Would the social dimensions of private law be in a safe harbour in a European civil code? This is a question that does not concern private law alone, but is connected with the fate of the welfare state as a whole. We shall come back to this 25 The difficulties that such a vision faces are, however, so massive that there is no sense in putting them off. To anticipat the argument that we are developing: the normative quality of the constitutional social private law'is dependent on the interplay of parliamentary legislation and the non parliamentary production of law, on regulatory policy, special statutory law and codification, on expert communities and on the general public.26 These circumstances are not present in the European context, and will not emerge in any near future That this is the case follows simply from state of the(European) Union: this polity is not unitary, but plural27 (heterarchical, as some call it; 28 or" mixed', as others do29) In it, there are - relatively autonomous political units, none of which are empowered with the Kompetenz-Kompetenz which would be needed for an authoritative resolution of jurisd ictional conflicts. The result is a very specific disjunction of society'and'state', of economic freed oms and political rights, market citizenship and political citizenship Let us distance ourselves from the two approaches initially dealt with: Europe has never become a market without a state in which a supranational economic constitution can structure the systems of private law, and it is even less the European transformation into a statal entity with comprehensive political powers nstead it is a tertium which finds itself in a constitutional moment that will continue to last for some time yet. 3 Sections 11.3 and Ill infra Cf. Ch Joerges, Formale Freiheitsethik, materiale Verantwortungsethik und Diskursethik im modernen Privatrecht, in: F U. Pappi(ed ) Wirtschaftsethik Gesellschaftswissenschaftliche Perspektiven ( Sonderheft der Christiana Albertina Universitat ), Kiel: s.n. 1989, 127 ff.; The Science of Private Law and the Nation-State, in F. Snyder(ed ) The Europeanisation ofLaw: The Legal Effects of European Integration, Oxford/Portland: Hart 2000, 47 ff, 70 ff.):O. Gerstenberg, Public Intervention, Private Ordering and Social Pluralism, in: Ch Joerges andO Gerstenberg(eds ) Private Governance, Democratic Constitutionalism and Supranationalism, Luxembourg: European Commission(Directorate-General Science, Research and Development; EUR 18340 EN,1998,205ff. As well argued by N. Walker, The Idea of Constitutional Plura lism, Modern Law Review 65(2002), 317ff K-H. Ladeur, The Theory of Autopoiesis: An Approach to a Better Understanding of Post-modern Law. From the Hierarchy of Norms to the Heterarchy of Changing Patterns of Legal Inter-relationships, EUI Working Paper Law 99/3 G Majone, Delegation of Regulatory Powers in a Mixed Polity, European Law Journal(2002), 319 This scepticism does not, as P. Legrand's(European Legal Systems Are not Converging, Internat and Comparative Law Quarterly, 45 (1996), 52 ff. ) result from presumed unbridgeable communication difficulties between common law and civil law, nor is it meant, as, for instance, in H. Collins, European Private Law and the Cultural Identity of States, European Review ofPrivate Law 3(1995), 353 ff, a rigid defence of the 'cultural ties of private law. Instead, it assumes two kinds of social integration-cultural and political. The former denotes the kind of integration that is needed for individuals and groups that seek to find out who they are or would like to be. . the latter does not rest upon a particular set of values but on trans-culturalnorms and universal principles; E.O. Eriksen and J.E. Fossum, The EU and Post-national Legitimacy, Oslo: Arena Working Paper 26/2000, text accompany ingnotes 40 ff. It is in this sense that I understand M.w. Hesselink, The New European Legal Culture, Deventer: Kluwer 2001, 72 ff
Would the ‘social’ dimensions of private law be in a safe harbour in a European civil code? This is a question that does not concern private law alone, but is connected with the fate of the welfare state as a whole. We shall come back to this.25 The difficulties that such a vision faces are, however, so massive that there is no sense in putting them off. To anticipate the argument that we are developing: the normative quality of the constitutional ‘social private law’ is dependent on the interplay of parliamentary legislation and the nonparliamentary production of law, on regulatory policy, special statutory law and codification, on expert communities and on the general public.26 These circumstances are not present in the European context, and will not emerge in any near future. That this is the case follows simply from ‘state of the (European) Union’: this polity is not unitary, but plural27 (‘heterarchical’, as some call it;28 or ‘mixed’, as others do29). In it, there are - relatively - autonomous political units, none of which are empowered with the Kompetenz-Kompetenz which would be needed for an authoritative resolution of jurisdictional conflicts. The result is a very specific disjunction of ‘society’ and ‘state’, of economic freedoms and political rights, market citizenship and political citizenship. Let us distance ourselves from the two approaches initially dealt with: Europe has never become a ‘market without a state’ in which a supranational economic constitution can structure the systems of private law; and it is even less the European transformation into a statal entity with comprehensive political powers. Instead, it is a tertium which finds itself in a ‘constitutional moment’ that will continue to last for some time yet.30 25 Sections II.3 and III infra. 26 Cf. Ch. Joerges, Formale Freiheitsethik, materiale Verantwortungsethik und Diskursethik im modernen Privatrecht, in: F.U. Pappi (ed.), Wirtschaftsethik. Gesellschaftswissenschaftliche Perspektiven (Sonderheft der Christiana Albertina Universität), Kiel: s.n. 1989, 127 ff.; The Science of Private Law and the Nation-State, in: F. Snyder (ed.), The Europeanisation of Law: The Legal Effects of European Integration , Oxford/Portland: Hart 2000, 47 ff., 70 ff. ); O. Gerstenberg, Public Intervention, Private Ordering and Social Pluralism, in: Ch. Joerges and O. Gerstenberg (eds.), Private Governance, Democratic Constitutionalism and Supranationalism, Luxembourg: European Commission (Directorate-General Science, Research and Development; EUR 18340 EN), 1998, 205 ff. 27 As well argued by N. Walker, The Idea of Constitutional Pluralism, Modern Law Review 65 (2002), 317 ff. 28 K.-H. Ladeur, The Theory of Autopoiesis: An Approach to a Better Understanding of Post-modern Law. From the Hierarchy of Norms to the Heterarchy of Changing Patterns of Legal Inter-relationships, EUI Working Paper Law 99/3. 29 G. Majone, Delegation of Regulatory Powers in a Mixed Polity, European Law Journal 8 (2002), 319 ff. 30 This scepticism does not, as P. Legrand’s (European Legal Systems Are not Converging, International and Comparative Law Quarterly, 45 (1996), 52 ff.), result from presumed unbridgeable communication difficulties between common law and civil law, nor is it meant, as, for instance, in H. Collins, European Private Law and the Cultural Identity of States, European Review of Private Law 3 (1995), 353 ff., a rigid defence of the ‘cultural’ ties of private law. Instead, it assumes ‘two kinds of social integration - cultural and political. The former denotes the kind of integration that is needed for individuals and groups that seek to find out who they are or would like to be . . ., the latter does not rest upon a particular set of values but on trans-cultural norms and universal principles’; E.O. Eriksen and J.E. Fossum, The EU and Post-national Legitimacy, Oslo: Arena - Working Paper 26/2000, text accompanying notes 40 ff. It is in this sense that I understand M.W. Hesselink, The New European Legal Culture, Deventer: Kluwer 2001, 72 ff
Il Three sets of examples Verba docent, exempla trahunt. But it is by no means the case that the sets of examples from the case law of the eCJ discussed below could" confute' the paradigms sketched out in the first section, or represent some higher law. This is because these paradigms merely refer to sets of ideas in which legal concepts and arguments can find a theoretical basis. To that extent, they compete with each other. But it is not to be expected, say, that one of them will totally dominate practice, or that one tradition of thought will disappear without trace Nevertheless, the analyses below pursues systematic and theoretical claims: they are intended to illustrate problems graphically with all three of the paradigms set forth in the previous section, thus preparing the transition to the synthesising perspectives in the concluding section II. 1 Centros and Uberseering The transformation of the freedoms of market citizens into political rights, and the obsolescence of trad itional private international law CentrosI may be regarded as the ECJ's most interesting judgment on European market building since the legendary Cassis de Dijon decision of 1979: 32 it is, at any rate, the most intensively debated one. 33 Expectations about the subsequent Uberseering litigation were correspondingly tense. 34 So much has been written that it would seem appropriate to start with the three theses that are to be established below: (1)This case law transforms economic freedoms into political rights. (2) It strives towards a jurid ification(proceduralisation) of regulatory competition. (3)It has the potential of constitutionalising' the Europeanisation process through a law of just(ce ) -fication that reaches beyond both orthodox supranationalism and trad itional private international law IL. .I Centros The judgment in Centros concems the core of the European legal acquis, namely the freedoms of market citizens which apply directly and ought therefore to take primacy over national law. Moreover, the decision is widely perceived as a step towards a long expected new type of negative integration, because it seems to expose the national company laws to regulatory competition. But Centros is more sophisticated than such interpretations suggest. 35 As so often occurs, the facts of this seminal case were triv ial a Danish married couple Case 212/97, Judgment of9 March 1999, ECR(1999-1)1459, Centros Ltd v. Ervervsog Selskabsstrylsen Rs. 120/78, SIg. 1979, 649-Cassis de dijon A Celex search on 25 March 2002 indicated 1 12 commentaries. That figure was too modest, for it did not take into account, for instance, H. Halbhuber's monograph Limited Company statt GmbH? Europarechtlicher Rahmen und deutscher Widerstand- Ein Beitrag =ur Auslegung von Art. 48 EG und =um Europaischen Gesellschaftsrecht, Baden-Baden: Nomos 2001 Rs 208/00, U.v. 5 November 2002, Uberseering Bl v Nordic Construction Company The following owes much to B. Trefil, Die Niederlassungsfreiheit fur Gesellschaften in der Rechtsprechung des EuGH und ihre Auswirkungen auf nationales Recht, EUl Working Paper Law 200319. nttp:/www.iue.it/pub/law03-9pdf.IamalsoindebtedtoKaraPreedyformanydiscussionsonthenormative contents of the freedoms, see K Preedy, Fundamental Rights and Private Acts: Horizontal Direct or Indirect Effect, European Review of private Law 8(2000), 125 ff
II Three sets of examples Verba docent, exempla trahunt. But it is by no means the case that the sets of examples from the case law of the ECJ discussed below could ‘confute’ the paradigms sketched out in the first section, or represent some ‘higher law’. This is because these paradigms merely refer to sets of ideas in which legal concepts and arguments can find a theoretical basis. To that extent, they compete with each other. But it is not to be expected, say, that one of them will totally dominate ‘practice’, or that one tradition of thought will disappear without trace. Nevertheless, the analyses below pursues systematic and theoretical claims: they are intended to illustrate problems graphically with all three of the paradigms set forth in the previous section, thus preparing the transition to the synthesising perspectives in the concluding section. II.1 Centros and Überseering: The transformation of the freedoms of market citizens into political rights, and the obsolescence of traditional private international law Centros31 may be regarded as the ECJ’s most interesting judgment on European market building since the legendary Cassis de Dijon decision of 1979;32 it is, at any rate, the most intensively debated one.33 Expectations about the subsequent Überseering litigation were correspondingly tense.34 So much has been written that it would seem appropriate to start with the three theses that are to be established below: (1) This case law transforms economic freedoms into political rights. (2) It strives towards a juridification (proceduralisation) of regulatory competition. (3) It has the potential of ‘constitutionalising’ the Europeanisation process through a law of just(ce)-fication that reaches beyond both orthodox supranationalism and traditional private international law. II.1.1 Centros The judgment in Centros concerns the core of the European legal acquis, namely the freedoms of market citizens which apply directly and ought therefore to take primacy over national law. Moreover, the decision is widely perceived as a step towards a long expected new type of ‘negative integration’, because it seems to expose the national company laws to regulatory competition. But Centros is more sophisticated than such interpretations suggest.35 As so often occurs, the facts of this seminal case were trivial: a Danish married couple, 31 Case 212/97, judgment of 9 March 1999, ECR (1999-I) 1459, Centros Ltd. v. Ervervsog Selskabsstrylsen. 32 Rs. 120/78, Slg. 1979, 649 - Cassis de Dijon. 33 A Celex search on 25 March 2002 indicated 112 commentaries. That figure was too modest, for it did not take into account, for instance, H. Halbhuber’s monograph Limited Company statt GmbH? Europarechtlicher Rahmen und deutscher Widerstand - Ein Beitrag zur Auslegung von Art. 48 EG und zum Europäischen Gesellschaftsrecht, Baden-Baden: Nomos 2001. 34 Rs. 208/00, U. v. 5 November 2002, Überseering BV v. Nordic Construction Company Baumanagement GmbH (NCC). 35 The following owes much to B. Trefil, Die Niederlassungsfreiheit für Gesellschaften in der Rechtsprechung des EuGH und ihre Auswirkungen auf nationales Recht, EUI Working Paper Law 2003 /9, <http://www.iue.it/PUB/law03-9.pdf>. I am also indebted to Kara Preedy for many discussions on the normative contents of the freedoms; see K. Preedy, Fundamental Rights and Private Acts: Horizontal Direct or Indirect Effect, European Review of Private Law 8 (2000), 125 ff
Marianne and Tony Bryde, wished to import wine into Denmark but not pay the fee of the DK 200,000(28,000 Euro) that Denmark requires for the registration of companies. The two then hit on the idea of cocking a snoot'at their Danish Law. 36 They founded, and this was in May 1992, a private limited company in England, the now legendary Centros Ltd, and set up a subsidiary in Copenhagen- for none of these steps did they require more than the minimum capital investment However, the Danish authorities refused registration; the Brydes went to court. After all the courts had been gone through, the Hojesteret brought the questionwhether the refusal of registration was compatible with the guaranteed freedom of establishment(Article (ex 52)taken together with Articles 52 and 58 EC Treaty) before the ECJ in early June 97. The ECs answer(given on 9 March 1999)read It is contrary to Articles 52 and 58 of the Treaty for a Member State to refuse to register a branch of a company formed in a ccordance with the law of another Member State in which it las its registered office but in which it conducts no business where the branch is intended to enable the company in question to carry on its entire business in the state im which that branch is to be created, while avoiding the need to form a company there, thus evading application of the rules goveming the formation of companies which, in that state, are more restrictive as regards the paying up of a m inimum share capital. 38 11.1.2 Interpretation The ECJ is seen by some39 as cautiously continuing its earlier case law on freedom of establishment or radicalising it in a questionable fashion. 4 The incorporation theory (Gruindungstheorie) is seen as having won through against the sitztheorie(company seat principle)with the help of the ECJ. 42 None of this is true, it is argued by others: in Denmark, the incorporation theory applied anyway, and recognition of the seat of the company principle through the Daily Mail decision does not come into it: hence, it is business as usual for 36 This is how the maitre penseur of private international law, G. Kegel, interpreted what the Brydes were doing in his Editorial in Europaisches Wirtschafts und Steuerrecht(9)1999(Es ist was faul im Staate Danemark und anderswo.. - There is something rotten in the State of Denmark) Para. 13 Sentence l of the tenor of the judgment ECJ(1999)1-1947 Completeness can scarcely be achieved in portray ing the range of opinions. Specifically on the response in Germany, see H. Halbhuber, National Doctrinal Structures and European Company Law, Common Market Law Review 38(2001); a very comprehensive survey "from outside on the overall development of company law is offered by J Wouters, European Company Law. Quo Vadis?, Common Market Law Review 37 (2000), 257 ff. more topically, B. Trefil(note 35 supra) Judgment of 10 July 1986, Case C-79785, (1986)ECR 2375-Segers 41 An opinion to be found in E Steindorff, Centros und das Recht auf die gunstigste Rechtsordnung Juristen Zeitung 1999, 1140 ff. 42 Cf, for example, P. Behrens, Das Internationale Gesellscha ftsrecht nach dem Centros-Urteil des EuGH Praxis des Internationalen Privat und Verfahrensrechts 19(1999), 323 ff. this was the question the Federal High Court subm itted to the EJC on 25 May 2000; cf the Uberseering decision, Il. 1. 4 infra 43 Case C-81/87, judgment of 27 September 1988, (1988)ECR 5483, The Queen v. Treasury and Commissioners of Inland Revenue, ex parte Daily Mail and General Trust PLC
Marianne and Tony Bryde, wished to import wine into Denmark but not pay the fee of the DK 200,000 (28,000 Euro) that Denmark requires for the registration of companies. The two then hit on the idea of ‘cocking a snoot’ at their Danish Law.36 They founded, and this was in May 1992, a private limited company in England, the now legendary Centros Ltd., and set up a subsidiary in Copenhagen - for none of these steps did they require more than the minimum capital investment. However, the Danish authorities refused registration; the Brydes went to court. After all the courts had been gone through, the Højesteret brought the question37 whether the refusal of registration was compatible with the guaranteed freedom of establishment (Article 43 (ex 52) taken together with Articles 52 and 58 EC Treaty) before the ECJ in early June 1997. The ECJ’s answer (given on 9 March 1999) read: It is contrary to Articles 52 and 58 of the Treaty for a Member State to refuse to register a branch of a company formed in a ccordance with the law of another Member State in which it has its registered office but in which it conducts no business where the branch is intended to enable the company in question to carry on its entire business in the state in which that branch is to be created, while avoiding the need to form a company there, thus evading application of the rules governing the formation of companies which, in that state, are more restrictive as regards the paying up of a minimum share capital.38 II.1.2 Interpretation The ECJ is seen by some39 as cautiously continuing its earlier case law on freedom of establishment40 or radicalising it in a questionable fashion.41 The incorporation theory (Gründungstheorie) is seen as having won through against the Sitztheorie (company seat principle) with the help of the ECJ.42 None of this is true, it is argued by others: in Denmark, the incorporation theory applied anyway, and recognition of the seat of the company principle through the Daily Mail decision43 does not come into it: hence, it is business as usual for 36 This is how the maître penseur of private international law, G. Kegel, interpreted what the Brydes were doing in his Editorial in Europäisches Wirtschafts und Steuerrecht (9) 1999 (‘Es ist was faul im Staate Dänemark und anderswo …’ - ‘There is something rotten in the State of Denmark’). 37 Para. 13. 38 Sentence 1 of the tenor of the judgment ECJ (1999) I-1947. 39 Completeness can scarcely be achieved in portraying the range of opinions. Specifically on the response in Germany, see H. Halbhuber, National Doctrinal Structures and European Company Law, Common Market Law Review 38 (2001); a very comprehensive survey ‘from outside’ on the overall development of company law is offered by J. Wouters, European Company Law: Quo Vadis?, Common Market Law Review 37 (2000), 257 ff.; more topically, B. Trefil (note 35 supra). 40 Judgment of 10 July 1986, Case C-79/85, (1986) ECR 2375 - Segers. 41 An opinion to be found in E. Steindorff, Centros und das Recht auf die günstigste Rechtsordnung, Juristen Zeitung 1999, 1140 ff. 42 Cf., for example, P. Behrens, Das Internationale Gesellschaftsrecht nach dem Centros-Urteil des EuGH, Praxis des Internationalen Privat und Verfahrensrechts 19 (1999), 323 ff.; this was the question the Federal High Court submitted to the EJC on 25 May 2000; cf. the Uberseering decision, II.1.4 infra. 43 Case C-81/87, judgment of 27 September 1988, (1988) ECR 5483, The Queen v. Treasury and Commissioners of Inland Revenue, ex parte Daily Mail and General Trust PLC
private international law(PIL). 4 Again, the ECJ is seen as opening the road to regulatory competition, so one would now have to expect Delaware effects in Europe. 45 My first thesis 46 seeks to demarcate itself from the doctrinal dichotomy between European law and PIL, between thinking in terms of primacy and linkage and the associated policy dualism of negative and positive integration. The way the ECJ treated the conduct of the Brydes seems to me to make this sort of interpretation plausible. European law, says the criticism of the ECJ, has no business interfering with a purely internal Danish matter. The Brydes, who were pursuing no business interests in England, ought to have bowed to their home sovereign. But are the Brydes only Danes? May they have the right to the most citizens of the EU? This is the way thal/ fact. read the ECJ: there is nothing n lse o favourable legal system', 4/just because they are not merely citizens of Denmark, but al abusive in a citizen of a member State found ing a company in accordance with another Members State's provisions which are more favourable for him. That is simply his right Certainly, Centros concerned the incorporation of a company in England; the Brydes never intended to do business in England but merely wished to start their activities to Denmark. But can one call the freedom to exploit the provision of English law an abuse? No the ecj insists TTHe fact that a national of a Member State who wishes to set up a com pany chooses to form it in the Member State whose rules of company lawseem to him the least restrictive and to set up branches in other Mem ber States cannot, in itself, constitute an abuse of the right of establishment. The right to form a company in accordance with the law of a Member State and to set up branches in other Mem ber States is inherent in the exercise, in a single market, of the freedom of establishment guaranteed by the Treaty. Is this, then, negative integration, interference with Denmark's constitutional autonomy, and a new confirmation of the deregulatory effect of the freedoms? 50 Is the ECJ sending Europe's constitutional law off on the road to Delaware? Not really. For Denmark remains entitled to impose regulatory requirements on both its own -and on foreign -citizens, but has to adduce compelling grounds of public interest. European law does not push Danish law aside, but places it under pressure of justification. It was this pressure that Denmark could not stand up to it was completely unable to achieve the protection of creditors which, accord ing to the Danish governments presentation, was the object of the Danish regulation-that was Thus, for example, w. Ebke, Das Schicksal der Sitztheorie nach dem Centros-Urteil des euGH, Juristen Zeitung 1999, 656ff, P. Kindler, Niederlassungsfreiheit fur Scheinauslandsgesellschaften? Die Centros-Entscheidung des EuGH und das internationale Privatrecht, Neue Juristische Wochenschrift 1999, 1993 ff, W-H. Roth, Case Note, Common Market Law Review 37(2000), 147 ff It was especially paragraph 20 in Advocate General La Pergolas Opinion that inspired this sort of 46 Above text before section I. E. Steindorff, Centros und das Recht auf die gunstigste Rechtsordnung, note 4 1 supra Para. 27; cf. para. 29 Para 35 M. Baudisch discusses and contests this point in a very comprehensive study: From Status to Contract An American Perspective on Recent Developments in European Company Law, MS New York(Columbia Law School) 2002(on file with the author)
private international law (PIL).44 Again, the ECJ is seen as opening the road to regulatory competition, so one would now have to expect Delaware effects in Europe.45 My first thesis46 seeks to demarcate itself from the doctrinal dichotomy between European law and PIL, between thinking in terms of primacy and linkage and the associated policy dualism of ‘negative’ and ‘positive’ integration. The way the ECJ treated the conduct of the Brydes seems to me to make this sort of interpretation plausible. European law, says the criticism of the ECJ, has no business interfering with a purely internal Danish matter. The Brydes, who were pursuing no business interests in England, ought to have bowed to their home sovereign. But are the Brydes only Danes? May they have the ‘right to the most favourable legal system’,47 just because they are not merely citizens of Denmark, but also citizens of the EU? This is the way that I, in fact, read the ECJ: there is nothing in itself abusive in a citizen of a Member State founding a company in accordance with another Members State’s provisions which are more favourable for him. That is simply his right.48 Certainly, Centros concerned the incorporation of a company in England; the Brydes never intended to do business in England, but merely wished to start their activities to Denmark. But can one call the freedom to exploit the provision of English law an abuse? No, the ECJ insists: [T]he fact that a national of a Member State who wishes to set up a company chooses to form it in the Member State whose rules of company law seem to him the least restrictive and to set up branches in other Member States cannot, in itself, constitute an abuse of the right of establishment. The right to form a company in accordance with the law of a Member State and to set up branches in other Member States is inherent in the exercise, in a single market, of the freedom of establishment guaranteed by the Treaty.49 Is this, then, ‘negative integration’, interference with Denmark’s constitutional autonomy, and a new confirmation of the deregulatory effect of the freedoms?50 Is the ECJ sending Europe’s constitutional law off on the road to Delaware? Not really. For Denmark remains entitled to impose regulatory requirements on both its own - and on foreign - citizens, but has to adduce ‘compelling grounds of public interest’. European law does not push Danish law aside, but places it under pressure of justification. It was this pressure that Denmark could not stand up to: it was completely unable to achieve the protection of creditors which, according to the Danish government’s presentation, was the object of the Danish regulation - that was 44 Thus, for example, W. Ebke, Das Schicksal der Sitztheorie nach dem Centros-Urteil des EuGH, Juristen Zeitung 1999, 656 ff.; P. Kindler, Niederlassungsfreiheit für Scheinauslandsgesellschaften? Die Centros-Entscheidung des EuGH und das internationale Privatrecht, Neue Juristische Wochenschrift 1999, 1993 ff.; W.-H. Roth, Case Note, Common Market Law Review 37 (2000), 147 ff. 45 It was especially paragraph 20 in Advocate General La Pergola’s Opinion that inspired this sort of interpretation. 46 Above text before section II.1. 47 E. Steindorff, Centros und das Recht auf die günstigste Rechtsordnung, note 41 supra. 48 Para. 27; cf. para. 29. 49 Para. 35. 50 M. Baudisch discusses and contests this point in a very comprehensive study: From Status to Contract: An American Perspective on Recent Developments in European Company Law, MS New York (Columbia Law School) 2002 (on file with the author)
the ECj's find ing. I The ECJ acted as a constitutional court It assumed the right to test Danish law according to whether it respects rights guaranteed at the European level. However, the limits imposed on Denmark are limited. Denmark remains entitled to protect cred itors and act against fraud but in accordance with the provisos familiar to the readers of the case law on Article 28(ex 30). Denmark very soon, in May 2000, adopted a new regulation accord ing to which companies wishing to do business in Denmark and having their main centre there, must either deposit a caution amounting to DK 110,000 with the Danish bank authorities in the form of cash, government bonds or bank guarantees (which in the event of insolvency serve exclusively to meet tax demands), or else it must be clear that minimum assets of at least DK 125.000 are available. 53 Merely putting new gloss on the old provisions? At least some Danish commentators think so. 54 In its judgment of 3 February 2002, the Danish Supreme Court was silent on th issue of Centros's tax liability; it simply reprimanded the company that the forms had not been completed correctly. 55 What, then, is so rotten'-in the State of Denmark -or elsewhere?56 Denmark has to justify itself before its own citizens in the forum of the ECJ.It is entitled to pursue its regulatory interests, but it also has to show that the means it chooses serve the ends it pursues. What sort of law, then, are we dealing with here? With provisions that subject the case to the geographically'best-suited jurisdiction? A legal innovation supported by comparative studies? What is at stake -rather a European conflict of laws'to the extent that it involves dealing with legal differences or a conflict of laws that seeks to reconcile Denmark's political autonomy with the granting of European citizenship rights to Danish citizens? In reshaping economic freedoms as rights to political participation, I see the constitutional core of the decision: private autonomy and political rights in democracies, as Jurgen Habermas has continually argued since Between Facts and norms, 7 have to be conceived as both having an equivalent original dignity 8 What does this mean in the Paras 34-36 nach dem Centros-Urteil des EuGH: Eine Bilanz, Europarecht 2000, 167 ff, 192 ff for a very thoughtful recent comprehensive analysis of the Article 28 jursiprudence, cf S. Feiden, Die Bedeutung der ' Keck Rechtsprechung im system der Grundfreiheiten. Ein Beitrag =ur Konvergenzder Freheiten, Berlin: Duncker Humblot 2003, passim 53cf.B.Trefil(note35supra),at31ff.,withreferencestowww.retsinfo.dkandasurveyofthedebate on the questiona bility in European law of the new regulations. F Hansen, From C 12 to L 212: Centros Revisited, European Business Organization Law Review 2 (2001), 141 ff, 156: a flagrant violation of Article 43 EU Ugeskrift for Retsvaen 2002.1079H; Laurits Christensen(Copenhagen)and Hanne G. Kegel, note 36 J. Habermas, Faktizitiat und Geltung, Frankfurt a M. Suhrkamp 1992, 109 ff, Between Facts Norms, Cambridge, MA: MIT Press 1998, 82 ff, 133 ff. Cf. his recent restatement in Constitutional Democracy: A Paradoxical Union of Contradictory iples?, Political Theory 29(2002), 766-781, as well as Why Europe Needs a Constitution,, in: EO en,JE. Fossum and J. Menendez(eds ) Developing a Constitution for Europe, London: Routledge
the ECJ’s finding.51 The ECJ acted as a constitutional court. It assumed the right to test Danish law according to whether it respects rights guaranteed at the European level. However, the limits imposed on Denmark are limited. Denmark remains entitled to protect creditors and act against fraud - but in accordance with the provisos familiar to the readers of the case law on Article 28 (ex 30).52 Denmark very soon, in May 2000, adopted a new regulation according to which companies wishing to do business in Denmark and having their main centre there, must either deposit a caution amounting to DK 110,000 with the Danish bank authorities in the form of cash, government bonds or bank guarantees (which in the event of insolvency serve exclusively to meet tax demands), or else it must be clear that minimum assets of at least DK 125,000 are available.53 Merely putting new gloss on the old provisions? At least some Danish commentators think so.54 In its judgment of 3 February 2002, the Danish Supreme Court was silent on the issue of Centros’s tax liability; it simply reprimanded the company that the forms had not been completed correctly.55 What, then, is so ‘rotten’ - in the State of Denmark - or elsewhere?56 Denmark has to justify itself before its own citizens in the forum of the ECJ. It is entitled to pursue its regulatory interests, but it also has to show that the means it chooses serve the ends it pursues. What sort of law, then, are we dealing with here? With provisions that subject the case to the ‘geographically’ best-suited jurisdiction? A legal innovation supported by comparative studies? What is at stake - rather a European ‘conflict of laws’ to the extent that it involves dealing with legal differences or a conflict of laws that seeks to reconcile Denmark’s political autonomy with the granting of European citizenship rights to Danish citizens? In reshaping economic freedoms as rights to political participation, I see the constitutional core of the decision: private autonomy and political rights in democracies, as Jürgen Habermas has continually argued since Between Facts and Norms, 57 have to be conceived as both having an equivalent original dignity.58 What does this mean in the 51 Paras. 34-36. 52 Paras. 37-39; for a particularly lucid analysis, cf. U. Forsthoff, Niederlassungsrecht für Gesellschaften nach dem Centros-Urteil des EuGH: Eine Bilanz, Europarecht 2000, 167 ff., 192 ff.; for a very thoughtful recent comprehensive analysis of the Article 28 jursiprudence, cf. S. Feiden, Die Bedeutung der ‘Keck’- Rechtsprechung im system der Grundfreiheiten. Ein Beitrag zur Konvergenz der Freheiten, Berlin: Duncker & Humblot 2003, passim. 53 Cf. B. Trefil (note 35 supra), at 31 ff., with references to www.retsinfo.dk and a survey of the debate on the questionability in European law of the new regulations. 54 F. Hansen, From C 212 to L 212: CentrosRevisited, European Business Organization Law Review 2 (2001), 141 ff., 156: ‘a flagrant violation of Article 43 EU’. 55 Ugeskrift for Retsvæn 2002.1079H; Laurits Christensen (Copenhagen) and Hanne B. Jensen (Florence) kindly pointed me to the judgment. 56 G. Kegel, note 36 supra. 57 J. Habermas, Faktizitiät und Geltung, Frankfurt a.M.: Suhrkamp 1992, 109 ff.; Between Facts and Norms, Cambridge, MA: MIT Press 1998, 82 ff., 133 ff. 58 Cf. his recent restatement in Constitutional Democracy: A Paradoxical Union of Contradictory Principles?, Political Theory 29 (2002), 766-781, as well as ‘Why Europe Needs a Constitution’, in: E.O. Eriksen, J.E. Fossum and J. Menéndez (eds.), Developing a Constitution for Europe, London: Routledge (forthcoming)