Panagis Pafitis and others v Trapeza Kentrikis Ellados A.E. and others.
Date: 1996-03-12
38. In response to those arguments, it must be pointed out, first, that the Second Directive is intended, in accordance with Article 54(3)(g) of the EC Treaty, to coordinate the safeguards which are required by Member States of companies or firms within the meaning of the second paragraph of Article 58 of the Treaty with a view to making such safeguards equivalent and protecting the interests of members and others.  The Second Directive thus seeks to ensure a minimum level of protection for shareholders in all the Member States.
39. That objective would be seriously frustrated if the Member States were entitled to derogate from the provisions of the directive by maintaining in force rules ─ even rules categorized as special or exceptional ─ under which it is possible to decide by administrative measure, separately from any decision by the general meeting of shareholders, to effect an increase in the company ' s capital (see the judgments in Joined Cases C-19/90 and C-20/90  Karella and Karellas  [1991] ECR I-2691, paragraphs 25 and 26, and Case C-381/89  Syndesmos Melon tis Eleftheras Evangelikis Ekklisias and Others  [1992] ECR I-2111, paragraphs 32 and 33).
40. For those reasons, the Court has thus already held that Article 25(1) of the Second Directive precludes the application of rules which, being designed to ensure the reorganization and continued trading of undertakings that are of particular importance to the national economy and are in an exceptional situation by reason of their debt burden, allow an increase in capital to be decided upon by administrative measure, without any resolution being passed by the general meeting (judgments in  Karella and Karellas , paragraph 31,  Syndesmos Melon tis Eleftheras Evangelikis Ekklisias and Others,  paragraph 37, and Joined Cases C-134/91 and C-135/91  Kerafina-Keramische und Finanz-Holding and Vioktimatiki  [1992] ECR I-5699, paragraph 18, hereinafter   " the  Karella  and  Syndesmos Melon  line of cases" ).
54. The defendants in the main proceedings contend that, in any event, the conditions for the application of Article 25(1) of the Second Directive are not satisfied.  They refer in that connection to  Karella  (paragraph 30) and  Syndesmos Melon  (paragraph 27).
55. They maintain that, unlike the national provisions at issue in the  Karella  and  Syndesmos Melon  line of cases, which merely brought to an end the powers of the management of the undertaking, whilst the general meeting continued to exist, the legislation at issue in this case provides for a temporary administrator whose appointment causes all the powers and competencies of the organs of the company, including the general meeting, to lapse and to become vested in him.  Appointments of that kind constitute measures wholly analogous to execution measures, in particular rules on liquidation of the kind in point in   Karella  and  Syndesmos Melon,  and, in addition, mean that, owing to the removal of powers from the shareholders and the normal organs of the company, the company does not continue to exist within its own structures, within the meaning of those judgments.
57. In  Karella  (paragraph 30) and  Syndesmos Melon  (paragraph 27), the Court pointed out that the Second Directive is intended to ensure that members ' and third parties ' rights are safeguarded, in particular in the operations for setting up companies and increasing and reducing their capital.  The directive does not, admittedly, preclude the taking of execution measures intended to put an end to the company ' s existence and, in particular, does not preclude liquidation measures placing the company under compulsory administration with a view to safeguarding the rights of creditors.  However, the directive continues to apply where ordinary reorganization measures are taken in order to ensure the survival of the company, even if those measures mean that the shareholders and the normal organs of the company are temporarily divested of their powers.
68. Although, since the national court has submitted no question on the matter, it is unnecessary to rule as to whether it is permissible, under the Community legal order, to apply a national rule in determining whether a right conferred by the provisions of Community law at issue is being exercised abusively, the fact remains that, in any event, the application of such a rule must not detract from the full effect and uniform application of Community law in the Member States.
69. It must be borne in mind in that connection that it is settled case-law that it is for the Court of Justice, in relation to rights relied on by an individual on the basis of Community provisions, to verify whether the judicial protection available under national law is appropriate.
70. In this case, the uniform application and full effect of Community law would be undermined if a shareholder relying on Article 25(1) of the Second Directive were deemed to be abusing his rights merely because he was a minority shareholder of a company subject to reorganization measures or had benefited from the reorganization of the company.  Since Article 25(1) applies without distinction to all shareholders, regardless of the outcome of any reorganization procedure, to treat an action based on Article 25(1) as abusive for such reasons would be tantamount to altering the scope of that provision.