Stephan Rammeloo

The long and winding road towards freedom of establishment for legal persons in Europe. ECJ Case C-208/00, Überseering BV v Nordic Construction Company Baumanagement GmbH (NCC)

Cross-border company migration in Europe. Where a company formed in accordance with the law of a Member State (‘A’) in which it has its registered office is deemed, under the law of another Member State (‘B’), to have moved its actual centre of administration to Member State B, Articles 43 and 48 EC preclude Member State B from denying the company legal capacity and, consequently, the capacity to bring proceedings before its national courts for the purpose of enforcing rights under a contract with a company established in Member State B.

The 14th EC Company Law Directive on the Cross-Border Transfer of the Registered Office of Limited Liability Companies - Now or Never?

This paper analyses two academic legislative proposals concerning cross-border company migration. A ‘European’ proposal develops a future EC Directive EC, and a more national law-oriented approach is pursued by the ‘German’ proposal. First, the outcome of a Consultation round held by the European Commission for the business world and a brief overview of EC law as it currently stands are described. The description of the legal status quo concerning cross-border company migration on the community level is followed by a brief reference to pending Case EJ C-210/06 Cartesio, which appears to offer the opportunity of a link between the EC judicature and future EC legislation. Subsequently, both academic proposals, elaborated within the ambit of the Deutsche Rat für Internationales Privatrecht, are given detailed attention. The conclusion is that with a view to Article 44(2)(g) of the EC Treaty, the EC legislator cannot abstain from elaborating a clear secondary EC law instrument in order to safeguard the justified interests of both companies and firms migrating throughout Europe and of those doing business with these entities.

‘From Rome to Rome’: Cross-border employment contract. European private international law: Intertemporal law and foreign overriding mandatory laws Case C-135/15 Greek Republic v. Grigorios Nikiforidis, EU:C:2016:774

To what extent are Greek saving laws, resulting in payment cuts in the public sector (that is employment conditions), capable of overriding the applicable (German) law? A dispute arising from an employment relationship between the Greek Republic and an employee habitually carrying out work in Germany, gave rise to preliminary questions having regard to the temporal scope of EU Regulation No. 593/2008 (the ‘Rome I Regulation’)1 and, closely related thereto, the functional reach of Article 9(3) of that Regulation in respect of ‘foreign’ mandatory laws, in light of the principle of sincere cooperation enshrined in Article 4(3) TEU. An analysis of the Advocate General’s Opinion and the Court of Justice of the European Union’s (CJEU) ruling is followed by critical commentary and suggestions for future EU legislative amendments to the Rome I regime.

Litigation or arbitration : A competition? Cross-border commercial dispute adjudication in a globalizing worldunder the reign of EU regulation 1215/2012

Cross-border civil and commercial conflicts can be adjudicated by courts of sovereign states or in a private setting, namely by arbitration panels. Against the background of a globalizing world and an increase in popularity of arbitration as a means of dispute resolution ‘Europe’ (the European Union) faces the challenge to demarcate borderlines as litigation in court and arbitration tend to get in conflict more often. Conflicts may relate to the jurisdiction of courts versus the competence of arbitration panels (inter alia resulting in anti-suit court orders or even arbitral awards), as well as to the recognition of foreign court orders being capable of frustrating arbitral awards or vice versa. This contribution attempts to analyze how these clashes ought to be resolved under the reign of ‘new’ cross-border civil and procedural law in Europe (EU Regulation 1215/2012, or ‘Recast’) on Jurisdiction and Recognition of Foreign Judgments in Civil and Commercial Matters’ (in force January 15, 2015). Two preliminary rulings of the Court of Justice of the European Union (CJEU) though still interpreting EU Regulation 44/2001 (i.e. the legislative predecessor of the Recast), remain important to the law regime of the Recast. The final conclusion is that, even though the Recast respects the international law framework of notably the 1958 New York Convention on the recognition and enforcement of arbitral awards, a considerable amount of legal uncertainty remains, as Recital 12 of the Recast Preamble contains ‘open-ended’ parameters leaving discretionary room for national law of each individual EU Member State and calling for further interpretative rulings of the CJEU.

The 2015 Proposal for an EU Directive on the Societas Unius Personae (SUP) - Another attempt to square the circle?

Stimulating business throughout the Single Market, not in the least for Smalland Medium-Sized Enterprises (SMEs), is one of the key priorities of the EU’s ten-year growth strategy, ‘Europe 2020’.1 Empirical research, however, reveals hindrances, as notably SMEs find it (too) costly to be active across borders and only a small number of SMEs invest abroad. The reasons for this include the diversity of national legislations, in particular differences in national company laws, and the lack of trust in foreign companies among customers and business partners.2 These factors incited the Commission on 10 April 2014 to submit a proposal for a Directive on single-member private limited liability companies, making it easier to set up companies across borders between Member States. This should encourage more entrepreneurship and lead to more growth, innovation and jobs in the EU. The objective underlying the proposal is to facilitate cross-border activities of companies, by asking Member States to provide in their legal systems for a national company law form that would follow similar rules in all Member States and would have an EU-wide abbreviation – SUP (Societas Unius Personae). May 2015, however, the 2014 Proposal was superseded by a ‘compromising text’.3 This contribution aims at exploring the 2015 Proposal as it represents ius constituendum in its most recent form and compared to its 2014 ‘predecessor’ Proposal. In order to be capable of comparing both singlemember company legislation projects, first the preliminary question must be answered: why sole-member companies deserve special notice from EU legislator (2),

EU Law reform: cross-border civil and commercial procedural law and cross-border insolvency law

Business contractors increasingly find themselves involved in a private or commercial law relationship with cross-border elements because of the fact that, e.g. the plaintiff and the defendant may reside in different EU Member States, contract performance is due in a ‘foreign’ legal order, a court from a ‘foreign’ country has been designated by the parties, etc. Such cross-border elements may give rise to a dispute culminating into court litigation. The very first question to be answered then is: in which legal order may – or perhaps even must – proceedings be initiated? And, subsequently, how do we deal with the issue that sovereign states tend to be reluctant in recognizing, let alone enforcing, foreign court orders? The strive for a (European) Single Market yet presupposes the breaking down of (procedural as well as substantive) legal barriers emanating from the crossborder nature of private law relationships, notably business transactions. Ideally speaking, this objective could be attained when, substantively speaking, private and commercial laws would be uniform throughout the entire Market. But even to date, private and commercial law – inasmuch not harmonized at the EU level, let alone made uniform by EU Regulations or international conventions – largely remains the domain of national law of each individual EU Member State. Consequently, private and commercial law-related disputes showing ties with two or perhaps even more EU Member States inevitably give rise to three questions to be answered: (1) The court of which legal order (i.e. EU Member State or other) must be attributed jurisdiction? (2) Which applicable (national) law applies in court proceedings? And last but certainly not least, (3) how far are court judgments as well as other ex officio documents to be recognized and, even more important to the business world, enforced in other legal orders? Even more, this question comes up in case of businesses declining, i.e. situations involving cross-border insolvency.

The EC Commission's Company Law Action Plan - A Proposal to Amend the 2nd EC Company Law Directive. Law Competition in a Globalizing World?

The privilege of a limited liability regime for companies is commonly considered a condition sine qua non for business entrepreneurs to undertake risk-carrying economic activities. This privilege should, however, be counterbalanced by sufficient safeguards for both company creditors and investors, i.e. company shareholders. Currently, this goal is served, on the basis of Article 44 (2) (g) of the EC Treaty, by, notably, the 2nd EC Council Directive 77/91 EEC of 13 December 1976 on the formation of public limited liability companies and the maintenance and alteration of their capital. From May 2003 onwards, the European Commission initiated the Company Law Action Plan on Company Law and Corporate Governance with a view to harmonizing various subject matter such as cross-border mergers, cross-border seat transfers, directors’ remuneration, the responsibility of board members, shareholders rights, and, last but certainly not least, the capital of (public) companies. ‘Fostering efficiency and competitiveness of business’ and ‘stimulating discussions between Member States on the modernization of company law’ are key expressions in the Plan. In respect of the proposal for a revised 2nd EC Company Law Directive, the Commission even speaks of ‘one of the most important modernizations of company law which should be executed in a short term’, further being suited to ‘updating and simplifying the Community Aquis’.

Cross-Border Mobility of Corporations and the European Union: Two Future Landmark Cases?

The significance of companies to business in Europe is clearly expressed by Lutter: ‘Unternehmen sind die Motoren des Europäischen Binnenmarkts’. From the early days of the European Union, however, freedom of establishment for legal persons under Articles 43 and 48 (formerly Articles 52 and 58) of the Treaty on the European Union has been thwarted by two conflicting theories. According to the ‘Real Seat’ theory, the law of the country where the company has its ‘real’ seat (i.e. the management and control centre) is the law applicable to company relationships. Pursuant to the ‘Incorporation’ theory, the company is governed by the law of the country according to which it is duly established. The latter theory is flexible and lenient, as it allows businessmen to nominate the proper law of the company to be that of the country of their choice. Moreover, this theory enables businessmen to move their company’s headquarters to another country without the compulsory dissolution and winding up of the company. Though favouring intra-community cross-border mobility, the ‘Incorporation’ theory is severely criticized for provoking a ‘rat race’ in favour of the most flexible and lenient company law systems. The controversy between both theories is explained by the fact that authorities of involved states take a rather ambivalent position: each state seeks to balance the goal of stimulating economic growth by welcoming foreign investors, against other aims such as creditor protection, worker codetermination, fair and equal competition on domestic markets, tax revenue policies, etc. This is why until recently neither cross-border mobility of companies duly established under national laws of the involved Member States, nor the realization of a European Public Company could be achieved.