# C_2009044EN.01000401.xml

| 21.2.2009 | EN | Official Journal of the European Union | C 44/4 |
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Judgment of the Court (First Chamber) of 18 December 2008 — Commission of the European Communities v Kingdom of Spain

(Case C-338/06)( 1 )

(Failure of a Member State to fulfil obligations - Second Directive 77/91/EEC - Articles 29 and 42 - Public limited liability companies - Capital increase - Right to pre-emptive subscription for shares and for bonds convertible into shares - Withdrawal - Protection of shareholders - Equal treatment)

(2009/C 44/05)

Language of the case: Spanish

Parties

Applicant: Commission of the European Communities (represented by: G. Braun and R. Vidal Puig, Agents)

Defendant: Kingdom of Spain (represented by: F. Díez Moreno, Agent)

Interveners in support of the defendant: Republic of Poland (represented by: E. Ośniecka-Tamecka, Agent), Republic of Finland (represented by: J. Heliskoski, Agent), United Kingdom of Great Britain and Northern Ireland (represented by: V. Jackson, Agent, assisted by J. Stratford, Barrister)

Re:

Failure by a Member State to fulfil obligations — Infringement of Articles 29 and 42 of Second Council Directive 77/91/EEC of 13 December 1976 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent (OJ 1977 L 26, p. 1) — Failure to protect minority shareholders

Operative part of the judgment

The Court:

| 1) | Declares that the Kingdom of Spain:
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by granting the right to pre-emptive subscription of shares in the event of a capital increase by consideration in cash, not only to shareholders, but also to holders of bonds convertible into shares; —
by granting the right to pre-emptive subscription rights for bonds convertible into shares not only to shareholders, but also to holders of bonds convertible into shares pertaining to earlier issues; and —
by failing to provide that the shareholders' meeting may decide to withdraw pre-emptive subscription rights for bonds convertible into shares; has failed to fulfil its obligations under Article 29 of Second Council Directive 77/91/EEC of 13 December 1976 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article [48] of the Treaty, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent; | — | by granting the right to pre-emptive subscription of shares in the event of a capital increase by consideration in cash, not only to shareholders, but also to holders of bonds convertible into shares; | — | by granting the right to pre-emptive subscription rights for bonds convertible into shares not only to shareholders, but also to holders of bonds convertible into shares pertaining to earlier issues; and | — | by failing to provide that the shareholders' meeting may decide to withdraw pre-emptive subscription rights for bonds convertible into shares; |
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| — | by granting the right to pre-emptive subscription of shares in the event of a capital increase by consideration in cash, not only to shareholders, but also to holders of bonds convertible into shares; | | | | | | |
| — | by granting the right to pre-emptive subscription rights for bonds convertible into shares not only to shareholders, but also to holders of bonds convertible into shares pertaining to earlier issues; and | | | | | | |
| — | by failing to provide that the shareholders' meeting may decide to withdraw pre-emptive subscription rights for bonds convertible into shares; | | | | | | |

| 2) | Dismisses the action as to the remainder; |
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| 3) | Orders the Kingdom of Spain to pay three quarters of all the costs. The Commission of the European Communities is ordered to pay a quarter of the costs; |
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| 4) | Orders the Republic of Poland, the Republic of Finland and the United Kingdom of Great Britain and Northern Ireland to bear their own costs. |
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( 1 )  OJ C 261, 28.10.2006.

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