4.

With regard to the complaint of discrimination, Fearon contends that Article 58 requires the Member States to grant the right of establishment, conferred on natural persons by Article 52, to companies, as defined by the second paragraph of Article 58. According to Fearon, although Section 35 of the Land Act 1965 does not embody any express discrimination, it is in fact discriminatory in two respects: on the ground of nationality, because the parliamentary debates which preceded its enactment demonstrated the wish of the Irish Parliament to place Irish nationals in a privileged position; and more generally, and to the detriment of companies, because it is more difficult than it is in the case of natural persons, and sometimes even impossible, for each of their shareholders to meet the residence requirement which would enable a successful objection to be made against a compulsory acquisition. The first paragraph of Article 58 provides that: “Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Community shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States.” Two observations should therefore be made: 1. It may be asked, and the Commission of the European Communities, Ireland and the Irish Land Commission do in fact ask, whether Article 58 can be usefully relied upon in this case. Fearon is not a company constituted in another Member State which wishes to establish itself in Ireland. It is an Irish company already established in Ireland. 2. Article 58, which is the last article of Chapter II dealing with the right of establishment, by implication but necessarily refers back to the preceding articles and in particular to Article 52 and this is confirmed moreover by the second paragraph of the latter article. That paragraph is worded as follows: “Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 58, under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capital.” As the Commission rightly maintains, the problem is therefore as follows: In the light of the provisions of the Treaty relating to establishment, may a residence requirement be applied to British nationals who have exercised their right of establishment in Ireland under Article 52 as shareholders in an Irish company? That question should be answered in the affirmative. Article 52 requires that all nationals of a Member State seeking to exercise their right of establishment in another Member State be treated in the same way as nationals of the latter State. However, the residence requirement, which enables the risk of compulsory acquisition to be avoided, is required both in the case of natural persons and in the case of the holders of shares in a body corporate, without any distinction as to nationality. There is thus no discrimination in that respect in the text of the Land Act. Nor has any discriminatory practice been proved. Consequently, foreign shareholders cannot rely on reverse discrimination as a means of avoiding that requirement. Nor is there any discrimination lato sensu against bodies corporate. There is no doubt that it is more-difficult for a body corporate than it is for a natural person to meet the residence requirement- because that requirement must be met by all the members of the body corporate. However, that difficulty, which undoubtedly grows with the number of shareholders, is attributable to the nature of a body corporate and not to any discrimination against companies. The contrary solution, which would dispense bodies corporate from the residence requirement demanded of their shareholders would have two disadvantages : It would enable natural persons, by constituting a company, fraudulently to avoid the risks inherent in non-residence, and it would constitute discrimination, contrary to the provisions of Article 58 of the Treaty, against natural persons and in favour of companies.