Judgment — ECLI:EU:C:2012:694
Date: 2012-11-08
Language of the case: Greek
Court formation: Fourth Chamber
Subject matter: Right of establishment
Procedure: Action for failure to fulfil obligations - successful
Origin: Greece

Summary — Judgment of the Court (Fourth Chamber), 8 November 2012 1. Freedom of movement of persons — Freedom of establishment — Free movement of capital — Restrictions — National legislation under which prior authorisation is required for the acquisition of shares of certain strategic companies — Justification — Property schemes — None (Arts 43 EC, 56 EC and 295 EC) 2. Freedom of movement of persons — Freedom of establishment — Provisions of the Treaty — Scope — National legislation under which prior authorisation is required for the acquisition of voting rights representing 20% or more of the share capital in certain strategic companies — Ex post control provision on certain decisions taken by those companies — Included (Art. 43 EC) 3. Freedom of movement of persons — Freedom of establishment — Restrictions — Company law — National legislation under which prior authorisation is required for the acquisition of voting rights representing 20% or more of the share capital in certain strategic companies — Ex post control provision on certain decisions taken by those companies, leaving too much discretion to the national authorities — Inadmissibility — Justification — None (Art. 43 EC) 1. Although Article 295 EC does not call into question the Member States’ right to establish a system for the acquisition of immovable property, such a system remains subject to the fundamental rules of EU law, including those of non-discrimination, freedom of establishment and free movement of capital. Accordingly, if a State decides to transform public undertakings into public limited companies whose shares are quoted on a stock exchange and may, in principle, be purchased freely on the market, allowing a non-State shareholder to establish itself in a significant way within those companies, it cannot be accepted that Article 295 EC may be invoked by a Member State in order to remove such acquisitions from the ambit of the fundamental freedoms guaranteed by the Treaty by making those acquisitions subject to a prior authorisation scheme, as an unjustified lacuna in the system of protection of those fundamental freedoms will otherwise be created. (see paras 16, 18) 2. See the text of the decision. (see paras 21, 23-25, 30, 31) 3. The Member State which requires prior authorisation of the acquisition of voting rights representing 20% or more of the share capital in strategic public limited companies and also requires authorisation of the Minster for Finance for decisions of those companies concerning: - dissolution of the undertaking, its placing in liquidation and the designation of liquidators; - restructuring the abovementioned undertakings: conversion, merger with another company, merger with the creation of a new public limited company, break-up in any form whatsoever or break-up of one or more divisions liable to place in jeopardy the supply of services in the sectors of strategic importance; - the transfer, transformation or conversion, disposal, supply as a guarantee, as well as transformation or alteration of the allocation of strategic elements of the assets of the abovementioned undertakings and of the basic networks and infrastructure necessary for the economic and social life of the country as well as its security; fails to fulfil its obligations under Article 43 EC. Such a scheme does not appear to be a suitable means of attaining the objective of ensuring continuity of certain basic services and the operation of networks considered to be necessary to the economic and social life of a country; in particular the country’s necessary energy and water supply, the provision of telecommunications services, and the management of the country’s two largest ports. The prior authorisation scheme produces its effects before the company has even adopted a decision, namely without a risk being established, even a potential one, of interference with the security of supply. Moreover, at the time of issuing the authorisation, it is not certain that all the cases of real and serious threats to the security of energy supply may be identified and taken into account. Moreover, the limitation to the exercise of voting rights, even, if necessary, the refusal to recognise those rights which give rise to the mechanism concerned applies to all decisions giving rise to a vote by shareholders and not only those capable of specifically threatening the stated objective of that law. Furthermore, that scheme cannot be considered to be proportionate to the objective pursued since it confers a discretionary power on the administration which is difficult for the courts to control and which includes a risk of discrimination. Finally, as regards the provision on the control of decisions, the circumstances in which the right to object may be exercised are potentially numerous, undetermined and indeterminable and leave the national authorities too much discretion. (see paras 64, 68, 70-72, 79, 86-87)