Disclaimer

LEGAL ARGUMENTS



Claims of Shareholder Applicants

The direction order effected by the Irish Minister for Finance (the "Minister") on 26 July 2011 (the "July 2011 Ex Parte Provisional Direction Order"), by means of which the Minister appropriated the 99.2% of the separate PTSB GH paid-in capital, is subject to court proceedings. The Applicants in the proceedings are shareholders in Permanent TSB Group Holdings ("PTSB GH"). One of the Applicants is also a former Director of PTSB GH. The Respondent in the proceedings is the Irish Minister for Finance, who is supported by PTSB GH and PTSB (who are controlled by the Minister).
 
The Minister for Finance effected an increase in capital in PTSB GH by way of the July 2011 Ex Parte Provisional Direction Order in a manner incompatible with, inter alia, the following provisions of the Second Council Directive 77/91/EEC (the “Second Company Law Directive”):

a. The Minister breached Article 25(1) of the Second Company Law Directive, because the July 2011 Ex Parte Provisional Direction Order effected by the Minister forced an increase in the capital in PTSB GH, against the decision of an extraordinary general meeting of PTSB GH of 20 July 2011 (the “EGM”), by an issuance to the Minister of more than 36 billion new shares in PTSB GH, causing a massive dilution to the existing shareholders; and

b. The Minister breached Article 29(1) of the Second Company Law Directive, because the said direction order deprived the PTSB GH shareholders, against the respective decision of the EGM, of their pre-emption rights, as the existing shareholders were not offered shares on a pre-emptive basis in proportion to the capital represented by their shares; and

c. The Minister breached Article 8(1) of the Second Company Law Directive, because the above-mentioned direction order changed, against the respective decisions of the EGM, the PTSB GH Memorandum and Articles of Association and reduced the nominal value of the share from 32 cents to 3.1 cents in order to enable the Minister to immediately subscribe for new shares at 6.345 cents (i.e. below the original nominal value of 32 cents).

The Applicants in the proceedings challenging the July 2011 Ex Parte Provisional Direction Order based their application to set aside that Direction Order on the following important premise:

The Applicants unequivocally do not challenge either the PTSB’s binding prudential capital requirements or the PTSB’s recapitalisation. What the Applicants do challenge in the [court] proceedings are the illegal terms of the takeover by the Minister of the 99.2% of the voting share capital in PTSB GH.”

The July 2011 Ex Parte Provisional Direction Order consisted of two sets of directions - one directed at PTSB and the other directed at PTSB GH. The Applicants, who are shareholders in PTSB GH, challenge only certain directions for PTSB GH. They do not challenge the directions for PTSB.

The fact is that the PTSB recapitalisation should have - and could have - been effected in a manner compatible with EU law. In particular, there was no legitimate reason to funnel through PTSB GH the funds to recapitalise PTSB, against the respective decision of the EGM of PTSB GH. Furthermore, there was no legitimate reason to abrogate mandatory pre-emption rights of the PTSB GH shareholders or to lower the nominal value of the PTSB GH share, against the respective decisions of the EGM of PTSB GH. The has never been any obligation under EU law to effect those measures the way the Minister did, i.e. in a manner incompatible with EU law, including in particular in a manner incompatible with the Second Company Law Directive.


Primacy of EU law

Primacy of EU law is a fundamental principle of the legal system in the EU. By virtue of the doctrine of supremacy of EU law, provisions of EU law with direct effect take precedence over domestic laws. Taken together, the principles of direct effect and supremacy mean that applicable provisions of EU law may be used to make claims before domestic courts and in effect override domestic law or rules that are incompatible with EU law. In its judgment of 9 March 1978 in the case 106/77 Amministrazione delle finanze dello Stato [1978] ECR 629, the CJEU  held that directly applicable rules of EU law “must be fully and uniformly applied in all the Member States from the date of their entry into force and for so long as they continue in force' and that 'in accordance with the principle of the precedence of Community law, the relationship between provisions of the Treaty and directly applicable measures of the institutions on the one hand and the national law of the Member States on the other is such that those provisions and measures ... by their entry into force render automatically inapplicable any conflicting provision of ... national law."


The Applicants' claims are supported by the comprehensive and consistent case law of the Court of Justice of the European Union

Article 25(1) of the Second Council Directive 77/91/EEC (Article 29(1) of the recast Directive 2012/30/EU) states: "
Any increase in capital must be decided upon by the general meeting."

Article 29(1) of the Second Council Directive 77/91/EEC (Article 33(1) of the recast Directive 2012/30/EU) states: "
Whenever the capital is increased by consideration in cash, the shares must be offered on a pre-emptive basis to shareholders in proportion to the capital represented by their shares."

The comprehensive case law of the Court of Justice of the European Union (the “CJEU”) and on relevant documents issued by the European Commission make it clear that the Irish Finance Minister acted illegally. The respective CJEU case law comprises seven consistent rulings of the CJEU between May 1991 and December 2008. The case law includes the following CJEU judgments: the judgment of 30 May 1991, C-19/90 and C-20/90, Karella and Karellas v Minister for Industry, Energy and Technology; the judgment of 24 March 1992, Case C-381/89, Sindesmos Melon Tis Eleftheras Evangelikisekklisias and Others; the judgment of 12 November 1992, C-134/91 and C-135/91, Kerafina v Greek State and others; the judgment of 12 March 1996, C-441/93, Pafitis and others; the judgment of 12 May 1998, C-367/96, Kefalas and others v Greek State and Oae; the judgment of 23 March 2000, C-373/97, Diamantis; and the judgment of 18 December 2008, C-338/06, Commission v Spain.

The above mentioned CJEU case law provides, inter alia, the following:

A. “23. Court of Justice has already had occasion to hold that the Second Directive seeks, pursuant to Article 44(2)(g) EC, to coordinate the safeguards which, for the protection of the interests of members and others, are required of companies within the meaning of the second paragraph of Article 48 EC with a view to making such safeguards equivalent. According to the second recital in the preamble thereto, the Second Directive is therefore intended to ensure minimum equivalent protection for both shareholders and creditors of public limited liability companies (Case C-42/95 Siemens[1996] ECR I-6017, paragraph 13). [Judgment of 18 December 2008 (i.e. relatively shortly before the making of the July 2011 Ex Parte Provisional Direction Order) in the case C-338/06 Commission v Spain.]

B. “... Consequently, the aim of the Second Directive is to provide a minimum level of protection for shareholders in all the Member States.

That objective would be seriously compromised if the Member States were allowed to derogate from the provisions of the directive by maintaining in force rules - even rules categorized as special or exceptional - which make it possible to decide, by administrative measure, outside any decision of the general meeting of shareholders, to effect an increase in the company's capital without guaranteeing them pre-emptive rights in respect of the shares to be issued.”
[Judgment in Sindesmos case C-381/89, paragraphs 32 and 33, which has been confirmed also numerous times in other CJEU judgments on the Second Company Law Directive.] 

C. “... the fact that the Community legislature provided for precise, concrete derogations confirms the unconditional character of the principle set forth in Article 25(1) of the Second Directive [in respect of prohibition of raising capital without consent of general meeting].” [Judgment in the joined cases Karella and Karellas C-19/90 and C-20/90, paragraph 22, which has been confirmed also in other CJEU judgments on the Second Company Law Directive.] 

D. “There is no provision, either in the EEC Treaty or in the Second Directive itself, which allows the Member States to derogate from Articles 25(1) and 29(1) [in respect of prohibition of abrogating pre-emption rights without consent of general meeting] of the Second Directive when there is a crisis. On the contrary, Article 17(1) of the directive expressly provides that in the case of a serious loss of the subscribed capital, a general meeting of shareholders must be called, within the period laid down by the laws of the Member States, to consider whether the company should be wound up or any other measures taken. That provision thus confirms the decision-making power of the general meeting provided for in Article 25(1), even where the company in question is experiencing serious financial difficulties, and does not allow any derogation whatsoever from the pre-emptive right provided for in Article 29(1).” [Paragraph 35 of the CJEU case C-381/89 Syndesmos Melon and others v Greek State and others, which has been confirmed in other CJEU judgments on the Second Company Law Directive.]

E. “24. As regards more particularly the protection of shareholders when capital is increased by consideration in cash, Article 29(1) of the Second Directive provides clearly, precisely and unconditionally that the shares must be offered on a pre-emptive basis to shareholders in proportion to the capital represented by their shares (see, to that effect, Case C-381/89 Syndesmos Melon tis Eleftheras Evangelikis Ekklisias and Others [1992] ECR I-2111, paragraph 39).

25. It is therefore only by way of exception that Article 29(4) of the Second Directive provides for the general meeting to be able to limit or withdraw the shareholders’ rights of pre-emption, subject to certain conditions expressly laid down in that provision.

26. ... the right of pre-emption granted to shareholders does not admit of any exception other than that expressly laid down in Article 29(4) of the directive (Syndesmos Melon tis Eleftheras Evangelikis Ekklisias and Others, paragraph 40) .... ”
[Judgment of 18 December 2008 (i.e. relatively shortly before the making of the July 2011 Ex Parte Provisional Direction Order) in the case C-338/06 Commission v Spain.] 

F.“the [Second Company Law] directive continues to apply where ordinary reorganization measures are taken in order to ensure the survival of the company, even if those measures mean that the shareholders and the normal organs of the company are temporarily divested of their powers.” [Judgment in the Pafitis case C-441/93, paragraph 57, which has been confirmed also in other CJEU judgments on the Second Company Law Directive.]

G.... To recognize the existence of a general reservation covering exceptional situations, outside the specific conditions laid down in the provisions of the Treaty and the Second Directive, would, moreover, be liable to impair the binding nature and uniform application of Community law ...[Judgment in the joined cases Karella and Karellas C-19/90 and C-20/90, paragraph 31, which has been confirmed also in other CJEU judgments on the Second Company Law Directive.]


The Applicants' claims are also supported by the formal communications from the European Commission

The European Commission has confirmed that a company's capital cannot be increased without shareholder approval, as per Article 25(1) of the Second Council Directive 77/91/EEC (Article 29(1) of Directive 2012/30/EU). The Commission has also confirmed the mandatory nature of the requirement to offer pre-emption rights, as per Article 29(1) of the Second Council Directive 77/91/EEC (Article 33(1) of Directive 2012/30/EU). Specifically, the European Commission formally confirmed in the “Impact Assessment Accompanying the Communication from the Commission on an EU Framework for Cross-Border Crisis Management in the Banking Sector” dated 20 October 2009 (i.e. relatively shortly before the July 2011 Ex Parte Provisional Direction Order was made) that:

“Shareholders' versus authorities' (public) interest

Banks are subject to general company law rules and in particular certain rules aimed at the protection of the company's shareholders. At European level, there are mandatory requirements on the shareholders' approval of any increase or reduction of capital as well as rules on shareholders' pre-emption rights in the Second Company Law Directive.”
[Page 32 of the said EC Communication] (Emphasis added)

Furthermore, the “Proposal for a Directive of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms” (the “BRRD Proposal”) issued by the European Commission on 6 June 2012 (i.e. after the July 2011 Ex Parte Provisional Direction Order had been made) states at pages 17 and 18 (COM(2012) 280 final; 2012/0150 (COD)):

The Second Company Law Directive requires that any increase in capital in a public limited liability company be agreed by the general meeting, while Directive 2007/36 (the Shareholders' Rights Directive) requires a 21 day convocation period for that meeting. Restoring the financial situation of a credit institution rapidly by means of capital increase is therefore not possible. … Moreover, Company Law Directives require that increase and decrease of capital, mergers and divisions are subject to shareholders' agreement, and pre-emption rights apply whenever the capital is increased by consideration in cash. In addition, the Takeover Bids Directive requires mandatory bids when any person - including the State - acquires shares in a listed company above the control threshold (usually 30-50%).”
(Emphases added).

Additionally, the Proposal of the Recovery and Resolution Directive of June 2013 (Council of the European Union, 28 June 2013, Interinstitutional File: 2012/0150 (COD)) states in pre-ambles 87 and 88:

“(87) Union company law directives contain mandatory rules for the protection of shareholders and creditors of credit institutions which fall within the scope of those directives. In a situation where resolution authorities need to act rapidly, those rules may hinder effective action and use of resolution tools and powers by resolution authorities and appropriate derogations should be included in this Directive. In order to guarantee the maximum degree of legal certainty for stakeholders, the derogations should be clearly and narrowly defined and they should only be used in the public interest and when resolution triggers are met. The use of resolution tools presupposes that the resolution objectives and the conditions for resolution laid down in this Directive are respected.

(88) Second Council Directive 77/91/EEC of 13 December 1976 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent, contains rules on shareholders' rights to decide on capital increases and reductions, on their right to participate in any new share issue for cash consideration, on creditor protection in the event of capital reduction and the convening of shareholders' meeting in the event of serious loss of capital. Those rules may hinder the rapid action by resolution authorities and appropriate derogations from them should be provided for.”
(Emphasis added). [the Bank Recovery and Resolution Directive (the "BRRD") will offer certain derogations from the Second Company Law Directive in the future, as part of an EU-wide bank supervision, only under specific conditions and in specific circumstances of the future EU-wide bank recovery and resolution regime. It is clear that no derogations from the relevant provisions of the Second Company Law Directive were legally possible in July 2011 (when the said directive plainly did not exist).]

The “Communication from the Commission: Action Plan: European company law and corporate governance - a modern legal framework for more engaged shareholders and sustainable companies” from 12 December 2012 (COM(2012) 740 final) confirms that:

European company law is a cornerstone of the internal market. It facilitates freedom of establishment of companies while enhancing transparency, legal certainty and control of their operations ... The scope of EU company law covers the protection of interests of shareholders and others, the constitution and maintenance of public limited-liability companies’ capital ... and shareholders’ rights.” [Page 4 of the said Communication from the European Commission, including footnote 17] (Emphasis added).

Thus, the Commission clearly confirmed the fundamental importance of EU company law. The Commission did so during the recent financial crisis (and after the July 2011 Ex Parte Provisional Direction Order had been made). This was following the “Communication from the Commission to the Council and the European Parliament: Modernising Company Law and Enhancing Corporate Governance in the European Union - A Plan to Move Forward” from 25 May 2003 (COM (2003) 284 final), where the Commission stated, inter alia, the following:

“2.1. Strengthening shareholders rights and third parties protection

Ensuring effective and proportionate protection of shareholders and third parties must be at the core of any company law policy. A sound framework for protection of members and third parties, which properly achieves a high degree of confidence in business relationships, is a fundamental condition for business efficiency and competitiveness. In particular, an effective regime for the protection of shareholders and their rights, protecting the savings and pensions of millions of people and strengthening the foundations of capital markets for the long term in a context of diversified shareholding within the EU, is essential if companies are to raise capital at the lowest cost.

Maintaining efficient protection of members and third parties will be even more important in the future, in view of the increasing mobility of companies within the EU.”
(Emphases by the European Commission).



Prohibition of allotting shares at a discount

Article 8(1) of the Second Council Directive 77/91/EEC (first paragraph of Article 8 of the recast Directive 2012/30/EU) states: "
Shares may not be issued at a price lower than their nominal value, or, where there is no nominal value, their accountable par."

Shares allotted at a discount to a relevant nominal value must be cancelled and duly re-issued at or above the nominal value. Alternatively, the allottee is liable for the amount of the discount together with interest. In this case, if the CJEU makes a preliminary ruling determining that the Minister’s actions in question were incompatible with Art. 8(1) of the Second Council Directive 77/91/EEC, then the 36.249 billion ILPGH shares allotted to the Minister pursuant to the July 2011 Ex Parte Provisional Direction Order will have to be cancelled, and shares will have to be re-issued at or above 32 cents (which was the nominal value of the share prior to the July 2011 Ex Parte Provisional Direction Order). Otherwise, the Minister (or any subsequent buyer of his shares) will become liable pursuant to s. 27 of the Companies Act. 1983 for the amount of Euro 9.3 billion plus interest. In this regard, it is relevant to refer to MacCann and Courtney, who state the following in “[Irish] Companies Acts 1963-2012” (Bloomsbury Professional Limited 2012, ISBN 978 1 78043 134 5) at page 931:

“Consequence of allotting shares at a discount:

If Shares are issued at a discount, the allottee becomes liable to pay the company in cash a sum equivalent to the amount of the discount together with interest
(C(A)A 1983, s. 27(2)). Moreover, any subsequent holder of the shares (other than a purchaser for value without notice of the contravention or a person deriving his title from an innocent purchaser) will also be jointly and severally liable to pay to the company the amount of the discount plus interest, even though he may already have duly paid his predecessor in title full value of the shares (C(A)A 1983, s. 27(3)). The liability of the allottee or subsequent holder to pay the amount of this discount plus interest arises regardless of whether he holds the shares in his own rights or as agent, trustee or nominee by way of security (Re Munster Bank (Dillon’s Claim) (1886-87) 17 LR Ir 341). Moreover, where the company goes into liquidation, this liability to pay up the discount plus interest arises even if there are sufficient assets to pay the creditors in full (Re Newtownards Gas Co (1885-86) 15 LR Ir 51; Welton v Saffrey [1897] AC 299). Furthermore, if the company is unable to recover the amount of the discount from the allottee or from subsequent holders of the shares, it will be entitled to recoup the sum in question from the directors who were responsible for the discount, even though they had acted in good faith and in what they considered to be the company’s best interest in effecting the allotment at a discount.”

It is relevant to refer to the case of Ooregum Gold Mining v. Roper [1892] AC 125. It is an ancient landmark case regarding issuing shares below nominal value, which MacCann and Courtney refer to on pages 930 and 931 of the aforementioned “Companies Acts 1963-2012”. The House of Lords determined that regardless of the circumstances:
- Shares cannot be issued at a discount to the nominal value; and
- The issue is beyond the powers of the company; and
- The shares are held subject to the liability of the allottees to pay to the company in cash the full amount unpaid on the shares.

Furthermore, the above rule is what Michael Forde and Hugh Kennedy, in the “Company Law” 4th Ed, call an “iron rule” of the Irish corporate law:
“6-28  The shares of all registered companies “shall not be allotted at a discount” (1983 Act, s. 27). This iron rule admits of no exceptions or qualifications
(cf. pages 165 and 166 of the aforementioned book).


Second Company Law Directive was confirmed by European Parliament more than a year after Minister breached its fundamental provisions


It is highly relevant that, following an elaborate legislative process, the Second Company Law Directive was in fact recast without any substantive changes in October 2012 by Directive 2012/30/EU (i.e. more than a year after the making of the July 2011 Ex Parte Provisional Direction Order). That recast of the Second Company Law Directive confirmed without any qualifications the pertinence of the relevant provisions of the Directive.

It highly important and relevant in this regard to understand what “recasting” actually means under EU law.
Recasting under EU law is an elaborate legislative process. It is like codification in that is brings together in a single new act a legislative act and all the amendments made to it. The new act passes through the full legislative process and repeals all the acts being recast. But unlike codification, recasting involves, if necessary, new substantive changes, as amendments are made to the original act during preparation of the recast text. Where, in the course of the legislative procedure, it appears necessary to introduce substantive amendments in the recasting act to those provisions which remain unchanged in the European Commission's proposal, such amendments shall be made to that act in compliance with the procedure laid down by the EU Treaties according to the applicable legal basis. In this context, it is highly relevant and important that the recast of the Second Company Law Directive in October 2012 did not involve any relevant substantive changes, which confirmed the pertinence of the relevant provisions of the Second Company Law Directive, without any qualifications whatsoever, to the issues at hand here. Thus, it is clear that the recast of the Second Company Law Directive in October 2012 did not put in any doubt the pertinence of the CJEU case law regarding the aforementioned provisions of the Second Company Law Directive. That CJEU case law unequivocally shows the incompatibility of the July 2011 Ex Parte Provisional Direction Order with the relevant provisions of the Second Company Law Directive.


The Minister has not offered any case law to challenge the above CJEU case law and communications from the European Commission


The Minister has absolutely no defence that would have any support whatsoever in EU law. He simply tries to rationalise the blatantly illegal into the palatable.


It is relevant that the Minister has not offered at any point any CJEU case law whatsoever that would support the notion that the comprehensive and consistent CJEU jurisprudence on the Second Company Law Directive could be disregarded by the Minister in July 2011, allowing the Minister to commit the alleged breaches when he effected the July 2011 Ex Parte Provisional Direction Order.

There is plainly no provision of EU law whatsoever that could support the egregious breaches committed by the Irish Minister for Finance.


In justifying the alleged necessity of the specific terms of the July 2011 Ex Parte Provisional Direction Order, the Minister relies, inter alia, on the State’s legal requirement to implement the Implementing Decisions 2011/77/EU and 2011/326/EU (made pursuant to Council Regulation (EU) No 407/2010 of 11 May 2010 establishing a European financial stabilisation mechanism) in respect of recapitalising Irish banks and PTSB in particular. The Minister claims he was legally required to effect the July 2011 Ex Parte Provisional Direction Order in the terms in which it was made in order to implement the Implementing Decisions 2011/77/EU and 2011/326/EU. However, the Implementing Decisions 2011/77/EU and 2011/326/EU did not require a recapitalisation of PTSB GH, which is not a bank / credit institution. There was never any legal requirement to raise capital in PTSB GH (or to funnel the capital recapitalising PTSB through PTSB GH); there were only legal requirements to recapitalise PTSB, which is a bank / credit institution. There is nothing in the said Implementing Decisions that could have legitimately justified the alleged breaches of the minimum rights enshrined in the Second Company Law Directive.

The Minister also refers to a temporary approval by the European Commission on 20 July 2011 of the State aid in respect of the recapitalisation of PTSB. That temporary approval referred to the terms that were identical to the terms of the resolutions put to vote at the EGM of PTSB GH on 20 July 2011. The temporary approval occurred prior to the EGM of PTSB GH on the same day. That EGM rejected the terms of the capital increase in PTSB GH and of the Minister’s respective takeover of PTSB GH, which were subsequently forced by the Minister by means of the July 2011 Ex Parte Provisional Direction Order. No final State aid approval has been granted thus far by the European Commission in this regard. Furthermore, there is unequivocal CJEU case law that provides that a decision adopted by the European Commission regarding an approval of State aid cannot be interpreted (especially if such a decision is only temporary) as authorising the Member State to whom it is addressed to maintain in force, even if only provisionally, a national provision which is contrary to the Second Council Directive 77/91/EEC.

The Minister also tries to rely on the CIWUD Directive as allegedly allowing the breaches that he committed. However, CIWUD is not applicable to PTSB GH because PTSB GH is not a credit institution, and CIWUD only applies to credit institutions. In fact, the Minister’s grounding affidavit for the July 2011 Ex Parte Provisional Direction Order states clearly that the CIWUD Directive is not applicable to PTSB GH as PTSB GH is not a credit institution. Thus, the Minister explicitly did not rely on CIWUD in respect of PTSB GH when effecting the July 2011 Ex Parte Provisional Direction Order. Furthermore, pre-existing rights of shareholders cannot be affected as part of reorganisation measures under the CIWUD because shareholders are not considered “third parties” for the purposes of the CIWUD. This is further reinforced by the overarching principle that CIWUD does not introduce any new resolution regime, but merely coordinates existing national regimes.

Finally, the Minister claims - without any support whatsoever in the CJEU case law - that allegedly the general provisions of certain Articles of the Treaty on the Functioning of the European Union (the "TFEU") can offer some alleged general derogations from the relevant provisions of the Second Company Law Directive. This is despite the fact that the above-quoted CJEU case law states that: ... To recognize the existence of a general reservation covering exceptional situations, outside the specific conditions laid down in the provisions of the Treaty and the Second Directive, would, moreover, be liable to impair the binding nature and uniform application of Community law ...[judgment in the joined cases Karella and Karellas C-19/90 and C-20/90, paragraph 31, which has been confirmed also in other CJEU judgments on the Second Company Law Directive.] Astonishingly, the Minister’s claims are set in the context of the fact that those TFEU provisions have been actually in existence since at least the Treaty of 1992, if not since the EEC Treaty of 1957. Specifically, the EU Treaties have had the following common / overlapping provisions:

TFEU
-------------------------------------------------------1992 Treaty (92/C 224/01)------------------------------------- EEC Treaty of 1957

Article 49
-------------------------------------------------Article 52------------------------------------------------------------ Article 52

Article 65 (art. 65.4 is unrelated)
-------------------Article 73d------------------------------------------------------------

Article 107
-----------------------------------------------Article 92------------------------------------------------------------ Article 92

Article 120
-----------------------------------------------Article 102a-----------------------------------------------------------

Part Three, Title VIII-----------------------------------Part Three, Title VI-------------------------------------------------Part Three, Title II (partly)


Most importantly, none of those provisions includes any applicable express derogation from the relevant Articles of the Second Company Law Directive. In fact, the aforementioned CJEU case law on the Second Company Law Directive, covering the period between May 1991 and December 2008, consistently reiterated the above-mentioned sacrosanct nature of the relevant provisions of the Second Company Law Directive. The said case law also consistently reiterated the CJEU determination that the Second Company Law Directive itself is intended to ensure the minimum equivalent protections for shareholders across the Member States. 

Moreover, in the above context, it is clear that the very enactment of the relevant express derogation provisions embedded in the Bank Recovery and Resolution Directive 2014/59/EU (the “BRRD”) confirms that, in the absence of the applicability of those express derogations (which apply only under the specific conditions set out in the BRRD), no applicable derogations from the relevant provisions of the Second Company Law Directive are currently legally possible; and certainly no such derogations were legally possible in July 2011 (unless the CJEU retroactively changes its current comprehensive and consistent jurisprudence on the Second Company Law Directive following the aforementioned reference from the Irish High Court).

 
PTSB Shareholders Oppose Blatant Breaches of EU Law by Irish Finance Minister