Case C-98/01: Action brought on 27 February 2001 by the Commission of the European Communities against the United Kingdom of Great Britain and Northern Ireland
Date: 2001-05-05
Institutions: Court of Justice
Subjects: European Commission, Northern Ireland, United Kingdom, appeal to the Court (EU), right of establishment, share

5.5.2001

EN

Official Journal of the European Communities

C 134/9

iii) By assimilating the position of the existing four
global CRS operators with all other operators active
on the relevant market such as system vendors,
airlines or subscribers and in so doing failed to apply
the case law of the Court of Justice and, in particular
the Court’s decision in Bock and Piraiki-Patraiki.

b)

In finding that exceptional economic circumstances do
not mean that the Appellants are individually concerned
by the contested measure the Court of First Instance erred
as a matter of law:

i)

ii)

By failing to apply the principles laid down in the
judgments of the Court of First Instance in Codorniu
v. Council and Extrament Industrie v. Council and
subsequently applied by the Court of First Instance
and the Court of Justice and/or failing to distinguish
those cases adequately or at all.

By failing to take account of the decision of the
Court of First Instance in Case T-60/96, Merck and
others.

(1) OJ C 226, 7.8.1999, p. 34.

Action brought on 27 February 2001 by the Commission
the United
of

the European Communities against
Kingdom of Great Britain and Northern Ireland

(Case C-98/01)

(2001/C 134/13)

An action against the United Kingdom of Great Britain and
Northern Ireland was brought before the Court of Justice of
the European Communities on 27 February 2001 by the
Commission of the European Communities, represented by
Mr Frank Benyon and Ms Maria Patakia, acting as agents, with
an address for service in Luxembourg.

The Applicant claims that the Court should:

a)

declare that the provisions setting a limitation on interests
in voting shares in the BAA plc company (Article 40 of
the Articles of Association), as well as the authorisation
procedure on the disposal of assets of the company or
control in subsidiaries and winding-up (Article 10 of the
Articles of Association) are incompatible with Articles 43
and 56 of the EC Treaty;

Pleas in law and main arguments

Article 40 of BAA’s Articles, which prevents any person from
controlling more than 15 % of the company, restricts portfolio
investment, and restricts direct investment and, by the same
token, establishment: such restrictions fall under Articles 56
and 43 of the EC Treaty. While the restriction is not explicitly
of a discriminatory nature, such a restriction, liable to hinder
the exercise of these freedoms, must be justified by ‘imperative
requirements in the general interest’ and be necessary and
appropriate for these requirements.

The UK authorities have failed to demonstrate the imperative
requirements of general interest which are to be protected by
the rights attached to the Special share and by the 15 % equity
limit and, thus, a fortiori, their proportionality, and it therefore
must be concluded that the restrictions on the free movement
of capital and on establishment created thereby are in violation
of the obligations of the Member State under Articles 43 and
56 of the Treaty.

A breach of the Treaty may occur upon the introduction by a
Member State of restrictions on establishment or capital
movements, by whatever means.
In relation to BAA the
measures introduced by mechanisms of company law were
introduced by the State in its capacity as public authority and
are clearly intended to remain thus since Article 10(1) of BAA’s
Articles only allows the Special share to be transferred to ‘one
of Her Majesty’s Secretaries of State, another Minister of the
Crown or any other person acting on behalf of the Crown’.
Consequently, and in order in particular to uphold the
uniformity and supremacy of Community law, the adoption
by a Member State of the mechanisms of private company law
to introduce restrictions on Treaty freedoms can in no way
avoid the examination of the compatibility of such restrictions
with the Treaty.

After such examination the Commission has reached the
conclusion that the restrictions contained in Articles 10 and
40 of the Articles of Association of BAA are incompatible
with the provisions of Articles 43 and 56 of the Treaty on the
freedoms of establishment and capital movements.

Reference for a preliminary ruling made by the House of
Lords by order of that court of 8 February 2001, in the
case of 1) Consorzio del Prosciutto Di Parma 2) Salumi-
ficio S. Rita S.P.A. against 1) Asda Stores Limited 2) Hy-
grade Foods Limited

(Case C-108/01)

(2001/C 134/14)

b)

order the United Kingdom to pay the costs.

Reference has been made to the Court of Justice of the
European Communities by an order of the House of Lords, of