C-19/90

Mr President, administration and day-to-day operation of Members of the Court, undertakings undergoing rejuvenation or nationalized undertakings. Article 8(8) of Law N o 1386/1983 provides that, during its provisional administration of the under- taking subject to the system established by 1. In this case, the Court is asked to the Law, the OAE may decide inter alia, by interpret a number of provisions of the way of derogation from the provisions in Second Council Directive 7 7 / 9 1 / E E C of 13 force relating to public limited liability December 1976 on coordination of safe- companies as regards the exclusive power of guards which, for the protection of the the general meeting, to increase the capital interests of members and others, are of the undertaking concerned. However, the required by Member States of companies original shareholders continue to have within the meaning of the second paragraph pre-emptive rights, which they must exercise of Article 58 of the Treaty, in respect of the within a certain period. formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent 1 (hereinafter referred to as 'the Second Directive'). Law N o 1386/1983 was the subject of Commission Decision 86/167/EEC of 7 October 1987, 3 which was adopted in the 2. I shall briefly summarize the relevant course of the procedure provided for in national legislation and the background to Article 93 of the EEC Treaty. In that the main proceedings. decision, the Commission stated that it had no objections to the implementation of the Law, provided that, among other things, the Greek Government amended the provisions relating to capital increases in order to bring Greek Law No 1386/1983 of 5 August them into line with Articles 25, 26, 29 and 1983 2 set up the Organismos Ikonomikis 30 of the Second Directive. Subsequently, Anasygkrotiseos Epicheiriseon AE (Business on 7 March 1989, the Commission initiated Reconstruction Organization, hereinafter proceedings under Article 169 of the EEC referred to as 'the OAE'), a public limited Treaty on the ground that the Hellenic liability company whose capital is entirely Republic had failed to fulfil its obligations subscribed by the State and whose purpose under the Second Directive. Finally, on 10 is to contribute to the economic and social March 1990, the Greek Parliament passed development of the country. T o that end, Law N o 1882/1990 4 amending the previous the OAE may inter aha take over the legislation as regards the point at issue in the way desired by the Commission. * Original language: Italian. 1 — OJ 1977 L 26, p. I. 3 — OJ 1988 L 76, p. 18. 2 — Official Journal of the Hellenic Republic No 107 of 4 — Official Journal of the Hellenic Republic N o A 43 of 8. 8. 1983, p. 1926. 23. 3. 1990.

3. The applicants in the main proceedings set out in a legislative provision are incom- are shareholders in Klostiria Velka AE, a patible with them. company subjected to the provisions of Law N o 1386/1983 by decision of 14 December 1983 of the State Secretary for Industry, Energy and Technology. 5 On 28 May 1986 For the moment, I shall not consider the the OAE, which had taken over the admin- question of the direct effect, if any, of istration of the company, decided to Article 42, to which I reserve the right to increase its capital of approximately DR 200 return in the final part of my Opinion.

This precept does not appear to be conditional on the provisions of the next paragraph, The Council of State, to which the according to which the statutes, the applicants applied for the annulment of the instrument of incorporation or the general decree ratifying the increase in capital, meeting may authorize an increase in the which they claimed was unlawful on the subscribed capital up to a maximum amount ground that it infringed the Greek fixed by them with due regard for any Constitution and the Second Directive, maximum amount provided for by law.

Conse- quently, the derogation provided for in Article 25(2) is not such as to rule out the direct effect of Article 25(1). 4. In its first question, the national court refers impliedly to the Court's consistent case-law on the direct effect of directives and asks whether Article 25 in conjunction 5. The same applies to Article 41 of the with Article 41(1) and Article 42 of the Second Directive, under which the Member Second Directive are free of conditions left States may derogate from Article 25 if such to the discretion of the Member States and derogation is necessary for the adoption or are sufficiently precise for individuals to rely application of provisions designed to on them against the administration before encourage the participation of employees or the national courts, claiming that the rules other groups of persons defined by national law in the capital of undertakings. Whilst it 5 — Official Journal of the Hellenic Republic N o 725 of is true that the provision does give the 14. 12. 1983. national authorities a discretion to derogate 6 — Official Journal of the Hellenic Republic N o 374 of 10. 6. 1986. from the principle set out in Article 25, it is

The first part of the question is concerned with the actual scope of Article 25 of the Second Directive. Indeed, as appears from Consequently, Article 41 does not enable the national court's order, the Greek Member States to limit ad nutum the scope Council of State is inclined to consider that of the principle set forth in Article 25, but Article 25 does not cover a national law merely lays down a precise derogation with which does not specifically govern increases a view to the achievement of a specific in company capital but is intended to deal social aim. The very reference to 'other with exceptional situations in which some groups of persons' must therefore be undertakings have found themselves on construed as referring to associations of account of their over-indebtedness. employees or legal persons whose aim is in any event to foster popular shareholding and evidently not credit institutions or any entity governed by public or private law irrespective of the aims which they pursue. Consequently, the scope of Article 41 is not such as to preclude the direct effect of I shall say forthwith that I cannot agree Article 25, apart from those cases for which with that view. The aim of the Second express provision is made. Directive consists in particular of ensuring minimum equivalence in terms of the protection afforded to shareholders. T o concede that a Member State was entitled, by means of special or exceptional legis- lation, to derogate from the provisions laid 6. In its second question, the national court down at Community level to that end would asks whether a legal provision comes within considerably detract from the system of the scope of Article 25 of the Second safeguards intended to be laid down by the

7. On the other hand, where the EEC Treaty itself seeks to allow the Member States to adopt particular measures in order to safeguard vital interests, it makes express provision for this and generally arranges for appropriate control mechanisms designed to 8. As for the view that the national legis- obviate abuses. 7 lation at issue may fall within the dero- gations expressly provided for in Article 41 of the Second Directive, it must be observed that it emerges from an examination of the wording of Law N o 1386/1983 that It is in fact obvious that if every provision of transfers of shares, in particular to Community law were to be regarded as employees or their representative organiz- being subject to a general reservation as ations, local authorities, other public-law regards exceptional events, this might impair entities, charitable institutions or social the binding nature of Community law and organizations or private individuals (Article its uniform application. 8 2(3)), constitutes just one of the possibilities and potential activities of the OAE and is 7 — See in particular Anicie 36; Anicie 48(3) and (4); Article not the principal purpose of its operations. 73(2); Article 92(3); Article 100a(4); Article 108; Article 109; Article 223; Article 224; Article 226. Consequently, the provision is not such as 8 — See to that effect the judgment in Case 222/84 Johnston v Chie/ Constable of the Royal Ulster Constabulary [1986] ECR 1651, paragraph 26. 9 — OJ 1978 L 295, p. 36.

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OPINION OF MR TESAURO —JOINED CASES C-19/90 A N D C-20/90

9. The conclusions which I have reached regarding the interpretation of the provisions in question release me from It is only exceptionally that the Court may, having to consider the question on the in application of the general principle of direct effect of Article 42 of the Second legal certainty inherent in the Community Directive as raised in the third question legal order and in taking account of the concerning the interpretation of that serious effects which its judgment might provision. 10 have, as regards the past, on legal relationships established in good faith, be moved to restrict for any person concerned the opportunity of relying upon the 10. Before concluding, I shall briefly dwell provision as thus interpreted with view to on the Greek Government's request t o the calling into question those legal effect that the scope ratione temporis of the relationships. n Court's judgment should possibly be limited.

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KARELLA A N D KARELLAS

may possibly have contributed towards provision at issue or the number of persons other Member States or the Commission concerned — such as to justify derogating adopting that same conduct.13 from principle of the retroactive nature of the interpretative rulings. I therefore propose that the Court should abide by the However, even in such circumstances, the strict criteria which it has applied in its Court has made an exception for the rights previous case-law in this field and not limit of persons who brought court proceedings the scope of its judgment ratione temporis. or took equivalent action before the date of the judgment. 1. In the light of the foregoing consider- ations, I propose that the questions referred In this case, there is no element — in by the Greek Council of State should be relation to either the interpretation of the answered as follows:

'(1) Article 25 in conjunction with Article 41(1) of Council Directive 77/91/EEC are unconditional and sufficiently precise, with the result that individuals may rely upon them before national courts as against the administration, claiming that rules set out in a legal provision are incompatible with them.

(2) Article 25 in conjunction with Article 41(1) of Council Directive 77/91/EEC must be interpreted as meaning that they preclude the application of national rules which, in order to regulate the administration of certain undertakings in crisis situations, provide for the adoption by administrative act, without a vote by the general meeting, of a decision to increase the company capital, without prejudice to the right of pre-emption of the original shareholders.'