OPINION OF ADVOCATE GENERAL
TRSTENJAK
delivered on 30 June 2009 (1)
Case C‑101/08
Audiolux and Others
(Reference for a preliminary ruling from the Cour de cassation (Luxembourg))
(Company law – General principles of Community law – Existence of a general principle in Community law concerning the equal treatment of shareholders – Substantive and temporal scope – Rights of minority shareholders – Institutional balance – Legal certainty – Principle of non-retroactivity)
Table of contents
I – Introduction
II – Legislative framework
Directive 77/91/EEC
Recommendation 77/534/EEC
Directive 79/279/EEC
Directive 2001/34/EC
Directive 2004/25/EC
III – Facts, main proceedings and questions referred for a preliminary ruling
IV – Proceedings before the Court
V – Main arguments of the parties
VI – Legal assessment
A – Admissibility of the reference for a preliminary ruling
B – Examination of the questions referred
1. The first question
a) Introductory remarks
b) The general principles
i) Concept
ii) The principle of equal treatment of shareholders in Community law
– Analysis of the relevant rules of Community law
Primary law
International guidelines
Acts of the Community institutions
– Arguments against classification as a general principle
c) Conclusion
2. The second question
3. The third question
C – Conclusions
VII – Conclusion
I – Introduction
1. The Luxembourg Cour de cassation has referred to the Court of Justice three questions which essentially seek to ascertain whether it is possible to infer from a number of provisions contained in acts of the Community institutions in the field of company law that in Community law there is a general principle concerning the equal treatment of shareholders which protects a company’s minority shareholders in the event of acquisition of control by another company, in such a way that they are entitled to dispose of their securities on conditions identical to those applying to all other shareholders.
2. This reference for a preliminary ruling was made in proceedings brought by the minority shareholders of the RTL Group, a public limited company (‘the appellants in the main proceedings’), against Group Bruxelles Lambert (GBL), a company incorporated under Belgian law, Bertelsmann AG (Bertelsmann), a company incorporated under German law, the RTL Group, a public limited company, and against the directors of the RTL Group (‘the respondents in the main proceedings’). By their action, the appellants in the main proceedings are applying for the annulment of the agreement concluded between GBL and Bertelsmann under which GBL transferred its holding of 30% of the capital of the RTL Group to Bertelsmann in exchange for 25% of the capital of Bertelsmann or for a declaration that the respondents in the main proceedings are jointly liable for the damage suffered by them and for an order to pay compensation.
II – Legislative framework
Directive 77/91/EEC
3. According to the fifth recital in the preamble to Directive 77/91, (2) ‘it is necessary, having regard to the objectives of Article 54(3)(g), that the Member States’ laws relating to the increase or reduction of capital ensure that the principles of equal treatment of shareholders in the same position and of protection of creditors whose claims exist prior to the decision on reduction are observed and harmonised’.
4. Articles 20 and 42 of Directive 77/91 read as follows:
‘Article 20
1. Member States may decide not to apply Article 19 to:
…
(d) shares acquired by virtue of a legal obligation or resulting from a court ruling for the protection of minority shareholders in the event, particularly, of a merger, a change in the company’s object or form, transfer abroad of the registered office, or the introduction of restrictions on the transfer of shares;
…
(f) shares acquired in order to indemnify minority shareholders in associated companies;
…
Article 42
For the purposes of the implementation of this Directive, the laws of the Member States shall ensure equal treatment to all shareholders who are in the same position.’
Recommendation 77/534/EEC
5. According to paragraph 6 of Commission Recommendation 77/534/EEC, (3) ‘the Commission has consulted those involved and has ascertained that there is already broad support for the principles of the code’.
6. Paragraph 11 of that recommendation states:
‘The general principles are the key provisions of the code and are of overriding importance.
They take priority over and go well beyond the detailed principles which follow them, and which are merely illustrations of them.
…
C. The third general principle relates to equality of treatment for shareholders. Despite some criticism, the Commission has taken the view that the principle of equality of treatment should be retained, illustrating its application by two supplementary principles, with the accent mainly on a specific obligation to disclose information.
Supplementary principle 17 mentions equality of treatment for other shareholders where a controlling holding is transferred, but accepts that the protection of such shareholders could be achieved by other means; this takes account of the existence in Germany of a law limiting the powers of the dominant shareholder.
…’
7. General principle 3 of the European Code of Conduct relating to transactions in transferable securities, which is annexed to the Recommendation, states:
‘Equality of treatment should be guaranteed to all holders of securities of the same type issued by the same company; in particular, any act resulting directly or indirectly in the transfer of a holding conferring de jure or de facto control of a company whose securities are dealt in on the market, should have regard to the right of all shareholders to be treated in the same fashion.’
8. Supplementary principle 17 of the European Code of Conduct provides as follows:
‘Any transaction resulting in the transfer of a holding conferring control in the sense referred to in general principle 3 should not be carried out in a surreptitious fashion without informing the other shareholders and the market control authorities.
It is desirable that all the shareholders of the company whose control has changed hands should be offered the opportunity of disposing of their securities on identical conditions, unless they have the benefit of alternative safeguards which can be regarded as equivalent.’
Directive 79/279/EEC
9. Under Article 4(2) of Directive 79/279, (4) ‘the issuers of securities admitted to official listing must fulfil the obligations set out in schedules C and D to this directive, relating to shares and debt securities respectively’.
10. In the Annex to that directive, under Schedule C relating to ‘Obligations of companies whose shares are admitted to official listing on a stock exchange’, paragraph 2(a) states: ‘the company shall ensure equal treatment for all shareholders who are in the same position’.
Directive 2001/34/EC
11. The abovementioned provision was reproduced into Article 65(1) of Directive 2001/34, (5) by which Directive 79/279 was repealed under Article 111(1).
12. Nevertheless, Article 65 of Directive 2001/34 was deleted under Article 32(5) of Directive 2004/109 (6) with effect from 20 January 2007. Article 17 of Directive 2004/109, which is headed ‘Information requirements for issuers whose shares are admitted to trading on a regulated market’, provides in paragraph 1:
‘The issuer of shares admitted to trading on a regulated market shall ensure equal treatment for all holders of shares who are in the same position.’
Directive 2004/25/EC
13. Recitals 8, 9 and 10 in the preamble to Directive 2004/25 (7) state:
‘(8) In accordance with general principles of Community law, and in particular the right to a fair hearing, decisions of a supervisory authority should in appropriate circumstances be susceptible to review by an independent court or tribunal. …
(9) Member States should take the necessary steps to protect the holders of securities, in particular those with minority holdings, when control of their companies has been acquired. The Member States should ensure such protection by obliging the person who has acquired control of a company to make an offer to all the holders of that company’s securities for all of their holdings at an equitable price in accordance with a common definition. …
(10) The obligation to make a bid to all the holders of securities should not apply to those controlling holdings already in existence on the date on which the national legislation transposing this Directive enters into force.’
14. Article 3 of Directive 2004/25, which is headed ‘General principles’, provides as follows in paragraph 1(a) and (2)(a):
‘1. For the purpose of implementing this Directive, Member States shall ensure that the following principles are complied with:
(a) all holders of the securities of an offeree company of the same class must be afforded equivalent treatment; moreover, if a person acquires control of a company, the other holders of securities must be protected.
…
2. With a view to ensuring compliance with the principles laid down in paragraph 1, Member States,
(a) shall ensure that the minimum requirements set out in this Directive are observed,
…’
15. Article 5 of Directive 2004/25, which is headed ‘Protection of minority shareholders, the mandatory bid and the equitable price’, provides as follows in paragraphs 1, 3 and 4:
‘1. Where a natural or legal person, as a result of his/her own acquisition or the acquisition by persons acting in concert with him/her, holds securities of a company as referred to in Article 1(1) which, added to any existing holdings of those securities of his/hers and the holdings of those securities of persons acting in concert with him/her, directly or indirectly give him/her a specified percentage of voting rights in that company, giving him/her control of that company, Member States shall ensure that such a person is required to make a bid as a means of protecting the minority shareholders of that company. Such a bid shall be addressed at the earliest opportunity to all the holders of those securities for all their holdings at the equitable price as defined in paragraph 4.
…
3. The percentage of voting rights which confers control for the purposes of paragraph 1 and the method of its calculation shall be determined by the rules of the Member State in which the company has its registered office.
4. The highest price paid for the same securities by the offeror, or by persons acting in concert with him/her, over a period, to be determined by Member States, of not less than six months and not more than 12 before the bid referred to in paragraph 1 shall be regarded as the equitable price. …
Provided that the general principles laid down in Article 3(1) are respected, Member States may authorise their supervisory authorities to adjust the price referred to in the first subparagraph in circumstances and in accordance with criteria that are clearly determined. …’
16. The time-limit for transposition is laid down under Article 21 of Directive 2004/25 as 20 May 2006.
III – Facts, main proceedings and questions referred for a preliminary ruling
17. Audiolux SA and the other appellants in the main proceedings are minority shareholders in the RTL Group, a public limited company having its registered office in Luxembourg, whose shares are traded on the stock exchanges in Luxembourg, Brussels and London. According to the documents before the Court, before the events which gave rise to the main proceedings, GBL had a 30% shareholding in RTL. Bertelsmann held a share of 80% in Bertelsmann Westdeutsche TV GmbH (‘BWTV’), whilst the remaining 20% was held by Westdeutsche Allgemeine Zeitungsverlagsgesellschaft E. Brost & J. Funke GmbH & Co. (‘WAZ’). BWTV held 37% of the shares in RTL, the British Group Pearson Television a share of 22%, whilst the other shareholders owned 11%, including Audiolux.
18. In the course of several transactions during the first half of 2001, GBL transferred its holding of 30% of the capital of RTL in exchange for 25% of the capital of Bertelsmann.
19. Subsequently, in December 2001, Bertelsmann acquired the shares held by Pearson Television. Thereupon, RTL delisted its securities from the London stock exchange. The transfer of GBL’s shares to Bertelsmann is the subject of proceedings brought by Audiolux S.A., BGL Investment Partners and the other minority shareholders (‘the appellants in the main proceedings’) against GBL, Bertelsmann and the RTL Group and against other directors of the RTL Group before the Commercial Chamber of the Tribunal d’arrondissement de Luxembourg for the annulment of the agreements concluded between GBL and Bertelsmann under which GBL transferred its holding of 30% of the capital of RTL to the Bertelsmann Group in exchange for 25% of the capital of Bertelsmann. In the alternative, the appellants in the main proceedings applied for a declaration that the respondents were jointly liable to pay compensation and for permission to sell their shares on the same terms. The appellants subsequently extended their action by further claims.
20. By a further action brought against Bertelsmann and other companies, the appellants in the main proceedings applied for an order requiring the respondents, in accordance with the undertakings contained in the prospectus introducing the RTL Group to the London stock exchange published on 30 June 2000, inter alia, to increase the availability of RTL Group shares to the public to 15% and not to withdraw the listing from the London stock exchange. They made various claims in this respect by an application of 6 September 2002, and of 3, 14 and 18 October 2002.
21. By judgment of 8 July 2003, the Tribunal d’arrondissement de Luxembourg ruled on the first proceedings concerning the transfer of the shares from GBL to Bertelsmann, dismissing the applications as inadmissible on the ground that the claims put forward by Audiolux were based on no rule of law or principle of law recognised in Luxembourg law. The appellants in the main proceedings lodged an appeal against that judgment at the Cour d’appel (Court of Appeal) by a letter of 8 October 2003.
22. By judgment of 30 March 2004 on the second proceedings, the Tribunal d’arrondissement de Luxembourg dismissed the applications. The appellants in the main proceedings also lodged an appeal against that judgment before the Cour d’appel by a written pleading of 21 June 2004.
23. The Cour d’appel joined both sets of proceedings and dismissed the appeals by judgment of 12 July 2006. It confirmed that there was no general principle of equal treatment of shareholders either in the company law or finance law of Luxembourg and there were no grounds for referring a question to the Court of Justice of the European Communities for a preliminary ruling on that subject.
24. By written pleading of 22 November 2006, the appellants in the main proceedings lodged an appeal on a point of law before the Cour de cassation against the judgment on the appeal and put forward seven grounds of appeal. By its first ground of appeal, Audiolux alleged infringement, or erroneous application, of the general principle of the equal treatment of shareholders, in particular in the case of a company whose shares are listed on a stock exchange.
25. Since the Cour de cassation considers that the first ground of appeal concerns a question of interpretation of Community law, the answer to which is relevant to the outcome of the main proceedings, it stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling:
‘(1) Are the references to the equality of shareholders, and more specifically, to the protection of minorities
(a) in Articles 20 and 42 of the Second Company Directive 77/91/EC of 13 December 1976,
(b) in the Third General Principle and Supplementary Principle 17 of the Commission Recommendation of 25 July 1977 concerning a European code of conduct relating to transactions in transferable securities,
(c) in Schedule C, point 2(A) annexed to Council Directive 79/279/EEC of 5 March 1979 coordinating the conditions for the admission of securities to official stock exchange listing and carried over in the consolidating directive of 28 May 2001,
(d) in Article 3(1)(a) of Directive 2004/25/EC of 21 April 2004 on takeover bids, read together with the eighth recital in the preamble thereto
manifestations of a general principle of Community law?
(2) If so, does that general principle of Community law apply only to the relations between a company and its shareholders or, on the contrary, does it also apply to the relations between majority shareholders exercising or acquiring control of a company and the minority shareholders of that company?
(3) If the answer to the foregoing two questions is in the affirmative, must that general principle of Community law be regarded, having regard to the development in time of the references referred to in Question 1, as having existed and being binding on the relations between majority and minority shareholders within the meaning of Question 2 before the entry into force of the abovementioned Directive 2004/25/EC and before the facts at issue, which occurred during the first half of 2001?’
IV – Proceedings before the Court
26. The order for reference of 4 March 2008 was lodged at the Registry of the Court of Justice on 5 March 2008.
27. Written observations were submitted by Audiolux, GBL, Bertelsmann, the Governments of the French Republic, the Republic of Ireland, the Republic of Poland, and by the Commission within the period laid down in Article 23 of the Statute of the Court of Justice.
28. At the hearing on 30 April 2009, oral argument was presented by the Agents of Audiolux, GBL, Bertelsmann, the Government of the Republic of Ireland, and the Commission.
V – Main arguments of the parties
29. Audiolux considers the reference for a preliminary ruling to be admissible. It suggests that the questions referred should be answered in the affirmative. The Community acts mentioned in the first question and the provisions of those acts indicate the existence of a principle of equal treatment of shareholders. With regard to Directive 77/91, Audiolux claims in particular that it is clear from the fifth recital that the Community legislature considered the equal treatment of shareholders to be a principle which already existed. Audiolux also cites paragraphs 6 and 11 of the Recommendation concerning the Code of Conduct. The fact that the Code of Conduct is only a recommendation does not mean that it is not a manifestation of the general principles of Community law. Audiolux further bases its arguments on the Final Report of the High Level Group of Company Law Experts of January (‘Winter I’).
30. In the view of Audiolux, the drafting history of Directive 2004/25 shows that there was a consensus regarding the protection of minority shareholders provided for in Article 5. Recital 10 in the preamble to that directive refers only to the temporal application of the directive and does not concern the principle of equivalent treatment of shareholders, as provided for in Article 3(1)(a). As in Mangold, (8) a distinction must be drawn between the application of the provisions of a directive, on the one hand, and the application of the underlying general principle, on the other.
31. With regard to the second question, Audiolux claims that Article 44(2)(g) EC does not distinguish between the protection of shareholders by the company and the protection of shareholders vis-à-vis one another. Nor can such a distinction be found in Directive 77/91, as is confirmed by Article 20 thereof. As regards the Code of Conduct, it is recognised in General principle 3 and in Supplementary principle 17 that the principle of equal treatment of shareholders also applies in the relations between shareholders.
32. Audiolux takes the view that the influence exercised by a majority shareholder on the management of the company blurs the distinction between the company bodies and the majority shareholder. Equal treatment of all shareholders therefore requires the majority shareholder to be bound by that principle. Lastly, Audiolux refers to the Mangold judgment, which, in its view, indicates that a general principle of Community law applies in the present case.
33. With regard to the third question, Audiolux takes the view that the application of the principle of equal treatment of shareholders to the present case does not amount to a retroactive application of that directive, since that principle had already been laid down thirty years ago in the Code of Conduct and had been the subject of a consensus for a decade, as is shown by the adoption of Directive 2004/25.
34. Respondents 1 to 10 in the main proceedings (collectively ‘GBL’) begin by pointing out in connection with the first and second questions that recognition of general principle of Community law requires, first of all, the rule in question to stem from one of the aims of the Treaty and to have an adequate substance. In this regard they refer to Jippes (9) and Portugal v Council. (10)
35. With regard to the Community acts mentioned in the first question, GBL essentially claims that according to the Court’s case-law the Code of Conduct cannot have any legal effects. First of all, it has not been incorporated into Luxembourg law and, secondly, it refers only to Community provisions which it intends to supplement. Furthermore, the existence of Directive 2004/25 and its drafting history indicate the absence of a general principle of equal treatment of shareholders. In support of this argument, GBL refers to the Winter I report and to the Final Report of the High Level Group of Company Law Experts on a Modern Regulatory Framework for Company Law in Europe (‘Winter II’). In addition, both the numerous options available to the Member States and the definition of minimum requirements show that there is no such legal principle.
36. As far as the third question is concerned, GBL refers to the Court’s case-law on legal certainty and in particular on retroactive effect in order to prove that a principle of equal treatment of shareholders does not exist. In any case, that principle may not be applied to situations occurring before the entry into force of Directive 2004/25.
37. In the view of respondents 11 to 18 in the main proceedings (collectively ‘Bertelsmann’), the reference for a preliminary ruling is inadmissible. It does not set out the relevant facts which are necessary to enable for the Court to answer the questions referred in the light of the factual and legislative context.
38. The provisions of Directives 77/91 and 79/279 referred to in the first question relate exclusively to the relations between the company and its shareholders and concern specific situations which have no connection with the issues raised in the main proceedings. Even though the Code of Conduct annexed to the recommendation provides for a mandatory bid, according to Supplementary principle 17 this is merely ‘desirable’ and only in the absence of an ‘equivalent’ safeguard.
39. In connection with Directive 2004/25 Bertelsmann claims in particular that in the course of the drafting history of this directive there was disagreement over whether a mandatory bid should be the only possible means of protecting minority shareholders. In addition, the existence of numerous options available to the Member States, the specific rules on making a mandatory bid and temporal applicability are incompatible with the purported general principle. If the existence of such a principle were confirmed, it would have to be inferred that the directive was null and void.
40. In the view of Bertelsmann, there is no firm legal view (opinio juris), either at national or at international level, to support the existence of a general principle of this kind, as is also shown by the Winter I report. The various references in secondary legislation relating to the equal treatment of shareholders are not sufficient to be able to infer a general principle. The purported principle differs from the general principles already recognised in case-law on account of its fundamentally different substance. In any case it is much too imprecise to be able to create an obligation to make a mandatory bid.
41. Furthermore, recognition of a general principle of this kind would encroach on the power of the Community legislature by introducing rules which it alone is competent to adopt. In particular, there would be a breach of the principles of legal certainty and protection of legitimate expectations, specifically having regard to the principle of non-retroactivity. This is demonstrated by the provisions of Directive 2004/25, according to which the rules relating to the mandatory bid do not apply to events occurring before the date of entry into force of the national implementing provisions. In addition, the general principles of Community law do not apply, as a rule, to relations between private individuals. The only exceptions, including those under the Mangold judgment, differ from the present case because of the completely different legal context in which those decisions were taken.
42. The French Government makes observations solely on the first question, taking the view that the Community acts referred to in that question prove the existence of a principle of equal treatment of shareholders. Nevertheless, the application of that principle requires those concerned to be in a comparable position. In addition, there may be a derogation from the principle where a difference in treatment is objectively justified.
43. The Irish Government warns that answering the questions in the affirmative would have serious consequences at a constitutional level with regard to the distribution of powers between the Community institutions and legal certainty, and in terms of company law. It expressly advocates a negative answer to the questions.
44. In connection with the first question, the Irish Government argues that the Community measures mentioned therein do not provide any evidence that they stemmed from a common general principle of equality of shareholders. Rather, they are specific rules which relate to specific situations. In addition, the Irish Government states that such a principle cannot be regarded as a general principle of Community law on account of its specific nature. Such principles, as recognised in the Court’s case-law, concern fundamental aspects of the Community legal order, unlike the principle in question. Furthermore, the Irish Government draws attention to the considerable complexity of company law, which seeks to achieve a balance of interests. Consequently, a direct application of that principle is ruled out.
45. In connection with the second question, the Irish Government states that any general principle would apply solely to relations between a company and its shareholders. In this respect it points out that the mandatory bid provided for in Directive 2004/24 constitutes an exception in company law and cannot therefore be regarded as the result of a general principle.
46. In answer to the third question, the Irish Government submits that applying this principle, on account of the need for more precise provisions, would ultimately amount to an application of Directive 2004/25 before the date of its entry into force. The Irish Government considers this to be unlawful, especially since it would give rise to a horizontal application of the directive even before the expiry of the time-limit for transposition.
47. The Polish Government makes observations on the first and third questions, taking the view that the principle of equal treatment of shareholders is a general principle of Community law. It is a basic principle of European and national company law which was applicable long before the entry into force of Directive 2004/24. That principle is recognised expressly or by implication in many Community acts.
48. In view of its general nature, however, the principle cannot be directly applied, with the result that is addressed primarily at the legislature. The principle merely requires comparable situations to be treated equally, allowing the possibility of a difference in treatment provided it is objectively justified. According to that principle, the shareholders enjoy the same rights in accordance with their respective holding of the company’s capital, without precluding the special rights of minority shareholders intended for their protection. However, these rules take account of the specific situation of the minority shareholders in relation to the majority shareholders and therefore have to be laid down by the legislature.
49. With regard to the second question, the Polish Government argues that the principle of equality of shareholders applies only to the relations between the company and its shareholders with the result that shareholders are not required in principle to take into consideration the interests of the other shareholders.
50. The Commission suggests that the questions be answered in the negative. In its view, equality of shareholders and protection of minority shareholders cannot be regarded as a general principle of Community law. As is clear from the Court’s case-law, only certain fundamental principles should be regarded as higher-ranking in relation to secondary law and as belonging to the group of general principles of Community law. Equality of shareholders and protection of minority shareholders are much too precise legal principles to be regarded as ‘general’ principles of Community law. The Commission also observes that they are neither a principle common to the national legal orders nor a basic right laid down in the EC Treaty.
51. In the view of the Commission, the provisions of secondary legislation mentioned in the first question concern very specific situations and should not therefore be construed as resulting from a general principle. The adoption of Directive 2004/25 confirms that the Community legislature considered it necessary to enact rules to protect minority shareholders upon a change of control of the company.
52. With regard to the second question, the Commission argues, first of all, that the obligations imposed on the majority shareholder by Directive 2004/24 vis-à-vis the minority shareholders cannot be regarded as the expression of a general principle of Community law. Secondly, the acts of secondary legislation referred to in the first question do not lay down any obligations in the relations between the individual shareholders. Lastly, the Commission points out that a general principle of Community law cannot have any direct effect in relations between private individuals.
53. In connection with the third question, the Commission claims that Directive 2004/24 does not mention the existence of any general principle of equal treatment of shareholders and specifically of protection of minority shareholders which might have preceded its adoption.
VI – Legal assessment
A – Admissibility of the reference for a preliminary ruling
54. The first point of law which arises concerns the plea of inadmissibility raised by Bertelsmann with regard to the reference for a preliminary ruling.
55. The Court has consistently held that that the need to provide an interpretation of Community law which will be of use to the national court makes it necessary that the national court define the factual and legislative context of the questions it is asking or, at the very least, explain the factual circumstances on which those questions are based. (11)
56. The information provided in order for reference must therefore not only be such as to enable the Court to reply usefully but must also enable the Governments of the Member States and other interested parties to submit observations pursuant to Article 23 of the Statute of the Court of Justice. It is the Court’s duty to ensure that the possibility to submit observations is safeguarded, bearing in mind that, by virtue of the abovementioned provision, only the orders for reference are notified to the interested parties. (12)
57. In the present case, the order for reference sets out briefly but with appropriate precision the relevant national and Community legal context and the origin and nature of the dispute. The national court has therefore defined the factual and legislative context of its request for an interpretation of Community law sufficiently and has provided the Court with all the information necessary to enable it to reply usefully to that request.
58. Consequently, Bertelsmann’s argument seeking to have the reference for a preliminary ruling declared inadmissible in its entirety must be rejected.
B – Examination of the questions referred
59. The present case revolves around the first question, which essentially asks whether the principle of equal treatment of shareholders is one of the general principles of Community law. The second and third questions are expressly asked only if the first question is answered in the affirmative by the Court. They should therefore be considered in the order in which they are set out.
1. The first question
a) Introductory remarks
60. It should be pointed out, first of all, that the first question needs to be clarified.
61. It is settled case-law that, notwithstanding the division of jurisdiction between the national court and the Court of Justice in the preliminary ruling procedure under Article 234 EC, in the event of questions having been improperly formulated, the Court is free to extract from all the factors provided by the national court, and in particular from the statement of grounds contained in the reference, the elements of Community law requiring an interpretation having regard to the subject-matter of the dispute. (13)
62. On the basis of an objective assessment of the order for reference and having regard to the interests of the parties to the case in the main proceedings, the first question is to be understood as asking whether there is a general principle in Community law requiring equal treatment of shareholders and whether that principle also protects a company’s minority shareholders in such a way that in the event of an acquisition of control of the company the minority shareholders are entitled to dispose of their shares on conditions identical to those applying to the other shareholders.
63. By examining the further question whether the general principle in question requires a sufficiently precise legal consequence which favours the appellants in the main proceedings, it is possible to avoid the Court’s answer remaining abstract. (14) I will therefore proceed on the basis of the main question clarified as proposed.
64. In its first question, the referring court refers to a number of acts of the Community institutions within the meaning of Article 249 EC, whose legal character is not uniform, but which all make reference, more or less expressly, to a principle of equal treatment of shareholders, which is not defined any more precisely. On account of their status in positive law, those provisions form an important linking factor for the legal analysis below.
65. On systematic grounds, the general principles of Community law should first be considered conceptually, before examination of the question whether the requirements for recognition by the Court of equal treatment of shareholders as a general principle are satisfied.
b) The general principles
i) Concept
66. The general principles of Community law hold a particular place in the case-law of the Court of Justice.
67. However, even today the concept of general principles is a thorny issue. (15) The terminology is inconsistent both in legal literature and in the case-law. To some extent there are differences only in the choice of words, such as where the Court of Justice and the Advocates General refer to a generally-accepted rule of law, (16) a principle generally accepted, (17) a basic principle of law, (18) a fundamental principle, (19) a principle, (20) a rule, (21) or a general principle of equality which is one of the fundamental principles of Community law. (22)
68. There is agreement in any case that the general principles have considerable importance in the case-law in filling gaps and as an aid to interpretation, (23) not least because the Community legal order is a developing legal order which inevitably has gaps and requires interpretation on account of its openness in respect of integrational development. On the basis of such recognition the Court also appears to have opted not to undertake a precise classification of the general principles in order to retain the flexibility it needs in order to be able to decide on substantive matters which arise regardless of terminological discrepancies. (24)
69. According to one definition put forward in legal literature, the general principles include the fundamental provisions of unwritten primary Community law which are inherent in the legal order of the European Communities itself or are common to the legal orders of the Member States. (25) In principle, a distinction can be drawn between general principles of Community law in the narrow sense, namely those which are developed exclusively from the spirit and system of the EC Treaty and relate to specific points of Community law, and those general principles which are common to the legal and constitutional orders of the Member States. (26) Whereas the first category of general principles can be derived directly from primary Community law, the Court essentially uses a critical legal comparison in order to determine the second category, (27) which does not, however, amount to using the lowest common denominator method. Nor is it regarded as necessary for the legal principles developed in this way in their specific expression at Community level always to be present at the same time in all the legal orders under comparison.
70. The general principles are distinguished by the fact that they embody fundamental principles of the Community and of its Member States, which explains their status as primary law within the hierarchy of rules in the Community legal order. (28) Particular importance is attached to the protection of fundamental rights in the narrow sense developed and ensured by the Community courts under this general designation and to the formulation of the procedural rights which are equivalent to fundamental rights and which, as general principles of the rule of law, have been elevated to the status of constitutional law in the Community. (29) The general principles therefore also include principles which are closely connected with and may be derived from the structural principles of the European Union, such as liberty, democracy, respect for human rights and fundamental freedoms, and the rule of law within the meaning of Article 6(1) EU. If a Member State breaches those principles the special sanction mechanism laid down in Article 7 EU is triggered.
71. Important principles based on the rule of law such as the notion of proportionality, (30) legal clarity, (31) or the entitlement to effective protection by the courts (32) have been recognised as general principles of Community law. They also encompass various general principles of sound administration, such as the protection of legitimate expectations, (33) the principle of non bis in idem, (34) the right to be heard, (35) including the opportunity to make submissions in the case of measures affecting interests, (36) the obligation to state reasons for legal measures, (37) and the duty of the competent institution to establish the facts. (38) Reliance on force majeure is also included. (39) However, there are also principles which are not alien to contract law, such as the general principle pacta sunt servanda (40) or the principle of rebus sic stantibus. (41)
72. The notion of a social state based on the rule of law is also suggested, for instance, by the recognition of the principle of solidarity (42) or the duty of the administration to have regard for the welfare of its officials. (43) The recognition of federal commitments within the European Community includes the frequently highlighted principle of cooperation among the Member States and their obligations to cooperate in relation to the Community. On the basis of Article 10 EC the Court has thus developed the principle of reciprocal Community loyalty. (44) The Court has also professed the democratic principle, for example when it pointed to the need for the effective participation of the Parliament in the legislative process of the Community, in accordance with the procedures laid down by the Treaty. (45)
73. The fundamental Community rights which the Court has recognised by means of the abovementioned evaluative legal comparison and having regard to international and European human rights conventions include such fundamental and human rights as characterise liberal and democratic societies, such as freedom of expression (46) and freedom of association. (47) They also include basic principles stemming directly from the EC Treaty, such as the prohibition of discrimination based on nationality (48) and the prohibition of discrimination based on sex. (49)
ii) The principle of equal treatment of shareholders in Community law
74. It is uncertain whether a general principle of equal treatment of shareholders can be derived from the Community legal order itself. For that to be the case, such a principle in the field of Community company law would have to be of such fundamental importance, like the abovementioned examples, that it has found expression in primary law and in many rules of secondary Community law.
– Analysis of the relevant rules of Community law
Primary law
75. A general principle of this kind cannot be derived from written primary law itself in the absence of clear provisions in the founding treaties. No precise conclusions to that effect can be drawn from either the aims of the Community listed in Article 3 EC or from the provisions on the free movement of capital and payments laid down in Article 56 et seq. EC.
76. The general principle of equality could possibly form the basis for the claim to equal treatment of shareholders put forward by the appellants in the main proceedings. The general principle of equality which prohibits comparable situations from being treated differently unless the difference in treatment is objectively justified forms part of the foundations of the Community. (50) Rules on equality before the law are also part of the common constitutional traditions of the Member States.
77. In principle, fundamental rights, including the principle of equality, are rights of defence enjoyed by the individual vis-à-vis public authority. It would therefore appear to me to be dubious to apply the general principle of equality recognised in the Court’s case-law, as Audiolux seems to suggest, directly to a field which is classified as private law at national level. The principle of equality and the prohibition of discrimination are not among the traditional guiding principles of private law. (51) Irrespective of this, a mutatis mutandis application of the general principle of equality is generally hardly practicable for the decision in the main proceedings, since it is not possible to derive from it either the factual requirements for its application or a sufficiently precise legal consequence in the event of its breach.
78. However, the general principle of equality could have served as a foundation for a specific requirement of equal treatment in Community company law. It must therefore be examined whether a requirement of equal treatment of shareholders exists as a specific expression of the general principle of equality.
International guidelines
79. The OECD Principles of Corporate Governance, which were adopted in 1999 and revised in 2004, give a precise picture of the benchmark in respect of listed companies applicable worldwide. They are therefore to be used, first and foremost, in deciding whether a requirement of equal treatment among shareholders can be taken to exist in international law in the form of the right of sell-out in the event of the acquisition of a majority interest. The OECD recommendations were influenced by the key national and international standards for financial market stability. Important international organisations and a broad range of business associations were consulted in advance.
80. The 1999 paper did not lay down any rules on the equal treatment of shareholders. It was only when the principles were revised in 2004 that the principle of equal treatment was mentioned for the first time in ‘Part One, III. The Equitable Treatment of Shareholders’. (52) Under A(2) it is stated that ‘minority shareholders should be protected from abusive actions by, or in the interest of, controlling shareholders acting either directly or indirectly, and should have effective means of redress’. (53) In the annotations on section III it is stated that there is a danger that majority shareholders will engage in activities that may advance their own interests at the expense of minority shareholders. (54) Numerous methods are put forward as possible solutions, such as improving the ways in which minority shareholders can enforce their rights, improving the dissemination of information, qualified majorities for certain shareholder decisions etc. There is no express mention of a right of sell-out. It is merely explained that under certain circumstances, ‘some jurisdictions’ require or permit controlling shareholders to buy out the remaining shareholders at a share-price that is established through an independent appraisal. It is thus clear that no requirement of equal treatment exists in international company law.
Acts of the Community institutions
81. Inferences as to a general principle of that kind could possibly be drawn from secondary law or from other acts of the Community institutions. Several Community provisions actually contain references to a requirement of equal treatment of shareholders provided they are in the same position. (55)
82. Thus, in its order for reference the referring court draws attention to the following provisions: Article 42 of Directive 77/91, Schedule C, point 2(A) of Directive 79/279, which was incorporated into Article 65 of Directive 2001/34, and Article 3(1)(a) of Directive 2004/25. References to that requirement can also be found in other directives relating to company law, such as Directive 2004/109, Article 17(1) of which provides that ‘the issuer of shares admitted to trading on a regulated market shall ensure equal treatment for all holders of shares who are in the same position’. Article 18(1) further prescribes that ‘the issuer of debt securities admitted to trading on a regulated market shall ensure that all holders of debt securities ranking pari passu are given equal treatment in respect of all the rights attaching to those debt securities’. The same is true of Directive 2007/36/EC (56) on the exercise of certain rights of shareholders in listed companies, Article 4 of which states that ‘the company shall ensure equal treatment for all shareholders who are in the same position with regard to participation and the exercise of voting rights in the general meeting’.
83. Article 5(1) of Directive 2004/25 also lays down a specific duty to protect holders of securities with minority holdings, in order to ensure the equal treatment of all shareholders effectively when control of their companies has been acquired. That provision, which is explained in the ninth recital in the preamble to that directive, specifically stipulates that the person who has acquired control of a company should be obliged to make an offer to all the holders of that company’s securities for all of their holdings at an equitable price in accordance with a common definition.
– Arguments against classification as a general principle
Lack of constitutional status
84. On closer examination of the abovementioned provisions, however, it is clear that they are essentially limited to regulating very specific company-law situations by imposing on the company certain obligations for the protection of all shareholders. They do not therefore possess the general, comprehensive character which is otherwise naturally inherent in general principles.
85. In addition, not all the cited provisions are legally binding, as is shown by Recommendation 77/534/EEC. Like opinions, in accordance with the fifth paragraph of Article 249 EC, recommendations constitute non-binding acts of the Community institutions, which may be important as aids to interpretation, but from which no duties or rights may be derived for individuals. (57) The non-binding character of the provisions of that institutional measure can also be seen from the fact that the opportunity mentioned in supplementary principle 17 of the European Code of Conduct for all the shareholders of the company whose control has changed hands to dispose of their securities on identical conditions is merely described as ‘desirable’. This is certainly not sufficient grounds for a right of sell-out for minority shareholders vis-à-vis majority shareholders at Community level. Therefore, the Commission and Bertelsman are correct in their claim that the possibility of relying directly on the content of that recommendation in order to assert individual legal positions must be rejected by the Court.
86. The rules in question are obviously influenced by the efforts of the Community legislature to prevent arbitrary, i.e. objectively unjustified, differences in treatment among shareholders. However, they do not allow the direct conclusion that there is a general principle of equal treatment of shareholders in Community law.
87. As has already been explained, general principles are distinguished primarily by their constitutional status within the Community legal order. As a rule, general principles embody fundamental legal concepts and values inherent in a legal order. Furthermore, they differ from specific rules of law in that they claim a certain degree of general validity and are not restricted to a certain area of law. (58)
88. The notion of equal treatment of shareholders runs as a leitmotif through company law in the Community and its Member States and evidently represents an essential ideal in that area of law. (59) However, it cannot claim to have acquired constitutional status in any legal order thus far. In national law, as in Community law, its codification is restricted to individual rules in ordinary law.
Lack of shared conviction in legal literature
89. A study of legal literature also reveals considerable discrepancies in the assessment of the precise legal character of the notion of equal treatment of shareholders and its systematic status within the legal orders of the Member States. Whilst some authors assume the existence of a ‘fundamental legalprinciple of company law’, (60) others describe the notion of equal treatment of shareholders merely as a ‘basic idea’ (61) or a ‘simplified ideal to prevent arbitrary differences in treatment by company bodies’. (62) Many authors even see it as a ‘corollary of the general principle of justice, whose origins are not in statute, but are non-legal, supra-positive’. (63)
90. Regardless of the precise classification, however, it is clearly agreed that the principle of equal treatment of shareholders does not have a precise definition, and therefore ‘is conceptually not understandable and merely represents a flexible instrument for achieving certain aims’. (64) In view of the lack of clarity regarding this principle, which applies to its bases, scope, substance and the legal consequences of possible breaches, the vast majority of the legal literature concludes that the substance of the principle must be fleshed out by the legislature or by case-law in order to be put into effect. (65)
91. The Winter I and Winter II (66) reports likewise cannot be cited as evidence of a shared conviction in legal literature or within the national legal orders regarding the existence of a general principle of this kind.
92. For example, it is clear from the Winter I report that prior to the adoption of Directive 2004/25 there were many differences between the various Member States in the regulation of takeover bids, which meant that takeover bids could not be undertaken with the same expectation of success and shareholders in Member States did not have corresponding opportunities to tender their shares. On that basis, the Group advocated a mechanism which facilitates takeover bids. (67) The national provisions about the consideration to be paid also differed widely with respect to both the level and the nature of the consideration to be offered. (68) In the interest of a sufficient degree of predictability as to that consideration, which, in the view of the Group, is necessary for an efficient functioning of the capital markets in the European Union, it expressly supported the introduction of harmonised criteria at Community level.
93. If there were a general principle of equal treatment of shareholders which regulated sufficiently precisely the arrangements for a take-over bid, as Audiolux for example suggests, (69) it would not have been necessary to adopt harmonising rules at Community level in order to overcome the legal fragmentation in the Member States. On the contrary, the reports reveal an urgent need for regulation at Community level.
Lack of general validity
94. In addition, the validity of the notion of equal treatment of shareholders remains restricted to company law in the Community and its Member States, that is to say to a specific area of law, with the result that it has no general validity. Thus, a further criterion which as a rule distinguishes general principles is not satisfied. (70)
95. This finding places the notion of equal treatment of shareholders in clear contrast to the general principles, which have constitutional status, actually recognised as such by the Court, such as the rule of law, which is common to all the Member States of the Union and on which the Union is founded under Article 6(1) EU, which is recognised in the Court’s case-law and has found various expressions in secondary legislation in the form of legal certainty, the right to be heard and effective legal protection.
96. Both the lack of constitutional status and the lack of general validity of this notion therefore suggest that it should not be classified as a general principle of Community law.
Lack of clarity regarding the legal consequence
97. It is thus essentially unnecessary to answer the further question whether there is a general principle which protects a company’s minority shareholders in such a way that in the event of an acquisition of control of the company the minority shareholders are entitled to dispose of their securities on identical conditions to all other shareholders.
98. Nevertheless, and even if, contrary to the position taken here, the Court assumes the existence of a general principle of equal treatment of shareholders, there would be serious doubts, in my opinion, as to whether a general principle of that kind could be defined with sufficient precision to give rise to the legal consequence desired by the appellants in the main proceedings. As the Commission rightly explains, such a general principle would be much too precise to continue to be regarded as ‘general’.
Prohibition on circumventing the will of the legislature
99. The provisions cited by the referring court in its first question do not contain a single rule which would prescribe the legal consequence desired by the appellants in the main proceedings.
100. One exception might be Article 5(1) of Directive 2004/25, which regulates mandatory bids made by a natural or legal person acquiring control of a company. That provision requires the Member States to ensure that a bid is addressed to all holders of securities for all their holdings at the equitable price. To a certain extent, that provision gives concrete expression to Article 3(1)(a) of the directive, which establishes the general principle of the equal treatment of all holders of the securities of an offeree company. The latter provision further prescribes that if a person acquires control of a company, the other holders of securities must be protected.
101. However, a direct application of the directive is not a possibility in the present case. First of all, the events which gave rise to the main proceedings took place before the entry into force of the directive and before the expiry of the period for transposition, with the result that at the relevant time the Grand Duchy of Luxembourg was not yet required to apply the directive. (71) This has two consequences. First of all, the appellants in the main proceedings cannot rely directly on that provision. Secondly, it should be borne in mind that recognition of a general principle of equal treatment of shareholders, which essentially provides for the same legal consequence as Article 5(1) of Directive 2004/25, would inevitably result in Directive 2004/24 having retroactive effect, which clearly cannot be the intention of the Community legislature, however, since otherwise it would not have been necessary to adopt specific rules.
102. According to the first recital in the preamble to Directive 2004/25, it was necessary, in accordance with Article 44(2)(g) EC, to coordinate certain national safeguards with a view to making such safeguards equivalent throughout the Community. The fact that it was necessary for the Community legislature to act in this field, and to lay down precise obligations to be observed by market participants and to define detailed arrangements for the equal treatment of shareholders, shows that there was no general principle of equal treatment of shareholders which was in itself legally sufficient, either before or after the entry into force of Directive 2004/25.
Safeguarding of the institutional balance
103. Furthermore, recognition of a general principle of equal treatment of shareholders by the Court, which is more akin to a rule of law on account of its substantive precision, would run the risk of ignoring the institutional balance sought by the Treaty, especially since the Community’s legislative competence is exercised jointly by the Council and the European Parliament.
104. The institutional balance within the Community is not based on the principle of the separation of powers in the constitutional-law sense, (72) but on a principle of the separation of functions, whereby the Community’s functions are intended to be exercised by the organs which are best placed to perform them under the Treaties. Unlike the principle of the separation of powers, which seeks partly to ensure that the individual is protected by moderating state power, the principle of the separation of functions is intended to ensure that the Community’s aims are effectively achieved. (73)
105. In the light of this fact, the Court established, as early as 1958 on the basis of its judgment in Meroni(74) and subsequently in consistent case-law, the notion of ‘institutional balance’ from a combination of the organisational principles and powers to act under the treaties founding the European Communities, in particular the EC Treaty, and accorded it the role of a normative, actionable formal principle. (75)
106. As the Court found in Case 70/88 Parliament v Council, (76) the Treaty set up a system for distributing powers among the Community institutions, assigning to each institution its own role in the institutional structure of the Community and the accomplishment of the tasks entrusted to the Community. Observance of the institutional balance means that each of the institutions must exercise its powers with due regard for the powers of the other institutions. It also requires that it should be possible to penalise any breach of that rule which may occur. In the same judgment the Court also stated that under the Treaties it has the task of ensuring that in the interpretation and application of the Treaties the law is observed. It must therefore be able to maintain the institutional balance and, consequently, review the observance of the Community institutions’ prerogatives. (77)
107. As a Community institution within the meaning of Article 7(1) EC, the Court also forms part of that institutional balance. This fact implies that in its capacity as a Community judicial body which has the right under the first paragraph of Article 220 EC to ensure, within its jurisdiction, that in the interpretation and application of this Treaty the law is observed, it respects the rule-making powers of the Council and of the Parliament. (78) This necessarily presupposes that it leaves to the Community legislature the task of rule-making in the field of company law conferred on it by the treaties and, as before, observes the necessary self-restraint in developing general principles of Community law which might possibly run counter to the legislature’s aims. The Court may have recourse to general principles in order to find solutions, which are appropriate having regard to the aims of the Treaty, to the problems of interpretation on which it is required to decide. However, it may not assume the role of the Community legislature if a gap in the law can be filled by the Community legislature. (79)
108. Rule-making generally involves a choice between different political and social interests which are represented by the institutions and bodies participating in the rule-making procedure. In addition to the relevant democratic legitimation, those bodies possess the necessary expertise to fulfil the political responsibility conferred on them. It should be pointed out in this connection that in their case‑law the Community courts have expressly recognised the Community legislature’s powers of assessment and decision-making in certain areas of the law. (80)
109. Furthermore, attention should be paid to the reservations expressed by Ireland. (81) It is correct in its view that caution must be exercised in view of the complexity of company law and the diversity of the national rules which are often connected with the economic conditions in each Member State. It rightly points out that careful consideration must be given to a modification of company law, whether through legislative or judicial channels. The Community legislature is best placed to harmonise the positions of the individual Member States. If the Court recognised a general principle of equal treatment of shareholders, as suggested by the appellants in the main proceedings, the consequences could not be foreseen.
110. Lastly, it should be borne in mind with regard to the gap-filling function (82) of general principles that reliance on those principles in areas with a high intensity of regulation like company law is less necessary than in less strictly regulated areas.
Interest of legal certainty
111. Judicial self-restraint should also be exercised not least on grounds of protection of legitimate expectations and legal certainty. The principles of protection of legitimate expectations and legal certainty form part of the Community legal order. They must accordingly be observed by the Community institutions, but also by the Member States when they exercise the powers conferred on them by Community directives. (83)
112. The principle of legal certainty aims to ensure that situations and legal relationships governed by Community law remain foreseeable. (84) Recognition of a general principle of equal treatment of shareholders would, however, raise a number of questions regarding its precise substantive, personal and temporal scope. The Court would possibly have to determine which requirements would have to be fulfilled in the specific case for that general principle to apply.
113. It would also be difficult to determine the exact point in time from which that general principle would apply in Community law. As has already been explained, recognition of such a principle would ultimately result in the retroactive application of Article 5(1) of Directive 2004/25, which would breach the principle of non-retroactivity in view of the unambiguous decision of the legislature regarding the precise time of entry into force of that provision. Although in general the principle of legal certainty precludes a Community measure from taking effect from a date before its publication, it may exceptionally be otherwise where the purpose to be achieved in the general interest so requires and where the legitimate expectations of those concerned are duly respected. (85) However, it cannot be seen in the present case why a breach of the principle of non-retroactivity would be in the general interest.
c) Conclusion
114. On the basis of the above analysis, I conclude that in Community law there is no general principle of equal treatment of shareholders which protects a company’s minority shareholders in the event of acquisition of control by another company, in such a way that they are entitled to dispose of their securities on conditions identical to those of all other shareholders.
115. In the light of that conclusion, I do not think it necessary to examine the judgment in Mangold. For that case-law to be applied to the present case it would be necessary to identify beyond doubt a general principle of Community law, which would enable that general principle to be applied even before the entry into force of a specific provision of secondary law with essentially the same normative content. Thus, in Mangold the Court found that Directive 2000/78 does not itself lay down the principle of equal treatment in the field of employment and occupation. The Court based that conclusion on the finding that the source of the prohibition of discrimination on grounds of age is found in various international instruments and in the constitutional traditions common to the Member States. (86) However, that condition is not satisfied in the present case.
2. The second question
116. It is not therefore necessary in principle to answer the second question. The following statements are relevant only in the event that the Court should answer the first question in the affirmative, contrary to the opinion put forward here.
117. It should be stated, first of all, that the provisions cited by the referring court in its first question impose obligations only on the issuers of shares and the company, but not on the relations between the shareholders.
118. Whilst Articles 17 and 18 of Directive 2004/109 lay down requirements for issuers of shares, Article 4 of Directive 2007/36 establishes an equal treatment requirement for companies. Article 42 of Directive 77/61, on the other hand, does not specify to whom precisely the laws of the Member States which are adopted pursuant to that directive and must ensure equal treatment to all shareholders are addressed. (87) Nevertheless, the provisions of that directive all concern acts of the company itself, including the formation of a public limited liability company, the maintenance, increase or reduction of its capital and the compulsory withdrawal of shares. In so far as provision is made for decisions to be taken by the general meeting, for example in the case of an increase in capital pursuant to Article 25(1) of Directive 77/91, this must comply with the principle of equal treatment. It follows that the company bodies, but not the shareholders themselves are bound by the principle of equal treatment.
119. This finding is also consistent with the majority view taken in legal literature. According to that view, the company is the sole direct addressee of the principle of equal treatment in company law. (88) In the relations between the shareholders, on the other hand, there is at most a duty of loyalty, (89) which as such requires the shareholders to have regard to the interests of their fellow shareholders in exercising their company rights. However, it is not possible to infer any further-reaching duties on the part of shareholders vis-à-vis their fellow shareholders.
120. The fact that general principles are binding in principle solely on the Community institutions and the Member States and their subdivisions, but not on relations between individuals, also suggests that the appellants in the main proceedings are not able to rely directly on a general principle of equal treatment of shareholders. (90) This can be justified both by the source and the purpose of general principles, which consists in protecting individuals against unlawful infringements of fundamental rights by authorities. (91)
121. On the other hand, it cannot be ignored that Community law occasionally also creates subjective rights in relations between private individuals. This applies, for example, to provisions of secondary law. (92) However, those rules generally impose obligations on individuals only after they have been transposed into national law or by way of interpretation consistent with the directive, since directives themselves do not have any horizontal effect. (93) Nonetheless, case-law recognises that certain provisions of primary law such as the prohibitions of discrimination laid down in Articles 12, 39, 49 and 141 EC can have a horizontal effect. (94)
122. The judgment in Mangold cannot be invoked in any event in support of a possibility of relying directly on general principles in relations between private individuals, as the Court did not clarify in that case whether the prohibition of discrimination on grounds of age also has a horizontal effect. (95) Irrespective of the fact that the main proceedings in that case concerned a matter of civil law, in the reference for a preliminary ruling the Court essentially had to decide whether Community law precluded a provision of domestic law under which employers could conclude fixed-term contracts of employment without restrictions with workers who have reached the age of 52. It related primarily to the compatibility of national law with the requirements of Community law.
123. In the light of the foregoing, the second question must be answered to the effect that a general principle of equal treatment of shareholders, if such a principle exists at all in Community law, could apply only to the relations between a company and its shareholders.
3. The third question
124. The third question is referred only in the event that the two preceding questions are answered in the affirmative. Because a general principle of equal treatment of shareholders is not taken to exist in the present case and the underlying points of law have already been examined in connection with the first and second questions, there is no need, in my opinion, to answer the third question.
C – Conclusions
125. In summary, the non-existence of a general principle of this kind is suggested, first of all, by the fact that equal treatment of shareholders has constitutional status neither in the Community legal order nor in the legal orders of the Member States. (96) Furthermore, in the analysis it was established that there is no firm shared conviction in legal literature regarding the existence of such a general principle. (97) In view of the fact that it is restricted to the specific area of company law, that principle likewise does not have the general validity within a legal order which is typical of general principles. (98)
126. However, and even if, contrary to the position taken here, the Court assumes the existence of a general principle of this kind, there would be serious doubts as to whether it could have such a specific legal consequence that it could give rise to a right of sell-out for minority shareholders. (99) On the basis of the separation of functions between the Community institutions under Community institutional law, it is solely a matter for the Community legislature, which would have to define the precise legal requirements, if necessary by adopting a relevant rule of law, to provide for that legal effect. (100) Judicial recognition of a right of sell-out for minority shareholders in the form of a general principle would not be consistent with the will of the Community legislature. It would amount to a retroactive application of Directive 2004/24, also adversely affecting the interest of legal certainty. (101)
127. On the basis of the above analysis, I conclude that there is no general principle of equal treatment of shareholders as a specific manifestation of the general principle of equality which protects a company’s minority shareholders in the event of acquisition of control by another company, in such a way that they are entitled to dispose of their securities on conditions identical to those of all other shareholders.
128. Irrespective of the legal classification of equal treatment of shareholders, it must be stated that that principle can create rights and obligations only in the relations between a company and its shareholders, but not in the relations between shareholders. (102)
VII – Conclusion
129. In the light of the foregoing considerations, I propose that the Court answer the questions referred by the Cour de Cassation as follows:
(1) In Community law there is no general principle of law which prescribes equal treatment of shareholders and which protects a company’s minority shareholders in such a way that, in the event of an acquisition of control of the company, the minority shareholders are entitled to dispose of their shares on conditions identical to those of all other shareholders.
(2) A general principle of equal treatment of shareholders could apply at most only in the relations between a company and its shareholders.