Portuguese golden share in Energias de Portugal illegal

January 8, 2011 In the case Comission v. Portugal C-543/08 on 11.11.2010 European Court of Justice composed of inter alia polish judge Marek Safian ruled that the Portuguese Republic has failed to fulfil its obligations under Articles 56 EC and 43 EC. by maintaining special rights for the Portuguese State in EDP – Energias de Portugal (‘EDP’), allocated in connection with that State’s golden shares.
ECJ stipulated that although Article 15(3) of the LQP states that the creation in the share capital of EDP of golden shares which confer special rights on the Portuguese State is subject to the condition, which, it may be added, is formulated in a rather general and imprecise manner, that grounds of national interest must so require, the fact nevertheless remains that neither that law nor EDP’s articles of association lay down any criteria determining the specific circumstances in which those special rights may be exercised (see Case C 326/07 Commission v Italy, paragraph 51). The same finding applies to Article 15(1) of the LQP, in that, under that provision, the State’s appointment of a director is subject to the condition, also formulated in a rather general and imprecise manner, of safeguarding the public interest. Thus, such uncertainty constitutes serious interference with the free movement of capital in that it confers on the national authorities, as regards the use of such rights, a latitude so discretionary in nature that it cannot be regarded as proportionate to the objectives pursued (see, to that effect, Case C 326/07 Commission v Italy, paragraph 52).


Michael Dudkowiak
www.dudkowiak.com/michal-dudkowiak

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