VALE Építési kft.
Date: 2012-07-12
18. For the purposes of the examination, respectively, of the admissibility of the reference for a preliminary ruling in its entirety, and of the third and fourth questions referred, the Court recalls the settled case-law pursuant to which questions on the interpretation of European Union law referred by a national court, in the factual and legislative context which that court is responsible for defining and the accuracy of which is not a matter for the Court to determine, enjoy a presumption of relevance. The Court may refuse to rule on a question referred by a national court only where it is quite obvious that the interpretation of European Union law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (Joined Cases C-188/10 and C-189/10 Melki and Abdeli [2010] ECR I-5667, paragraph 27 and the case-law cited).
24. As regards the question whether such legislation falls within the scope of Articles 49 TFEU and 54 TFEU, it should be noted that the Court held, in paragraph 19 of its judgment in Case C-411/03 SEVIC Systems  [2005] ECR I-10805, that company transformation operations are, in principle, amongst those economic activities in respect of which Member States are required to comply with the freedom of establishment.
27. Indeed, according to settled case-law, companies are creatures of national law and exist only by virtue of the national legislation which determines their incorporation and functioning (see Case 81/87 Daily Mail and General Trust  [1988] ECR 5483, paragraph 19, and Cartesio , paragraph 104).
28. Similarly, it is not disputed that, in accordance with Article 54 TFEU, in the absence of a uniform definition in European Union law of the companies which may enjoy the right of establishment on the basis of a single connecting factor determining the national law applicable to a company, the question whether Article 49 TFEU applies to a company which seeks to rely on the fundamental freedom enshrined in that article is a preliminary matter which, as European Union law now stands, can be resolved only by the applicable national law (Case C-371/10 National Grid Indus  [2011] ECR I-12273, paragraph 26 and the case-law cited).
29. Finally, a Member State thus unquestionably has the power to define both the connecting factor required of a company if it is to be regarded as incorporated under its national law and as such capable of enjoying the right of establishment, and the connecting factor required if the company is to be able subsequently to maintain that status ( Cartesio , paragraph 110, and National Grid Indus , paragraph 27).
32. It is thus apparent that the expression ‘to the extent that it is permitted under that law to do so’, in paragraph 112 of Cartesio , cannot be understood as seeking to remove, from the outset, the legislation of the host Member State on company conversions from the scope of the provisions of the Treaty on the Functioning of the European Union governing the freedom of establishment, but as reflecting the mere consideration that a company established in accordance with national law exists only on the basis of the national legislation which ‘permits’ the incorporation of the company, provided the conditions laid down to that effect are satisfied.
34. As regards the existence of a restriction on the freedom of establishment, the Court notes that the concept of establishment within the meaning of the Treaty provisions on the freedom of establishment involves the actual pursuit of an economic activity through a fixed establishment in the host Member State for an indefinite period. Consequently, it presupposes actual establishment of the company concerned in that State and the pursuit of genuine economic activity there (Case C-196/04 Cadbury Schweppes and Cadbury Schweppes Overseas  [2006] ECR I-7995, paragraph 54 and the case-law cited).
36. The Court considers that, in so far as the national legislation at issue in the case in the main proceedings provides only for conversion of companies which already have their seat in the Member State concerned, that legislation treats companies differently according to whether the conversion is domestic or of a cross-border nature, which is likely to deter companies which have their seat in another Member State from exercising the freedom of establishment laid down by the Treaty and, therefore, amounts to a restriction within the meaning of Articles 49 TFEU and 54 TFEU (see, to that effect, SEVIC Systems , paragraphs 22 and 23).
37. In so far as concerns possible justification for the restriction at issue, it is true that the Court recognised, in paragraph 27 of SEVIC Systems , that cross-border mergers pose specific problems, which is also true of cross-border conversions. Indeed, such conversions presuppose the consecutive application of two national laws.
38. The Court notes, at the outset, that differences in treatment depending on whether a domestic or cross-border conversion is at issue cannot be justified by the absence of rules laid down in secondary European Union law. Even though such rules are indeed useful for facilitating cross-border conversions, their existence cannot be made a precondition for the implementation of the freedom of establishment laid down in Articles 49 TFEU and 54 TFEU (see, in relation to cross-border mergers, SEVIC Systems , paragraph 26).
39. In so far as concerns justification on the basis of overriding reasons in the public interest, such as protection of the interests of creditors, minority shareholders and employees, the preservation of the effectiveness of fiscal supervision and the fairness of commercial transactions, it is established that such reasons may justify a measure restricting the freedom of establishment on the condition that such a restrictive measure is appropriate for ensuring the attainment of the objectives pursued and does not go beyond what is necessary to attain them (see SEVIC Systems , paragraphs 28 and 29).
40. However, such justification is lacking in the present case. Hungarian law precludes, in a general manner, cross-border conversions, with the result that it prevents such operations from being carried out even if the interests, mentioned in the preceding paragraph, are not threatened. In any event, such a rule goes beyond what is necessary to protect those interests (see, as regards cross-border mergers, SEVIC Systems , paragraph 30).
48. In that regard, the Court notes that, in many areas, it is settled case-law that, in the absence of relevant European Union rules, the detailed procedural rules designed to ensure the protection of the rights which individuals acquire under European Union law are a matter for the domestic legal order of each Member State, provided that they are not less favourable than those governing similar domestic situations (principle of equivalence) and that they do not render impossible in practice or excessively difficult the exercise of rights conferred by the European Union legal order (principle of effectiveness) (see, to that effect, in relation to recovery of undue payments, Joined Cases C-10/97 to C-22/97 IN. CO. GE.’90 and Others  [1998] ECR I-6307, paragraph 25; in relation to administrative law, Joined Cases C-222/05 to C-225/05 van der Weerd and Others  [2007] ECR I-4233, paragraph 28; in relation to the non-contractual liability of a Member State, Case C-445/06 Danske Slagterier  [2009] ECR I-2119, paragraph 31; and, in relation to the requirement of a certificate for a tax advantage, Case C-262/09 Meilicke and Others  [2011] ECR I-5669, paragraph 55 and the case-law cited).
51. It is not disputed that, in the host Member State, a cross-border conversion leads to the incorporation of a company governed by the law of that Member State. Indeed, companies are creatures of national law and exist only by virtue of the national legislation which determines their incorporation and functioning (see Daily Mail and General Trust , paragraph 19, and Cartesio , paragraph 104).