Federconsumatori and Others (C-463/04) and Associazione Azionariato Diffuso dell’AEM SpA and Others (C-464/04) v Comune di Milano.

• Jurisdiction: European Union
• Celex Number: 62004CC0463
• ECLI: ECLI:EU:C:2006:524
• Docket Number: C-464/04,C-463/04
• Date: 07 September 2006
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling

OPINION OF ADVOCATE GENERAL

POIARES MADURO

delivered on 7 September 2006 (1)

Joined Cases C-463/04 and C-464/04

Federconsumatori

Adiconsum

ADOC

Ercole Pietro Zucca

and

Associazione Azionariato Diffuso dell’AEM e altri

Filippo Cuccia

Giacomo Fragapane

Pietro Angelo Puggioni

Annamaria Sanchirico

Sandro Sartorio

v

Comune di Milano

(Reference for a preliminary ruling from the Tribunale amministrativo regionale per la Lombardia (Italy))

1. In two proceedings brought against the Comune di Milano (Municipality of Milan), the Tribunale amministrativo regionale per la Lombardia (Regional Administrative Court for Lombardy) has referred a number of questions to the Court relating to the interpretation of Article 56 EC. The questions, which are identical in both cases, concern the situation where a public body, which retains a minority shareholding in a privatised company, maintains, as regards the control of that company, a privileged position in relation to the other shareholders. The company at issue in the main proceedings is AEM, in which the Comune di Milano, after selling part of its majority shareholding, has retained a shareholding of 33.4%. It has retained, however, the power to appoint the majority of the members of the board of directors. According to the claimants, this contravenes Article 56 EC, as interpreted by the Court in its case‑law on ‘golden shares’.

I – Facts, national legal framework and the reference for a preliminary ruling

2. AEM was set up by the Comune di Milano in 1996. It operates in the public service sector as a distributor of gas and electricity. In 1998, on the stock‑market flotation of AEM, the city sold a first tranche of shares, while maintaining a shareholding of 51% in the company’s capital.

3. By Decision No 4/04 of 17 February 2004, the Comune di Milano decided further to reduce its shareholding in AEM to 33.4%. However, it also decided that this reduction would be conditional on prior amendment of the articles of association of the company.

4. By Decision No 5/04 of 8 March 2004, the Comune di Milano concluded that it was necessary to amend the articles of association of AEM, in particular as regards the appointment of members of the board of directors, in the light of Law No 474/1994.

5. Article 2 of the consolidated text of Decree Law No 332 of 31 May 1994, which became, after amendment, Law No 474 of 30 July 1994 (‘Law No 474/1994’), provides, in so far as relevant:

‘1. The President of the Council of Ministers shall … determine by decree those companies controlled directly or indirectly by the State and operating in the defence, transport, telecommunications, energy resources and other public service sectors, the articles of association of which are to stipulate that, prior to the adoption of any measure resulting in a loss of control, there shall be inserted, by resolution to that effect passed at an extraordinary general meeting of the company, a provision conferring on the minister for the economy and finance one or more of the following special powers, to be exercised in consultation with the minister for productive activities:

…

(d) the appointment of a director without voting rights

…

3. The provisions of this article shall also apply to companies controlled, directly or indirectly, by public bodies … operating in the transport and other public service sectors and designated by decision of the public body holding shares in such companies, which shall be entitled to exercise the powers set out in paragraph 1.’

6. Article 4(1) provides, in so far as relevant:

‘Companies [such as AEM] … having articles of association which limit the rights of shareholders shall incorporate in their articles a special provision, which shall not be capable of being amended for so long as any such limit is in place, to the effect that directors shall be appointed on the basis of a list system … A minimum of one fifth of the directors not appointed pursuant to Article 2(1)(d) shall be appointed from minority lists, and in the event of the number being a fraction of less than a single unit, such number shall be rounded up to the nearest whole number.’

7. At an extraordinary general meeting held on 29 April 2004, the members of AEM adopted the resolutions necessary to amend the articles of association. In accordance with Article 4 of Law No 474/1994, the new articles of association included a provision regarding the election of directors on the basis of list voting. Essentially, certain shareholders, including the Comune di Milano, may propose lists of candidates. In a subsequent general meeting, all shareholders may subsequently vote in favour of a list. The list for which most votes are cast will provide six tenths of the members of the board of directors, while the list for which the next highest number of votes is cast will provide four tenths of the members. Thus, with 33.4% of the shares, the Comune di Milano, being the largest minority shareholder, can always be sure that the list of candidates it has proposed will attract at least enough votes to provide four tenths of the members of the board of directors.

8. In addition, the new articles of association granted the Comune di Milano the right to appoint up to one quarter of the members of the board of directors directly, in accordance with Article 2449 of the Italian Civil Code.

9. The heading of Article 2449 of the Italian Civil Code states that it relates to ‘companies in which the State or public bodies participate as shareholders’. It provides:

‘If the State or public bodies hold shares in a company limited by shares, the articles of association may confer on them the power to appoint one or more directors or auditors or members of the supervisory board.

The directors and the auditors or the members of the supervisory board appointed in accordance with the preceding paragraph can be removed only by the bodies by which they have been appointed.

They shall have the same rights and duties as the persons appointed by the company in general meeting. The provisions of special laws shall prevail.’

10. The referring court points out that, as a result of the combined effect of the right of direct appointment of up to a quarter of the members of the board of directors and the right to participate in the election of directors by voting on the basis of lists, the Comune di Milano can control an absolute majority of appointments to the board of directors, despite its minority shareholding. The board of directors of AEM consists of 7, 8 or 9 members and, as long as the Comune di Milano retains its 33.4% shareholding, it is entitled to appoint: four members on a board of seven (one by direct appointment); five members on a board of eight (two by direct appointment); or...