionasto

whetherthelegalexistenceandcapacityofacompanyaredctcrminedbytheplaceofi[sincorporation(incorporationtheory) orbythelocationofitsactualadministrativeoffice(realseattheory).Whilethelegalsystemsofcommonlawcoun[riestraditionallyfbllowthe
incorporationtheoryjparticularlyintheUnitedStatesofAmerica(USA),themajorityofcontinentalEuropeancoun[riesprefbrtheconnectiontotherealseat・ IUnderthepressureofthecaselawoftheCourtoflusticeoftheEuropeanUnion(qEU, fbrmerlyknownastheEq),however,evenEUMemberStateswhichtraditionallyadheredtotherealseattheory
fbundthemselvescompelled[oswitchtotheincorPorationtheoryatthebeginningofthe
21"centur)jatleastwithregardtocompaniesregisteredinotherMemberStatesoftheEUo'･ rlleEuropcanEconomicArea(EEA) (seejﾉﾂﾗ〃II) .ThisShiftmuStbeSeeninthewider

contextofaproperallocationoflegislativecompetences.Allowingthefbunderstoselectthelawapplicabletotheircompanywithouttherequirementofanyrealeconomicactivity
inthechosenstatehasthepotential totriggeracompetitionfbrcorporatechartersbe‑
tweenlegalorders,aphenomenonthat iswell‑knownintheUSA

theso‑called"Dela‑*ProfbssorofCivil,Compa'･ativeandPrivatelntematiOnalLawattheUniversityofFreiburg(Germany); since2014chairmanofthe2ndCommissionoftheGermanCouncil fbrPrivate
InternationalLaw.

lGermany,France, Italy;burnotSwitzerland,DenmarkortheNetherlands, fbracomprehen‑sivesurvey, seePeterBchrens, "Connecti,,gfhcto,sfbrthedeterminarionoftheproperlawof
companies'', inPeterMankowskiandWoltangWurmnesteds.,恥睡ﾙγ坂̲戯γα『たﾙM"7z"$(2014),PP.353,362‑366.

Corporations in European Private International Law[Jan von Hein]— Front Case-Law to Codification?

91

ware effect” — and that has been debated intensely in Europe as well (see infra I).

Since the Member States conferred upon the European Union a specific competence as

regards private international law (PIL) in 1997,2 no less than sixteen regulations have been
passed in many legal fields, such as clioice of law on contracts, torts, divorce and succes-

sions.5 Despite this growing Europeanization of PIE, however, a general regulation concerning the law applicable to companies is so far missing. Scattered provisions concerning

particular questions can only be found in sectorally limited directives^ and in regulations
on supranational types of companies, such as the Societas Europaea (SE), the European

Stock Corporation. The resulting lack of clear conflicts rules may lead to legal uncertainty
and higher transaction costs in cross-border cases, thus impeding the achievement of fullregional economic integration. Hence, the idea of codifying the law applicable to companies in the EU has gained considerable support in recent years. Already in 2006, the Ger-

man Council for Private International Law, a select group of law professors advising theFederal Ministry ofjustice, presented a proposal for European legislation. At the EU level.
2 Art. 61 (c) in conjunction with Art. 65 (b) of the Treaty of Amsterdam (today: Art. 81 (l)and (2) (c) of the Treaty of Lisbon).
For a current survey, see Giesela Ruhl and Jan von Hein, "Towards a European Code on Private \0 \ 1 ι4”, Rabd Zeitscbrijt jıİT ausländisches und internationales Pritiatrecht,

Voi. 79 (2015), pp. 701-751.
Ą E.g. die Merger Directive, Dir 2005/56 OJ L 310/1, ΟΓ the Talceover Directive, Dir 2004/25
OJL 142/12.

Council Regulation (EC) No. 2157/2001 of October 8, 2001 on the Statute for a European
company (SE), OJ L 294/01.
Hans Jürgen Sonnenberger and Frank Bauer, "Vorschlag des Deutschen Rates für Internationales Privatrecht fiir eine Regelung des Internationalen Gesellschaftsrechts auf europSischer/na-

tionaler Ebene”, Recht der Internationalen Wirtschaft, Supplement 1 to Journal No. 4 (2006),
pp. 1-24; published in English translation in: Hans Jürgen Sonnenberger ed., Vorschläge undBerichte zur Reform des europäischen und deutschen internationalen Gesellscbafyrechts kTÖQ7 , ~.
65-76, with an explanatory memorandum by Sonnenberger and Bauer; for a detailed analysisof the proposal, see Eva-Maria Kieninger, “Tie Law Applicable to Corporations in the EC",

Rabels Zcitschrlfyfir ausländisches und internationales Priuatrecht, Νο\. 7

700

,

et

seq. , Hans Jürgen Sonnenberger, “Etat de droit, construction européenne et droit des sociétés”,

Revue critique de droit international prive. Vol. 102 (2013), pp. 101 et seq. , Daniel Zimmer,“Tie Proposal of the Deutscher Rat fiit Internationales Privatrecht”, in Jürgen Basedow, Harald
Satira andJapanese and European Private International Lau, in Comparative

Perspective (2008), pp. 209 et seq:, see also Justin Borg-Barthet, 'A "New Approach' to theGoverning Law of Companies in the EU: A Legislative Proposal", 7/ of Private Interna-

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17f (2015)

the European Council stressed, in its 2010 Stockholm Programme, that "[(]here is a needto explore whether common rules determining the law applicable to matters of company
law [...] could be devised" and invited the Commission to "consider whether there is aneed to take measures in these areas, and, where appropriate, to put forward proposals inthis respect".7 In its response to this Programme, the Commission announced to present a
Green Paper on the applicable law relating to companies before the end of 2014, which sofar, however, has not seen the light of day. Finally, the European Parliament, in a Resolution of 2012, has taken "the view that conflict-oflaw issues also need to be tackled in thefield of company law and that an academic proposal in this field [i.e. the proposal madeby the German Council for Private International Law] could serve as a starting point for
further work on conflict-oflaw rules with regard to companies' cross-border operations".
This European development is in stark contrast with the current situation in the USA,
where conflict of laws in this area is still a matter governed almost exclusively by state
In this article, I will first give a very concise survey on the question as to whether a com-

petition of legal orders is a realistic perspective in the EU; moreover, I will distinguish between various types of competition that are of importance for devising adequate conflicts
i.e. state or federal in the US
rules in this area. The question to which regulatory leveltional Law, Voi. 6 (2010), p. 589, 611. The Federal Ministry of Justice prepared a legislative
draft on the basis of this proposal (2008; available at http://www.rwi.uzh.ch/oe/stiftungsrecht/
rechtsentwicklungen/Referentenenovurf-IGR-120417.pdf,, which was, however, shelved because of trade union's fears rhat it might have a negative impact on workers' co-determination,
see ftrrther Rolf Wagner and Birte Timm, "Der Referentenentwurf eines Gesetzes zum Internationalen Privatrecht der Gesellschaften, Vereine und juristischen Personen”, Pmis ầ Intema-tionalen Privat- und Verfahrensrechts (2008), p. 81.
7 .
CoutvcA, Tbe Stockholm Prořmme — An open and Secare Europe Serving and Protecting Citizens, OJ 2010 c 115/1, p. 16.
8 Communication ftom the Commission to the European Parliament, die Council, the European Economic and Social Committee and the Committee of the Regions, Delivering an area of^eedoTO. security and Justice ƒor Europe's citizens. Action Plan Implementing the Stockholm Pro-

gramme, COM (2010) 171 final, p. 26.
5 European Parliament, Resolution of June 14, 2012 on the fit ture of European company law(2012/2669 (RSP)).
‘ See Peter Hay, Patrick j. Borchers and Symeon c. Symeonides, Conflict of Laws (5'b ed.,2010), pp. 1394-1400.

Corporations in European Private International Law
von Hein]— From Case-Law to CoElficatlon?

93

vis-à-vis Member State or European in the EU — legislative authority to define conflicts

rules should be allocated is closely related to the fundamental understanding of the notionof a "competition" between legal orders. Already in the opinion which paved the way for
the ECJ'S judgment in tlie well-known Centros case. Advocate General La Pergola argued infavour of the theory of incorporation tliat "in the absence of harmonisation, competition

among rules must be allowed fiee play in corporate matters.”" The phrase "competition
among rules” was used in English even in the original Italian text of the opinion, a clear
hint at the Anglo-American roots of this concept. This legal origin was also made visibleby the discussion of the so-called "Delaware effect” in a lengthy footnote.' Therein, La
Pergola cited to a law review article by Ckus-Dieter Ehlermann, who had submitted that arace to the bottom in the EU could be prevented by steps towards legal harmonization un-

der the EC Treaty.'5 Moreover, La Pergola referred to an article by the late Harvard professor David Charny, who had argued that competition among the Member States would
lead to a substantive harmonization of national corporate laws without firrther interven-tion by Brussels.'^ Recent experience in the US has shown, however, that this idyllic viewof a competition among legal orders leading to a quasi-automatic substantive harmonization of corporate laws is oversimplified (see infra 1.1.). After a concise review of the inter-play between tlie different concepts of legal competition and the underlying choice-oflaw
preferences, I will give an overview on the ECJ'S case-law that adopted the theory of incor-

potation and gave rise to the legislative proposal presented by the German Council (seefra II). After a brief sketch of this proposal's main features (see infra III), I will analyse thesubsequent jurisprudence of the CJEU and evaluate the proposal in the light of these re-cent developments (see infra IV). Finally, I will give an outlook on the current prospects
for codifying international company law in the EU.

II Opinion of AG La Pergola in Case C-212/97 (Centros Ltd V Erhvervs- og Selskabsstyreisen), 16 July 1998, [1999] ECR 1-1461, at p. 1-1479 para. 20.
12 Id. in footnote 48.

13 Ibid.Ị the article cited to is:) Rev. Marche Commun Union Europ. no. 387 (April

19951,220.

I La Pergola (supra note 12) ; the article cited to is: Charny, 32 Han,. Inti 1.1. 423 (1991).

94mềlìỀệl

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(2 15)

I. The Competition of Legal Orders in the European Union!.The US ModelFirst, I will turn to the question as to whether the ECJ’s famous Cenừos decision' andits progeny‘ have sparked an American-style competition for corporate cliarters within the
EU and whetlier this may lead to the so-called “Delaware” effect that is familiar from the
US experience, i.e. a quasi-monopolistic position of one member state of the Union as anofferor of corporate charters.' This type of competition may be called "horizontal” competition.'^ In so far, the doctrinal dispute between the incorporation and tlie real seat dieories
reflects the general tension between party autonomy., which leads to the free choice of theplace of incorporation, on the one hand, and the protection of third parties {e.g. creditors,

minority shareholders), which the real seat theory emphasizes, on the other.' Under the realseat tlieory, the connection to tlie actual place of the head office allows the application ofdomestic company law and its underlying social values to so-called pseudo-foreign or letterbox companies. Thus, corporations immigrating into a country by transferring their realseat without registering there have traditionally been punished by the loss of their legal

pacity. At a more technical level, the conflict beween the incorporation and the real seat
theories mirrors the functional complementarity between a liberal approach to interna-

tional (or interlocal) company law, on the one hand, and a supplemental control of companies by a liquid capital market and the accompanying regulation by supervisory andstock exchange law on the other. Tlie US and the UK developed liquid capital markets at acomparatively early stage in histoty. Le. the late 19* and early 20* century; in the light of(European) Court of Justice, March 9, 1999, Case C-212/97 {Centros Ltd V. Erhvervs- og
Sekfcabsstyrehen), European Court Register \(,\-\4' .
(European) Court of Justice, November 5, 2001, Case C-208/00 ( (jherseering BV V. Nordic
Construction Company Baumanagement GmbHj, European Court Register7.ữô7,,\- (\ , (,bito-pean) Court of Justice, September 30, 2003, Case C-167/01 [Kamer van Koophandel en Aa¿rieken voor Amsterdam I). Inspire Art Ltd. , European Court Register.
17 See «II.
See, e.g.. Mark j. Roe, “Regulatory Competition in Making Corporate Law in the UnitedStates — and its Limits”, Oxford Review ofEconomic Policy, Voi. 21 (2005), p. 232, 241.

A German and Eurocf. Marc-Philippe Weller, “Companies in Private International Law
pean Perspective”, in Jürgen Basedow and Knut Benjamin Pifller eds.. Private International~

in Mainland China, Taiwan and Europe (7.ữ\4, .

et seq.

Corporations in European Private International Law
Ian von Hein]— From Case-Law ro Codification?

55

the market as an efficient mechanism for corporate control, these countries have traditionally been liberal towards questions of organizational law. In Germany, on the contrary, abasically mandatory protection of shareholders, creditors (minimum capital) and employees
has been favoured, which has been secured, in terms of conflict oflaws, against the dangers
of emigration and circumvention by the real seat theory. To a certain degree, this strongemphasis on organizational safeguards reflected the less developed state of German capital

markets during the '!' century whicli resulted in a lack of external corporate control.
In the USA, the regulation of the internal affairs of a corporation has traditionally beenleft to the laws of the various States. Until the beginning of the 21 ' century., federal legislation concentrated upon securities regulation and mainly resorted to disclosure as the preferred mode of intervention into corporate affairs, leaving substantive regulation of corporate governance to a horizontal competition among the states, a competition that Delaware

has won by a decisive margin.^“ The reasons for Delaware's competitive edge are wellknown and mainly attributed to its julfdical and administrative infrastructure. ‘ Delaware
is the only American state which still adheres to a strict separation between common law
courts in the narrow sense and courts of equity, on the other hand. The Delaware courtof chancery is a higlily specialized court in corporate matters which has the important ad-vantage of sitting without a jury. 5 The selection of judges as well as the procedures of cor2“ See the up-to-date figures given by E. Norman Veasey and Christine T Di Guglielmo, “WhatHappened in Delaware Corporate Law and Governance ftom 1992-2004? A Retrospective on

Some Key Developments”, University of Petmsylvania Law Review, ol. 153 (2005), p. 1399,
1403; cf. also Lucian Arye Bebchuk and Assaf Hamdan , “Vigorous Race or Leisurely Walk:
Reconsidering the Competition over Corporate Charters”, Yale Law Journal, Vol. 112 (2002),
p. 553, 567.
2 See, ^ , Ronald Gilson, “Regulatory Competition and Subsidiarity ¡n Corporate Governance in a Transatlantic Perspective", presentation, July 12, 2004, http://www.ecgi.org/tcgd/
launch/gilson.speech.php: “At least for the last twenty years or so, the critical advantage of

Delaware has been the quality of its Chancety Court [...]."
See William T Quillen and Michael Hantallan, 'A Sliort History of the Delaware Court ofChancery — 1792-1992”, Delaware Journal of Corporate Law, Voi. 18 (1993), p. 819.

23 Art. IV § 10 Del. Const.: “The Chancellor and the Vice-Chancellor or Vice-Chancellors shallon
hold the Court of Chancety. One of them, respectively, shall sit alone in that court.
this advantage, see, ?. ., Jill E. Fisch, "Tie Peculiar Role of the Delaware Courts in the Compe-

tition for Corporate Charters”, University of Cincinnati Law Review, Voi. 68 (2000), p. 1061,
1077; Stephen j. Massey, "Chancellor Allen's Jurisprudence and the ^eory of Corporate Law”,

lilllíẲỈỀẹi

96

117

) 2015 )potate legislation in Delaware ate mainly determined by the local bar association, an influ-

ence which ensures a regulatory climate friendly to corporations.^ Apart from that, thetiny state's heavy economic dependence on franchise taxes acts as a de facto insurance thatthe legislation will not stray far from business interests.25 Moreover, Delaware's long-standing preeminent role in the race for corporate charters gives rise to important nework ef
fects: Delaware law is taught in corporations courses in all American universities, and lawyers in New York may give advice not only on their own law, but on that of Delaware as
well.

Nevertheless, the debate is not settled whether this result is benign or malignant from apublic policy perspective: Does competition lead to a race to the top or ratlier a race to thebottom? A general consensus on the pertinent data and their proper interpretation is stilllacking.27 Moreover, when one takes a closet look at recent developments in American legislation, one finds that there is a second dimension of competition that is increasingly
gaining attention, namely the competition between Delaware and the federal regulatory

authorities for establishing the rules of corporate governance, a type of competition thathas been called ‘‘vertical competition’’P This paradigm shift has been inspired by the SarDekware Journal of Corporate Law, Voi. 17 (1992), p. 683, 704.
24 The classic analysis is Jonathan R. Macey and Geoffrey p. Miller, "Toward an Interest-Group
Theory of Delaware Corporate Law”, Texas Law Review, Voi. 65 (1987), p. 469; see also John
c. Jr. Coffee, "The Future of Corporate Federalism: State Competition and the New Trend toward De Facto Federal Minimum Standards”, Cardozo Law Review, Voi. 8 (1987), pp. 759,
762-764.

V-oVetta, Th Genin ojAmerican Corporate Latu (,Ι\ύη ,ιοηΌ.ς, \

,

57 et

seq.

2 On network effects in particular see Bebchuk/Hamdani, supra note 20, pp. 586-588; Ehud
Kamat, "A Regulatory Competition Tieoty of Indeterminacy in Corporate Law", Columbia
Law Review, Voi. 98 (1998), pp. 1908, 1911, 1923 et seq.
Fot a comprehensive overview of the literature on this subject see Lucian Bebchuk, Alma Co-

hen and Allen Ferrell, "Does tire Evidence Favor State Competition in Corporate Law?”, California Law Review, Voi. 90 (2002), p. 1775; see also the cotrtroversy between ILobert Dai tres,“Does Delaware law improve fi rnr value?”, Journal of Financial Economics, Voi. 62 (2001),
p. 525 (answering the question in the affirmative) and Guhan Sttbramatrian, "Tre DisappearIng Delaware Effect”, Journal of Law, Economics, and Organization, Voi. 20 (2004), p. 32(partly rejecting, partly qualifyltrg the aforementioned study's results).
28 See ¿„IV.

Corpomrio''sinEuropeallPrivatelntcmationalLaw[IanvoI'HElN］−FromCase‑Law〔oCodi6ca[ion？

97bancs‑OxlcyActof2002("SOX")whichhasledtoahithertounprecedentedfederaliza‑

tionofAmericancorporategovernance.30Amongother[hings, theActmadetheestablish‑
mentofauditcommitteesmandatoryandtightenedthenecessarydegreeofindependencetha[membersofsuchacommitrechadtopossess,matterswhichhadtraditionallybeenre‑ユヴ

gardcdasamatterofstatelaw.3'ThisfEde,･alizationofkeyfbaturesofAmericancoI･po,･ate
govemancehascontinuedundertheDodd‑Frank‑Actpassedin2010,which,/"だγ〃"α，codifiedtheso‑called"say‑on‑pay"ruleontheremunerationofboardmembers.32Thus,
thetraditionalmodelofa"horizontal"competitionbetweenDelawareandothe'･Americansta[esmustberegardedasoversimpli6edtoday;Delawarelsmainrivals in[hefieldofcor‑
porateregulationarenottheotherstates,butthefbderal legislatureand[heSEC.
2.HorizontalCompetitionamongtheEUMemberStates
IntheEU, theECJ'sturntothetheoryofi''corporation(Cr""$)hasallowedfbL1''dersofacompa,,y[oselecttheapplicablelawwithou[[heneedtoestablishaheadoffice(&&realsea[") inthechosenjurisdiction.Althoughthishasopenedupthepossibilityofahorizon‑
talcompetitionbetweentheMemberStates,various ins[itutionalandeconomicreasonsprcvcnttheemergenceofaEuropeanDelaware､33Fromapoliticalandsocialpointofview,
29See,2.g,ReneeM. Jones, "RethinkingCorPorateFederalismintheEraofCorpora[eRe‑lbrm",ん"r""ﾉq/Cb,F"Izz"0"L",",Vbl29(2004),pp625,634f廊呼30PublicCompanyAccou''[ingRefbrmandl''ves[o'･Protection(Sarbanes‑Oxley)Ac[,Pub.L.
NoJO7‑294,116Stac745 (2002) (codi6cdasamendedinscat[eredscctio''sofl5,18
U.S､C.) ;see/"/irZ111.

31 Sect.301SOX,codifiedinsec[.10A(m) (2)SecuritiesandExchangcActandrheaccomPa‑
nyingSECRules;onthispoint, seeDouglasM.Branson, "Enron‑WhenAIISyStCmsFail:CreativeDestructioI1orRoadmap[oCorpomreGovernanceRefbrm", I/7肋"0"〃L"z"R"/2z",

Vbl48(2003),p.989, 1006: @Boardsandboardcommi[[ees including[heir e,ppointmenr
andcomposi[io,,, aremattersofs[atecorporate law";RobertB.Thompson, @@Delawa,･e, theFeds, andtheStockExchange:ChallengestotheFirs[StateasFi,･st inCorporateLaw",Dfﾙz−""'でん"'･""/q/cb'P''"rgL侭z",Vbl29(2004),P.779,791;RobertaRomano,"TheSarbanes‑
OxleyActand[1,eMakingofQuackCorPorateGoverna,,ce",脆〃Laj"ん"γ"α/,Vb1. 114(2005),p. 1321, 1ﾗﾗ1 (criricizingtl'i'tCongrcssdidnotdiscuss[hcaspcctoflegislariveau‑thority).
32Dodd‑FrankW,llStrectRefbrmnndConsumerProtectionAct (Pub.L. l1 1‑203,H.R.

4173);C/fTbbiasSieltr, @ZweilahrenachDodd‑Frank
ErfahrungenmitdemAktionirsvo‑[umiiberdieVbrs[andsvergUtuI'gindenUSA'', /VIF"ど壁 ん坂かQJf"cﾙ/z/f"rf"'(2013),
p.691 .

ユ

98

国際私法年報第17号(2015)

EL,,･oPeanSaremoreinclinedtof,voursmkeholderinterests.FranccandGermany,howev‑
er,modemizedthcirlawsco,,cerninglimi[edcompaniesbecausethelegislatorsfbaredthat
moreandmorefbundersofcompanieswould'･atherop[fbrtheEnglishequivalent, theLimitcd,whichismucI'cheapertosetupthanitscon[inentalcoL,nterpa'･ts. InGerman
law, fb,･example,asimpli6edmodelofthetraditionalGermanlimitcd(the$､GmbH'')was
introduced> [heso‑called((Unternehme'･gesellschaft"or <fentrepreneUrial company". I[smos[attmctiveftatureis that irdispenseswiththerequirementofhavingtoputdown
23.0006ofminimumcapital [hat ischaraCteristicoftheGmbH・Recentempiricaldata

evenpoin[toaconsiderabledeclinein[hecross‑borderestablishmen[ofpseudo‑fbreign
corporatio,Isasaresultofsuchrefbrms.

34

3.VbrticalCompetition:EuropeanCorporationsviS‑A‑viSDomeSticⅡｼPes

IntheEUaswell,"verticalcompctition''bctweenregulations (andregulators) a[theEu‑,･opcanlevel,0,,[heonehand,andthedomesticlevel,ontheo[her,playsanincreasingly
impo'･tantrole・ Insof,r, twodifibrentdimensionsofverticalcomperi[ionmustbedistin‑
guished:Untilrecently) theccntralpressureexcrtedbytheEUoncorporateregulationhas
beenweakerthanintheUSbeCauSetherewaS,,osingleregulatorofEuroPeancaPitalmar‑
ketscomparabletotheAmericanSEC.Under[heimpressionofthe6nancial crisisof
2008,however, theEUcreatedtheEuropeanSecuritiesandMarketsAL,thority(ESMA),

whichaims[ostrengthenthesupervisionofEuropcanCapitalMarketsandtofbstercon‑
ve'･gcncebctweentheapproachespLIrsucdbynationalregulators.AlthoughESMAiSStilla
lesspowe,･li,lauthoritythantheSEC,oncmayarguethatastrongcrEuropeanframework
fbr6nancial supervisionmakesaliberalattitudetowardspartyautonomyinintemational
companylawmoreacceptable, lcadingtoaconvergencewiththeUSmodel inthisregard.
Apartftom[hat, thereisanothcrfbrmof"vertical''competitio,, in[heEUthat is lesscommonintheUS.35Suprana[ionalfbrmsofcompaniessuchastheSE36createthepossi‑
33SeeLucaEnriques, <<ECCompanyLawandtheFearsofaEuropeanDelaware",Ez""""&"""L"zfノルzﾉ"I"(2004),pp.12391274;Tbbias 'If6ger,"ChoiceofjurisdictioninEuro‑
peimCorPorateLaw

PerspectivesofE'''･opeallCorpora[eGovemance'',鋤ｿ〃β j"EJゴ

0Wz"iz""""L""RE"だ'",Vb1.6(2001),PP.3‑64.
34WblfGeorgRinge, CorporateMobilityintheEuropeanUI1ion−aFlashiI1 thePan？An
empi,･icals[udyonthesucccssoflawmakingandregulatorycompetition",a""""Cb"Wノリ
α 〃"α"L･j@z/Lzzz"R"""ﾉ (2013),PP.230‑267.

[Jan von HeinJ

Corporations in European Private Internatlotra! Law— From Case-Law to Codification?

bility of choosing beween European and domestic types of companies, such as the German Aktiengesellschaft (AG). The SE is a European public limited company and was thus
created for big enterprises; its minimum capital amounts to 120.000 €. The SE is a successparticularly in Germany mainly for three reasons:5( 1 ) the possibility to fteeze workers" co-determination at a status ^level,(2) the facilitation of cross-border restructuring such as mergers or transfers of seat, and(3) the reputational gains associated with a European corporate “label". It seems thatmergers between companies ftom different Member States face less psychological obStacies if the resulting new company is not regarded as a "French” or “German” company, for example, but rather as a genuinely supranational, European "corporate citizen”.

ln addition, German stock corporations transforming themselves into an SE may opt
for the one-tier system of corporate governance known in the US rather than for the tradi-tional wo-tier system peculiar to German law. Thus, the European variant of the stock
corporation offers significant competitive advantages over its German counterpart.

With regard to smaller, private companies, several proposals have been presented anddiscussed at the European level in recent years as well, such as the Societas Privata Europea(SPE)kind of European private limited liability company, and the Societas Unius Per-sonae (SUP), a special type of single-member private limited liability company.^ So far,however, these legislative actions have not been completed.
See fars Klohn. “Supranationale Rechtsformen und vertikaler Wettbewerb der Gesetzgeber
I' tutoçatsckn GeseWscyisKck', Rabel Zeiticbrijtflir anslandiscbc und internationales Privatrecht. Vol. 76 (2012), pp. 276-315.
Council Regulation ( ) No. 2157/2001 of 8 October 2001 on the Statute for a European
company (SE), OJL 294/01, 10.11.2001, p. 1-21.
See Jürgen Oechsler, in Wulf Goette and Mathias Habersack eds., Münchener Kommentar
zum Aktiengesetz (3' ed., 2012), Vorbemerkung zu Art. 1 SE VO, paras. 7-10.
58 Ibid., para. 7.

Tie Commission presented a proposal for a Council Regulation on the Statute for a European private company in 2008, COM (2008) 396; on the subsequent developments, see Astrid
Roesener, "Das Warten auf Aktion: Der Aktfonsplan zum Europäischen Gesellschaftsrecht und

die Societas Privata Europaea”, Neue Zeitschriftfi r Gesellschafisrecht (2013), p. 241.
SUP Proposal, COM (2014) 212 final.

woIIÍẮÍŨ

inf (2015)

Ic should be noced chac che choice of law cules found in cuccenc EU cegulacions and legislacive pcoposals on supcanacional companies dlffec considecably: Wheceas che SE Scacuceis scili based on che ceai seac cheo

(Accicle 7 of this Scatute), demanding chac che cegisceced

office of an SE shall be located in the same Membec State as its centcal adininistcation, the

SUP Proposal deliberately omits such a requirement. Recital 12 of the said proposal emphasizes that “[t]o enable business to enjoy the full benefits of the internal market, Member States should not require the registered office of an SUP and its central administration

to be in the same Member State”.^' This divergence illustrates that European legislative
policy still seems to lack a coherent approach to this vital question of international company law.

4. Transatlantic Competition beleen the EU and the USA

Finally, one may look at competition beween legal orders from a traitsatlantic perspective. As long as a significant number of European companies were listed on Americanstock exchanges (NYSE, Nasdaq), it was a rational regulatory strategy for the EU to impose
American-style stringent requirements on the corporate governance of EU corporations inorder to dissuade US regulators fiom applying their own laws extraterritorlally.^2 Currently.,
however, a listing in the US has become largely unattractive for European companies, thus
alleviating the pressure for additional EU regulation in this regard.

II. The ECJ’s turn to the Theory of Incorporation

at the End of the 20"' Century!.Daily Mail

The starting point of the ECJ's jurisprudence on international company law was the
4' !his has been criticized by Hartmut Wicke, "Societas Unius Personae — SUP: eine äußerst

wacklige Angelegenheit”, Zeitschriftßr Wirtscbafisrecht und Insolvenzpraxis (2014), p. 1414,\A\6etseq.

42 n the extraterritorial application of US capital markets law see Jan von Hein, Die Rezeption
US-araerifeaniscben Geselkcbajtsrecbts „ DeutscbUnd, .
45 At the moment, only three Gernran stock corporations are listed on the NYSE (SAP, Fresen-lus Medical Care and the Deutsche Bank), see DCsiree Backhaus, "Siemens US-Delisting: Nurnoch drei Dax-Firmen an NYSE notiert” (January 30, 2014), availabu at http://ww.financemagazin.de.

Corporations in European Private International Law— From Case-Law to Codification?

[Jan von Hein]

101“Daily Mail” case of 1988.^ The Da !y Mail and General Trust PIC wanted to move Its
central administration from England to the Netherlands with the intention to avoid Brit-ish taxation. From a choice of law perspective, transferring Daily Mail's seat did not causea threat to tlie company's existence because both England and the Netherlands follow thetheory of incorporation. Nevertlieless, Daily Mail required the British tax authorities' consent in order to cease to be resident in the United Kingdom. When that consent was denied. Daily Mall claimed that its freedom of establishment had been infringed. The ECJ,
however, ruled that freedom of establishment does not confer on a company the tight —against its state of incorporation

to transfer its teal seat to another Member State. In

this regard, the Court emphasized that “it should be borne in mind tliat, unlike natural

persons, companies are creatures of the law and, in the present state of Community law,
creatures of national law. They exist only by virtue of the varying national legislation
which determines their incorporation and fiinctioning.''45

2. Centros, Überseering and Inspire Art
In first reactions to the Daily Mail decision, most academic commentators took theview that the ECJ had endorsed the fteedom of domestic legislators to follow either thereal seat theory or the incorporation theory.^ In this regard, it was ftequently overlookedthat Daily Mail solely concerned the question which rights a company had against thestate under whose laws it had been founded (the "home state"), but not the question
whether the host state could refuse to recognize a foreign company as being legally existent.
From 1999, the jurisprudence of the ECJ clarified the latter point in three decisions, Cen-tros, ijberseeringand Inspirs Art.
The Centros Ltd. was a private limited company registered in England and Wales, with-out pursuing any real economic activity there. The founders of this typical letterbox company applied to the Danish Trade and Companies Board to register a branch in Denmark.
q,

Ĩ?, \

, CasefTbs Queen υ. Dally Matt), European Court Register

1988, 5483.

ECJ, C-81/87 — Daily Mail (1988), supra note 44, para. 19.
46 Harald Halbhuber, "National Doctrinal Structures and European Company Law," Common
MarketLawkiew,\o\. 38, No. 6 (2001), pp. 1385, 1390-1395.

ECJ, C-212/97 — Centros (1999), supra note 15; ECJ, C-208/00 — Überseering (2002),
supra note 16; ECJ, Case C-167/01 — Inspire Art (2003), supra note 16.

102llíiĩíậệg

.17 ~~- (2015)

The Board refused, arguing that Centros was in fact seeking to establish a principal establishment in Denmark, thus trying to circumvent Danish minimum capital requitements.
The ECJ, however, classified the founders' legal tactics not as an abuse of rights, but as arealization of the fteedom of establishment. In this regard, the Court argued that denyinga registration of a letterbox company's branch “is not such as to attain the objective of protecting creditors[l]f the company concerned had conducted business in the United
Kingdom, its branch would have been registered in Denmark, even though Danish credi-

tors might have been equally exposed to risk.'^o Moreover, the Court pointed out that under European legislation on disclosure requirements, creditors would have to be informedof the fact that they were dealing with an English rather than a Danish company.^’ Theregistration of a branch could only be denied if it could be established that the company's
founders were actually trying to defiaud creditors in Denmark.

Afier Centros, it was controversial whether, in cases involving the transfer of a company's
center of administration, the ECJ'S judgment merely forced Member States to recognize
migrating companies as having legal capacity, but allowed them to apply the host state's

law on other matters, or whether the host state was actually required to apply the law of
the state of incorporation to the company as a whole. At first, the 2" Senate of the German Federal Court of Justice tried to maintain the real seat theory, with the result that
foreign corporation transferring its real seat to Germany was re-characterized under German law as a partnership with the capacity to sue and be sued. ' However, this modified

real seat theory took away the privilege of limited liability ftom the migrating company
and therefore still significantly restricted its fieedom of establishment. In the Überseering
case, the ECJ clarified that "[wjhere a company formed in accordance with the law of a
Member State (A) in whicli it has its registered office exercises its fteedom of establishment in another Member State (B), Articles 43 EC and 48 EC require Member State B 0

recognise the legal capacity and, consequently, the capacity to be a party to legal proceedm' , wVvkVt vk com a.ĩty ~~0~~ ider th ofits Stat of incorporation U'). Moreover,49

ECJ, C-212/97— Centros {[), supra note 15, para. 35.
ECJ, C-212/97— Centros (1999), « «? note 15, para. 36.
ECJ, C-212/97
Centros {\ ), supra note 15, para. 38.

5 Bundesgerichtshof, July 1, 2002, BGHZ [Entscheidungen des Bundesgerichtshofs in Zivil-

sachen] 151, p. 204.
ECJ, C-208/00 — Überseering (2002), supra note 16 (emphasis added).

Corporations ln European Private Internationa! Law[Jan von Hein]— From Case-Law to Codification?

lOS

the Court distinguished Cenưos and Überseering from the earlier precedent oi Daily ^ /:Whereas Daily Mail concerned the legal relationship between a company and its home

state, the state of incorporation. Centros and Überseering dealt with the recognition by thehost Member State of a company incorporated under the law of another Member State.
Finally, the ECJ made clear, in the Inspire Art case, that a special connection of mandatory provisions in order to protect minority shareholders, creditors and stakeholders (employees) is not absolutely excluded in the individual case, but that comprehensive defense
laws against 'pseudo-foreign' companies are not compatible with the freedom of establish-

ment.5^ In this regard, the EC] again heavily relied on the argument that potential creditors of a letterbox company “are put on sufficient notice that it is covered by legislation
other than that regulating the formationof limited liability companies

in thehost state.

III. The German Council's Proposal for codifying a European
PIL of Corporations
As the German Council's Proposal of 2006 (in the following: GCP.) was a direct responseto the Centros trilogy of cases, it comes as no surprise that, as a general rule, it subjects

companies to the law of the state in whose public register they are entered (Article 2(1)
GCP). It is not possible to examine all the details of the GCP here. Nevertheless, three fea-tures of the GCP deserve to be highlighted: First, the clear preference for a traditional,
multilateral conflicts rule instead of a mere principle of recognition; secondly, the deliber-

ate omission of any requirement of real economic activity in the state where the registeredoffice is located; thirdly, the universal application of the proposed conflicts rules also vis-àvis third states.

From a doctrinal point of view, it was — and still is — controversial whether the Ce«tros trilogy had to be interpreted within a unilateralist framework, leaving choice of law issues to the law of the state of incorporation, but forcing other Member States to accept theEC], C-208/00 — Überseering (2002), supra note 16, paras. 61-73.
EC], Case C-167/01 — Inspire Art (2003), supra note 16.
EC], Case C-167/01 — InspireArt (2003), supra note 16, para. 135.

104

17! (2015)

results of applying tilis law under a European principle of recognition or whether the ECJ

had derived a multilateral "hidden conflicts rule” ftom the EC Treaty.5 The practical implications of this distinction are important: Under the recognition approach as outlined inthe Überseering case, the new jurisprudence merely created legal obligations for the host
Member State of a migrating company, whereas the home state remained free to adopt elther the real seat theory or the theory of incorporation for companies created under its
own law. Thus, European international company law would be characterized by the distinction beween "inbound” and "outbound" cases. Under the assumption of a multilateral"hidden conflicts rule", on the contrary., the new case-law would also have ramifications

for the state of incorporation itself, limiting its powers to dissolve a company if it transfers
its center of administration to another Member State. In its legislative proposal of 2006,
the German Council did not decide this issue under primary EU law, but recommended a
traditional, multilateral conflicts rule based on the theory of incorporation (Article 2(1)

GCP). Pursuant to this rule, even the home Member State of a company would have totolerate a company's transfer of seat.5 In so far, the GCP is in line with other EU secondary legislation which has refrained ftom adopting the principle of recognition as a new
choice-oflaw approach.

Secondly., the GCP — in contrast, for example, with the SE statute (see supra 1.3) —does not require a coincidence between the actual seat and the place of registration.58 The
drafters point out explicitly that "it is irrelevant whether this [the place of registration] is
actually the principal place of business or whether that place is in fact located in the state„55
in which the (second) registration of a branch was entered, Moreover, Article 7(1) 1

sentence GCP would allow companies to relocate their place of registration to anotherMember State without having to transfer their actual seat as well. This is remarkable be-cause similar attempts at secondary EU legislation (14' Directive) have so far not beensuccessful.“ The protection of fundamental political, social and economic values of the
See Jan von Hein, in Franz JUrgen Säcker, Hartmut Oetker and Roland Rixecker eds.,
Münchener Kommentar zum BGB ( * ed., 2015), Art. 3 EGBGB para. 11 , witli further referenees; Weller, supra note 19, pp. 373-378, who argues in favour of a "hidden conflicts rule”
which slrould, however, be limited to inbound situations and to EUZEEA-companies.
57 See Kieninger, supra note 6, pp. 607, 620 et seq.
58 Sonnenberger and Bauer, supra note 6, p. 83.
55 Sonnenberger and Bauer, supra note 6, p. 82.

Corporations in European Private Iitternational Law[Jan von Hfjn]— From Case-Law to Codification?

105

host state is left to provisions on mandatory rules (Article 9 GCP) and public policy (ArticlelOGCP).

Finally, the GCP is framed as a / ' uniforme, ¿ , that it is not limited to intra-EU casUnder tlie current case-law, the transition to the incorporation theory also affects

companies registered in contracting states of the European Economic Area (EEA), whichhave to be treated in the same way as companies registered in Member States of the EU.
Likewise, the incorporation theory applies by virtue of bilateral conventions concluded

with important trade partners, particularly the US." However, at least in Germany, thereal seat theory is still applied to companies registered in third countries such as Switzerland which have not entered into bilateral conventions on this matter. ^ In contrast, the
GCP provides for a comprehensive codification of the incorporation theory also in rela-tions with third states. This approach is in line with existing ELI legislation in other fields,such as contracts or torts, because both the Rome I and II Regulations claim universal ap-

plication (Article 2 Rome I, Article 3 Rome II)

Moreover, a coherent and irnified approach

to international company law facilitates decision-making.

In the following, I will briefly present the case-law of the ECJ after 2006 and evaluate
the GCP in liglit of these subsequent developments.

See Zimmer, supra note 6, p. 215; on the proposal for a l4'b directive, see von Hein, supranote 56, Art. 3 EGBGB para. 113, with firrther references.
’ See Kieninger, supra note 6, pp. 607, 621 et seq.; Zimmer, supra note 6, Ρ.211.

Bundesgerichtshof, Sept. 19, 2005, BGHZ [Entscheidungen des Bundesgerichtshofs inZivilsachen] 164, p. 148 concerning Liechtenstein.
Bundesgerichtshof Jan. 29, 2003, BGHZ [Entscheidungen des Bundesgerichtshofs in ZivilSachen] 153, p. 353 regarding Art. XXV (5) of the GermanAmerican Treaiy of Friendship.

Bundesgerichtshof Oct. 27, 2008, BGHZ [Entscheidungen des Bundesgerichtshofs inZivilsachen] 178, p. 192, Horse Racing Track.
s>eevon Hem, tniftomas R’ .-ausckĩ

(2016), Article 2 Rome I paras. 1 et seq.
Zimmer, supra note , p. 211.

. Europäisches ZİDİiprozess- und Kollisionsrecbt

106

ipgfciii *17. (2015)

IV. The Recent Case-Law of the Court ofJustice
1. Cartesio

As have already stated, one of the most hotly debated issues in European international
company law was the question how Centros could be reconciled with Daily Mail, i.e.

whetlier a migrating company could also rely on the freedom of establishment against thestate where it is registered or whether the case-law of the ECJ merely created obligations ofrecognition for the host Member State. This question has been answered by the Court inanother trilogy of cases, Cartesio, National Grid Indus and Vale.

In the Cartesio decision, the ECJ essentially reaffirms — contrary to the opinion of the

Advocate General 5 and wide-spread expectations of practitioners and academics'

thedecision in Daily Mail. Cartesio was a company registered in Hungary. It applied to the
Regional Court in Hungary for registering the transfer of its actual seat to Italy in thecommercial register. This application was rejected because Hungarian law did not allow a
company incorporated in Hungary to transfer its center of administration to anotherMember States while continuing to be subject to Hungarian law. In its judgment, theCourt reaffirmed the basic argument of Daily Mail that companies are creatures which derive their existence ftom the laws of the Member State in which they are registered andthat, accordingly^ this state has the power to define the connecting factor required of acompany, even if this means that the legal existence of a company is terminated because ofa transfer of its actual seat. In so far, the Court argued that "the question whether Article
43 EC applies to a company which seeks to rely on the firndamental fteedom enshrined intliat article — like the question whether a natural person is a !rational of a Member State,hence entitled to enjoy that fieedom — is a prelimirrary matter which, as Community law

now stands, can only be resolved by the applicable national law".7' Yet it is submitted that.q,0£c,f CARTESIO Oktató és Szolgáltató bt), European Court/? » r 1-9641; Court of Justice of the European Union, Nov. 29, 2011, Case C-371/10 (Λώtional Grid Indus BVu Inspecteur van dc Belastingdienst Rijnmondlfeantoor RottcrdamJ, European

Court Register 1-12273; CJEU, July 12, 2012, Case 378/10 {VALE Építési kfi), ECLfiEU:
C;2012;440.

Advocat General Polares Maduro, Opinion of March 22, 2008 — ECJ, C-210/06 — Car j/ (2008), ru^ra note 67.
5
cf. Kien inger, supra note 6, p. 616: "quite unexpectedly".
ECJ, C-210/06 — Car »¿« ) 2008 ), supra note 67, paras. 109-110.

Corporations in European Private International Law[Jan von HetN]— From Case-Law to Codification?

107

drawing a normative parallel beween the law governing a company' existence and the na-

tionality of a natural person in tills respect is flawed.72 A Member State that deprived natural persons of their citizenship merely because they liave moved to another Member State
would evidently violate their freedom of establishment.

The Court emphasized, liowever, tliat it did not intend to confer any kind of “immunity from tlie rules of the EC Treaty on freedom of establishment" on tlie state of incorporation.

In particular, the Member State of incorporation must not prevent a “company

from converting Itself into a company governed by the law of tlie other [host] Member
State, to the extent that it is permitted under that law to do so”.75 This caveat gave rise to
new legal Lincertainties: First, it was questionable which degree of freedom tlie state ofincorporation actually enjoyed with regard to preventing a transfer of a company's actual seatto anotlier Member State. Secondly, tlie Cartesio judgment threw up tlie question as towhether it obliges tlie host Member State to accept a foreign company's transformation
into a new legal person incorporated under tlie laws of tlie latter state.
2. National Grid Indus

The first of these questions was answered in the Case National Grid IndusJ(“ which in-volved problems of cross-border taxation and was based on almost the reverse fact patternthat had given rise to the earlier Daily Mail decision. National Grid, a Dutch company
registered in the Netherlands, wanted to transfer its actual seat to the United Kingdom. As
both countries follow the theory of incorporation, this would liave been perfectly fi ne
fiom a choice of law point of view. The Netherlands, liowever, insisted on the company

paying taxes on currency gains made in the Netherlands before allowing a transfer of seat.
ECJ, C-210/ 6 — Cartesio (2008), supra note 67, para. 109.
Behrens, supra note 1, p. 353, 356: “ [T]he 'nationaliq,' [...] of a company is not in itself anindication of the law governing the company. It is rather tlie other way round: Tie ‘nationality’[...] of a company depends on the proper law of tile company as determined by the relevant
determinate connecting factor used In conflict of laws (choice of law) rules."73 Daniel Zimmer and Christoph Naendrup, “Das Cartesio-Urteil des EuGH: Rück- oder
Fortscliritt für das Internationale Gesellschaft recht?," Neue Juristische Wochenschrift (2009),
p. 545, 546.

ECJ, C-210/06 — Cartesio (2008), supra note 67, para. 112.
75 ECJ, C-210Ố6 — Cartesio (2008), supra note 67, para. 112.
CJEU, C-371/10
Grid Indus {2ữ\\), supra note 67.

108¡[gíẨĩỀệl

. 17)2015(

Contrary to Daily Mail, the Court decided that the company's home state had violated its

freedom of establishment in this case. "[s]ince the transfer by National Grid Indus of its
place of effective management to the United Kingdom did not affect its status of a company incorporated under Netherlands law,” the Court argued, “the transfer did not affectthat company’s possibility of relying on Article 49 TFEU” even against the state of its in-corporation.^ Thus, distinguishing Daily Mail ftom National Grid seems to turn on a subtie technicality: A Member State that strikes a company off the register in case of a transfer
of seat may do so without violating its fteedom of establishment; the state, may, so to
speak, kill its own creature of law. If, however, the state of incorporation considers tire migrating company as being still legally existent, it must reftain ftom erecting financial obstades to the company's fieedom of establishment. It is doubtful whether this line of reason-

ing is compatible with the principle of proportionality because, metaphorically speaking, itfavours a kind of corporate “death penalty" over the mere payment of a fine under applicatax laws.

3.ValeAfter Cartesio, there had been firrther uncertainty as to whether a company incorporated
under the law of Member State (A) that wished to transfer its registered office to Member

State (B) and to reincorporate there as a company governed by the host state's law could
rely on the fteedom of establishment against the designated host state in order to allow
such a conversion. The CJEU had the opportunity to clarify the issue in a case concerningan Italian company., VALE, which wanted to transfer its registered office to Hungary andthereby to convert itself into a Hungarian company.

It had been argued that such a con-version of an existing company under the host state's law should be treated in the same
way as an original incorporation of a newly founded company in the liost state, i.e. that
Member States remained fiee to accept or deny such an inbound conversion under theirdomestic international company law.®“ The C)EU, however, pointed out that "the expresCJEU, C-371/10 — National Grid Indus (2011), supra note Ồ7, para. 32.
Cf. Peter Jung, “Cartesio - Irrläufer im Koordinatensystem der Niederlassungsfreiheit," inFranco Lo randi and Daniel Staehelin, Festschriftßr Ivo Schwander (2011), pp. 463, 570 etseq.
CJEU, C-378/10 “ VALE, supra note 67.
8“ hhus the Hungarian, German, Britisli and Irish governments in ECJ C-378/10 — VALE,
supra note 67, para. 25.

Corpora[ions i''EL,ropeanPriva[EIntema[ionalLaw
ユ[janvonHIM1N]

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FromCase‑Law[oCodi6cation？

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sion totheextentthatitispermittedunderthatlaw[odoso',inparagraphll2ofGz7,"‑〃＠,cannoIbcunde'．stoodasseekingtoremovc, from[heoutsc[, thelegislationof[hehost
MemberStateoncompanyconversionsfrom[hescopeof[heprovisionsofthe[TFEU]
governingthefreedomofestablishment,butasreHectingthemercconsiderationthata
companyestablishedinaccordanccwithnational lawexistso,,lvonthebasisofthena‑
もグノ[ional legislationwhich{permits' thcincorporationofthecompany,provided[hecondi‑
tionslaiddown[o[hateHEctaresa[is6ed".81ThismeansthatthehostMemberStateisen‑titledtodetermincthenational lawapplicabletocross‑borderconvcrsionsandthusto

applytheprovisionsofirsnational lawtosuchoperations,butremainssubjecttotheprin‑ciplesofequivalenceandeffEc[ivenessinthisrcgard.82
Moreov"theCJEUdeniedthatacompanyenjoyedarighttotransibritsregisteredof
6cetoanotherMemberStateifitdidnot intendtopursueanvrealeconomicactivitvin且ゾノ

thehos[sta[e.Thecourtemphasized"thattheconcep[ofestablishmentwithinthemean‑

ingoftheTreatyprovisionsonthefi℃edomofestablishment i,,volvcstheactualpursuitof
aneconomicac[ivitythrougha6xedestablishment inthehos[MemberStatelbraninde6‑

nitepe,･iod.Consequently, itpresL,pposesactualestablishmentofthecompanyconcerncd
inthatStateandthepursuitofgenL,ineeconomicac[ivitythere. "83Thisrestrictionisall
themoreremarkableastheCourtrefUsedtorequircagenui,,eeconomicactivityasaprc‑

conditionfbravalidincorporationinthec"""case(seeJ"wzlL2);Centroswasatypi‑
cal letterboxcompanythatdidnotp,,rsuef,ny(sconomicactivi[yin[hcUK.Thctwocases
maybereconciledonlyifoneispreparedtoadoptastrictlyfbrmaldis[i1,ctionbetweenthe

sc[tingupofacOmPany("primary'' fieedomofestablishment) andthesubsequenttransfbr

ofitsstatutoryscatortheregistrationofabranch("secondary"freedomofestablishment) .84
WhereastheCJEU!･equiresagenL,ineeconomiclinkbetween[hecompany'sbranchanditshosts[a[ein[hesecondscenario, itdispenseswithsucharequirement inacaseinvolv‑
81CJEU,C‑378/10−晩LE,J"7izno[e67,para.32.
82CJEU,C378/10−ⅧLEj吻加no[e67,Pa'‑a.62.
83CJEU,C378/10−剛LE'"'7z I'o[e67,para.34, relyingonEq,SePt. 12,2006,CaSe

C‑196/04(cz""':)IS的" 釘 ､ fz""Q7〃",yScﾙ""W"Oz'f""JL城以cb"z"'""""q/､ﾉ>,‐〃7""Rf"ど""e),"""""Cb"γrR"""1‑7995,Para.54.
84Bundesgerich[shofJulyl2,2011､ ﾉVで"ど壁 ﾙ,･狼が,･GrJ2"L方城花どルバ201 1) ,p. 1114,
para.20""9.ラKars[enEngsigSorensen,"T1'eFightagainstLetterboxCompanies in[helnter‑

nalMarkc[,''Cb"z",′"A伽於"Z,zzzｲﾉRf'"/fi",Vbl.52(2013) ,PP.83,89‑94〃0

国際私法年報第17号(2015)

ing"primary'' fieedomofestablishment, leavingthequestion[otheinternationalcompa',ylawof[hes[atcofincorpora[ion.Again, i[ ispossibletomakesuchafbrmaldistinction,
butfromanormativepointofview, i[ishighlydebatablewhethercases[hatareverysimi‑

larfromafUnc[ionalandeconomicpointofviewshoL,ldbetreateddifftrentlyb85 1fone
conceivcsofthetheoryofincorporationasafi,nctionalequivalenttopartyautonomyj i[shouldbenotcdthatneithe,･Article3oftheRomelRegulationo,'contractsnorArticle
14oftheRomellRegulationon[ortsdistinguishbetween α"だand"'""partyauton‑
omyinthisregard; inbothscenarios,nogenuinelinkto[hechosenlawisrequired.
4.COncl'ISiOn

TI,cCJEU'sdoctrinalbasisfbr thetheoryofincorporation isanorma[iveparallelbe‑[wecnthelawgovemingacompany'sexistenceandthenationalityofanaturalpcrson.
Thisreaso,,ingisHawedbecauseitresults inaunila[eralistapproachtotheconHictoflaws[ha[ isoutofstcpwithexistingRegulatio''soI'Europcanprivate intcrnational law(egRomelandll) that lhvouramultilateralapproach.AlthoughtheCour['sunilateralistme[hodistemperedbyaprincipleofrecognitionimposcdonhostMcmberStates, it leads

toproblematicconsequences incases invoIvinganemigm[ionofcompaniesfiom[hestate
underwhoselawtheyhavebeenes[ablished(C",･"ioandV4LE) . Instead, [hetheoryofin‑′

corpomrionshouldratherbeco,,ccivedasaspecificexp,･essionofthegenerf,lprincipleof
partyautonomythat isoncofthecomerstonesofEUprivatein[emational law, inparticL'‑
larRomelandll・Moreover, theincreasedEuropeanizationofcapi[almarke[supervisionintheEUcontribu[estoanefBcientcorporategovernanceandthus1eavesmoreroomfbr
Partyautonomyinintemarionalcompanylaw.

Currcntlyj theqEUonlyallowsfbratransftrofacompany'sstatutoryseatifagenuine
linkcanbees[ablishedbetweenthecompany'sactivi[iesand itsncwstateofresidence(MLE),whereassucharequirement isnot imposedifacompanyisnewlyfbundedinas[atewithwhichthereis ,Iosigni6canteconomicconnection.Followingthemodelofthe
RomelandllRegula[ionsoI,Ewx‑"""and〃弓P"rpartya,,tonomyDhowever,sucharequire‑
mentought[obedispe',sedwithinbothsccnarios･Theprotectionoffi'ndamentalPoliti‑
8SSeejung, .『〃 note78,p.367;ChrisThomale,"DieGrUndungstheoriealsvers[eckteKolli‑

siollsnol‑m,""""壁飾cﾙγ淡倣γQMⅢ『cﾙ恥,でcﾙr (2011),p.1290,1292;vonHein,,""znore
56,Art.3EGBGBpara.112.

Corporations in European Private International Law
an vonHfjn]— From Case-Law to Codification?

111

cal, social and economic values of the host state should rather be left to provisions on
mandatory rules and public policy.
At the moment, tlie theory of incorporation is limited to companies incorporated under
the law of a Member State of the EU or the European Economic Area (EEA). In line withthe concept of universal application commonly adopted by EU private international law,
this restriction sliould be abolished as well.

Thus, on all three points, the German Council's Proposal on the law applicable to companies goes well beyond the current case-law of the CJEU. The Proposal would establish
multilateral conflicts rules in international company law, enshrine party autonomy as a

general principle in this legal field without any requirement of a "gemrine link" and have
universal application to companies registered in third states as well. Thus, the enactmentof the German Council's Proposal at the EU level would not only be an important contri-

bution to re-integrating international company law into the normative framework of existing EU legislation on private international law, it would also bring about real benefits forlegal practice.

Outlook: The Current Prospects for Codifying
the PIL of Corporations in the EU
In sum, adopting the German Council's proposal for an EU Regulation on the law applicable to companies would be a major step forward for European private internationallaw. The European Commission has already taken first steps for further legislation. In order to fulfil the promises set out in the 2010 action plan to implement the Stockholm Pro-

gramme (see supra Introduction) — and to implement the European Parliament Resolutionof 2012 (see supra Introduction), the Commission released a call for tenders relating to a

study on the law applicable to companies in 20 4. It is to be expected that the resulting
study will form the basis for a long envisioned Green Paper, which in turn will lay thefoundation for a European regulation on the law applicable to companies. Apart fiom

Open call for tender of August 6, 2014IUST/2014/ỊCOO/PR/CIVI/005 1: Study on the kw
applicable to companies loitb the aim ofa possible harmonization ofconvict oflaw rules on the mater, 2014/S 149-267126, IƯST/A/4/MB/ARES (2014) 2599553.

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l?ỉậl

.17 ~
~. )2015(

choice of law in the narrow sense, the study shall also encompass a possible harmonizationof relevant substantive laws which might hinder the cross-border establishment of compa-

nies, such as obstacles resulting from substantive tax laws (cf supra IV.2) or from substantive rules applicable to cross-border mergers or transfers of a company's seat (cf supraΙ .3).

* Ibid.

n etseq.