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– 331 – Transcripts of Corporate Mobility Session Paper: Marieke Wyckaert and Filip Jenné Respondent: Levinus Timmerman (Hoge Raad der Nederlanden, University of Rotterdam) Chair: Jan Meyers (Cleary Gottlieb Steen & Hamilton, K.U.Leuven) Rapporteur: Dominique Maes (K.U.Leuven) A. Abstract When discussing the topic amongst ourselves in the workgroup, we discovered that we were as divided as a “real seat” adept and an “incorporation seat” adept can possibly be. The reason for this is that company law can be approached in a twofold manner: 1. one can consider it as a technique or as a facility for organising a business; or 2. one can defend a notion of company law that should incorporate social responsibility and accountability. In the second approach, company law also encompasses means to protect minority shareholders, creditors, employees and possible other stakeholders. For a scholar or a practitioner adhering to the first – narrower – approach, the present state of the case law of the European Court of Justice appears to be completely satisfactory. The liberal approach followed by the European Court of Justice leads to a situation comparable to the USA situation, whereby state law competition can fully play its role and where it has not led to insurmountable problems, albeit in a context of further advanced harmonisation of company law. On top of that, US company law is not built around a concept of creditor protection; such creditor protection is governed by insolvency law. When adhering to the second – wider – notion of company law, the same case law of the European Court of Justice raises the following issues: 1. it does not offer any stakeholders’ protection; 2. the European Court of Justice seems inclined to follow the rule of reason very, if not too, narrowly; 3. it invites parties concerned to use other cross-border mobility techniques without legislative basis than those that are regulated, such as the European Company and the cross-border mergers, which creates legal uncertainty as to what is allowed and not. The majority of the members of the workshop keeps thinking that there is hence a case for a Fourteenth Company Law Directive. – 332 – B. Response to paper by Levinus Timmerman 1. Marieke WYCKAERT and Filip JENNÉ wrote an excellent report on corporate mobility within the European Community. Especially their analysis of the judgments of the European Court of Justice is clarifying. I fully agree with their finding that the European Court of Justice does not have the discretion to repeal the real seat doctrine. Article 48 of the EC Treaty places the registered office, the central administration and the principal place of business on the same footing as connecting factor for enjoying the right of establishment. The Cartesio judgment confirms this way of reasoning. The European Court of Justice allows a real seat state to prevent a company incorporated under its law from transferring its seat to another Member State, if the company wishes to retain its status as a company governed by the law of the Member State of incorporation. In this judgment, the European Court of Justice upholds the real seat doctrine. 2. This does not mean that the European Court of Justice leaves the real seat doctrine unaffected. I have the impression that the European Court of Justice seizes the opportunity in every appropriate judgment to undermine the real seat doctrine. This phenomenon can be seen in the Cartesio judgment. The European Court of Justice gives the real seat state the opportunity to prevent a transfer of the seat. At the same time, the European Court of Justice warns that a company can convert itself into a company governed by the law of another Member State, if this Member State permits it to do so. In my opinion, this obiter dictum of the European Court of Justice is a targeted attack on the real seat doctrine to the same extent as this was the case in the Überseering decision. A company can circumvent complications with the real seat doctrine by choosing a cross-border conversion, provided that the host state allows such a transfer. It is crystal clear that the European Court of Justice makes it more difficult for real seat states to apply the real seat doctrine effectively. The real seat doctrine is becoming a dull knife. The obiter dictum is also an open invitation to Member States that have the ambition to attract the incorporation of foreign businesses, such as the United Kingdom, to introduce in their legislation facilities for crossborder conversion. 3. I am...

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