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European Private Law: (1) Private law, the Internal Market and European Constitutionalism ; (2) Company law and financial markets. Professor Mads Andenas, Oslo Visiting Professor, Sapienza, Roma. ( 1) Private law, the Internal Market and European Constitutionalism.
Professor Mads Andenas, Oslo
Visiting Professor, Sapienza, Roma
1) private law in the Internal Market and in an EU constitutional order
2) the legal base for EU legislation in private law
3) the resistance at national level
Role of private law in the Internal Market and in an EU constitutional order: incidental but the total impact considerable.
Remains fragmented and not consistent
Contract law consequences of breach of EU law Consumer law directives, proposed and withdrawn directive on consumer rights (2008)
Financial markets, consequences for professional actors in the financial markets
National contract law including different models for the basic contracting mechanism with offerand acceptance (consideration) remain
Unclear impact on general contract law: emphasis on mandatory rules and non-derogable rights, against the paradigm of contractual freedom for general contract law.
Domestic discussion of constitutional rights in private law, breaking through in different jurisdictions
Is there anything such as purely “national” private law? Was there ever?
Article 114 TFEU: “the European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure … adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market”
Article 352: absence of any other legal basis in the Treaty unanimity in the Council.
And Stephen Weatherill, but after strong criticism of ‘competence creep’ and calls to private lawyers to resist, he concluded eventually, after the Commission Green Paper that the Commission had taken the ‘heat out of the competence question’.
Jürgen Basedow and MPI study: Outside Article 114 TFEU and has to rely onArticle 352.
Hans Micklitz: Article 114 TFEU cover the measures but need to pare down the CESL
The history of company law, the early directives, directives in other fields: banking (deposit guarantee schemes), SE/SCE (more below)
W.H. Roth: doorstep selling directive no cross border element and no treaty base, not succeeded before courts
Parallels on fundamental freedoms in the ECJ:
against the application of free movement post Centros . Private international law not free movement. IP rights, labour rights
Case C-376/98, Germany against the European Parliament and Council, citing ‘health’
C-380/03 Germany v European Parliament and Council
C-436/03 EP v Council  ECR I-3733 (SE and SCE)
National traditions as an obstacle. Defending the national system as a reflex. The variety of national law as a value and the inherent tension with rights at a European level and the internal market. Many complex relationships where the conflicts between disciplines and different parts of the legal community plays a role.
Jürgen Basedowand MPI Study: balanced and good argument, but also emphasis on the perspective of the comparativist and private international lawyer. Comparativist discourse often not engaging with EU law: the end of comparative law. Similar tendencies among some private international lawyers. Focus on international instruments in their scholarship, and a long time before the effect not only of EU or EU initiated private international law instruments was accounted for, not to speak of the effects of free movement and ECHR.
The variety of national law as a value and rights in the internal market.
Role of consumer law protection with mandatory rules and non-derogable rights, against the paradigm of contractual freedom for general contract law. What is ‘general contract law’: compare commercial and civil law conflicts, inclusion of consumer rights in general contract legislation
The outside-in perspective, Eric A Posner, in a recent paper completely rejects the CESL proposal:
Posner, Eric A., The Questionable Basis of the Common European Sales Law: The Role of an Optional Instrument in Jurisdictional Competition (May 1, 2012). University of Chicago Institute for Law & Economics Olin Research Paper No. 597. Available at SSRN: http://ssrn.com/abstract=2049594 or http://dx.doi.org/10.2139/ssrn.2049594
And freemovement: a cautionary tale
(2001) 38 Common Market Law Review1385–1420
Freedom of establishment is a fundamental freedom in EC law (Article 43 EC)
Free movement of capital is a fundamental freedom in EC law (Article 43 EC)
First Company Law Directive 68/151/EEC, on co-ordination of safeguards (...) for the protection of the interests of members and others, repealed by 2009/101/EC
Second Company Law Directive 77/91/EEC, on formation of public companies and the maintenance and alteration of capital, updated by 2006/68/EC and 2009/109/EC, repealed by 2012/30/EU
Third Company Law Directive 78/855/EEC, on mergers of public limited liability companies, repealed by 2011/35/EU
Fourth Company Law Directive 78/660/EEC, on accounting standards
Sixth Company Law Directive 82/891/EEC, on division of public companies, amended by 2007/63/EC
Seventh Company Law Directive 83/349/EEC, on group accounts
Eighth Company Law Directive 84/253/EEC, on the approval of persons responsible for carrying out the statutory audits of accounting document, repealed by 2006/43/EC, on statutory audits of annual accounts and consolidated accounts
Tenth Company Law Directive 2005/56/EC, on cross-border mergers of limited liability companies
Eleventh Company Law Directive 89/666/EEC, on disclosure requirements in respect of branches opened in a Member State by certain types of company governed by the law of another State
Twelfth Company Law Directive 89/667/EEC, on single-member private limited-liability companies, repealed by 2009/102/EC
Thirteenth Company Law Directive 2004/25/EC, on takeover bids
Market Abuse Directive 2003/6/EC
Transparency of Listed Companies Directive 2004/109/EC
Shareholder Rights Directive 2007/36/EC, on the exercise of certain rights of shareholders in listed companies
Merger Tax Directive 90/434/EEC, on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States, repealed by 2009/133/EC
Draft Fifth Company Law Directive, on structure of public companies, shareholder right to determine director pay and codetermination
Draft Ninth Company Law Directive, on corporate groups
Draft Fourteenth Company Law Directive, on cross-border transfer of the registered offices of limited liability companies
Commission Action Plan for company law and corporate governance contains Commission's plans to adopt a proposal codifying and merging major company law Directives in 2013, 12 December 2012.
outlines the initiatives which the Commission intends to take in this area in the coming years in order to modernise and enhance the current framework.
The initiatives, which will be both legislative and non-legislative, follow three main lines:
Firstsetting the scene: the ECJ caselaw
Contrary to Articles 52 and 58 EC for a Member State to refuse to register a branch of a company formed in accordance with the law of another Member State in which it has its registered office but in which it conducts no business where the branch is intended to enable the company in question to carry on its entire business in the State in which that branch is to be created, while avoiding the need to form a company there, thus evading application of the rules governing the formation of companies which, in that State, are more restrictive as regards the paying up of a minimum share capital.
The real seat doctrine, or, in the official English translation of the judgment in Überseering, the "company seat principle", is one of two alternative models in the private international law of companies. Under the real seat doctrine, the law applicable to a company is the law of the country where the company has its actual centre of administration. In the U.K. an incorporation doctrine is followed. The law of the country of incorporation applies irrespective of where a company carries out its business.
Sevicdecided a few weeks after the enactment of the Tenth Directive on Cross-Border Mergers, that a Luxembourg company had the right to merge with a German company, despite contrary rules of German law. Refusal to permit a merger would be a restriction in the meaning of Articles 43 and 48 EC and could only be justified if it pursued a legitimate objective under the Treaty and justified by imperative grounds in the public interest. The ECJ regarded the treatment of the Luxembourg company as an instance of discrimination.
In so far as, undernationalrules, recoursetosuch a means of company transformation is notpossiblewhereone of the companies is established in a Member State otherthan the Federal Republic of Germany, Germanlawestablishes a difference in treatment between companies accordingto the internal or cross-border nature of the merger, which is likelytodeter the exercise of the freedom of establishment laid down by the Treaty.
May a Hungarian company request transfer of its registered office to another Member State of the European Union relying directly on community law (Articles 43 and 48 of the Treaty of Rome)? If the answer is affirmative,may the transfer of the registered office be made subject to any kind of condition or authorisation by the Member State of origin or the host Member State?
Hungarian company law conversion rules were incompatible with the freedom of establishment because they provided for conversion opportunities when the companies involved in the operation were Hungarian but not when a company involved in the conversion operation was established in another member state, such as Italy.
National doctrine and EU law
Briefly about theharmonisationof financial market regulation: impact of free movement.
Monetary policy, costs of financial system
Briefly about theharmonisationof company law:
Company law directives on harmonisation of national company laws
Monetary policy, costs of financial system to the economy