Keywords

Summary



Keywords

1. Freedom of movement for persons – Freedom of establishment – Free movement of capital – Provisions of the Treaty – Scope

(Arts 43 EC and 56 EC)

2. Freedom of movement for persons – Freedom of establishment – Free movement of capital – Restrictions – Company law

(Arts 43 EC and 56 EC)

3. Freedom of movement for persons – Freedom of establishment – Restrictions – Company law

(Art. 43 EC)

Summary

1. National legislation not intended to apply only to those shareholdings which enable the holder to have a definite influence on a company’s decisions and to determine its activities but which applies irrespective of the size of the holding which the shareholder has in a company may fall within the ambit of both Article 43 EC and Article 56 EC.

Thus, with regard to the State’s powers to oppose the acquisition of shareholdings and the conclusion of contracts by shareholders representing a certain proportion of voting rights in a national company in question, the proportion of at least 5% of voting rights or, as the case may be, a lesser percentage fixed has to enable the persons concerned to participate effectively in the management of that company, which is covered by Article 56 EC. It is conceivable, in respect of companies having in general large numbers of smaller shareholdings, that the holders of shareholdings corresponding to those percentages might have the power to influence in a definite manner the management of such a company and to determine its activities, which is covered by Article 43 EC. Furthermore, because the national legislation at issue fixes a minimum percentage, that legislation is also designed to apply to holdings greater than that percentage which give an obvious power of control.

With regard to the power to veto certain decisions of a national company in question, that power clearly relates to decisions within the scope of the management of the company and therefore concerns only those shareholders capable of exerting a definite influence on the companies concerned, with the result that the criteria applying to the exercise of that power must be examined in the light of Article 43 EC. Moreover, even if the effects of those criteria are restrictive of the free movement of capital, those effects would be the unavoidable consequence of any restriction on freedom of establishment and would not warrant independent examination in the light of Article 56 EC.

(see paras 36-39)

2. A Member State that adopts national legislation laying down criteria for the exercise of the special powers of the State to oppose the acquisition of certain shareholdings or the conclusion of certain agreements of shareholders representing a certain percentage of voting rights in the national companies concerned fails to fulfil its obligations under Articles 43 EC and 56 EC if application of those criteria is not appropriate for the purpose of attaining the objectives pursued in the case in point, because there is no link between the criteria and the power.

A Member State’s powers of intervention, such as the powers of opposition in respect of which the criteria at issue determine the conditions for their exercise, which are not qualified by any condition, save for a reference to the protection of national interests, formulated in general terms and without any indication of the specific objective circumstances in which those powers are to be exercised, constitute serious interference with the free movement of capital. Even if the criteria at issue concern different kinds of public interests, in particular, the minimum supply of energy resources and goods essential to the public as a whole, the continuity of public service, national defence, the protection of public policy and public security and health emergencies, they are formulated in a general and imprecise manner. What is more, the lack of any connection between the criteria and the special powers to which they relate increases the uncertainty surrounding the circumstances in which those powers may be exercised and gives them a discretionary nature, having regard to the latitude enjoyed by the national authorities in making use of them. Such latitude is disproportionate in relation to the objectives pursued.

Furthermore, the mere statement in the national legislation that the special powers must be used only in accordance with Community law cannot make the use of those criteria consistent with Community law. The general and abstract nature of those criteria is incapable of ensuring that the special powers will be exercised in accordance with the requirements of Community law.

While the fact that the exercise of the special powers may be submitted to review by the national court is essential to the protection of persons having regard to the application of the rules on freedom of establishment, it cannot, on its own, suffice to make good the incompatibility with those rules of the criteria for the application of the special powers.

In so far as the exercise of the powers of opposition also concern holdings conferring on their holders the power to influence in a definite manner the managements of the companies concerned and to determine their activities and may therefore restrict freedom of establishment, it must be considered, for the same reasons, that the criteria in question give the national authorities disproportionate discretion in the exercise of their powers of opposition.

(see paras 40, 45, 47, 51-57, operative part)

3. A Member State that adopts national legislation laying down criteria for the exercise of the special power of the State to veto resolutions of the national companies concerned for the dissolution of the company, transfer of the undertaking, merger, demerger, transfer abroad of the company headquarters, alteration of the company’s objects and amendment of the articles of association removing or modifying the special powers fails to fulfil its obligations under Article 43 EC, if the circumstances in which that power may be exercised are not clear or if the legislation is disproportionate to the stated objective.

Even if that power may be exercised only in situations of real serious risk or health emergencies, and in observance of the conditions referred to in the national legislation, that is to say, for reasons of public policy, public safety, public health and defence, investors do not know, for want of any information as to the actual circumstances permitting the exercise of the power in question, when the power of veto may be applicable. In consequence, it must be considered that the situations allowing the exercise of the power of veto are potentially numerous, undetermined and undeterminable, and that they leave the national authorities broad discretion. The national legislation at issue contains no details of the actual circumstances in which the power of veto may be exercised and the criteria it lays down are not, therefore, based on objective verifiable conditions.

The statement that the power of veto must be used only in accordance with Community law and the fact that its exercise may be subject to national judicial review cannot make the legislation at issue compatible with Community law.

(see paras 45, 60-63, 66, 72-74, operative part)